The blowhard says "we're not in a recession, technically."

Well, okay then, how you liking the second Great Depression out there?

Democrats are far from socialist. They do, however, realize that the purpose of democratic institutions is to protect and better the lives of it's constituents and that there are limits to the value of free markets.

It's scary that that guy went to my high school. We turned out some nuts :P

LOL ... Jonathan goes whacko.

Even the other republicans found him to be a nut case.
♥♂

Another reason Fox business reporting will never be taken seriously. Their political crap - which much of this is - plays to the regulars down at the corner tavern.

Derry @ 8:

Barrack H. Obama sounds like a communist.

To those wondering in another thread what a troll looks like...

What does anyone expect from a television network that says that the reason the economy is tanking is the fear of the Dems winning in November? Sad part is, almost every network sounds the same if you pay close attention to what they are saying. Try CNN. Same thing, but glossed over a little more. Points still come across. Free market capitalism-good, regulations/watchdogs-bad.

This is the douchebag that basically said: "If you want to see the Dow go up, bomb Iran".....geeky ears and a microphone do not ensure smarts.

ray @ 15:

This is the douchebag that basically said: "If you want to see the Dow go up, bomb Iran".....geeky ears and a microphone do not ensure smarts.

Technically, he's right. The DOW will follow inflation.

We could see the DOW at a billion, while a loaf of bread goes for thousands of dollars and unemployment becomes endemic.

John Amato @ 16:

C&L is still having a lot of tech problems...It's been frustrating. I lost a bunch of posts...

Thanks John, I thought it was my server. It seems to take forever for a post to get loaded.

... if they (people) start to all get smart all of a sudden overnight, it’s trouble.

Yeah you don't want customers to spend wisely and be smart!
Keep milking the cow till it drops dead!
Then find another cow to milk.

Yes and it's taking forever to load up.

the use of sweeping and nebulous labels gives further indication that the wall street/"free" market myth believers, and strict mkt ideologues are grasping at straws, and pathetically flailing.

you see, since the 1980s our economy has been HEAVILY tilted toward their failed ideology. and all those promises that were made--if we just adhered to the extreme rightwinger prescription for economic/social/foreign/domestic policies--never came true. in fact, wea re much worse off now than we were in the 70s. well, let me put that another way... the overwhelming majority of people are worse off than before, while the upper class has profited and benefited mightily from the "free" market myth makers.

so what do these charlatans and liars have left? their claims have proven to be lies. what can they do? duh-duh! red scare. the commies are coming, the commies are coming!!

it is 2008, and if you really believe that the snake oil is going to cure wot ills you... then you have been duped (again)

What, me worry?

Last time the Fed tax rate was this low was 1929. No connection there.

J: I’m just gonna say, I’m just gonna…This whole idea of incentivizing consumption to spur the economy, it’s ludicrous, Terry. It’s not consumers. Consumers don’t do anything. It’s the producers that we should be incentivizing. It’s the business…

Oh that's just brilliant - consumer purchasing is down, so his answer is to have producers drive up their inventories even further.. That'll get the economy moving!

Where does the MSM find these bozos (apologies to Bob Bell), and why are they on TV?

If it's any comfort, Wall Street actually doesn't listen to Fox business reportage. People who actually spend their time dealing with reality--and let's face it: having your job depend on how adept you are at buying at selling off eighth-point increments puts one face to face with realilty--watch Bloomberg. They mostly don't even watch CNBC because they have to spend so much time filtering out the real business news from the folks who are there to put on the pom-poms for big business.

total distrust for free markets?

hmmm I just can't understand why I would have a total distrust for free markets

and lip service counts for something

my take is total free market is bad for the country too.

and what was this .. .if the people get smart over night - so the Republicans are saying the majority of peopel are stupid?

THIS IS HYSTERICAL!! The conservative? movement is coming apart at the seams!

"Consumers don't have anything to do with the markets, its the producers.....", ARE YOU KIDDING ME!

I listened to Rush this a.m. and I haven't laughed that much in years. He is predicting the demise of the 'con-movement' if McCain is the nominee. I JUST BECAME A MC CAIN SUPPORTER!

