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Thread: Grouch's economic outlook

  1. #1
    Senior Member grouch's Avatar
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    Grouch's economic outlook

    I've been watching the economy. Well, I'm sure most people are. I always felt the economy would skid to the bottom around March and that looks to be the case. I'm thinking that the economy will start to pull out a bit soon and about August, we'll be on our way back to a thriving economy. That doesn't mean we'll be recovered by then, just on the way. I suspect it'll be early next year before we're out of the woods.

    I work in the building materials industry. Where I work is the last to feel the effects and we're feeling it now. One of our fleet drivers though was talking to the places he delivers. Most of them say things are starting to pick up. So the GNP (Grouch national prediction) is we're bottomed out and starting to recover. We have a long way to go though because of how far we dropped.
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  2. #2
    Vulture of The Western World Eric's Avatar
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    Quote Originally Posted by grouch View Post
    I've been watching the economy. Well, I'm sure most people are. I always felt the economy would skid to the bottom around March and that looks to be the case. I'm thinking that the economy will start to pull out a bit soon and about August, we'll be on our way back to a thriving economy. That doesn't mean we'll be recovered by then, just on the way. I suspect it'll be early next year before we're out of the woods.

    I work in the building materials industry. Where I work is the last to feel the effects and we're feeling it now. One of our fleet drivers though was talking to the places he delivers. Most of them say things are starting to pick up. So the GNP (Grouch national prediction) is we're bottomed out and starting to recover. We have a long way to go though because of how far we dropped.
    I'm not as optimistic. I base that assessment on the nature of the "credit economy" that led to the current debacle. Sine the early '90s at least, people weren't earning more money, they were just spending it. And they were only spending because of the availability of easy (and often "no check") credit. Now that credit is gone - and the masses have no more basis for securing credit because they are either broke or their assets (home equity/401ks) can't be borrowed against. How can the economy "recover" in any meaningful sense absent real wealth creation/rising incomes (as opposed to pumping the economy full of more bogus credit that will only create another temporary bubble)? Where, in particular, will the working and lower middle classes get sufficient income to spend and thus drive the consumer economy given the wholesale exportation of decent-paying manufacturing jobs to China, et al?

    I'm not an economist, but that's how I look at it based on the facts I'm aware of.
    Last edited by Eric; 04-25-2009 at 08:02 AM.

  3. #3
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    I tend to agree with Eric on this one (no surprise there!). I think that the wage stagnation started in early 1980's for many blue collar folks and in the early 1990's for white collar workers, who were victims of the 1990-1993 recession and jobless recovery. Since then, incomes have basically stagnated on a per capita basis. There have been certain segments of the population benefitting from expanded debt levels, but the public at large has largely been treading water since 1990 and has dipped since 1973. In 1990, real wages were 16 percent below 1973 levels. I'd hate to see what that figure is today. That has been the major result of freeeeeeeeeeeeeeeeeeeeeeeeeeeeee trade.

    I believe that what we are possibly seeing is a temporary bubble being created by mass infusions of credit into the marketplace. It's a last hurrah, if you will. It will only result in temporary pain relief this time around. Some segments of the economy will "recover" off the lows for a short duration. It will look like something big, but will turn out to be short lived, probably spurts lasting a couple of months or so in each segment.

    Things are happening so quickly now, the market so volatile, its hard to pinpoint, much less assess where the next bubble will form, if it does at all.

    Unless by some monetary fluke, jobs begin to return to the US, we are likely to be mired in worsening conditions as far as we can see.

  4. #4
    Ridin Dirty dom's Avatar
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    GNP, sweet term! I agree with all you. I will use all analogy I am very familiar with, a visit to the chiropractor. Yeah, before you go your back is hurting, and yeah a couple hours later its hurting again. The temporary relief it provides allows you to make movements you otherwise couldn't, even though short lived. This mass spending and clearing the table is allowing a new beginning, sort of new more educated start. I mean we really have no choice but to believe in it. Mind you I am hoping for the best, but preparing for the worse. Our economy is bubble driven, as unfortunate as it may be. There is no choice but to spend our way out of it.

    What a mess..

    "Tutto nello Stato, niente al di fuori dello Stato, nulla contro lo Stato "
    -Mussolini
    All within the state, nothing outside the state, nothing against the state.

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