I think things are going to be roaring ahead in 2008. My company has been in a hiring frenzy over the past quarter (and continues to do so) at the point where teaching new hires seems to be like a common weekly task. And this month alone I have gotten 20 job offers when I'm not even actively searching for a job!
Things are looking pretty bright from where I'm standing, but maybe that's just me. ;)
Prokofy Neva
· 1 year ago
Scoble, I love you, but you're in a total bubble, living your upper class fabulous life in the Silicon Valley.
I marvel at how you can assume that Steve Jobs is a predicter of what the mass of people will be experiencing in the United States or around the world.
He's an industry exec, a very important one obviously, but he's going to look at what is good for *his* economy, and he doesn't see anything harming that.
Ditto the guy with the 250 start-ups. THEY may all be reporting growth in this big Web 2.0 tech bubble, but what about every other business? Ford, Citibank, all of the companies laying people off now. They're not in start-ups, Scoble, they are in end-downs...
My family members have suffered the foreclosure on a home in one of the worst hit cities in America where it's an absolute epidemic, where you can't get a house rent or sold or paid for because the jobs are gone, too. Seriously, you are *out of touch with the country*.
You didn't seem to grasp what I was saying on Qwk to you in Davos -- a $400 phone and its year of service is way beyond the pocket books of even "wired" people. I couldn't justify spending $400 on a phone; I spent $25 on a virgin mobile. If I have $400, I'm going to be spending it on health care as one of the uninsured contract workers of the country, or I'll spend it on a new computer. I'm not whining, but I'm just here to tell you that you're out of touch. It's like you won't believe the subprime mortgage crisis is real until it touches somebody in the Valley.
Jason Kolb
· 1 year ago
We are absolutely in a recession. All you need to do is look at corporate earnings, barring Microsoft. How many weeks have to go by with multi-billion dollar losses and thousands of layoffs before people wake up to that?
The biggest problem is that there's no trust in the financial system right now, which is seizing up commercial credit and business growth. Until companies are forced to mark to market and show true and honest balance sheets, the financial system will continue to implode. Better to take our lumps now and go thru a shorter recession, than to prolong it and make the recession deeper.
Keith
· 1 year ago
I think we're in for a bad, bad recession that affects the lower-to-middle classes the most due in part to oil-related inflation and also the inability to get any more credit. Regarding what Steve Forbes says, the guy appears almost weekly on FoxNews as an economic/policital pundit, so I tend to view his forecasts as suspect, as it is in his interests to cheerlead the economy. I don't expect it to hit the IT industry this time, though.
Ben
· 1 year ago
Is Scoble placing Ads on his personal blog a sign of a recession?
polizeros
· 1 year ago
Recession. The wave of subprime resets hasn't come close to peaking yet and the home equity-ATM machine has run dry for most.
If consumers cut back on spending, this will affect everything, including tech.
And we're already in a bear market.
Jukka-Pekka Keisala
· 1 year ago
If its recession or not for you Americans what I see from European angle it's bad and I hope someone will fix it soon. It's pretty amazing that when US banks f*** up with their loans it's also European real estate market that suffers.
Brian Lewis
· 1 year ago
I think the only recession we're heading into is a media contrived one. We have yet to have a quarter of negative GDP, much less the two consecutive quarters that typically define a recession.
Robert Scoble
· 1 year ago
Brian: it's amazing you think it's a media contrived one. If it was the Fed wouldn't have had one of the biggest rate cuts in its history and George Bush would have remained asleep instead of pushing through a stimulus package. But go on believing that the media is making this one up. None of the economists here in Davos agree with you, though.
Kodiak
· 1 year ago
Artificial recession preparing our minds for war. I remember in the pre-iraq-war the DOW plummeted to 6000. As an old saying goes "nobody goes to war with a full belly"
Brian Lewis
· 1 year ago
Robert: Keep in mind it's an election year with the 'stimulus package.' I have mixed feelings with the guts of the package - specifically the non-taxpayer rebate. My point is that people seem to want to re-invent definitions to fit a particular point of view. I look at my local paper, and if I were to take it at face value, I should expect bare shopping malls, lines at gas stations, anarchy in the streets, etc. The problem is it's not accurate.
Barbara
· 1 year ago
I run a health care blog and if you want a real eye opener, look at what's happening to the doctors, yikes! We need those guys, but I recently posted a story about a physician that had to close down and had a few more add their stories added. We have all this new wonderful technology and it's becoming difficult for health care facilities to afford what has and is saving lives. Come visit HIMMS next month, and by the way great kudos for a wonderful job on sharing this technology with all, a nice encore even from the neat coverage at CES! If you were not out there doing what you do, many, including me, would not be aware of what is going on the world around us. Great stuff!
Webomatica
· 1 year ago
I think the arguments for a slow down in 2008 are greater: Falling house prices, consumer spending down, California is facing a huge budget deficit, the credit crunch, falling dollar.
A lot of the money floating around the US economy ever since 2001: I'm talking about the housing bubble and consumer spending - were basically financed by borrowed money.
Naravja van Tree
· 1 year ago
Geez wake up. Recession is not about superduper internet start ups that are hiring or not. It's about the people in the middle of society, and below. The people that suffer the consequences of the upside down wealth piramid that is the US. And just because you don't see them, doesn't mean they're not hungry.
Todd Dailey
· 1 year ago
Uh, Prokofy, Steve Forbes is not Steve Jobs.
Kin Lane
· 1 year ago
Is this just dooomy and gloomy people?
Or are there actually people out there driving this that profit from recession and stocks going down?
Rick Mahn
· 1 year ago
From my perspective and the people I've talked with it's full steam ahead in 2008. There sure is a housing bubble, and I'm concerned about the people who will loose in many situations. However, that hasn't changed business plans for industries outside the housing markets - they still have their growth plans and money to make it happen. They are still planning those projects and hiring to make it happen.
Sorry folks, while I'm not an expert, it doesn't look, smell, or taste like a recession.
Regards, Rick
Mike B
· 1 year ago
I want to point out for all you young folks, that the world looked FANTASTIC in March 2000. There were no signs of a recession or a downturn on the horizon, everything was great.
Later that month, the stock market cracked. That is when everything changed.
The layoffs came, the spending froze up, and the stock market kept tanking. The recession "arrived" shortly thereafter.
In my view, this coming recession could be a lot worse than that one. The last time, the consumer kept spending and buying houses and spurred the economy even though coporations slowed down tech spending. This time, that probably won't be happening.
Rick
· 1 year ago
@9 Do you know the economic definition of "recession", Scoble? This is why Brian is saying it's partly contrived. The said the Fed cut will likely prove to be one of more disastrous moves made. Let's hope if Dem wins, he/she, or he can figure out how to pay for it. On top of that, it's not the President's responsibility to push through a "stimulus package". It's your elected representatives. So, talk to Pelosi. If anythng, it's been the do nothing Dem led Congress that has been asleep at the wheel. If you compare approval numbers, Bush looks like Oprah compared to the approval ratings of Congress.
Catchwa
· 1 year ago
"Most people here believe we’re in the midst of a recession, which technically is two quarters of negative growth"
exactly. you won't know you you were in a recession until we see two quarters of negative growth. we haven't even seen *one* quarter yet (as far as I'm aware), and even still by the time it's official there will most likely be a turnaround.
David
· 1 year ago
There are seperate things going on here. You may recall I used to work in the mortgage bond market.
All the money that was being given to people who truly weren't qualified for mortgages is now being put into REAL growth businesses. So some sectors grow while others falter. This is not new.
On another front, the dollar is under severe challenge as a reserve currency due to our decades of reckless spending and consumption - if we dont reverse this this nation is in deep trouble.
Bill
· 1 year ago
Recession (in the US).
Look at any retail-based business that doesn't have an international presence to prop up the US business. They're not growing.
You can probably see this is website traffic to all those great startups, where the international traffic is what is making them look good.
