Dont have time to start the topic, but since the Union thread got tied up with the ECONOMY; I thought I would start a convrsation here.

Seems today I heard someone in the Administration in advising on the ECONOMY, said: We are a Nation of Whiners!

Such baby’s we are crying over losing our homes, jobs, credit…....

Here’s the post from POLITICO.COM:

Gramm calls slowdown ‘mental’

Former Sen. Phil Gramm, a top economic adviser to presumptive GOP nominee John McCain, referred to the economic slowdown as “a mental recession” and called the United States “a nation of whiners.”

The comments, in an interview with The Washington Times, could hurt the campaign’s efforts to convince working-class Americans that McCain feels their pain.

McCain strongly disavowed the comments today , saying Phil Gramm “does not speak for me — I speak for me.”

“So I strongly disagree,” McCain told reporters gathered for a press conference.

go to politico.com for whole story

- Are there real problems with the economy right now? Yes.
- Is “this time different?” No.
- Are people lined up right this minute at every AT&T;store across the country to buy a $200.00 cell phone? Yes.
- Is the parking lot at Best Buy always full? Yes.
- Do people still drive like maniacs even though gas costs $4.00 per gallon? Yes.
- Is it true that fewer than 1% of Americans actually save any money each year? Yes.
- 60% of American households have 2 or more cars. The most popular “new car purchase” is that of “entry level luxury sedans.”
- Has the stock market ever failed to recover from a down market? No.
- Is it true that down markets present incredible opportunities for investors? Yes.
- In the past 25 years, have Americans insisted on living way beyond their means by overextending credit and purchasing homes they could not afford? Yes.
- Did adjustable rate mortgages “adjust” recently? Yes.
- Are the poor still poor? Yes.
- Are the rich still rich? Yes.
- Have Americans been paying less for gas than the rest of the world (excepting OPEC nations)? Yes.
- Did Al Gore, that champion for the working man, insist that it would be a good thing to artificially inflate U.S. gas prices up to $5.00 per gallon? Yes.

- Are Americans whiners and complainers? ABSOLUTELY!

Seems today I heard someone in the Administration in advising on the ECONOMY, said: We are a Nation of Whiners!

Such baby’s we are crying over losing our homes, jobs, credit…....

Of course that someone would be sitting up there in an air-conditioned White House pulling down a 6 figure salary, correct? 

Yes, we’ve been lucky that we haven’t had to pay what the Europeans pay for gas, yet!  With the subprime housing mess, rising food prices (well, actually, food prices realllllllllly aren’t rising THAT much—what’s happening is food manufacturers are reducing content size—same difference), lack of savings, massive credit card debt, etc.  and the fact that the Consumer Price Index does NOT include these most basic expenses, it’s easy to crunch the economic numbers and proclaim, “Everything’s just Ducky!” 

As for Al Gore…no one wants to wish $5 a gallon gas on anyone…it’s just not the American way (whatever that means), BUT….back in the ‘70s we had a warning shot fired across our bow.  Gas lines wound around blocks; folks waited for hours to fill up; many fights broke out as, when a station ran out, those waiting for so long got irate.  If you could get gas, you were considered lucky.  We had odd/even days to fill up.  Jimmy Carter suggested alternative fuels; many drove small cars that got decent mileage, and thermostats were turned down to conserve energy.  Carter, either, didn’t push hard enough or no one took him seriously, or both, and little was accomplished.  We’ve been lucky that gas has been so cheap up ‘til now.   

If there was ever a time that a strong Federal presence was needed, now would be it.  It’s time to wean our nation off oil once and for all.  Will it be difficult?  You betcha’!  Is it doable?  You betcha’!  I like that some of the auto makers are starting to build affordable, useful hybrids.  That’s a start, but we don’t dare forget and ignore this time around, and, hopefully, whoever wins the Presidency will be capable of producing results!

TODAY:
By Charley Blaine and Elizabeth Strott
The markets were in turmoil again today after oil surged to a record and worries about mortgage companies Fannie Mae (FNM, news, msgs) and Freddie Mac (FRE, news, msgs) slammed stocks.