Any Democrat IN A COMMA is a better choice than McCain.

I wonder how Fox studios keeps the pig-sty smell down and the flies......

J: I’m just gonna say, I’m just gonna…This whole idea of incentivizing consumption to spur the economy, it’s ludicrous, Terry. It’s not consumers. Consumers don’t do anything. It’s the producers that we should be incentivizing. It’s the business…

Brilliant - consumer spending is down, so his answer is to ramp up production and increase inventories of things that people already aren't buying.

Where did this doofus study economics, and why do people listen to him?

sorry for the duplicate posts - due to earlier server problems.

Yeah, it's only socialism when its economic assistance to the poor. When you're bailing out corrupt market lenders and contractors, it's in tune with the market.

Actually Jonathan is exactly right on this one.

The other "analysts" simply cannot see that consumer spending is not the most important thing to keep an economy going. They assume that consumer goods are the only thing that is produced in an economy. The other analysts seem to have been educated by Keynesian economists, who go out of their way to emphasize that consumer spending is the most important thing.

The one analyst who asked what planet Jonathan is living on, and the dude who said:

"J2: People don’t produce stuff for each other. They produce stuff because consumers ultimately demand it!"

THIS statement is EXACTLY what is wrong with mainstream economics. "J2" simply refuses to see that business, IN THE AGGREGATE, is in fact the source of its own sales revenues. The overwhelming majority of overall spending that goes in an economy is business to business transactions, which in other words means, PEOPLE PRODUCING FOR EACH OTHER.

Contrary to what the idiot analysts think, Jonathan is right on target. It is true that consumption is the ULTIMATE end-point, the final stop for the bucks, but this does not in any way eradicate the fact that the most important aspects of an economy are business to business sales.

Even if we look at consumption, which by the analysts' reactions and demeanors is allegedly ONLY be made up of wage earners, the fact remains is that business is STILL the source of its own sales revenues. The two main sources for consumption in an economy are dividends / interest payments, and wages. It is the totality of businesses interacting with each other that allow each business to be profitable. Being profitable presumes that each business takes in revenues.

Business in the aggregate CAN and DOES create its won sales revenues. If we look at consumption, the first question that must be asked is, WHERE does the demand for consumption originate, and thus, WHO is responsible for that origination?

Asking the question in this way makes easy to see that consumption demand originates from wage payments and dividend payments BY BUSINESS FIRMS. When business pays wages, that paying of wages CREATES a demand for consumer goods. When business pays dividends and interest, that paying of dividends and interest CREATES a further demand for consumer goods.

What Jonathan was trying to say over the screeching and yelling of the other analysts is that if the economy is going to progress, meaning get better, the answer is not for there to be a redistribution of income from rich to poor. All that will do is merely change the composition of an economy, it will not ADVANCE that economy. For what the "stimulus package" really does is this: It will shift demands. It will shift demands from investments to more consumption (VERY BAD for this country).

For instead of dividends and interest payments being the source of the demand for consumer goods, and the reinvestment of profit income being a source for the demand of capital goods and wages, consumption will instead be increased AT THE EXPENSE of savings. The most important thing everyone must learn is that it is SAVINGS that create wages, and SAVINGS that create capital goods. Consumption is only the last step. More consumption does not increase wages or capital formation. It operates AGAINST it. More consumption can only exist if there is less savings and investments. Think of an average household, or even an individual person. If there is more consumption, then it can only exist if there is less savings. It's simple math here.

e.g. If a business has $20,000 in cash and is considering what to do with it, it has one of two choices. It can either CONSUME the money by buying a car for the firms' owners, or it can SAVE that money. If it SAVES that money, then it can either pay wages or pay for a machine or other capital good. If it pays for wages or capital goods, then it does so in the hopes that it can sell products or services in order to REPLACE that $20,000, for that is what businesses do. If it pays all $20,000 in wages, then what will happen is that the wage earner will spend that money on consumption or he/she will save a portion of it. If they spend it all on consumption, then there will be no difference on total consumption in the economy than if the owners spent it. The economy will see $20,000 in consumption receipts as it did before, generating an income.