By the way, how many of those 250 startups charge actual money for their service? I don't get the correlation between recession and website traffic...
wholefoodnation
· 1 year ago
Seth Godin (Squidoo) is also hiring - a software type - and paying $3,000 bounty to the person who brings him/her to Godin. See here: http://tinyurl.com/yw9of2
Thriveal
· 1 year ago
Speaking for the small business, which I consult with in my firm, the recession may be a factor to consider, but it won't cripple the nanobusiness.
The small business is a resiliant model of operation, mean and lean, and can weather hard times.
Things currently look bright for our firm and our smart clients, as do the next 10 years. No worries here.
Thanks, Jason M. Blumer
ericabiz
· 1 year ago
The housing crash is hitting the Bay Area too -- even Half Moon Bay, though the wave has just started there. Here's proof:
We are not in a recession yet. I think we won't be until closer to the end of this year. Harry S. Dent is predicting that the stock market just hit its low. He thinks NASDAQ will likely go up 30-36% this year from the low it hit last week. Should prove to be an interesting year!
Brian Lewis
· 1 year ago
As someone who weathered the 2001 IT stupidity (former Whittman-Hart, nee marchFIRST alum,) I want to lend a few comments to the 'things looked fantastic in march 2000.' It wasn't so much the stock market gyrating that caused so many IT startups as well as established firms to go belly up, it was the rank utter stupidity of the people at the top of said firms. We're talking people flush with venture capital, but no business plan - or something that might actually make money anyway. In m1's case, the powers that be deemed it necessary to get rid of their established brand (whittman-hart), buy a web company with a truckload of debt (USWeb-CKS), hire a few thousand more people that probably never would be billable, send the employees fedex packages (overnight, mind you) with red film so we could read the FULL PAGE WSJ ads that only we who had the red film could read...
So... On one hand, we have the crazy - dazy stock market... On the other, we have.... Well, you get the idea ;)
Brian Lewis
· 1 year ago
One more thing...
The full page WSJ ads were to convey to the Whittman-Hart employees, the name of the new company...
BRILLIANT!!!
Pete Steege
· 1 year ago
It's a Tale of Two Economies for sure, Robert. In one economic "village", there's clearly hell to pay with the sub-prime mortgage mess - look at all the money flowing from Asia to get the Western banks through it all. Yet across town in Techno-ville, things are almost overheating. In addition to your Google, Forbes and venture capital datapoints, storage demand continues to outpace supply, even though the industry has been in allocation for several months in a row. I'm very curious as to how these have and have-not trends will play out.
Rod Boothby
· 1 year ago
Hi Robert,
I work at Joyent.com. We're a Cloud Computing company. Infrastructure on demand. If you go to
there are only two companies listed as Facebook developer resources: Microsoft and Joyent.
We're bootstrapped, self financed, profitable and our revenues, which are already in the millions, are growing at over 500% annually.
In the last 3 months it has been accelerating past 600% annual growth.
Maybe it's because we offer significantly lower total cost of ownership for infrastructure. Maybe it's because one of our clients was able to use our infrastructure to scale their Facebook application up to 700 million page views a month without skipping a beat.
Sure, we're only one data point.
But if Joyent's experience means anything, Steve Forbes might be right.
Gale Whitaker
· 1 year ago
Its not clear to me the world economy can survive $90 oil. I think the high cost of energy trumps all aspects of the trobled economy. If folks can't afford to drive their SUVs to work they won't be able to buy those cheese doodles and flat screen TVs.
Layne
· 1 year ago
The NBER's definition is somewhat different from the 2 quarter decline in GDP, and so we'll see from their numbers in 6 -18 months if we reached the peak and are now headed for the trough. http://www.nber.org/cycles/jan08bcdc_memo.html
Colin Joss
· 1 year ago
I think it is all depending on oil and raw material supplies. If supplies for things like oil, wood, and soy beans, etc. continues to go either up or down, it will difficult to see where are the heading for most economy sectors.
Colin Joss East Lothian, Haddington, United Kingdom
John
· 1 year ago
Scoble.....Great stuff from Davos..Thanks for sharing. I think we have a few things going on here in CA regarding slowdown. The EDD is ramping up with extended hours. In response to increasing unemployment, mainly due to the national subprime mortgage crisis and housing slump, the California Employment Development Department (EDD) will be extending hours of operation at many offices to assist unemployed workers. EDD is working to provide extended hours in as many areas of the State as possible. http://www.edd.ca.gov/onestopextendedhrs.htm
Michelle Dunn
· 1 year ago
I live in rural NH and my community and the surrounding communities have been living in a recession for about a year now, the government is just noticing and trying to decide if this is "real". This is very real for me and the people in my community.
courtney benson
· 1 year ago
Scoble - we are in a recession and lowering the prime will only add to the pain to come. People have been encouraged to get into debt - they are told to keep buying and consume (refinance, yada, yada). Just wait until the LBO bubble burst and the Banks will have to be totally owned by foreigners
Jeff
· 1 year ago
I just have to add 2 cents into this discussion. My wife and I bought our house two years ago and make a total combined income of 115k a year. We paid 258k for our house in New Hampshire and and the house quickly jumped to 350k. Did we refinance and take money out. No! The house is now down to 315k. Did we lose money? No! It is like going to the casino with 500 dollars and at midnight having 1000 dollars in your pocket and leaving at 3 am with only 750. You could have left at midnight with 1000 but you decided to gamble. Deal with it. It is the people that went into these mortgages fault for taking moneyt every 2 months so they could have their money for a tv or a BMW. Don't tell me I have to bail you out.
As for people getting loans that never should have been signed. Blame the Congress for the Community Reinvestment Act.
This "Recession" is caused only by greed. That of a maid think he/she can afford a 650k dollar house and the bank for thinking she can pay for it on 10 dollars and hour. So, yes, there is an issue and I will gladly take the 1200 stimulus, but I feel that I should not have to bail someone out for being stupid.
askbusinesscoach
· 1 year ago
Since most of us who read your post are in technology I'll focus on tech and recession. From all that I hear and see, we are in a recession. While I agree that some tech companies are doing well (there will always be successful companies in a down market)I'm hearing from sales pros in technology that many of Fortune 2000 companies are delaying or canceling large deals. They say that the prospects are concerned for their jobs and unless a product/service reduces costs or generates revenue now - don't even think about calling to get an appointment. These are the typical signs of fear that generally lead to pink slips and the Valley boom and bust phases. Should this get worse, you can bet that marketing departments will suffer as budgets fall and many of the new start-ups focused on that community will bust
Wilhelm Tiefenbrun
· 1 year ago
Over the past year, US goods producing industries lost 374,000 jobs. US manufacturing employment fell to 13.91 million in 2007. The last time US manufacturing employment fell below 14 million was 1950! The average workers real-income is back at the level it was in 1971. Just a few facts.
Remember that the US GDP expansion is not the result of "real" growth (making stuff and selling it to others) - it is the result of the credit expansion (borrowing heavily from the rest of the world).
But the rest of the world is reacting now. That is why the recession is starting to show. The EU Central Bank has started to offer the US loans in euros, not in dollars - this means that Bernankes plan to to solve any real crisis by, as he says, "dropping money from helicopters" (thus creating a dollar hyperinflation) will not work.
This could also spell the end of the dollar as the world trading currency - which in practice means the US can no longer pay for oil and imports by just printing more dollars. It has to earn the money like every other country.
The *real* problem occurs when people no longer accept the money no matter it is thrown out of helicopters or whatever. Then we have a deflationary senario. Just like in the 30's. But let us hope this doesnt play out that way - but the US is playing with fire at the moment by keeping its head in the sand and not dealing with the actual economic situation.
Stabbing Westward
· 1 year ago
I agree with others here: we are in a recession, whether small or large, we still do not know. I have ideas on why based on what I've read and whom I've spoken with.
One of the overwhelming themes I heard in my area comes from older people, many of whom were kids during and after the great depression. That theme is simply this: we have given our country away in terms of manufacturing, service sector jobs, etc. For better of for worse, this county came out of the depression and made it through WWII largely based on a union workforce. Poo-poo the unions all you want, but you can thank your ability to have a five-day workweek, breaks, and a weekend, along with health insurance basically because the unions fought for these things. Think I'm wrong? The only reason most businesses (non-IT) even offer benefits and other goodies is largely to keep the unions off their properties. IT is starting to become unionized in some places through the CWA. Unions are both good and bad, but they have done more good.
