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It’s Academic: U.S. Recession

December 1, 2008

banking-house-of-cards-11For those that needed affirmation, the U.S. has been officially in a recession since December 2007. The Republican’s greatest political fears have finally been clarified by economic academic definitions.

Now that recession is officially here, what are we going to do about it? “It is clearly not going to end in a few months,” noted Jeffrey Frankel, a Harvard economist with the National Bureau of Economic Research. “We would be lucky to get done with it in the middle of next year.”

The White House says, “The most important things we can do for the economy right now are to return the financial and credit markets to normal.” If you’ve been watching the news on television, one idea continues to surface: the best ideas that politicians can come up is to somehow continue the obscene use of endless credit, especially where the American public is concerned. They haven’t awakened to the reality of the need for cost adjustments in the economy that simply make living more affordable and realistic. Instead, we cling to same ideals that brought the nation exactly where it is. However, the fact remains that economic price adjustments are already in process and will continue to work their economic magic whether politicians or economists like the news or not. We are in for another 5 quarters of economic contraction at a minimum along with concordant price adjustments. Business will suffer. Government will “suffer.” Americans will suffer.

Then, on the other hand, many more millions of Americans will also continue to prosper or at the very least, get by. Soon enough, the recession will be past if politics doesn’t keep trying to prolong the cycle by circumventing pain. Evaluating what really put us here beyond crooked banking is exactly what needs to happen. If you read this blog, you have a clue what this is. Otherwise, America hasn’t learned a thing. What do you think? ~ E. Manning

3 Comments leave one →
  1. December 27, 2008 12:40 pm

    To be clear, this is a systemic consequence of 50+ years of bad policy; policy that encouraged rampant borrowing and spending. It was all too convenient for politicians to latch onto the idea that spending equates to prosperity.

    That was fine while our balance sheets were healthy, but now we have a severely distorted system that has too much capacity built into it.

    The only healthy adjustment that can take place-and will take place whether we like it or not-is to shed assets, jobs, and clean up our balance sheets, as individuals, and as a country.

    You will hear lots of distorted blame-game nonsense, such as calls to curtail trade, tax this group or that, and inhibit markets from functioning freely, but these calls are destructive and fail to address root causes.

  2. chinatown permalink
    December 3, 2008 10:50 am

    Americans have to stop buying from China-Town (Wal-Mart) and start buying American goods and services. When an American buys from another American that money is circulated over and over again, but when Americans buy foreign goods the money is lost.

    We”ve sold our country for cheap China-Town trinkets.

    Buy American, and quit shopping at China-Town you”re only making the problem worst.

  3. tired of robber barons permalink
    December 3, 2008 10:49 am

    Why should we continue to bailout these Robber Barons, when all they really are concerned about are their bottom line, whether corporate or personal.
    After seeing him testify, I wrote and sent a certified letter to Mr. Mozillo at Countrywide requesting assistance. My interest rate though fixed is high…8.9%. As of this date I have heard absolutely nothing from him. Of course after hearing of his email faux pas, I can see why. I, along with many others dont fit in his bottom line.
    Monthly calls are met with proposed repayments that raise the monthly payment 5 to 7 hundred dollars, and request for a wrap around modification are scoffed at. We have to consider our investor is what I am told. By providing these bailouts do I become an investor? TRICKLE DOWN DOES NOT WORK. Lets tell the Barons of Greed and Chinese Labor and trinkets we are going to switch to TRICKLE UP and see there response.

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