If the business spends the $20,000 on capital equipment, then there will be an increase of $20,000 in demand for capital goods. The sellers of capital goods will see increase of $20,000 in demand, and hence that much more in revenues. The difference here is that there will be $20,000 less consumption in the economy than what it otherwise would have been, but there will be an increase of $20,000 in the economy for capital goods. In other words, the economy as whole is EXACTLY the same as it was before in terms of profitability. The difference is that the demand for capital goods has grown and the demand for consumer goods has fallen.

It is here where Keynesians like the analysts on the program come in and say that the economy is worse off because there is less consumption and more capital goods purchasing. They think "how can business be profitable here?" Their mistake is that if the business spends $20,000 in capital goods, this will serve to increase the productivity of whatever wage earners it does have, causing an increase in the supply of both capital goods and consumer goods. If the $20,000 is spent on capital goods, then there will be MORE consumer goods being produced, for lower prices. So even if the economy has an increase of $20,000 in the demand for capital goods, and a corresponding decrease in consumer goods, the fact that remains is that whatever IS spent on consumption, that amount will be able to buy MORE consumer goods than before!

This stimulus package is completely bonkers because it assumes that more consumption IN OF ITSELF is somehow "PRODUCTIVE". This is crazy....if I consumed all my income on booze and cigs, I will have not CONTRIBUTED ANYTHING MYSELF to production in the economy. It is only when I SAVE, when I DON'T consume, that creates a demand for wages and capital goods.

Any idiot can consume by spending money...but not everyone can produce. THAT is why there must be incentives to SAVE more, and not incentives to CONSUME more.

It is too much consumption that bankrupts not only people, but whole countries.

Is this guy living in bizarro world or what?

There should be a rule that if you're in any media and comment on politics at any level, you must disclose how much money you save from Bush's tax cut plans.

Charles @ 48:

Radian @ 31:

J: I’m just gonna say, I’m just gonna…This whole idea of incentivizing consumption to spur the economy, it’s ludicrous, Terry. It’s not consumers. Consumers don’t do anything. It’s the producers that we should be incentivizing. It’s the business…

Oh that's just brilliant - consumer purchasing is down, so his answer is to have producers drive up their inventories even further.. That'll get the economy moving!

Where does the MSM find these bozos (apologies to Bob Bell), and why are they on TV?

Pauly Shore was busy, so they went with the next best guy.

Consumer spending is down because the money supply is contracting around the world. It is contracting because there was an initial increase in credit during 2001-2004.

The answer is to increase production, because that will lower prices back down to the lower level of consumer spending that exists. You got to stop thinking that more inventory means that prices stay the same, which means more consumer spending.

Unfortunately, our economy has been destroyed by the philosophies that encouraged spending for more than 50 years. But you know what the problem is? All the ignoramuses who for years have advocated more consumer spending, which acts to destroy an economy, are now saying that more spending is going to solve everything. The VERY SAME people are not blaming their own ineptitude, they are actually blaming the people who have been saying all along to NOT spend so much and to save more.

Consumer spending is down, but what you don't understand is that CAPITAL GOODS spending is down MORE than consumer spending. Prices are rising, but there is LESS BEING PRODUCED.

Our media and schools are filled with idiotic, stupid, ignorant, lying, greasy, backstabbing crooks who are so incredibly ignorant, that they are ignorant of their own ignorance. But because they have such huge egos, such huge senses of entitlements, that they think they are correct and have no problems with talking down to people who KNOW what they are talking about. The more people are shrill, the more they yell, the more they scream over each other, the more ignorant they are.

That Fox panel is filled with a bunch of retards who couldn't tell their ass from a hole in the ground. If I was on that show, I would put those idiots in their place so fast their heads would spin.

MORE CONSUMPTION IS BAD FOR THIS ECONOMY!!!!