A certain large reataler has done more harm than good as well because in cutting costs, they have forced manufacturers to deliver more and more and more. In order to deliver more and more and more, you have to cut costs by moving offshore. I preferred paying $30 for a pair of Levi's. I preferred paying $5 for a gallon of pickles. Why? Because this stuff was made in the US by well-paid union workers.
Just remember, high wages are good for America. More of a tax base, more money goes into the economy, and, quoting JFK, a rising tide lifts all boats. Now, in the US, our economy is 85% based on consumer goods. This is not sustainable in the long run no matter anyone says. History has shown this to be true. You can only cut costs so much before there is a backlash. The middle class is disappearing in the US at a rapid rate largely because there is no sustainable manufacturing base. People are forced from their manufacturing jobs and end up working for Wal-Mart or other less-than-ideal menial jobs.
Back when the unions were strong, before the republicans killed them off, a man or woman could support their family largely on one income. The fact that houses cost what they do, food costs what it does, and a host of other woes is largely tied to our inability as a nation to provide for ourselves. In the 50s, the US was the most egalitarian, self-sufficient country on earth. The desires of the top 5% of profit mongerers has damned this country.
Techies that have comfortable lives should be thankful. Most of them live in a bubble and don't see how most of the US actually lives. I live in rural TX. I can tell you that people here, through no fault of their own are largely doomed to working for Wal-Mart or other service sector jobs. The hospitals here, one of the only sources of IT jobs have outsourced the IT work to third-world hell holes leaving those IT workers in a pinch.
IT workers who live in larger cities, and especially those who live on the coasts are insulated from the woes of the rest of the country. I know. I worked in the NE for over a decade in a series of cushy IT jobs. I rarely considered the plight of the average American until I moved to TX to be with my aging parents.
This country needs to bring back the jobs. Remember, a rising tide lifts all boats. The greed of the major corporations occurs at the expense of the worker. Let's pray we can turn this trend around or we are in trouble.
Stabbing Westward
· 1 year ago
@10,
I don't think Americans would stop shopping or eating out no matter what. People are largely ignorant when it comes to their own money. I personally know people who have menial jobs who spend and spend and spend. Credit cards. Debt.
Economics are very, very simple: don't spend more than you take in. If everyone followed this golden money rule, we would all be better off.
I also know of people who work the same menial jobs who only spend what they need to, live below their means, save as much as possible, and are recession-proof largely because they have saved for a rainy day, socked away funds, and drive older cars, use older electronics.
Americans have been conditioned to spend, spend, spend no matter what. In the 50s, a family lived in a 1200 sq. ft. home. No one needs a McMansion. They are not good investments. Especially not now. People that cashed out in the last few years got lucky. It will never happen again. No one needs a giant house, a $100k BMW, or a second beach house. These things are wants, not needs. People need the basics with a few cool toys now and again. Keeping up with Joneses has damned more than a few people.
Think about this. 20 years ago, the average CEO made about 20 times the average worker. No, the average CEO makes 400 times the average worker. Uncool. All things considered, the trends have shown the rich get richer and the poor and middle class largely do not advance ahead that much. Unfair. Unfettered capitalism and globalism are damning.
dan
· 1 year ago
I see especially amongst both large established companies and startups the same enthusiasm, but what is interesting is that many people are hoarding cash right now, figuring out ways to cut costs, and not spending if they don't need it. This covers people and companies. With systems like AWS, distributed offices, working from home, all this is leading to a cost savings for people.
Maybe not so much a change in the idea of a recession, but the underlying commitment to spending time in an office, burning gas, buying servers, building infrastructure. All that has changed, and will continue to change. A recession would merely fuel this, it is happening, people panic, they change the way that they are running companies. In the end, there is a lot of commitment to ideas, lots of enthusiasm, and lots of people changing what they need and how they do things to survive the unknown.
Ian D. Nock
· 1 year ago
This is a grassroots thing... and not just for Americans. When you have a grocery store owner talking about increasing the price of loss leaders because he is not making enough sales on a week by week basis, you have trouble ahead.
As for those who are still experiencing positive growth and cannot see the recession? Well recessions can be a little lumpy, and the other factor is overshoot - a property of any dynamic system. Can the overshoot keep going to meet the economic recovery that comes after?
Ann
· 1 year ago
This the perfect time to be buying up stocks .. if you have the money. And yes, to whoever said "who stands to gain by low stocks?" is partly right; those of us who can step back a bit and see the big picture realize we can cut our debt and still stay in the stock market if we arent over our heads in our homes.
For anyone who bought more home than they could afford, well, I'm sorry, but you're going to lose it. Even in the Silicon Valley, people make bad money moves. So, Robert, living in the Valley doesnt make one immune to bad choices. It happens everywhere.
This stimulus package is a joke and it will backfire. Almost no one with any economic smarts is for it... its an election year, thats all this is.
JoeDuck
· 1 year ago
Recession in USA. It's already here. I wonder if Davos could have problems as a recession vantage point because people there tend to be chosen for success and optimism rather than predictive power. Certainly many people will come out of this recession much wealthier than they went in, but most ... will not.
Mike
· 1 year ago
It's the bursting of a housing bubble now (although a mortgage banker friend says there's a refi boom right now since the Feds cut rates again), but soon it will be a health care bust that will really cause a recession.
techpisstaker
· 1 year ago
With the benefit of insight, I predict that economists will tell us that the first day of the current economic slow down started on November 9th 2007. How do I know this with such authority? Because it was the day I received my Green Card and became legally able to live here in the US.
Let's just say that while waiting a year for the passport to the American Dream, (and not working illegally because I am a stupid law-abiding dummy) I am not impressed with the way life here is shaping up!
My wife's home, which she/we renovated to a very high standard (unlike most rehab projects in Phila) has depreciated by perhaps 25% in a year - and even though we are on the point of putting it up for sale at a discount price, because we want to move out West, we still may not be able to sell it without going even further behind.
And over the past year, as an outsider looking around from the inside, I have seen enough to convince me that I wont be signing up to work for any corporations any time soon! It seems to me that the whole middle class are now locked in to their catch-22 lives, and corporation heads now have everything they need to take, take, take from the indebted workforce here, in order to fund the cost of their global expansion to bring new found prosperity (and a new generation of locked-in middle classes) in the developing world.
Not that I have anything against global development, but I prefer a little bit of freedom at home!
Bottom line, I don't think the current recession (aka slow down in incessant growth) is a problem if you are happy to stagnate, or if you dont want to get a better job, or if you dont want to sell your home or if you dont want a couple degrees less stress in your life.
nemrut
· 1 year ago
Yes, we are in a recession. The question is how severe it will be and how long will it last.
The troubling thing about this one compared to others in the past, is that the most trusted and estblished financial organizations(banks, creditors) were largely responsible for creating/excacerbating the situation we're in now.
To deny that things will get worse befor they get better is like Bush/Rumsfeld on the war in Iraq.
Steve
· 1 year ago
@46. And with the benefit of insight, I predict that the recession will end Nov 5th, 2008...if a Dem wins.(nevermind the fact we are not in a recession) They will take credit for it, plua any positve economic upturn that might occur afterwards. Nevermind the fact that most economic results take months to realize.
To quote the man that most hold personally responsible for all the supposed economic good times during the Clinton administration...Alan Greenspan: "The probability of a recession is 50 per cent, maybe more, but we are not there yet."
The US economy may not be growing at all but it is not yet clear that it is falling into recession, Alan Greenspan, the former Federal Reserve chairman, has told the Financial Times.
Mr Greenspan said: "The reason we have had this extraordinary volatility in stock markets over recent days is that there is extreme uncertainty about the financial and economic outlook."
In a series of interviews with the FT, Mr Greenspan argued that the mark of a recession was discontinuity in the economic data. "You don't gradually fall into recession, you jump," he said.
