# Recession: Fact or Fiction?



## TMMKC (Aug 2, 2007)

Up until December, I was convinced the U.S. would have a mild recession during the first quarter and rebound by the end of the third quarter. Now, thanks to news media that sensationalizes for ratings and politicians that peddle fear to get votes...I am now wondering if the "recession" (of which we may already be in) is just a self-fulfilling prophecy.

Are we heading into a storm that was looming on the horizon for several years (e.g. a long-needed adjustment to an over-heated economy) or was it artificially created out of fear by the media and politicians?


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## BertieW (Jan 17, 2006)

TMMKC said:


> Up until December, I was convinced the U.S. would have a mild recession during the first quarter and rebound by the end of the third quarter. Now, thanks to news media that sensationalizes for ratings and politicians that peddle fear to get votes...I am now wondering if the "recession" (of which we may already be in) is just a self-fulfilling prophecy.
> 
> Are we heading into a storm that was looming on the horizon for several years (e.g. a long-needed adjustment to an over-heated economy) or was it artificially created out of fear by the media and politicians?


I vote "overheated economy" and dubious banking practises. Time will tell.


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## burnedandfrozen (Mar 11, 2004)

I never could figure out any of this out myself. The Dems always say the economy stinks (when the Republicans are in office) and vice-versa.


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## Orsini (Apr 24, 2007)

*Grassroots Reality*

If I go bankrupt then it is fact. If I get a job then it is fiction.


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## radix023 (May 3, 2007)

The economists work in the rear-view mirror, so the actual start of a recession gets dated about 2 years after it happens. December saw both a slowdown in consumer activity and an increase in unemployment (4.7% -> 5.0%).

The banks are learning a Washington, DC lesson: the coverup can be worse than the crime. Citibank and others have been drip-drip-drip-ing their bad news instead of coming clean completely and early. This leads to a lack of confidence in the markets.

Bernanke is in a bit of a bind as inflation is up (6.7% increase in the cost of food, but some of that is due to the ethanol debacle/boondoggle) which limits the extent to which rates can be cut. There is also a case being made that loose credit is the cause of the housing bubble and risky bank activity and that cutting rates just prolongs the correction.


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## maxnharry (Dec 3, 2004)

radix023 said:


> The economists work in the rear-view mirror, so the actual start of a recession gets dated about 2 years after it happens. December saw both a slowdown in consumer activity and an increase in unemployment (4.7% -> 5.0%).
> 
> The banks are learning a Washington, DC lesson: the coverup can be worse than the crime. Citibank and others have been drip-drip-drip-ing their bad news instead of coming clean completely and early. This leads to a lack of confidence in the markets.
> 
> Bernanke is in a bit of a bind as inflation is up (6.7% increase in the cost of food, but some of that is due to the ethanol debacle/boondoggle) which limits the extent to which rates can be cut. There is also a case being made that loose credit is the cause of the housing bubble and risky bank activity and that cutting rates just prolongs the correction.


+1

Japan was in a similar situation and actually prolonged their problems by not coming clean quickly. All the tomfoolery needs to be admitted to, a few sent to prison and then we will be back on our way to improvement.


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## KenR (Jun 22, 2005)

Glenn Beck was opining last night that we are entering a big recession. He may be right.


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## Phinn (Apr 18, 2006)

> Are we heading into a storm that was looming on the horizon for several years (e.g. a long-needed adjustment to an over-heated economy) or was it artificially created out of fear by the media and politicians?


It's not "overheating." It's artificial (i.e., governmental) credit expansion that's causing all the problems.

The problem is worse in the housing market because our glorious, beneficent government has graced us with especially easy credit when it is tied to mortgages. So, you have additional artificial credit expansion going on in that one sector, on top of the general credit expansion that the Fed controls for all other money.



> There is also a case being made that loose credit is the cause of the housing bubble and risky bank activity and that cutting rates just prolongs the correction.


The credit expansion is the root cause of all of these problems. George Reisman just released a very good article on the subject, discussing how the credit expansion not only causes the boom and bust markets (as Mises showed), but also such familiar problems like wage stagnation and income inequality -- two things that left-wingers invariably (and incorrectly) claim are caused by free markets.



> All the tomfoolery needs to be admitted to, a few sent to prison and then we will be back on our way to improvement.


I agree. Alan Greenspan and Ben Bernanke get to go first.