Oil rose $2.65 to $144.30 a barrel this afternoon after hitting an intraday record of $147.27 earlier this morning. Oil pulled back off its highs after the Pentagon denied reports that Israel jets conducted military tests over Iraq.

Treasury Secretary Hank Paulson this morning said the government will support Fannie and Freddie in their current states but has no plans right now to bail them out.

At 1 p.m. ET, the Dow Jones Industrial Average was down 239 points to 10,989—the second time in the session that the Dow crossed below the 11,000 mark. Today marks the first day in two years for the Dow to fall below that level.

The Nasdaq Composite Index had lost 53 points this afternoon to 2,205, and the Standard & Poor’s 500 Index had shed 28 points to 1,226.

Stocks had pulled off their opening lows after word that Paulson would be talking about the companies, as investors hoped for news of a rescue plan. But stocks turned sharply lower again after Paulson’s statement was released, because he did not hint at any plans to bail out the government-sponsored entities.

I think someone told me to throw out Newsweek and NBC and MSNBC and a top financial advisors’ advise to the wealthy: HOW ABOUT TIME?

July 10, 2008 2:52
Phil Gramm’s mental recession analyzed
Posted by Justin Fox
Politically speaking, Phil Gramm’s “mental recession” remark was about the dumbest thing imaginable—which is why the McCain camp is running away from it as fast as it can (I liked McCain’s “Ambassador to Belarus” remark). But taken on purely economic terms his comments to the Washington Times weren’t all crazy. A quick run-through, after the break:

“You’ve heard of mental depression; this is a mental recession,” he said, noting that growth has held up at about 1 percent despite all the publicity over losing jobs to India, China, illegal immigration, housing and credit problems and record oil prices. “We may have a recession; we haven’t had one yet.”

First quarter GDP growth was in fact reported at 1%, and as I just wrote it’s likely to be higher in the second quarter. We haven’t had a recession declared yet by the Business Cycle Dating Committee at the National Bureau of Economic Research, but they never do that until long, long after a recession has begun. My prediction (which is worth precisely what you’re paying for it) is that they eventually will declare that one started late last year or early this year, but it’ll likely be W-shaped, with a period of growth interrupting two periods of economic shrinkage. If that’s the case, both of this administration’s recessions will have been Ws. Which would be a charming little coincidence, don’t you think?

“We have sort of become a nation of whiners,” he said. “You just hear this constant whining, complaining about a loss of competitiveness, America in decline” despite a major export boom that is the primary reason that growth continues in the economy, he said.

I sympathize with him a bit there. It’s not so much that we’re a “nation of whiners”—as nations go, I think the U.S. is generally on the optimistic, uncomplaining side. But we do tend to go through dramatic mood swings about our position in the world. Americans were way too triumphalist in the late 1990s, now we seem way too prone to believe that we’ve become a second-rate economic power. The reality is that the U.S. has been on a trajectory of relative economic decline for decades—simply because poor countries making the leap to rich-country status are going to grow a lot faster than developed economies like ours—but remain one of the most competitive economies on the planet. And there is in fact an export boom, but so far it hasn’t cut into the trade deficit much because we’re spending so much more on imported oil.

“We’ve never been more dominant; we’ve never had more natural advantages than we have today,” he said. “We have benefited greatly” from the globalization of the economy in the last 30 years.

Competitive yes, “dominant” no. The U.S. simply doesn’t call the global economic shots anymore as it did in the decades following World War II and even in the late 1990s. And I’m not sure what those “natural advantages” are that he’s talking about. We certainly have a lot less oil than we did 40 years ago. As for benefiting from globalization, Gramm’s right on a macro, national level. But those benefits have been distributed so unequally that a lot of Americans may wonder who the heck he means by “we.”

Mr. Gramm said the constant drubbing of the media on the economy’s problems is one reason people have lost confidence. Various surveys show that consumer confidence has fallen precipitously this year to the lowest levels in two to three decades, with most analysts attributing that to record high gasoline prices over $4 a gallon and big drops in the value of homes, which are consumers’ biggest assets.