"We are beginning to see discontinuities in the data - for instance, the employment report and the Philadelphia Fed survey," he said.
But other indicators continued to give more positive signals. "The hard data that we are in recession is by no means conclusive," he said.
He questioned the utility of using standard economic models to forecast whether the US would now go into recession or not.
"The models never forecast recession, because the parameters are dominated by what happens in normal times when the economy is growing," he said. "In fear-driven periods the parameters are quite different from the periods of euphoria."
My advice, Mr. Scoble? Leave economic forecasting to the experts.
Steve
· 1 year ago
@39 "I preferred paying $30 for a pair of Levi’s. I preferred paying $5 for a gallon of pickles. Why? Because this stuff was made in the US by well-paid union workers."
Why would anyone with a rational mind pay $30 for something they can get for $5" How does the fact that it's made by a "well paid union worker" make that a smart purchasing decision by the consumer? I'm pretty sure gas is distributed by union truckers. Would you pay $10/gal for gas because it was delivered by a union truck driver, if you could get it for $$3/gal across the street because it was delivered by a non-union truck driver?
"This country needs to bring back the jobs. Remember, a rising tide lifts all boats. The greed of the major corporations occurs at the expense of the worker. Let’s pray we can turn this trend around or we are in trouble."
To quote Milton Friedman: "If all we want are jobs, we can create any number--for example, have people dig holes and then fill them up again or perform other useless tasks. Work is sometimes its own reward. Mostly, however, it is the price we pay to get the things we want. Our real objective is not just jobs but productive jobs--jobs that will mean more goods and services to consume."
Prokofy Neva
· 1 year ago
>Uh, Prokofy, Steve Forbes is not Steve Jobs.
Gosh, I'm so glad you set me straight on that because I might have gone on mixing them up forever because they are so indistinguishable when you get a certain distance away from being cool like they are, but oops I think I might do that again because I'm so stupid but what's more important is that you're so smart and will be able to maliciously and gleefully correct me again and again .
Andy Freeman
· 1 year ago
> I know a couple of people who are getting kicked out of their homes because they couldn’t afford to keep up with payments. Now, you can blame these people, but one of these families has an autistic child and so the mom can’t work.
That kid has it rough - autism and parents who didn't know that they shouldn't buy a house that they can't afford.
The kid has my sympathy - the parents, not so much.
Jack Krupansky
· 1 year ago
Technically, the U.S. economy is probably not in a formal recession per se, regardless of whether you use the popular two-quarter negative real GDP informal definition or the more robust NBER definition.
That said, clearly there are a lot of middle class families that are suffering from significant "economic distress."
Unfortunately, no matter how short (or long) the formal "recession" lasts (if it occurs at all), the economic distress of the middle class will persist.
Even a moderate economic "slowdown", which we are obviously in the middle of even if we are not in a formal recession, can cause significant economic distress for a significant fraction of the population. Not to mention the emotional stress of constantly being bombarded with messages of doom and gloom from the media even if your own situation is actually reasonably solid. The overall economic message coming from the media right now is that if you are not worrying about a recession, you should be worried.
So, there are two bottom lines here:
1) The economic distress of the middle class is not linked to whether a formal recession is underway. 2)"Fixing" the formal recession (if it even exists at all) will not fix the economic distress of the middle class.
Be clear, is your question about a formal recession per se, or simply whether there is enough of a slowdown in growth that significant numbers of people are feeling pain?
Health care "reform" (including care for chronic conditions such as you mention) obviously needs to be a key part of relieving the economic distress of the middle class. Debating whether we are or aren't in a formal recession is orthogonal to addressing such social issues.
-- Jack Krupansky
zafer
· 1 year ago
What is the future of the US dolar?
Brian Lewis
· 1 year ago
Here's a reasoned perspective on the sub-prime mess.
My perspective is probably as skewed as Scobles. I live in Calgary, Alberta. People here are more concerned about the weather or the writer's strike than the economy. I don't know anyone who is unemployed or losing their house.
Wish it was that way everywhere. Some areas of the US will have it quite rough. I feel for those of you who are going through tough times. It was like that here back in the early 80's.
TranceMist
· 1 year ago
Startups and venture capitalists and Google...
This is limited to the "high tech" sector, not a broad view.
Personally, I don't really care if you call it a recession or not. Unless it's so bad that EVERYONE agrees, it doesn't matter so much.
Colin Joss
· 1 year ago
3 difficult interest policy option for the government..
Lowering interest will attract people to go into debt while spending will keep the economy going.
Not doing anything will make people crazy, because they think government doesn't care about what's happening.
Increasing interest will piss everyone off, because those with debts will be strangled even more and those who are not will go into trouble because of this.
So, I think lowering the interest still the best option there is for the goverment to make.
WorldWakeUpCall
· 1 year ago
Robert, About Davos, I hope you get the chance to read French policy analyst Dominique Morsi's incisive and salient editorial about how Davos has devolved from a barometer for significant world trends to a mere mirrored echo chamber. I quote: "[...]call it the 'I was told in Davos' impramatur -- which explains why political and economic analysts and commentators, keep coming back despite the forum's combination of pomposity and intellectual vacuity."
phone man
· 1 year ago
The way I look at this is simple, if the main street media plays this up everyday its likely to NOT come true. There is this sudden need for media to get ahead of the news by basically predicting the future, they have a bad track record.
I think the subprime mess and housing market hit a bottom in Dec. Dec is when homebuilder's finally got the hint and stopped building, this historically has proved to be a bottom. No doubt subprime is bad, but its pretty much built into the market, I don't see another shoe dropping unless we end up with a big unemployment problem, which I don't see coming from my vantage.
Also I wish the stimulus was better focused on small biz and not individuals who I predict will run to Best Buy and buy a flatscreen made in China... money flowing with little in between directly out of our economy.
GC
· 1 year ago
The "bottom line", or rather, "ONLY LINE" for determining whether this condition exist can be summed as follows: 1. An economic downturn is when a neighbor two blocks away loses his/her job and he is up-ended for a couple of months to a year(s). 2. A recession is when some near and dear to you loses his/her job and he is up-ended for a couple of months to a year(s). 3. A depression is when YOU his/her job and he is up-ended for a couple of months to a year(s). You can spin the issue around a million technically theoretical ecomonic methods, but it still only boils down to these simple, direct points!
Chris K.
· 1 year ago
When someone wins, someone loses. When the stocks are low, that is "trouble" to the ones that have billions of dollars in it. Not really, its just greed. They really truly don't need all of that, the millions they are left with are plenty enough. That is the perfect opportunity for someone that has little cash to jump in. All we are doing is shifting the money into different hands. Who are the ones that make the headlines? The ones with the big bucks. Who are the ones that make decisions? The big Whigs. Who donates the most to candidates? Big lenders. Who persuades the media to twist a story around to attempt to persuade the masses? Companies with big money - that advertise - who happen to benefit the most when their party wins the election. So what do people do that have money and power when "their" economy is pointing downward? They attempt to change things for their benefit. Basically, what I am saying is that the money is still there, we as individuals should each do something to get it in our own pockets. Don't fall for lies candidates are telling, don't let the issues they bring up divert your attention from the real issue and don't waste 400 dollars on a Nintendo Wii for a 5 year old, put it into a guaranteed investment for his/her college. Also, for those lower income folks, don't spend a thousand dollars on rims and subwoofers. Prioritize, Prioritize, Prioritize! The government makes only so much money a year. The majority of the money goes into fewer people’s hands and the lesser of the cash to the majority of people. Does that sound right?
ALAN COOK
· 1 year ago
I am a lumber trader for the largest wholesale company in America. We have over $8billion in sales annually. We see the lumber market and feel trend change sooner than anyone in the business, period. We knew the market was slowing down in June 2005 and predicted it. Katrina came along and prolonged the inevitable. We blew hard for 3+ years and the correction was necessary. That being said, the main stream media is way overhyping today's market to the downside. The housing market will begin to feel better late second quarter and will be on a slow trend towards recovery thru end of 2008. By this time next year, the news you hear everyday will not come close to mirroring today's news but it will be a "hindsight". I am certainly not saying all things are rosy, just want to please advise using sound judgement and think about the big picture. Job market is as good as it has been in the last 10 years. The cost of borrowing money is way cheap and probably will get cheaper. Their is tons of pent up demand. European investers are flush with cash and speculation is already starting to show in the hardest hit markets like Florida. Commercial jobs are starting up every day. I quote huge jobs almost daily and have been for months. Heads up........we have troughed out.