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## Wayfarer (Mar 19, 2006)

I think the media and the Dems have been trying to convince us we have been in a recession since Gore gave his concession speech. At some point, it was bound to happen and now they can carry on.

I am growing concerned. What really has me concerned are a few things. First, it concerns me that our hugest financial corporations are needing such monumental cash infusions right now, and where these infusions are coming from is somewhat concerning. I believe in a world wide economy but the thing is, the US has ceased to function as an equal in many aspects, and has become the supplicant. 

Second, the possible tax SNAFUs a Dem POTUS, House, and Senate might bring. Dubya's spending addiction has done us no good, but upping taxes on capital gains, high income earners, elminating the SS cap, and really fooked up things like Conyer's move to eliminate mortgage deductions on house over 3k sq feet. That will exacerbate point #3.

Third (and last), the continued mortgage fiasco. Hmm, people that already cannot afford a house are now going to be paying more in taxes and then Conyers wants to remove a deduction (as really, what size of house do you think all this sub-prime concentrated in?). And then they will not allow the market to correct, they are going to legislate not letting ARMs expire? Bullshyte. That totally punishes the ant and rewards the grasshopper.

And that is what America has become, a placating of grasshoppers, a punisher of ants.


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## Spence (Feb 28, 2006)

Just keep printing more money and everything will be ok 

-spence


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## Mark from Plano (Jan 29, 2007)

Look, there are a few "big picture" facts to keep in mind here: 
1. the Fed has gotten much better over the last 40 years at managing the money supply which has led to a period of generally steady growth and moderate inflation (anyone who thinks this isn't moderate has completely forgotten 1978).
2. Economic growth cycles have grown progressively longer and stronger during that period as the environment for economic investment has grown more stable (and after all, stability is one of the key factors that business people look to in making investments).
3. Not everything is rosy (it never is). There is a substantial restructuring of our economy as it shifts from industrial to informational in nature. These disruptions create instability in portions of the economy even though, as a whole, things are going well. This means certain segments of the economy (both in terms of sector and geography) don't participate in the boom as fully.

ALL THAT SAID...no one has yet figured out a way to fully repeal the business cycle. Booms are followed by recessions. That's the way it works. It's painful, but growth can not be constant and uninterrupted (at least not in this world). Whether the recession is mild or deep is yet to be seen, but one is coming. During boom times it seems like the good times will never end and it causes the markets to make bad decisions. Those decisions get corrected in recessions and discipline gets restored.

Eventually it's all gonna be OK. Booms don't last forever, but neither do recessions.


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## Kav (Jun 19, 2005)

I saw three, not one cars stopping at my apt dumpsters for recyclables this morning. I heard some mexicans at the street corner complain nobody was hiring day labourers and they might return home. I actually won a bid on EBAY for a set of vintage cufflinks this morning. I hope my beans hold out until I recuperate from that moment of financial indescretion.


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## Phinn (Apr 18, 2006)

> ALL THAT SAID...no one has yet figured out a way to fully repeal the business cycle.


Actually, someone has.


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## Rossini (Oct 7, 2007)

Wayfarer said:


> I am growing concerned. What really has me concerned are a few things. First, it concerns me that our hugest financial corporations are needing such monumental cash infusions right now, and where these infusions are coming from is somewhat concerning. I believe in a world wide economy but the thing is, the US has ceased to function as an equal in many aspects, and has become the supplicant.


I find that interesting, too. Has there been much comment in the US news on the dependency on the Far East, etc., to support the refinancing?


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## 16412 (Apr 1, 2005)

Recessions are a fact of life. They have always been, and shall always be. Recessions are littler corrections for bubbles that get to big during economical growth. Depressions are what we don't want.

With so many overpaid people at the top and so many underpaid people at the bottom and so few middle class people, nowadays, perhaps we will see a depression again.


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## BertieW (Jan 17, 2006)

TMMKC said:


> Up until December, I was convinced the U.S. would have a mild recession during the first quarter and rebound by the end of the third quarter. Now, thanks to news media that sensationalizes for ratings and politicians that peddle fear to get votes...I am now wondering if the "recession" (of which we may already be in) is just a self-fulfilling prophecy.
> 
> Are we heading into a storm that was looming on the horizon for several years (e.g. a long-needed adjustment to an over-heated economy) or was it artificially created out of fear by the media and politicians?