Drew @ 49:

Charles @ 48:

Radian @ 31:

J: I’m just gonna say, I’m just gonna…This whole idea of incentivizing consumption to spur the economy, it’s ludicrous, Terry. It’s not consumers. Consumers don’t do anything. It’s the producers that we should be incentivizing. It’s the business…

Oh that's just brilliant - consumer purchasing is down, so his answer is to have producers drive up their inventories even further.. That'll get the economy moving!

Where does the MSM find these bozos (apologies to Bob Bell), and why are they on TV?

Pauly Shore was busy, so they went with the next best guy.

Consumer spending is down because the money supply is contracting around the world. It is contracting because there was an initial increase in credit during 2001-2004.

The answer is to increase production, because that will lower prices back down to the lower level of consumer spending that exists. You got to stop thinking that more inventory means that prices stay the same, which means more consumer spending.

Unfortunately, our economy has been destroyed by the philosophies that encouraged spending for more than 50 years. But you know what the problem is? All the ignoramuses who for years have advocated more consumer spending, which acts to destroy an economy, are now saying that more spending is going to solve everything. The VERY SAME people are not blaming their own ineptitude, they are actually blaming the people who have been saying all along to NOT spend so much and to save more.

Consumer spending is down, but what you don't understand is that CAPITAL GOODS spending is down MORE than consumer spending. Prices are rising, but there is LESS BEING PRODUCED.

Our media and schools are filled with idiotic, stupid, ignorant, lying, greasy, backstabbing crooks who are so incredibly ignorant, that they are ignorant of their own ignorance. But because they have such huge egos, such huge senses of entitlements, that they think they are correct and have no problems with talking down to people who KNOW what they are talking about. The more people are shrill, the more they yell, the more they scream over each other, the more ignorant they are.

That Fox panel is filled with a bunch of retards who couldn't tell their ass from a hole in the ground. If I was on that show, I would put those idiots in their place so fast their heads would spin.

MORE CONSUMPTION IS BAD FOR THIS ECONOMY!!!!

When your economy has nothing left to offer but consumption, what are you suppose to do? That is the main point of the entire "global economy" shit-sandwich that idiots like this guy have been praising for the last 15 years.

That's why we are in this position today. Spending didn't destroy our economy. The outsourcing of middle class jobs, so that corporate pigs could create a second gilded age is what is destroying this country. How in the hell are you suppose to save anything, when wages have been stagnant for thirty years?

Seems to me, you may be the ignorant, stupid, lying, greasy, backstabbing idiot who doesn't have the I.Q. to recognize your own lack of I.Q. Maybe before you go off impugning and insulting other people, you should take a look in the mirror. Moron!

archerofloaf @ 50:

Cool, you seem to understand things...but being the devil's advocate that I am I have to rebuttal your rebuttal.

"The only reason business to business transactions even exist in any economy is because both entities anticipate a future end user for commodities. Just because business to business transactions tend to be more massive and comprise a higher portion of the economy doesn't change the fact that they wouldn't even exist if there was no demand down the road for what they are trading."

That is true. But I think most economists put an "undue" emphasis on consumer spending, as if that type of spending is the ONLY type of spending. You have to admit, whenever there is talk about "fixing" the economy with the upper echelons in policy, there is always 100% focus on ways to increase final goods spending. But you're right, the stimulus package is a band aid solution that will not solve the long term problems, because once people spend that money on final product, WHAT THEN?

"Claiming that Hoenig's opponents want an economy consisting of only wage earners is a straw man arguement you are making."

I didn't exactly mean that. The analyst Sara clearly seems to be completely oblivious to the importance of capital goods spending and saving. I think Jonathan's point was perhaps a little too extreme when he says that consumers are "nothing". But I do think that the word "consumer" is misunderstood. A "consumer" is not a person like you and me. It is an abstract description for the ROLE that everyone plays whenever they consume and not save. So in this sense, even the richest people in the world, who save most of their money, act as consumers whenever they buy without the intention of selling. They are actually arguing that BOTH are vitally important. It is Hoenig that is literally advocating for a supplier-only economy. He said it himself. "It’s not consumers. Consumers don’t do anything."