John Kenney
· 1 year ago
All of the indicators are pointing to a major recession: Over 2000 points lost in the stockmarket within the last 12 months; Negative Job Growth in the last two quarters; Stagflation driven by Gasoline Prices which is making everything much more expensive in terms or food and transport (in 2004 we were at $20 a barrel for oil now it is a staggering $104+ with Opec not expected to increase it's productivity); Consumer cuts in spending which will exaggerate the problem even more; A HUGE Deficit by this country which is devaluing the dollar because will not be able to cover its debts without foreign capital;and more that i don't have time to mention. We are in for some very trying times until this administration is out of the house for good...
Jim Heller
· 1 year ago
It's amazing to me how quickly Kuwait and Saudi Arabia have forgotten our military bailout of them. Now we ask for alittle more oil production and they stick it to us. Next time I say let them suffer.
Winfred Mann
· 1 year ago
It's amazing how few people understand what a recession is. They prefer to create their own definition.
In spite of the "media contrived recession," we still had positive growth in the 4th quarter of 2007. February 2008 bls stats indicate an unemployment rate of less than 5%.
On the other hand, we must reduce our dependence on foreign oil. Nuclear, wind, solar and whatever we can use for energy must be developed. Unfortunately, environmentalists fight every option we attempt. Why?
Lissandra Canal
· 1 year ago
The question of are we in a recession? Is very difficult to answer at this point in time but it is leaning in the direction of yes. The economy of this country is having problems with mortgages, prices, jobs, inflation and unemployment. One of the biggest problems in this economy is foreclosures on homes; there becoming an epidemic in this country, where you can’t get a house rented or sold or paid for because there are no jobs. There are thousands of people getting laid off because the country does not have the means to pay them, due to inflation. This country is basically financed by borrowed money and it does not seem to be getting any better for a long time. There are many problems with the jobs and people getting laid off and that is causing a lot of unemployment and due to all the new unemployment there won’t be enough money to support everyone. On the news I heard that President Bush is trying to get the banks to forgive the late fees and freeze the mortgages so people won’t lose their homes and go to foreclosure and that way they can pay the debt on a later time. The problem of inflation is also hitting us hard because since everything is going up and it’s very rapidly we don’t know what to do. People are not going out with their families anymore to save money and they are also not going on vacation because they’re scared to waist the only little money they have; in this state that we are in the people have started thinking of saving money for the future. I will say this we are heading for a recession whether small or large that is still to be known. I do know this if this country does not buckle down and start fixing this mess correctly (no this does not mean cut taxes), but really fix this mess that we are in then we could avoid a large recession in the economy in the future.
Rita Ashley
· 1 year ago
Pundits aside, each of us feels the recession every time we go to the grocery store. The question is not are we in a recession, the question is how do we protect ourselves, our finances and our careers. Each of us faces the recession differently and each of us needs different resources. The first line of defense is recession proofing our jobs/career. And that ain't easy. A few ideas are mentioned in my articles http://jobsearchdebugged.com/blogs/index.php.
Frank
· 1 year ago
Prokofy Neva and the rest of you out there...
Get your facts straight - subjective reasoning while reasonably interesting misses the point. Objectively we are not in a recession - which requires two negative quarters of GDP growth - in fact, we have not even achieved one quarter of negative GDP growth - yet. And we may, and we may enter into a recession, but redefining the term to mean that because you lost your job or a loved one had their house foreclosed is misleading and emotionally based - not factually accurate.
Keep it real, keep it objective, leave the story telling to grandpa.
Jason
· 1 year ago
You people are idiots. If you want to say the economy is weak, that's fine. It is. But we ARE NOT in a recession. A recession requires multiple quarters of negative growth. That simply has not happened. I can't help but think that some of you are just taking your own personal struggles and looking for a scapegoat. This economy is slow but it will be fine. Chill out and at a minimum, don't go running around saying we are in a recession when we are NOT.
John
· 1 year ago
I think it is funny that the upper class does not see a recession forming yet if you talk to the middle and lower class they are the ones hurting. They are more and more people everyday that have just enough money to fill their tank but none left for the kitchen table. I have seen many people shut down their business, evicted from their homes, lose their cars, defaulting on credit cards and just trying everything they can to make ends meet. Big business will continue raise their rates and prices due to fuel or whatever reason they see fit this week but never pass that on to the employee. Our government is crap. We all know that there is no fuel shortage. They should have a cap on the property values and fuel. Anybody that does not see what is going on has entirely too much money and should spread it those that work for them or at least go live a day in your employees' shoes(You would jump off a bridge). I have had to lay off several guys that have dedicated their service and life to a company that has normally treated us well. They to have become money hungry and letting their employees' starve while we raise prices. I have watched the rates rise because of such lies like (we have a to pay employees more, gas for their vehicals to the job-sites, material costs and so on). They took their fuel cards away and no raises have been given, so they are pretty much stealing from the employee. I could go on for days but I will spare you.....
Stephen
· 1 year ago
FYI - Australian comment
History repeats. 7 year cycle
Reason: Let your slaves go free on the 7th year. Origin: Biblical Controller: WZO
Plan: do your research.
The WWW is an excellent resource. Turn off the TV and live. Read the book of truth for more reasons and clues.
Signed Fellow Slave...
felipe
· 1 year ago
ok ha who cares ha just play the slots and youll be fine ahhahah
johny
· 1 year ago
who cares ha losers
Ken
· 1 year ago
John, (april 22nd)
Have you considered we are not in a recession, but maybe we as americans have been living beyond our means?? we have crossed that boundary, and now we are reaping the consequences of that??
Yes, people are defaulting on credit cards... but why did they overextend their credit?
Yes, people are being forclosed on, but why did they think they could afford a 400,000 home on a 50k a year job?
My wife an I have worked hard the past 2 years to pay off all our credit card debt, pay off 2 cars, 1 jetski and 1 motorcycle that we had overextended ourselves on. After paying that all off, we still scrimped and lived frugally, and now have 6months of living expenses in an amboydirect savings account making around 4% interest (not alot, but not risky either). When we have our first child in august, we will both take 16 weeks off (unpaid) and still have enough $$ to live on. We also have another account that we have saved about $5k in. this is our emergency fund. It pays for home/car repairs. Yes, that means no credit cards to pay for emergencies. No stress when we run over a nail and need a new tire.
Now we only have our utilities/food/gas and mortgage to pay every month. This means out of our less than $4k a month take home, we have over $2500 a month to invest / save and play with. I went to a local church yardsale last weekend and bought myself a 60" Sony TV (not an LCD) for $300. Did I flinch to buy it?? No, I paid cash. Why? because I don't use credit for anything. If I can't afford to pay cash for it, then I don't need it.
Stop living the lie that you are entitled to drive a tahoe, that you are entitled to that nice lake house and a $30k pontoon boat. You do NOT need that 60" LCD TV.
If the "recession" is breaking you, then I believe you deserve to be broken. If you would learn to manage your $$, and live within your means ( not your delusional ones, but the ones dictated by your current paycheck) then I believe you will find freedom from the slavery of the dollar.
I really encourage any and all of you to do all you can to get out from under your creditors, FAST. Do a google for debt snowball, debt reduction. Stop buying starbucks and start drinking JFG brewed at home. Stop eating out every meal and eat some ramen noodles. If you are buying your $30 angus steak on your visa, then should you be eating that steak?