I would add that, while clearly there is a significant psychological (and therefore partially media-driven) aspect to the market, it's hard to ignore underlying numbers associated with what some players in the financial industry are putting up (or down). These stories

https://www.nytimes.com/2008/01/16/...em&ex=1200632400&en=3ee968ed396d5dd2&ei=5087


may not do anything to calm the market, but they do seem to be revealing a reality, unpleasant or no.

What I mean is, there damn well ought to be a psychological reaction to stories (strategies) like these. At this point, I'm concerned that the Fed's actions will only prolong and/or deepen potential recession.

I'm also wondering if any of the banking executives are going to have to return their bonuses given the massive write-downs of firms like Citi, et al. Equally disturbing is going to be the day we wake up to discover that China and Saudi Arabia own more of us than they already do. And as far as banks' ability to lend, I believe that for every dollar lost in the subprime (or whatever) problem, the banks have to scale back by about a factor of 10 what they can (by law) loan. That's got to have an impact on business growth.


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## Wayfarer (Mar 19, 2006)

This weekend we found our dream house. It is brand new, in a small desert development, just 60 lots on 250 acres. The builder had 29 deposits and built out 29 houses. Seven sales were actually consummated. So he is sitting with 22 houses in inventory. 

We were out driving on Saturday and stopped in on a lark. Three hours later, we want this one particular house. Perfect lot, 270 degrees of desert and mountain vistas, one neighbor on the entire cul-de-sac. They just reduced the price by 200k. We are seriously thinking of making an offer 50k under the reduced price. But we are hesitating as it seems they just are not writing mortgages anymore. That is how bad I feel the housing/mortgage market is right now.


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## marlinspike (Jun 4, 2007)

If I were in charge...

I'd return us to a real progressive tax rate (i.e. one where people who make more actually do pay a higher percentage of their income to taxes) and I would get rid of the mortgage interest deduction on homes that are larger than 1000 sq. ft. per occupant (the current $1 million cap works well in markets like DC, but not so well in Texas). This isn't about redistribution of wealth but about keeping a cap on the economy.

I would tell both the banks and the people who took out mortgages they couldn't afford that it's their tough luck for making bad choices. I don't think I would touch the money supply either way right now. I'd also leave interest rates where they are (which is pretty low) because I like having the dollar be a little weak for now.

It would be a hard couple of years, but I think it would give things a chance to self-correct.


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## ksinc (May 30, 2005)

marlinspike said:


> If I were in charge...
> 
> and I would get rid of the mortgage interest deduction on homes that are larger than 1000 sq. ft. per occupant


When I was in Saint Petersburg my apartment was one of the more desirable ones because it was built before WW2. After WW2 the Russians lowered the square footage allowed per occupant so the apartments are much smaller.

Thanks for the sentimental journey!


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## Wayfarer (Mar 19, 2006)

marlinspike said:


> If I were in charge...
> 
> I'd return us to a real progressive tax rate (i.e. one where people who make more actually do pay a higher percentage of their income to taxes) and I would get rid of the mortgage interest deduction on homes that are larger than 1000 sq. ft. per occupant (the current $1 million cap works well in markets like DC, but not so well in Texas). This isn't about redistribution of wealth but about keeping a cap on the economy.


So Mormons and Catholics would be the only ones that could afford huge houses and me? I would quit my high paying, high stress job and wait tables or tend bar, and live in a rent controlled loft.

That would be quite the world you create.


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## ksinc (May 30, 2005)

Wayfarer said:


> So Mormons and Catholics would be the only ones that could afford huge houses and me? I would quit my high paying, high stress job and wait tables or tend bar, and live in a rent controlled loft.
> 
> That would be quite the world you create.


People of Scottish decent should get an extra 10 sq ft for storing of bag-pipes and Scotch


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## Wayfarer (Mar 19, 2006)

ksinc said:


> People of Scottish decent should get an extra 10 sq ft for storing of bag-pipes and Scotch


LOL, I think people would *want...plead...beg* for any piper to get an extra large house


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## TMMKC (Aug 2, 2007)

marlinspike said:


> I would tell both the banks and the people who took out mortgages they couldn't afford that it's their tough luck for making bad choices.


Don't count on that if Hillary Clinton becomes the prez. She may hang the banks out to dry, but the plan she's put forth will pick taxpayer's pockets to pay for others' stupidity...or at least naivetee.