I find that too many people, when they hear the word "consumer", right away think the average wage earner, because they consume MOST of their incomes. But everyone in the world, if they want to live and be happy, MUST consume a positive amount. So, in this sense, it is not offensive to say that "consumers" mean nothing, in the grand scheme of things, because it is not singling out anyone in particular, it is merely saying that the consumption everyone on the planet does is not CAUSING prosperity, but rather, consumption is a RESULT of savings, and is greater to the extent that saving is greater. So I think it's OK to "condemn" consumption when the economy is doing so shitty right now.

"I do agree with you towards the end when you say that consumption in of itself is not productive. People need to save. The culture that exists to just blow money without securing the future needs to change. Getting people to change the way they view their own money is a real solution. Such a solution would require government spending in education. But Hoenig would just call that "collectivism" for some delusional reason."

I agreed with this point all the way up until you said "require government spending in education". I would say that government spending on education is what CAUSED an overemphasis on consumer spending because of the prevalence of the Keynesian doctrine, a doctrine that was thought up by a man who thought government spending, any government spending, directly results in more employment and hence more productivity. Even pyramid building was seen by Keynes to be a source of prosperity. Government funded education is not value free...there is a huge tendency to stifle dissent and creativity, as well as stifling "controversial" topics, topics that create innovation.

"Nevertheless a stimulus package helping consumers directly helps both consumers and suppliers. Even though it is a band-aid solution. Real solutions need to be made down the road."

It does NOT directly help consumers. It just SEEMS to be that way. I find that the SOURCE of the "stimulus package" is being ignored. It is ignored because too many people see these types of programs as being either free, or solely at the expense of capitalists, and not at the expense of consumers. But there are only two sources for this. Either borrow it from China, or print it. I don't have to tell you that BOTH of these options HURT the consumer, the former causes a weaker dollar and/or the necessity of higher taxes, the second causes inflation, which raises prices, leaving the consumer having to pay higher prices, which leaves real income unchanged. This is why the world's stock markets took a dive after the announcement of the stimulus. It is a BAD thing to do.

"On Drew's argument that redistribution of income from rich to poor is bad because it only changes the composition of the economy and not advance it. I argue that redistributing income in small amounts to lower and middle income people does change the composition but it ALSO advances the economy.

Businesses base their decisions on anticipating demand. They have two very general choices in how they spend a tax cut: INVESTMENT BY SPENDING in ventures that they operate (executives, wages, capital goods), and INVESTMENT BY SAVING in money earning vehicles (which does make businesses money but is not the way they prefer to make it)."

These two options you just described are actually forms of saving, both of them. For by engaging in either form of spending, they each presuppose a LACK of consumption. If a business pays executives, or wages, capital goods, or money earning vehicles, all of these things imply that consumption is NOT taking place. Consumption would take place if the firms spend their revenues on the personal consumption for the owners. In any event, THEIR consumption affects the market and causes higher profits elsewhere, by their spending. If consumption of business firms goes up, then wages go down. But prices stay the same, which means workers are WORSE off by the increase in consumption.

Yeah, thats FOX alright.........like I remember FOX was when I would try watching it.

--- Just imagine my chagrin upon loosing potential investors after they saw me reading the WSJ the other day. Of course, I cancelled my subscription immediately ... but it did no good ... water over the bridge ... first impressions ... that sort of thing... I thought about feigning ignorance for a moment --- that I had NO IDEA Murdoch was the new owner of the WSJ ... but that would have made me look stupider (... is that even a word?). No, my life is over, without purpose, and pointless. --- And it's all because of Murdoch...

I'm a person with no background in economics, and I can't speak to the accuracy of the points being discussed here. But for myself I think the point Drew makes about the need and logic of starting to encourage people to save rather than spend is one that has been on my mind for a long time - you never hear anyone in a position of authority encouraging people to save. Separately, whether or not you agree with Drew, he seems to me to be trying to have an intelligent conversation on this subject, and using epithets like moron and idiot to stifle the discussion is just sad - what are these threads for if not to consider different points of view?