“Misery sells newspapers,” Mr. Gramm said. “Thank God the economy is not as bad as you read in the newspaper every day.”

Misery doesn’t sell newspapers. I don’t know if Phil Gramm has noticed, but newspaper circulation is going down, fast. It’s certainly possible that the truly horrific economic situation in the newspaper business is making journalists especially gloomy. But that’s another story.

Treasury Secretary Hank Paulson this morning said the government will support Fannie and Freddie in their current states but has no plans right now to bail them out.

I certainly hope the Feds don’t throw more taxpayer money into these 2 bottomless pits, but I don’t think they’re going to let them go under, either, which would mean a last minute bail-out.

Gramm blaming the media is a hoot!  Guess ya’ gotta’ blame someone, and, yeah, the media with 24/7 coverage has to talk about something so we get stories about folks losing their house, folks having to give up their pets (BUMMER), folks getting scammed by collection agencies, folks getting their vehicles repo’d or owing $50,000 in credit card debt or whatever else it is that holds a reader’s/viewer’s attention (and let’s face it, attention spans for many are short).  But if this stuff wasn’t happening, we wouldn’t be hearing about it.  The media might take the ball and run for the goal, but they don’t invent bad economic times just to have news—heck, they don’t have to—Wall Street and the Feds lack of oversight did it for ‘em.

BJG, your analysis is right on!

Today’s crunch feels like ‘70s/ By Michael E. Kanell/ The Atlanta Journal-Constitution/Published on: 07/13/08

High oil prices, a sluggish economy, persistent inflation, an unpopular president and the Eagles are out on tour.

Sounds like a rerun of the 1970s.

But it is also a snapshot from the summer of 2008 —- even if it does conjure images from the past.

“The similarities are there,” said economist Gerald Lynch of Purdue University. “That was a miserable time for the economy. And the clothes were ugly, too.”

Wide ties may not be making a comeback, but hints of the era’s economics are in the air.

One of the stars of that original ‘70s show was stagflation, a term invented to describe a mix of rapid inflation and near-stagnant growth. The word has re-entered the economic vocabulary of late.

“As far as I can see, the wheels have fallen off the wagon,” said Peter Miralles, president of Atlanta Wealth Consultants. “This is as close to the ‘70s as we have seen in the past couple of decades.”

First, the sluggishness: Gross domestic product the past two quarters has expanded by less than 1 percent. The economy shed 438,000 jobs in the first six months of the year, while the official unemployment rate has climbed to 5.5 percent.

Meanwhile, the official measure of inflation has been running slightly higher than 4 percent per year —- while energy prices have more than doubled.

Yet comparing the current moment to the 1970s can offer some reassurance: Today’s numbers pale beside the Hotel California Era.

In 1975, unemployment peaked at 9 percent, fell for a while and then climbed to 7.8 percent in 1980. Inflation hit double digits in 1974 and 1975, slipped back and then roared up, cresting at more than 13 percent in 1979 and 14 percent in 1980. It was a time, too, when the nightly news rattled the American psyche.

The first half of the decade saw the revolution-promoting Weathermen, Watergate, the bitter, bloody end to the Vietnam War and the Arab oil embargo. The second half of the ‘70s brought the Soviet invasion of Afghanistan and the Iranian Revolution.

“There was a kind of extremism in the air,” said Herb London, president of the Hudson Institute, a conservative, Washington-based think tank. “Conditions now are also kind of frightening. But the situation is not as extreme.”

Still, today’s list of potential villains sounds like a cast from the past.

The most obvious repeat offender is oil. Oil prices quadrupled in the mid-1970s, then soared again after the Iranian Revolution in 1979.

Now, U.S. troops are fighting in Iraq and Afghanistan, there is renewed talk about a U.S. conflict with Iran, and oil prices are at it again. Crude has doubled in the past year, and the economy again is struggling.

“Oil was at the scene of the crime in both cases,” said Jared Bernstein, senior economist at the liberal Economics Policy Institute in Washington. “If you have a police lineup, you really want to have oil in it.”

