What Warren said....Follow

It's normal to see a spike in unemployment and some economic downturn when a bubble pops because so much of the economy was tied up in that bubble. What you need is someplace else for that economy can turn as it recovers. The economy under Clinton was sounder than just the tech bubble, hence the tech bubble not causing the damage that Bush's housing bubble (or Reagan's S&L bubble if you insist) caused. Look at the market and employment numbers from the recession Reagan/Bush left Clinton with vs the "depth" of the tech crash. Notice anything...? Like, we were still doing better post-tech crash than before?

Look at the numbers for the depths of the tech crash vs. when Bush left office. Notice anything? Like how we were worse off post Bush housing crash than post "Clinton" tech crash? As in, the rest of the economy was shrinking while the bubble grew and the lack of that bubble put us in a deeper hole than before?

Were you trying to argue my point for me? Thanks!

Edited, Aug 22nd 2011 5:26pm by Jophiel

Wait!? So we recovered quickly from the S&L crisis because of sound economic decisions made *after* the crash, but we've failed to recovery quickly from the housing bubble crisis because of unsound economic decisions *before* the crash? Which is it Joph? You're trying to play them both ways. We recovered quickly in the 90s because of Clinton, but the lack of recovery today has nothing to do with Obama?

Kinda cherry picking how you view the data there, aren't you?


BTW, I agree that it's about what we do after a crash that determines how well we recover. And the common pattern we see is that in the early 80s, we recovered from the recession of that time (less of a bubble than a transition from high to low inflation period), in the early 90s we recovered from the S&L hit, and in the early 2000s we similarly recovered from an economic hit. But today, we have *not* recovered from the housing bubble. It's a pretty clear difference from the previous patterns of hitting a high point and then recovering fairly quickly.


What's the difference? In all those other cases we had either mixed GOP/Dem governments or GOP only governments. The only case where we don't see this recovery is the period when we have Dems in full control. Which is what I've been saying all along. It's because of what the Dems did after the crash that has prevented us from recovering as normal.

If you give credit to Clinton for a swift recovery in the 90s, then you have to blame Obama for the lack of such today. Right?

I'm only half paying attention to this banter going back and forth, but I realize that Joph's statement was not that the previous bubble pops recovered more quickly because of decisions made *after* the crash, but instead by a stronger economy outside of the bubble available to fill the gap after it popped.

And that's your blind partisanship rearing it's retched head, yet again. The truth is, Dubya & Obama both passed stimulus bills that, if nothing else, lessened the impact of that crash & contributed to this deficit issue that's at the heart of the recent economic turmoil. Neither stimulus "fixed" the economy & both seem, in hindsight, incredibly wasteful. But the stock market didn't crash, some banks & car companies didn't fail, & we got some roadwork done.

And some fat cats on wall street got to keep their bonuses for crashing the economy. Hurray!

Unfortunately, Obama & congress weren't able to come to terms on the debt ceiling issue. Neither are solely to blame for this, instead I blame the perpetual re-election cycle for the complete & utter lack of compromise.

The debt ceiling should have been raised, spending cuts should have been made, & taxes should have been increased (Tax loopholes closed, roll back of Dubya's tax cuts, & rollback to tax rates on the upper 2% to 90s levels). That would have stopped the S&P downgrade &, hopefully, would have lessened the burden of the worldwide economic turmoil that has resulted because of the lack of compromise.

Instead the Dems swallowed a **** sandwich, the Pubbies "win", yet the economy, worldwide, gets to suffer because it didn't accomplish what could have/should have been done with raising taxes WHILE also cutting spending.

The fact that two things are labeled the same doesn't make them the same. There's also a huge difference in scale. Between 2000 and 2002, spending increased by less than 1% of GDP. Between 2008 and 2009, spending increased a whopping 4.3% of GDP. You can't possibly equate the minor amounts of spending Bush did in response to the techbubble crash to the amount Obama spent.

And in case you're arguing that they were different scales or types of crisis, we can look at the S&L crisis. At the time it was the biggest financial crisis since the Great Depression, with nearly 50% of all banks in the US in or threatening to enter bankruptcy. Want to know how much we increased spending between 1989 and 1990? .7% of GDP. So a slight spending increase in response to the crisis (and partially to falling growth levels), but not enough to cause problems.


Can't you at least consider that we spent too darn much money? Or at least that this is a clear departure from other recessionary patterns?

Edited, Aug 22nd 2011 6:31pm by gbaji

That's a circular argument though. You assume that the reason the economy isn't recovering today is because the economy under Bush was less resilient, and then use the fact that the economy isn't recovering as well as in past recessions as proof that your assumption is true.

