Capitol Hill Blue Forums Political Issues Finance, the economy & Economics The Economy and Positive Thinking

It seems that every Presidential election cycle the economy starts to tank. Part of that is just cyclical, as uncertainty grows in the market place people take their money out and part of it is because the Pols decide that it is easier to gettheir candidate elected by telling everybody what the last guy did wrong. First it was the economy stupid, then it was that the economy isn't as robust as it looks and now it is heading to recession.

The US economy is getting killed by a number of different problems. High fuel prices, the housing and credit markets, the weak dollar versus the euro. But one of the biggest factors in the bad economy has been Congress' public pronouncments that the economy is in trouble. The insidious little digs at the Republicans by Dems. The equally insidious digs by the Reps about the Democrats. It seems that every 4 years Congress takes it upon itself to kill the prosperity of the nation.

Ronald Reagan came into an economy that was a mess, run away inflation and interest rates and a public that expected the worst. Carter had told the American people that the economy was in the dumps and that credit was too high, so America tried to help by lowering their credit spending, then he told America to start using credit again because it was doing damage to the economy. Reagan, through sheer force of personality, turned the economy around and made America feel good about itself again. That is an indication of the power a President has over the economy. Two presidents, two requests for help with the economy, two time that Americans did what their President asked them to do. This isn't a debate over tax cuts or increases, it is a debate on the power of positive thinking.

This is what we need now. We have to get the Pols on both sides to start takingt a positive attitude about the economy. They have to talk it up and accentuate the good parts of the economy. Shipping jobs out of America is not a good practice, but does it help the economy? NAFTA is not good for the country's opinion of itself, but does it help the economy? It is time to once again put Americans first. The mortgage crisis is a joke. Anybody with any sense of history and a grammer school education could understand the implications of a 1/2 point rise in interest rates. Everybody in the banking industry knew that this day would come to fruition. Congressional bailouts are not the answer and neither are federal subsidies to borrowers in default.

It is time to take the economy out of the hands of the press and politicians and put it back into the hands of the people who make it work. We shouldn't listen to pols who tell tales of failure and devistation. We shouldn't blindly accept what a presidentail candidate says because it makes us feel like we are right. The economy is a mental representation of how we value our country. R or D, we need somebody who is positive and who can convince Americans we aren't in bad shape. The three clowns who are running for the office today are doom sayers of the first order. Hillary and Obama are painting a picture of total failure while McCain can be spared because he isn't getting any real press.

We need insperation from somebody, not self-fulfilling negativism.

That is my rant. Thank you for taking the time to read it.

Tim aka Ma_Republican

A smile stops no raindrops.

A sunny disposition grows no crops.

Wear your raincoat and plant your garden. Smile if you can, but if you can't, you will still be dry and have something to eat.

Hasn't consumer confidence always been the driving force behind our overall economy?

There is a lot of jargon involved in talking economics that most people don't understand.

As I remember Economics 101 in college, the creation of economic wealth was dependent on "borrowing money". It's a bit of a trickle up dynamics. It starts with a consumer who borrows to to buy something, like a house or a car. Then whoever the lender is basically regulated to maintain a specific reserve, based on any given institution's assets. To prevent the over-extension of the reserve, lenders (banks) have to go to the Feds and borrow money. Therefore, the overall wealth has been enhanced. That's a major measuring stick of consumer activity.

I haven't looked anything up to post the above, just all out of memory. If my old whiskey soaked brain is way off on how I've described how the creation of wealth works, I'd appreciate being corrected.

I disagree.

imo "it" is "fighting" a "slow death".

It is time to "throw out" [or "revamp"] "the old" and "make room" for "the new"[or "revamped"].

[Or,at least,stop with "the painkillers" and,instead,change "the diet".]

Example






Fuel "efficient" cars "ARE".
Home heat/cool "efficient" systems "ARE".
"Jobs created" during "efficiency adoption"-"wanted".

[The "NEW" technology that "Big Business"["Colossus"] is always "claiming" ISN'T "anywhere-to-be-found" IS.[just ask any "12-year-old!].]

Those are symtoms, not causes, of a sick economy, MA_Republican. But, it is true that politicians exagerating and economic reporters (most of whom are utterly stumpwater stupid when it comes to economics) hyperventilating over the economy do not help matters.