And it’s not just oil —- global demand has shoved prices higher on a range of commodities from rice to steel.

But inflation this time has some brand-new accomplices: the housing crash; the subprime meltdown that followed; and the crunch in credit that the meltdown triggered.

“This is a very different world,” Bernstein said.

For starters, the sources of inflation are different. During the 1970s, workers —- often through powerful unions —- insisted on raises that matched higher consumer prices.

Those higher payroll costs were then added to the prices businesses charged, which were then used by workers to demand higher pay.

“You can’t have a wage-price spiral without wage pressures, and we ain’t got wage pressures,” Bernstein said. “That is a huge difference.”

It’s not just that business costs don’t rise as much. Companies are also less likely to pass them along.

Many are so afraid of losing customers, they don’t dare raise prices as much as their costs. Instead, they slash their own costs or accept a smaller profit margin —- and potential inflation never gets to consumers.

What worries some economists is that, eventually, companies must pass along costs. Other economists argue that the official inflation numbers are wildly understating the pain consumers already feel.

“The part that concerns me the most is that the government numbers do not actually represent what’s going on,” said Miralles of Atlanta Wealth Consultants. “I just don’t buy it.”

If the plot of the rerun does mimic the original, then the pain is only getting started.

Led by then-Chairman Paul Volcker, the Federal Reserve decided that inflation was so dangerous it had to be stopped —- even if that meant choking off growth. So in 1979, interest rates were raised dramatically.

The economy spun into back-to-back recessions starting in January 1980.

As the economy stalled, the inflation rate leapt to a high of 14.6 percent. After the second recession, unemployment climbed to a peak of 10.8 percent.

But the Fed won its war: Inflation was dormant for the next two decades.

Even now, inflation —- at least the official measure of 4 percent —- seems modest enough to let the Fed keep rates low.

In the past two years, the Fed has cut the benchmark rate from 5.25 percent to 2 percent.

Any inflation-fighting would mean moving them upward again, which would likely slow the economy more.

At least some inflation may be coming from a “bubble” —- speculation that could pop if demand slackens.

“If oil is a bubble, and there’s a good chance it is, then its bursting would lessen the inflationary threat a lot,” said Doug Henwood, author of the book “Wall Street: How It Works and for Whom” and editor of the economics newsletter Left Business Observer.

Waiting for the scenario to play out, consumers and companies alike must do their best to plan, hoping to protect and nurture their assets.

“There are quite a few parallel

Analysts Say More Banks Will Fail
by Louise Story
Monday, July 14, 2008
provided by New York Times

for whole story: http://finance.yahoo.com/banking-budgeting/article/105391/Analysts-Say-More-Banks-Will-Fail

Exerpt:
As home prices continue to decline and loan defaults mount, federal regulators are bracing for dozens of American banks to fail over the next year.

But after a large mortgage lender in California collapsed late Friday, Wall Street analysts began posing two crucial questions: Just how many banks might falter? And, more urgently, which one could be next?

The nation’s banks are in far less danger than they were in the late 1980s and early 1990s, when more than 1,000 federally insured institutions went under during the savings-and-loan crisis. The debacle, the greatest collapse of American financial institutions since the Depression, prompted a government bailout that cost taxpayers about $125 billion.

But the troubles are growing so rapidly at some small and midsize banks that as many as 150 out of the 7,500 banks nationwide could fail over the next 12 to 18 months, analysts say. Other lenders are likely to shut branches or seek mergers.

JULY 15:AP - Federal Reserve Chairman Ben Bernanke told Congress Tuesday the fragile economy is facing “numerous difficulties” including persistent strains in financial markets, rising joblessness and housing problems — despite the Fed’s aggressive interest rate reductions and other fortifying steps.

Wouldn’t mind offering an opinion here…but I am not sure what is being debated.

tHE other day Bruce and I on another thread got into a debate about the economy- I siad a recession was coming- he say’s hogwash, he knows someone in the Bush advisors who says its fine.

So instead of keeping the debate going in another forum that had nothing to do with the economy I started another thread because people had some ideas to debate. Now I’ve been trying to lure them back here with an update from the news each day. I love debating Bruce and Imagination- we have such fun and frustration.