You have provided zero evidence to support your claim that the economy under Bush was any less resilient than the economies under Carter/Reagan, or Bush Sr, or Clinton. I have provided direct evidence proving that Obama increased spending more after the crisis point than Reagan, Bush/Clinton, or Bush did (respectively).

So on my side we have direct facts showing that there was a significant difference in the spending *after* the crash. And on your side we have you just repeating the claim that Bush's economy was less resilient to a crash because... well... because the economy didn't recover after the crash. Like I said, your argument is circular.



Of course you're not! Wouldn't want to actually have to look at facts or data or anything!



This isn't about defending Bush. See. That's you projecting onto me. This is about pointing out why the economy isn't recovering. And that fault lies squarely with Obama and the Democrats. The amazing irony of this is that you're accusing me of doing what you are doing. It's your need to defend Obama and the Democrats that leads you into this amazingly illogical argument.

Where's your proof Joph? I've got proof of a radically different spending pattern after the crash. It supports my assertion that recovery has been hampered by that spending. Your assertion is that recovery has been hampered by some inherent weakness in the Bush economy prior to the crash. But you can't even show significant differences in economic factors under Bush than in other economies prior to other crashes, let alone connect those differences in any logical way to a lack of recovery.

It's amazing how strongly you attack when you know your own position is very very weak.



I'm wrong that the spending increase in 2009 was more than 4 times larger relatively speaking than the spending increase after any other economic crisis in the last 30 years?


I guess what I just find amazing about all of this is that we conservatives warned about exactly this outcome. We told you guys that if you spent that much money on stimulus that it could create a debt problem and would hamper recovery. We begged you not to do it. We got nearly all of our representatives in Congress to vote against that spending. We were attacked for being partisan, even as nearly all of your representative voted in lockstep for the very spending in question. And now that exactly the negative effects we conservatives predicted would happen has happened, instead of realizing that maybe we were right, you go looking for any other lame explanation you can to blame it on instead?


I thought you guys were supposed to be all about rational scientific thought? That seems particularly non-rational and non-scientific to me. Most sane people, if told "don't do X, or Y will happen", upon doing X anyway and having Y happen, would tend to give great credence to whomever told them that. But not liberals I guess! Can't possibly acknowledge that those evil conservatives could possibly have been right all along. Nosireee! Gotta spin up some other explanation that allows you to blame conservatives anyway.

I wasn't equating stimulus spending by Dubya/Obama with post 9/11-techbubble spending. I was saying the stimulus' (and there were two: TARP for $700 billion & $170 billion economic stimulus/$200 checks packages) passed by Dubya & the $780 billion economic stimulus by Obama helped the recession not be as bad as it could have been.

Granted, none really helped with long term employment, but Obama's really did create some jobs (until the cash runs out) while Dubya's only did if you got a job as a TARP bureaucrat.

In Dubya's case, some of the TARP money has been paid back, but that money wasn't used to buy up the troubled assets it just infused sweet *** cash into banks & insurers whom would have gone bankrupt. If the economy dips again, TARP will HAVE to come to the rescue again or the entire US financial system will be in peril of failing AGAIN. The banks STILL own those troubled assets!!!

Yes, stimulus' increased the deficit, but it was pretty much that or the collapse of the economy. It's just too bad that:

A) Obama can't seem to inspire any sort of compromise

B) Congress can't get beyond their perpetual campaigning and, ya know, actually work together to solve our countries problems.

To be fair, this is a known effect that happens in a market economy. Doesn't excuse not trying to fix the underlying problem, though.

It's obvious that the answer is yes.

I just wanted to hear someone say it before Gbaji went into Full Spin Mode denying it

That's not what it looked like to me. I said that it was what the Dems did after the crash (spending specifically) which has prevented the economy from recovering. You responded by saying that both Bush and Obama did stimulus programs after their respective crashes. That sure looks like you were trying to say that the Dems didn't do anything different than the GOP did.


The point is that the Dems spent too much money, not just that they spent some money at all.



That's not the issue though. The issue is that the Dem's spent too much money. It doesn't matter what their intentions were, or whether it was successful or not. The very fact of spending that much money, put us too far in debt and has created a second crisis which did not happen in previous recessions where spending was more modest.



It doesn't matter though, because... Bush didn't spend too much money. I'm trying to get you to understand that it doesn't matter what the money was spent on, who profited, or whether it helped the economy recover. That's a whole different issue. What matters is that in past recessions, only modest amounts of spending occurred as a result of the crisis itself (typically less than 1% of GDP). In this recession, spending jumped by over 4% of GDP.

It's too much of a jump in spending in too short a period of time. That creates a problem all by itself regardless of what other effects are going on.



No, it wasn't. Unless you honestly believe that spending money on alternative fuel subsidies was necessary to prevent the economy from collapsing, then I think it's safe to say that the total volume of money spent on various stimulus bills and amendments were not necessary.

