gut wrote:
Footwedge wrote:
That is your opinion...which is different from mine. Real wealth is defined by tangible items born through the fruits of human labor. Not the paper products that have replaced real goods and services. At least that's what Adam Smith stated in his book "Wealth of Nations".
The banking crisis is much more complex than simply being a liquidity problem. Liquidity problems are elastically controlled through fiscal and monetary policy.
To state that the banking crisis can all to attributed to poor liquidity is farcical.
I did not characterize the banking crisis as solely a liquidity problem. The economic shock that resulted was, in large part, an issue of frozen credit markets COMBINED with a reduction in appetite for risk.
Yet you fail to address the issues that correspond to the frozen markets and loss of risk appetite.
"Risk appetite" is pretty appetizing when you are too big to fail....running financial operations whereby "heads I win, and tails I win as well" because the end game will be a bailout from the government. We learned that lesson back in the 80's whenever Reagan and Congress relaxed regulations of the Savings and Loan people.
Pretty good gamble, huh?
And it's not my opinion that services are a real part of GDP and productivity, it is, in fact, included and certainly does add value. You are making a gross oversimplification to blame the severity of economic downturns on the loss of manufacturing, given that many of our corporations are global and retain ownership and profits on those manufactured goods.
I never said that services are not part of our GDP or that they shouldn't be a part of our GDP. But when simple math shows causes and effects....regarding real growth...and I mean real gdrowth of the GDP (not the bullshit that we see today in adding back the huge growth in government jobs as part of our GDP), corresponds directly with the outsourcing of jobs and an increase in financial services, should be a true head turner.
Additionally, the last 2+ decades coinciding with a growth in financial services has seen the mildest recessions in quite some time prior to this recent one.
Absolute bullshit. The only "perceived" growth in our economy was a result of 2 artificial bubbles...1. the dotcom cherade, whereby investment hucksters hoodwinked the public in pump priming investors in ballooning the worth of these pieces of shit, inspite of price to earnings ratios that were incredibly benign, and 2, the financial housing bubble, whereby Wall Street again pump primed and balooned the housing frenzy in manipulative fashion...which has hastened the realities of Americans losing our collective wealth.
Leverage - not a shift in the mix between service/mfring - is responsible for this severe recession. There is no proof that the loss of mfring jobs has made our economy more susceptible to recession or the depth more severe, especially considering the US is not the only country to be hit really hard.
I will agree that leveraging had a lot to do with it. But what caused accessive leveraging? What was liberalized in creating excessive leveraging? well you can start with the repeal of Glass Steagle, which had worked quite well since Depression part 1.
As for providing proof on the loss of manufacturing contributing to our economic demise.....proof is in the numbers.
Compare and contrast the overall economic growth with countries that have seen GDP rates 4 to 5 times higher than the US has seen over the past decade. Vietnam, China, Laos, India....all growing their manufacturing base...and kicking our ass economically. Look it up.
Americans need to take off their rose colored glasses, evaluate the data, and come to the same conclusion that most economists have come to. The loss of the American smokestacks has had an extreme deleterious effect on our growth, our hope, and if not changed, our future.