But Im ready for anyone else to talk about the economy- is it tanking and are we going into stagflation and recession like the 70’s-80’s all over again- or is it just a small downturn?

Whats your experience with the economy?

Anyone wanting to debate or talk is invited to particaipate- I hate talking to myself.

I agree the recession times are on us…  you don’t have to talk to yourself- LoL

Here are some facts:

- 94.5 percent of people who want a job can get one.

- 94% of people who own there own homes CAN afford them!

- Recessions are hard to pinpoint and whether we are experiencing one or not may not be apparent until after the time in question has passed.  That’s usually the way it works.  Economists will debate the “yes / no” stance for years.

- Bear markets, compared to Bull markets are short and have less impact.  In the past 56 years, there have been 11 bear markets, each averaging 14 months in duration with an average impact of -22%.  In the same period, there have been 12 bull markets, each averaging 3.5 years with an average impact of 152%.

- The market has NEVER failed to recover…ever!  The year(s) following down markets are typically very good years.

- Every time this happens people say, “this time’s different.”

- Gas prices in 1973 quadrupled in one month.  How long ago were gas prices at $1.00 per gallon?

- Home prices have been inflated by everyone involved in the sales process from real estate brokers to lenders to appraisers for a while now and loans were given to anyone who could fog a mirror.  We got caught and so did the people living way beyond their means.

I had the Today Show on while I was getting ready for work the other day and I saw something hysterical.  They had a “news” story about how bad the economy was.  Right afterward, they brought in one of their “experts” to help viewers find ways to “get through” these tough times.  Some of the solutions that she came up with were (1) Get a Starbucks frequent visitor card because you can get free syrups and the occasional free cup of coffee resulting in considerable savings.  (2) When vacationing this year, look for good deals like the weekday rates at Mandalay Bay in Las Vegas. 

There were a few others but I don’t want to misquote the show and I don’t remember exactly what they were.  So the question is, if the media, which tells us how bad things are, truly believes that we are on the brink of economic ruin because we have to resort to the cheap nights at Mandaly Bay, are we going to trust them to tell us how things are in the real world?

Is it a recession or isn’t it? Who knows. All the folks I listen to and read were convinced 6 months ago that we either were or were not in a recession. Today the same talking heads are having the same debates. Truth is we won’t know for sure until it is over and we are well into the next expansion.

One thing is for sure from my point of view…the media has talked consumer confidence down the levels we currently see. After 9 months of telling people how lousy they have it, people believe they have it lousy.

Are prices up? Yes. Are they out of control? Hardly. My first mortgage in 1988 was at 10 5/8%! Current rates are a little more than half that. My parents waited in lines for gas. I don’t have to…unless I really want to save 5 cents a gallon at Shell on Thursdays.

Is unemployment up? Yes. Is it out of control? Lord, no. A decade ago, 5.5% unemployment was common and 5% was considered full employment. Total job losses in this downturn/recession amount to not much more than the MONTHLY losses we saw in the last recession.

The stock market stinks right now but, for those who are still buying via their 401ks, this is one huge opportunity for long term growth. Its too late now to bail anyway…

The bond market is more interesting…the yield curve…look at the yield curve and read up on what it tells us.

The outlier is energy. If energy prices stay where they are (well were), then we are in for a longer slog thru this ickiness. If energy prices come down to managable levels, we will pull out of this more quickly.

Oh the “this time it’s different” comments you hear on tv…that tells you its time to run….run out when you hear that in good times…run in when you hear that in bad times.

PS. How blasted bad can the economy be when people across the country wait in line for 20+ hours, not for food or gas, but to buy a CELLPHONE!! Oye…talk about misplaced priorities.
PPS. Don’t get me started on the Time piece…doesn’t know what our country’s natural advantages are??? please!

ANybody applaud when Gramm withdrew? I did. He was one of my main concerns about electing Mc Cain. If Gramm leaves his campaign all together and McCain promises he gets no where near money matters or policy- his chance of winning goes up.

WHINERS, indeed!