We could have spent the TARP funds and maybe a couple hundred billion on stimulus checks and whatnot and the economy would have recovered just fine and we wouldn't be in our current predicament.




It's too bad that Obama didn't compromise with Republicans back in 2009 and keep stimulus spending to about 1/10th of what he actually spent. Had he actually been willing to listen to the other side and reach across the aisle and all that wonderful stuff he promised when campaigning instead of ignoring it all and embarking on a partisan spending spree, the country would have been much better off.

You can't complain about compromise when you're utterly unwilling to do it yourself.



As I've said many times, it takes two to disagree. Unfortunately, the Dems made this into an "all or nothing" situation when they showed clearly (and continue to show) that as long as they hold power in Washington, they will not stop spending and they will not stop working to raise taxes to pay for it. They've shown no willingness to compromise at all. The moment they had the power to spend, they did so. With no concern for the economic stability of the country, and while completely ignoring the warnings of the GOP. Their own partisan objectives were more important than good governance.

Which is why they're suffering one of the fastest political turnarounds in history. So a hell of a lot of people aren't happy with what they've done.

Edited, Aug 23rd 2011 6:19pm by gbaji

I think you missed the point I'm making (or are sidestepping it). I'm not comparing Bush's spending in 2008 to Obama's spending in 2009/2010. I'm looking at four recessionary cycles which have occurred in the last 30 years and comparing them. I'm making note that in 3 of the four cycles, spending during the recession itself increased only modestly, but in one spending increased dramatically. I'm then noting that in the first three cases, the recession turned around almost like clockwork right around 2 years after starting, but in the fourth case, the one in which spending increased dramatically instead of modestly, that hasn't happened. Unemployment specifically has remained high, when in all the others you can see a very clear reversal.

I'm then speculating that the reason this recession is different than those others is because of the higher spending rate.

And as a side point, I'm also noting which parties were in power at the time. In the first recession we had a Dem congress and GOP president. In the second, we had the same. In the third, we had a GOP congress and a GOP president. In the fourth, the one where we haven't recovered, we very initially had a GOP president and Dem congress, but then the Dems won the white house and large majorities in both houses. The relevant point there is that Bush spent the necessary money on TARP (unfortunately with some extra spending the Dems slipped in as well). Then Obama doubled that amount in the Recovery Act. Then he and the Dems spent even more money in various stimulus amendments added into energy, omnibus, jobs, and education bills over the next year.

That's why the spending was so much higher. So if I'm right that the increased spending is why the economy isn't recovering, than it's pretty safe to put the fault squarely on the Dems.



It doesn't matter who was there when the recession started. The question is who spent the extra money that pushed us from "enough to help" to "so much we're going to have a debt problem". That part of it clearly fell to the Dems. Let's also not forget that the Dems controlled congress in 2008 when TARP was passed. That bill was about half again as expensive as the original plan called for. The Dems dropped a bunch more money into it, and spent the money poorly IMO. It still worked, and it was still necessary, but TARP was more expensive than it had to be because of the Democrats.

Add in even more spending after that, and this is why we're in a deficit crisis today. The numbers are pretty hard to argue with. I'll post them if you want.



You can label anything as "necessary" if you try hard enough. The Dems spent too much money. Period. Neither you, nor I, probably want to go into so much detail to look at every dollar spent and where it went, but the end result was that far too much money was spent and this caused a second economic problem.



Hahahahahahaha! Please tell me you're not going to repeat that bit of lie/rhetoric.

Very little of those "tax cuts" were really cuts in tax rates, or even deductions. They were "tax credits", which is basically increased spending laundered through the IRS. They are in no way at all what conservatives are talking about when we speak of cutting taxes. The fact that the only people who insist that those tax cuts were things that conservatives should have liked are liberals, while conservatives rejected them pretty universally as a scam should be your first clue that they weren't something that conservatives liked or wanted.



First off, it's not just an official measure of recession that matters. Other factors in the economy matter as well, even if we're not in full recession. The rate of recovery has been anemic. Normally, there is a "bounce". We didn't get one this time. I'd also suggest that all those people who are unemployed right now aren't so thrilled with the fact that since GDP growth is positive instead of negative, that this means we're not in a recession, so everything is just peachy.

The jobs haven't come back. And that's something lots of people kinda care about.



Which would be a far better ringing endorsement if the decisions made didn't have such negative consequences. Consequences that the side he ignored and overruled warned about repeatedly.



Once again. It was such a great deal for the GOP that the only people insisting it was a great deal for the GOP are Dems and liberals. Does it ever occur to you that maybe it really wasn't such a great deal for conservatives and that's why they rejected it?




I'm not the one who sounds like the political equivalent of a used car salesman.

Edited, Aug 24th 2011 2:24pm by gbaji