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## marlinspike (Jun 4, 2007)

Wayfarer said:


> So Mormons and Catholics would be the only ones that could afford huge houses and me? I would quit my high paying, high stress job and wait tables or tend bar, and live in a rent controlled loft.
> 
> That would be quite the world you create.


Can you figure a better way to make the $1 million cap workable, or do you think there should be no cap? NB: Huckabee is going to get rid of the mortgage interest deduction in full.

Why would you not live in a smaller place (or just wait until you can afford a large place rather than let the bank fund your impatience) and keep your job and buy nicer things with money you don't need to be wasting (because getting a mortgage is really just biting off more than you should be chewing - if you can afford to buy a bigger house without someone else funding it, then it wouldn't be a waste).

The self-correcting feature of an actual progressive tax rate is the most basic of economics. It serves to both prevent runaway inflation and keep us from deflation (which is always runaway).

It wasn't all that long ago that you couldn't lease expensive cars and you had to pay your credit card bill off in full each month.


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## Phinn (Apr 18, 2006)

> If I were in charge...
> 
> I'd return us to a real progressive tax rate (i.e. one where people who make more actually do pay a higher percentage of their income to taxes) and I would get rid of the mortgage interest deduction on homes that are larger than 1000 sq. ft. per occupant (the current $1 million cap works well in markets like DC, but not so well in Texas). This isn't about redistribution of wealth but about keeping a cap on the economy.
> 
> ...


So, let's see ... you would: 

 decide how much of their own money that people get to keep, 
 control the square footage people get to live in, under penalty of added taxation,
 continue to have the government sponsor loan guarantees and other programs that exist for the purpose of increasing the number and amount of housing loans than lenders otherwise would (then blame consumers for using these programs exactly as they were intended), and
 control interest rates from a central bank at a level you think is just about right.

And, to you, _that_ is allowing the market to "self-correct"?


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## Wayfarer (Mar 19, 2006)

marlinspike said:


> Can you figure a better way to make the $1 million cap workable, or do you think there should be no cap? NB: Huckabee is going to get rid of the mortgage interest deduction in full.


I believe in equal treatment of people. Therefore I would not discriminate based on income and/or purchasing power. Translation: no cap or eliminate deduction.



marlinspike said:


> Why would you not live in a smaller place (or just wait until you can afford a large place rather than let the bank fund your impatience)


So what you have just said here, is if you cannot pay cash, do not have a house. That is the only way this statement can be read. Do you have any idea how few people would own their dwellings? You would create a land owning class all over again. Financial instruments are not bad things, per se, and are what have allowed the middle class to enjoy such things as home ownership.



marlinspike said:


> and keep your job and buy nicer things with money you don't need to be wasting (because getting a mortgage is really just biting off more than you should be chewing - if you can afford to buy a bigger house without someone else funding it, then it wouldn't be a waste).


Again, very firm statement, buy a house cash or do not buy. Again, home ownership would plunge. Single digits probably as % of population that own. And also, I will not have extra money, as you intend to make the tax system, "truly progressive". So why be a chump? Work a fun, lower stress job, and just rent in a nice rent controlled place. This is exactly the world you have created.



marlinspike said:


> The self-correcting feature of an actual progressive tax rate is the most basic of economics. It serves to both prevent runaway inflation and keep us from deflation (which is always runaway).
> 
> It wasn't all that long ago that you couldn't lease expensive cars and you had to pay your credit card bill off in full each month.


This is the true dilema of the liberal. You cannot put hard strictures via legislation and then say you have a "self-corrercting" free market. The markets are the self-correcting feature, not government intrusion.

Oh, and I do pay my credit cards off monthly. And my mortgage is now about 5% of our monthly gross income and I am looking to bump it to about 9%. Yeah, I am just such a spend-a-holic and WAY over my head in debt. 

And as to leasing cars: why be a chump and tie up my capital in a value portion of a vehicle I do not intend to use and also expose myself to risk in fluctuations of the used car market? The answer, of coure, is that would be stupid of me given the fact I have a handy-dandy financial tool not to tie up extra capital nor expose myself to risk in the used car market. We call it "a lease".


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## ksinc (May 30, 2005)

As to the "most basic of economics" statement: 

Keynes believed that a regressive tax was more effective at curbing inflation because of the propensity of lower income people to consume more; proportionately.