Erika Isleta
· 1 year ago
To the the guy who said he has 20 job offers and he is not even searching for a job. I am happy for you. My guess is you are either from Goldman Sachs, JP Morgan,Morgan Stanley, Merrill Lynch and probably from MIT, Harvard, Wharton, Univ. Chicago, Darden, Yale or Stanford MBA or undergrad. Well, how many of the average American have that background??? We are talking about recession average American who comprise the majority of the population. The 30Billion Federal Reserve to bail out Bear Stearns came out from the Average Americans' taxes. But who got those big fat bonuses after the Average American can't afford to pay their home loans? The point is although there could be greed on most Ave. Americans (either because of greed or ignorance since they simply listened to those financial institutions decorated by their handsome Ivy League degrees), who really got the better end of the deal? The average american is losing his house, while those with their creative financial solutions got their big fat checks and got bailed out with 30B using the Ave. American's taxes . And yes, most of those who created this creative financial risky loan still have 20 job offers while the Ave. American is homeless queing up for his SSS to have something to eat. I have nothing against the rich and I do believe in Ivy League education but I do hope that the upper class who are really running our country both in the government and private sector will use their education not to serve themselves but to give back to the country.
Rebecca McIntyre
· 1 year ago
It is clear that the only real security in life is money in the bank. We need to start helping ourselves by making it a priority to "buy American" made products whenever possible. We need to refocus our efforts on "Made in the U.S.A." instead of supporting products made offshore or using services now being set up in record numbers offshore. As a nation, we continue to give it all away. It is financial suicide. Now, despite the fact econimc statistics say we are not in a recession, why are vendors who are setting up at nationwide flea makets routinely selling one item for $14.95 after a days work? After the booth fee and gas costs, they are down about $100. Based on sales, it appears people are not spending money, when they do spend it is with a credit card, and the people trying to earn an extra buck to pay for living expenses are going in the whole for trying.
Afar
· 1 year ago
Why do I care more about the American worker than the truly impoverished worker in a 3rd world country who's children are much more likely to be actually starving? I never have understood this argument that one is more important than the other.
John Maas
· 1 year ago
Recession is relative! Is the country in a recession? Maybe not by the means of the definition, but is sure isn't progressing diligently. Unemployment is up, and in certain parts of the country it's insanely high! You can definitely say that the midwest is in a recession.
kelly
· 1 year ago
I believe that a Recession is on it's way. I vave a good paying job, as does my husband, and were ok. But for those who do not have a good job and are only making min. wage, they have to pick and choose which bills to pay each month. The stimulus check that was sent out to buy things to boost the economy....everyone that I know spent it on trying to catch up on back bills. The upper class may think that all is well, but let them walk in lower class shoes and see if they have the same view point.
Andy Winters
· 1 year ago
Clearly there's no argument to the question now. The rite to bear arms may become a good thing depending upon your demographic!
All Comments
Things are looking pretty bright from where I'm standing, but maybe that's just me. ;)
I marvel at how you can assume that Steve Jobs is a predicter of what the mass of people will be experiencing in the United States or around the world.
He's an industry exec, a very important one obviously, but he's going to look at what is good for *his* economy, and he doesn't see anything harming that.
Ditto the guy with the 250 start-ups. THEY may all be reporting growth in this big Web 2.0 tech bubble, but what about every other business? Ford, Citibank, all of the companies laying people off now. They're not in start-ups, Scoble, they are in end-downs...
My family members have suffered the foreclosure on a home in one of the worst hit cities in America where it's an absolute epidemic, where you can't get a house rent or sold or paid for because the jobs are gone, too. Seriously, you are *out of touch with the country*.
You didn't seem to grasp what I was saying on Qwk to you in Davos -- a $400 phone and its year of service is way beyond the pocket books of even "wired" people. I couldn't justify spending $400 on a phone; I spent $25 on a virgin mobile. If I have $400, I'm going to be spending it on health care as one of the uninsured contract workers of the country, or I'll spend it on a new computer. I'm not whining, but I'm just here to tell you that you're out of touch. It's like you won't believe the subprime mortgage crisis is real until it touches somebody in the Valley.
The biggest problem is that there's no trust in the financial system right now, which is seizing up commercial credit and business growth. Until companies are forced to mark to market and show true and honest balance sheets, the financial system will continue to implode. Better to take our lumps now and go thru a shorter recession, than to prolong it and make the recession deeper.
Regarding what Steve Forbes says, the guy appears almost weekly on FoxNews as an economic/policital pundit, so I tend to view his forecasts as suspect, as it is in his interests to cheerlead the economy.
I don't expect it to hit the IT industry this time, though.
If consumers cut back on spending, this will affect everything, including tech.
And we're already in a bear market.
I remember in the pre-iraq-war the DOW plummeted to 6000.
As an old saying goes "nobody goes to war with a full belly"
Great stuff!
A lot of the money floating around the US economy ever since 2001: I'm talking about the housing bubble and consumer spending - were basically financed by borrowed money.
Or are there actually people out there driving this that profit from recession and stocks going down?
Sorry folks, while I'm not an expert, it doesn't look, smell, or taste like a recession.
Regards,
Rick
Later that month, the stock market cracked. That is when everything changed.
The layoffs came, the spending froze up, and the stock market kept tanking. The recession "arrived" shortly thereafter.
In my view, this coming recession could be a lot worse than that one. The last time, the consumer kept spending and buying houses and spurred the economy even though coporations slowed down tech spending. This time, that probably won't be happening.
exactly. you won't know you you were in a recession until we see two quarters of negative growth. we haven't even seen *one* quarter yet (as far as I'm aware), and even still by the time it's official there will most likely be a turnaround.
All the money that was being given to people who truly weren't qualified for mortgages is now being put into REAL growth businesses. So some sectors grow while others falter. This is not new.
On another front, the dollar is under severe challenge as a reserve currency due to our decades of reckless spending and consumption - if we dont reverse this this nation is in deep trouble.
Look at any retail-based business that doesn't have an international presence to prop up the US business. They're not growing.
You can probably see this is website traffic to all those great startups, where the international traffic is what is making them look good.
By the way, how many of those 250 startups charge actual money for their service? I don't get the correlation between recession and website traffic...
The small business is a resiliant model of operation, mean and lean, and can weather hard times.
Things currently look bright for our firm and our smart clients, as do the next 10 years. No worries here.
Thanks, Jason M. Blumer
http://www.erica.biz/2008/real-estate-bubble-th...
We are not in a recession yet. I think we won't be until closer to the end of this year. Harry S. Dent is predicting that the stock market just hit its low. He thinks NASDAQ will likely go up 30-36% this year from the low it hit last week. Should prove to be an interesting year!
So... On one hand, we have the crazy - dazy stock market... On the other, we have.... Well, you get the idea ;)
The full page WSJ ads were to convey to the Whittman-Hart employees, the name of the new company...
BRILLIANT!!!
Yet across town in Techno-ville, things are almost overheating. In addition to your Google, Forbes and venture capital datapoints, storage demand continues to outpace supply, even though the industry has been in allocation for several months in a row.
I'm very curious as to how these have and have-not trends will play out.
I work at Joyent.com. We're a Cloud Computing company. Infrastructure on demand. If you go to
http://developers.facebook.com/resources.php
there are only two companies listed as Facebook developer resources: Microsoft and Joyent.
We're bootstrapped, self financed, profitable and our revenues, which are already in the millions, are growing at over 500% annually.
In the last 3 months it has been accelerating past 600% annual growth.
Maybe it's because we offer significantly lower total cost of ownership for infrastructure. Maybe it's because one of our clients was able to use our infrastructure to scale their Facebook application up to 700 million page views a month without skipping a beat.
Sure, we're only one data point.
But if Joyent's experience means anything, Steve Forbes might be right.
http://www.nber.org/cycles/jan08bcdc_memo.html
Colin Joss
East Lothian, Haddington, United Kingdom
I think we have a few things going on here in CA regarding slowdown.
The EDD is ramping up with extended hours.
In response to increasing unemployment, mainly due to the national subprime mortgage crisis and housing slump, the California Employment Development Department (EDD) will be extending hours of operation at many offices to assist unemployed workers. EDD is working to provide extended hours in as many areas of the State as possible.
http://www.edd.ca.gov/onestopextendedhrs.htm
As for people getting loans that never should have been signed. Blame the Congress for the Community Reinvestment Act.