As to Carter, he did inherit the accumulated sins of the Kennedy/Johnson guns-and-butter war and Nixon's idiotic economic schemes both of which resulted in stagflation (a keynesian impossibility, by the way;-))and oil shocks. He could have been a veritable orator on the level of Demosthenes and it would not have altered the economic situation. In 1979 when inflation was going through the roof, Carter put Paul Volker in charge of the Federal Reserve and he immediately began to raise interest rates so as to reduce the money supply. It was Paul Volker who stopped run-away inflation and stagflation by throwing the economy into an acute recession. Reagan merely took credit for it because the successful emergence of the economy on the back side of the recession occured on his watch. Reagan deserves both credit for cutting taxes which stimulated the recovery and condemnation for putting us into deep debt - but not for rescuing the economy from stagflation. Again, he could have talked until he was blue in the face and it would not have changed a thing without Volker's actions.
Yours,
Issodhos

The economy is almost a living being. It responds to public pressure, it improves when the outlook is positive and declines when the outlook is poor. The more that the Pols talk down the economy, the more the economy will tank. Because the economy is goes down, the value of the dollar goes down versus the Euro ot the Yen (sp), so the price of a barrel of oil increases, since it is based on the Dollar. It is a snowball effect that gains momentum with every negative comment. A look at the economy tells people that it really isn't in bad shape, yet. The housing market has started to go down, but recently, and with that the sale of big ticket items will decrease proportionately. Once the the economy starts to roll down hill it takes faith to reverse it.

The banking crisis is a joke. When banks lent money to people who couldn't afford to pay the mortgage it was disaster waiting to happen. When they started selling interest only ARMs because the home buyers couldn't get approved for anything else, it was obvious what was going to happen, but the people who sell those products get paid by the sale, so they didn't worry about the consequences. I have no problem with the Fed lending money to the banks at below market rates, too many failures and the industry would crumble, but Americans shouldn't be required to bail them out. The same thing goes for the people who are in default, if they qualify for a below market loan they should get one. If they don't then they don't get one. It doesn't take a genius to understand that barely making payments on a ARM at 4% will translate to default status at 5%. They took the loans knowing what could happen and what the results could be. They bet the house, literally, and lost.

Durning the Carter Administration money was printed to hide the economic disaster that was the Carter Administration. He had no clue and it showed. Paul Volker did indeed make the changes necessary for the economy to improve, but Reagan gave the American people the kick in the pants to make it happen. He was the equivalent of a carnival barker sometimes, repeatedly telling America what we needed to do to fix our problems. He put the right people in place and let then do their jobs. He was masterful! Had Carter been reelected, or Kennedy for that matter, the economy would not have turned around as quickly or strongly as it did. He forced the tax cuts through congress. He gave the economy the money it needed to rebound. We agree on alot, but the Reagan effect cannot and should not be underestimated. He knew what he wanted to do, convinced America that what he wanted to do was the correct course, and forced his will on Congress and the economy.

Ma_Republican, it is amazing how differently we see Ronald Reagan. You see a masterful leader imposing his clarity of thinking on at least the government and maybe all of us.

I see a pawn who didn't have a clue about the complexities he was forced to deal with and who followed the lead of several very close cronies tied to big money interests. It was those people in the "invisible government" who used Reagan's term to implement a form of "shock therapy" on America -- a shift of wealth to the very wealthy placed on the taxpayers credit card -- while cheer-leading the public into praising their robbery as "cutting government".

Every time big money takes over the government, as it has during the Bush II presidency, there is a lot of happy talk and "get out there and spend" rah rah. It is all done to increase debt, both private and public.

Increasing debt gives these big money interest more power. If the whole system fails, they will suffer, but with the tremendous assets they hold, even a 90% drop in value leaves them as billionaires. The more debt, the fewer people have any power left.

All of the ecomonic theories in the world don't beat out a very simple human concept; "Hope mixed with inspiration". Now that does wonders for a bad ecomony.

Yep. It's amazing what the power of positive thinking can do. Looking back at the early stages of MS, I can't count the number of times people told me the MS would get better--or at least not progress so quickly--if only I had a better attitude. Balls! There's reality and there's wishful thinking. I'll take reality any day. You deal with it; you don't "positive think" it away. And what I've discovered about positive thinkers is that there's usually some reason why they can't or don't want to face reality.

Martha,

There's an old saying:

You can't think yourself into acting right. You have to act yourself into thinking right.