In the 1970s, we experienced high inflation and high unemployment while we had the highest and most progressive tax structure to-date. The progressive tax rate was found to be self-reinforcing and not self-correcting. What you refer to as really progressive is properly called doubly progressive and the effects were accurately predicted by Friedman and Hayek in the 1960s. One reason for this is because capital gains are not indexed like income tax brackets. 

'Reaganomics' was based on this set of observations and was the reason the 1981 Economic Recovery Act included the introduction of ACRS (and later MACRS in 1986).

The success of lessening the doubly progressive features of the income tax with MACRS led to support for removing the double taxation of dividends as sound economic policy to stimulate economic growth.

I believe your comments would be considered highly non-normative. The root cause of our inflation is deficit spending, but spending cuts and not doubly progressive taxes are the solution. Doubly progressive taxes would seem to work except for the unintended consequence of mass unemployment.

Unfortunately (or fortunately depending on your view) there is large difference between basic economics and applied economics.


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## Wayfarer (Mar 19, 2006)

Excellent post ksinc. Very insightful. Also, as to what I was getting at in my initial reply to him, some more basic...probably the single most basic, precept of economics: people respond to incentives. This simple thing should be a self-evident truth to me, but it seems to elude some people and they create very intricate and arcane rationalizations as to why this is not true. If they would just honestly examine themselves, they would see the truth value of the statement and many of its implications in crafting sound taxation policy.

Just my .2 cents. Oh, and I amortized the .2 cents, so it must be wasteful


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## marlinspike (Jun 4, 2007)

Phinn said:


> So, let's see ... you would:
> 
> decide how much of their own money that people get to keep,
> control the square footage people get to live in, under penalty of added taxation,
> ...


It's not allowing the market to self-correct, it's getting the market to self correct.

I do think the market is self-correcting in the long run, but that in the long run we are all dead. To get the market to be self-correcting at a speed that is useful to humans, we need to insert correcting factors.

A progressive tax rate is such a self-correcting factor. If you don't understand how this works, quite frankly I'm not going to waste time trying to explain it to you.

A lack of mortgage deduction is not a penalty. I don't think we need a mortgage deduction except that there are some markets where vast income disparities have led to high housing prices even though there is a sizeable lower-middle economic class population. The mortgage interest tax deduction is a way of allowing those lower-middle economic class people to buy a home as a social policy. Getting rid of the deduction for people who want a large home is not a penalty, but rather a recognition that we don't need to subsidize the purchase of gravy.

You don't think it is important that the fed be able to set interest rates? I'm left to assume you have never studied economics. If you have, you were short-changed.

(with regards to my tone, I've made the assumption that you, like Wayfarer, are someone who knows how to take tone in stride)


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## marlinspike (Jun 4, 2007)

Wayfarer said:


> So what you have just said here, is if you cannot pay cash, do not have a house. That is the only way this statement can be read. Do you have any idea how few people would own their dwellings? You would create a land owning class all over again. Financial instruments are not bad things, per se, and are what have allowed the middle class to enjoy such things as home ownership.
> 
> Again, very firm statement, buy a house cash or do not buy. Again, home ownership would plunge. Single digits probably as % of population that own. And also, I will not have extra money, as you intend to make the tax system, "truly progressive". So why be a chump? Work a fun, lower stress job, and just rent in a nice rent controlled place. This is exactly the world you have created.
> 
> ...


(first, let me start by pointing out that when I say "you" here, I really mean "one," but I didn't feel like changing all the subjects and verbs.

To the first part: I suppose I spoke in harsh terms, but my point is this. If you are in a spot where you need the mortgage interest deduction to buy a home, then you shouldn't be buying a home that is larger than 1000 sq ft per person (I view the mortgage interest deduction as a subsidy).

to part 2: no, I say if you can't buy a house cash then either you shouldn't buy a large house or you don't need the benefit of a mortgage interest deduction to buy your house.

to part 3: see my response to Phinn

to parts 4 and 5: I was making no implications about you personally, I was merely pointing out how as a society we have come to think it's a good practice to buy luxuries that we can't afford.

BTW, I think it's silly to say you would have no motiviation to make more money. How would you not have extra money by making more? By truely progressive I mean one like how the one we have claims to be (i.e. I would maintain tiers so that dollars 20k-40k would be taxed the same for everybody for instance, but then the dollars made that are in the next tier would be at a higher rate), only without all the loopholes.