This "Recession" is caused only by greed. That of a maid think he/she can afford a 650k dollar house and the bank for thinking she can pay for it on 10 dollars and hour. So, yes, there is an issue and I will gladly take the 1200 stimulus, but I feel that I should not have to bail someone out for being stupid.
Remember that the US GDP expansion is not the result of "real" growth (making stuff and selling it to others) - it is the result of the credit expansion (borrowing heavily from the rest of the world).
But the rest of the world is reacting now. That is why the recession is starting to show. The EU Central Bank has started to offer the US loans in euros, not in dollars - this means that Bernankes plan to to solve any real crisis by, as he says, "dropping money from helicopters" (thus creating a dollar hyperinflation) will not work.
This could also spell the end of the dollar as the world trading currency - which in practice means the US can no longer pay for oil and imports by just printing more dollars. It has to earn the money like every other country.
The *real* problem occurs when people no longer accept the money no matter it is thrown out of helicopters or whatever. Then we have a deflationary senario. Just like in the 30's. But let us hope this doesnt play out that way - but the US is playing with fire at the moment by keeping its head in the sand and not dealing with the actual economic situation.
One of the overwhelming themes I heard in my area comes from older people, many of whom were kids during and after the great depression. That theme is simply this: we have given our country away in terms of manufacturing, service sector jobs, etc. For better of for worse, this county came out of the depression and made it through WWII largely based on a union workforce. Poo-poo the unions all you want, but you can thank your ability to have a five-day workweek, breaks, and a weekend, along with health insurance basically because the unions fought for these things. Think I'm wrong? The only reason most businesses (non-IT) even offer benefits and other goodies is largely to keep the unions off their properties. IT is starting to become unionized in some places through the CWA. Unions are both good and bad, but they have done more good.
A certain large reataler has done more harm than good as well because in cutting costs, they have forced manufacturers to deliver more and more and more. In order to deliver more and more and more, you have to cut costs by moving offshore. I preferred paying $30 for a pair of Levi's. I preferred paying $5 for a gallon of pickles. Why? Because this stuff was made in the US by well-paid union workers.
Just remember, high wages are good for America. More of a tax base, more money goes into the economy, and, quoting JFK, a rising tide lifts all boats. Now, in the US, our economy is 85% based on consumer goods. This is not sustainable in the long run no matter anyone says. History has shown this to be true. You can only cut costs so much before there is a backlash. The middle class is disappearing in the US at a rapid rate largely because there is no sustainable manufacturing base. People are forced from their manufacturing jobs and end up working for Wal-Mart or other less-than-ideal menial jobs.
Back when the unions were strong, before the republicans killed them off, a man or woman could support their family largely on one income. The fact that houses cost what they do, food costs what it does, and a host of other woes is largely tied to our inability as a nation to provide for ourselves. In the 50s, the US was the most egalitarian, self-sufficient country on earth. The desires of the top 5% of profit mongerers has damned this country.
Techies that have comfortable lives should be thankful. Most of them live in a bubble and don't see how most of the US actually lives. I live in rural TX. I can tell you that people here, through no fault of their own are largely doomed to working for Wal-Mart or other service sector jobs. The hospitals here, one of the only sources of IT jobs have outsourced the IT work to third-world hell holes leaving those IT workers in a pinch.
IT workers who live in larger cities, and especially those who live on the coasts are insulated from the woes of the rest of the country. I know. I worked in the NE for over a decade in a series of cushy IT jobs. I rarely considered the plight of the average American until I moved to TX to be with my aging parents.
This country needs to bring back the jobs. Remember, a rising tide lifts all boats. The greed of the major corporations occurs at the expense of the worker. Let's pray we can turn this trend around or we are in trouble.
I don't think Americans would stop shopping or eating out no matter what. People are largely ignorant when it comes to their own money. I personally know people who have menial jobs who spend and spend and spend. Credit cards. Debt.
Economics are very, very simple: don't spend more than you take in. If everyone followed this golden money rule, we would all be better off.
I also know of people who work the same menial jobs who only spend what they need to, live below their means, save as much as possible, and are recession-proof largely because they have saved for a rainy day, socked away funds, and drive older cars, use older electronics.
Americans have been conditioned to spend, spend, spend no matter what. In the 50s, a family lived in a 1200 sq. ft. home. No one needs a McMansion. They are not good investments. Especially not now. People that cashed out in the last few years got lucky. It will never happen again. No one needs a giant house, a $100k BMW, or a second beach house. These things are wants, not needs. People need the basics with a few cool toys now and again. Keeping up with Joneses has damned more than a few people.
Think about this. 20 years ago, the average CEO made about 20 times the average worker. No, the average CEO makes 400 times the average worker. Uncool. All things considered, the trends have shown the rich get richer and the poor and middle class largely do not advance ahead that much. Unfair. Unfettered capitalism and globalism are damning.
Maybe not so much a change in the idea of a recession, but the underlying commitment to spending time in an office, burning gas, buying servers, building infrastructure. All that has changed, and will continue to change. A recession would merely fuel this, it is happening, people panic, they change the way that they are running companies. In the end, there is a lot of commitment to ideas, lots of enthusiasm, and lots of people changing what they need and how they do things to survive the unknown.
As for those who are still experiencing positive growth and cannot see the recession? Well recessions can be a little lumpy, and the other factor is overshoot - a property of any dynamic system. Can the overshoot keep going to meet the economic recovery that comes after?
For anyone who bought more home than they could afford, well, I'm sorry, but you're going to lose it. Even in the Silicon Valley, people make bad money moves. So, Robert, living in the Valley doesnt make one immune to bad choices. It happens everywhere.
This stimulus package is a joke and it will backfire. Almost no one with any economic smarts is for it... its an election year, thats all this is.
Let's just say that while waiting a year for the passport to the American Dream, (and not working illegally because I am a stupid law-abiding dummy) I am not impressed with the way life here is shaping up!
My wife's home, which she/we renovated to a very high standard (unlike most rehab projects in Phila) has depreciated by perhaps 25% in a year - and even though we are on the point of putting it up for sale at a discount price, because we want to move out West, we still may not be able to sell it without going even further behind.
And over the past year, as an outsider looking around from the inside, I have seen enough to convince me that I wont be signing up to work for any corporations any time soon! It seems to me that the whole middle class are now locked in to their catch-22 lives, and corporation heads now have everything they need to take, take, take from the indebted workforce here, in order to fund the cost of their global expansion to bring new found prosperity (and a new generation of locked-in middle classes) in the developing world.
Not that I have anything against global development, but I prefer a little bit of freedom at home!
Bottom line, I don't think the current recession (aka slow down in incessant growth) is a problem if you are happy to stagnate, or if you dont want to get a better job, or if you dont want to sell your home or if you dont want a couple degrees less stress in your life.
The troubling thing about this one compared to others in the past, is that the most trusted and estblished financial organizations(banks, creditors) were largely responsible for creating/excacerbating the situation we're in now.
To deny that things will get worse befor they get better is like Bush/Rumsfeld on the war in Iraq.
To quote the man that most hold personally responsible for all the supposed economic good times during the Clinton administration...Alan Greenspan: "The probability of a recession is 50 per cent, maybe more, but we are not there yet."
and from http://www.ft.com/cms/s/0/377d5532-cae8-11dc-a9...
""The initial [unemployment] claims data are not signalling -recession.""
The US economy may not be growing at all but it is not yet clear that it is falling into recession, Alan Greenspan, the former Federal Reserve chairman, has told the Financial Times.
Mr Greenspan said: "The reason we have had this extraordinary volatility in stock markets over recent days is that there is extreme uncertainty about the financial and economic outlook."
In a series of interviews with the FT, Mr Greenspan argued that the mark of a recession was discontinuity in the economic data. "You don't gradually fall into recession, you jump," he said.
"We are beginning to see discontinuities in the data - for instance, the employment report and the Philadelphia Fed survey," he said.
But other indicators continued to give more positive signals. "The hard data that we are in recession is by no means conclusive," he said.
He questioned the utility of using standard economic models to forecast whether the US would now go into recession or not.
"The models never forecast recession, because the parameters are dominated by what happens in normal times when the economy is growing," he said. "In fear-driven periods the parameters are quite different from the periods of euphoria."
My advice, Mr. Scoble? Leave economic forecasting to the experts.
Why would anyone with a rational mind pay $30 for something they can get for $5" How does the fact that it's made by a "well paid union worker" make that a smart purchasing decision by the consumer? I'm pretty sure gas is distributed by union truckers. Would you pay $10/gal for gas because it was delivered by a union truck driver, if you could get it for $$3/gal across the street because it was delivered by a non-union truck driver?
"This country needs to bring back the jobs. Remember, a rising tide lifts all boats. The greed of the major corporations occurs at the expense of the worker. Let’s pray we can turn this trend around or we are in trouble."
To quote Milton Friedman: "If all we want are jobs, we can create any number--for example, have people dig holes and then fill them up again or perform other useless tasks. Work is sometimes its own reward. Mostly, however, it is the price we pay to get the things we want. Our real objective is not just jobs but productive jobs--jobs that will mean more goods and services to consume."
Gosh, I'm so glad you set me straight on that because I might have gone on mixing them up forever because they are so indistinguishable when you get a certain distance away from being cool like they are, but oops I think I might do that again because I'm so stupid but what's more important is that you're so smart and will be able to maliciously and gleefully correct me again and again .
That kid has it rough - autism and parents who didn't know that they shouldn't buy a house that they can't afford.
The kid has my sympathy - the parents, not so much.
That said, clearly there are a lot of middle class families that are suffering from significant "economic distress."
Unfortunately, no matter how short (or long) the formal "recession" lasts (if it occurs at all), the economic distress of the middle class will persist.
Even a moderate economic "slowdown", which we are obviously in the middle of even if we are not in a formal recession, can cause significant economic distress for a significant fraction of the population. Not to mention the emotional stress of constantly being bombarded with messages of doom and gloom from the media even if your own situation is actually reasonably solid. The overall economic message coming from the media right now is that if you are not worrying about a recession, you should be worried.
So, there are two bottom lines here:
1) The economic distress of the middle class is not linked to whether a formal recession is underway.
2)"Fixing" the formal recession (if it even exists at all) will not fix the economic distress of the middle class.
Be clear, is your question about a formal recession per se, or simply whether there is enough of a slowdown in growth that significant numbers of people are feeling pain?
Health care "reform" (including care for chronic conditions such as you mention) obviously needs to be a key part of relieving the economic distress of the middle class. Debating whether we are or aren't in a formal recession is orthogonal to addressing such social issues.
-- Jack Krupansky
http://www.townhall.com/columnists/WalterEWilli...
Wish it was that way everywhere. Some areas of the US will have it quite rough. I feel for those of you who are going through tough times. It was like that here back in the early 80's.
This is limited to the "high tech" sector, not a broad view.
Personally, I don't really care if you call it a recession or not. Unless it's so bad that EVERYONE agrees, it doesn't matter so much.
Lowering interest will attract people to go into debt while spending will keep the economy going.
Not doing anything will make people crazy, because they think government doesn't care about what's happening.
Increasing interest will piss everyone off, because those with debts will be strangled even more and those who are not will go into trouble because of this.
So, I think lowering the interest still the best option there is for the goverment to make.
About Davos, I hope you get the chance to read French policy analyst Dominique Morsi's incisive and salient editorial about how Davos has devolved from a barometer for significant world trends to a mere mirrored echo chamber. I quote: "[...]call it the 'I was told in Davos' impramatur -- which explains why political and economic analysts and commentators, keep coming back despite the forum's combination of pomposity and intellectual vacuity."
I think the subprime mess and housing market hit a bottom in Dec. Dec is when homebuilder's finally got the hint and stopped building, this historically has proved to be a bottom. No doubt subprime is bad, but its pretty much built into the market, I don't see another shoe dropping unless we end up with a big unemployment problem, which I don't see coming from my vantage.
Also I wish the stimulus was better focused on small biz and not individuals who I predict will run to Best Buy and buy a flatscreen made in China... money flowing with little in between directly out of our economy.
1. An economic downturn is when a neighbor two blocks away loses his/her job and he is up-ended for a couple of months to a year(s).
2. A recession is when some near and dear to you loses his/her job and he is up-ended for a couple of months to a year(s).
3. A depression is when YOU his/her job and he is up-ended for a couple of months to a year(s).
You can spin the issue around a million technically theoretical ecomonic methods, but it still only boils down to these simple, direct points!
In spite of the "media contrived recession," we still had positive growth in the 4th quarter of 2007. February 2008 bls stats indicate an unemployment rate of less than 5%.
On the other hand, we must reduce our dependence on foreign oil. Nuclear, wind, solar and whatever we can use for energy must be developed. Unfortunately, environmentalists fight every option we attempt. Why?
Get your facts straight - subjective reasoning while reasonably interesting misses the point. Objectively we are not in a recession - which requires two negative quarters of GDP growth - in fact, we have not even achieved one quarter of negative GDP growth - yet. And we may, and we may enter into a recession, but redefining the term to mean that because you lost your job or a loved one had their house foreclosed is misleading and emotionally based - not factually accurate.
Keep it real, keep it objective, leave the story telling to grandpa.
History repeats.
7 year cycle
Reason: Let your slaves go free on the 7th year.
Origin: Biblical
Controller: WZO
Plan: do your research.
The WWW is an excellent resource. Turn off the TV and live. Read the book of truth for more reasons and clues.
Signed
Fellow Slave...
Have you considered we are not in a recession, but maybe we as americans have been living beyond our means?? we have crossed that boundary, and now we are reaping the consequences of that??
Yes, people are defaulting on credit cards... but why did they overextend their credit?
Yes, people are being forclosed on, but why did they think they could afford a 400,000 home on a 50k a year job?
My wife an I have worked hard the past 2 years to pay off all our credit card debt, pay off 2 cars, 1 jetski and 1 motorcycle that we had overextended ourselves on. After paying that all off, we still scrimped and lived frugally, and now have 6months of living expenses in an amboydirect savings account making around 4% interest (not alot, but not risky either). When we have our first child in august, we will both take 16 weeks off (unpaid) and still have enough $$ to live on. We also have another account that we have saved about $5k in. this is our emergency fund. It pays for home/car repairs. Yes, that means no credit cards to pay for emergencies. No stress when we run over a nail and need a new tire.
Now we only have our utilities/food/gas and mortgage to pay every month. This means out of our less than $4k a month take home, we have over $2500 a month to invest / save and play with. I went to a local church yardsale last weekend and bought myself a 60" Sony TV (not an LCD) for $300. Did I flinch to buy it?? No, I paid cash. Why? because I don't use credit for anything. If I can't afford to pay cash for it, then I don't need it.
Stop living the lie that you are entitled to drive a tahoe, that you are entitled to that nice lake house and a $30k pontoon boat. You do NOT need that 60" LCD TV.
If the "recession" is breaking you, then I believe you deserve to be broken. If you would learn to manage your $$, and live within your means ( not your delusional ones, but the ones dictated by your current paycheck) then I believe you will find freedom from the slavery of the dollar.
I really encourage any and all of you to do all you can to get out from under your creditors, FAST. Do a google for debt snowball, debt reduction. Stop buying starbucks and start drinking JFG brewed at home. Stop eating out every meal and eat some ramen noodles. If you are buying your $30 angus steak on your visa, then should you be eating that steak?
We need to start helping ourselves by making it a priority to "buy American" made products whenever possible. We need to refocus our efforts on "Made in the U.S.A." instead of supporting products made offshore or using services now being set up in record numbers offshore. As a nation, we continue to give it all away. It is financial suicide. Now, despite the fact econimc statistics say we are not in a recession, why are vendors who are setting up at nationwide flea makets routinely selling one item for $14.95 after a days work? After the booth fee and gas costs, they are down about $100. Based on sales, it appears people are not spending money, when they do spend it is with a credit card, and the people trying to earn an extra buck to pay for living expenses are going in the whole for trying.