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## Wayfarer (Mar 19, 2006)

marlinspike said:


> A lack of mortgage deduction is not a penalty. I don't think we need a mortgage deduction except that there are some markets where vast income disparities have led to high housing prices even though there is a sizeable lower-middle economic class population. The mortgage interest tax deduction is a way of allowing those lower-middle economic class people to buy a home as a social policy. Getting rid of the deduction for people who want a large home is not a penalty, but rather a recognition that we don't need to subsidize the purchase of gravy.


How can these lower-middle income families ever buy a home in your world? You removed the option of mortgages above. Do you really think real-estate would "self-correct" to this point? You do not think wealthy people, from both the US and other countries, would sufficiently drive up the price of real estate purchasing property to use as rental units once mortgages were gone?

Law of unintended consequences, you seem to indicate this tax credit elimination would occur in a vacuum. It would not. If property prices drastically fell in the US, foriegn buyers would swoop in with the net effect of raising prices again, no doubt far above what any lower-middle income family could afford on a cash basis. Tokoyo residents would all have vacation homes in the US.



marlinspike said:


> You don't think it is important that the fed be able to set interest rates? I'm left to assume you have never studied economics.


LOL, whether or not you agree with the federal monetary system or not is probably not a 1:1 predictor of whether or not you know something about the field of economics. Depending on his mood, be ready for Phinn to hand you your arse on a platter. :icon_smile_big:


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## Phinn (Apr 18, 2006)

> It's not allowing the market to self-correct, it's _*getting*_ the market to self correct.


That's priceless.



> A progressive tax rate is such a self-correcting factor. If you don't understand how this works, quite frankly I'm not going to waste time trying to explain it to you.


If you don't understand how escalating (I refuse to use the term "progressive") taxation inhibits investment in capital goods, then I'm not going to waste time trying to explain it to you.



> there are some markets where vast income disparities have led to high housing prices even though there is a sizeable lower-middle economic class population


The high housing prices you refer to (i.e., triple the rate of ordinary inflation, last I checked) is the direct result of federal programs that facilitate the extension of credit for buying houses. You do know that the market for housing loans is subsidized, yes? Well, that artificially-expanded housing credit _is_ inflation. It doesn't cause inflation. It is inflation.



> You don't think it is important that the fed be able to set interest rates?


The Fed's very existence is affirmatively harmful. It is inconceivable to me that anyone halfway intelligent and capable of operating a computer could fail to grasp that it is a bad idea to have wholly inconvertible, state-mandated paper, controlled by an institution that feels the need to interject itself into tax-and-spend political issues, particularly when it opts for inflating our way out of our problems (and straight into disaster, by the way).


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## marlinspike (Jun 4, 2007)

ksinc said:


> As to the "most basic of economics" statement:
> 
> Keynes believed that a regressive tax was more effective at curbing inflation because of the propensity of lower income people to consume more; proportionately.
> 
> ...


I don't think you can turn all of the 70s on the tax structure. If you could, then during Clinton we would have seen unemployment shoot up and stay up since he added two tax brackets.

That said I would maintain indexing across the board (I realize I didn't say this).

Reagan, HW, and W all have done trickle down (or at least parts of it), and all we see are wider and wider income disparities.


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## Wayfarer (Mar 19, 2006)

marlinspike said:


> BTW, I think it's silly to say you would have no motiviation to make more money. How would you not have extra money by making more? By truely progressive I mean one like how the one we have claims to be (i.e. I would maintain tiers so that dollars 20k-40k would be taxed the same for everybody for instance, but then the dollars made that are in the next tier would be at a higher rate), only without all the loopholes.


Okay, now it is my turn to ask you if you have ever studied economics. There is "more money" then there is "enough more money to alter where my personal indifference curve sits".


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## marlinspike (Jun 4, 2007)

Wayfarer said:


> How can these lower-middle income families ever buy a home in your world? You removed the option of mortgages above.
> 
> LOL, whether or not you agree with the federal monetary system or not is probably not a 1:1 predictor of whether or not you know something about the field of economics. Depending on his mood, be ready for Phinn to hand you your arse on a platter. :icon_smile_big:


On the first part: I didn't say no more mortgages, I said people shouldn't be getting mortgages for houses larger than they need (and if they do that's fine, the government just shouldn't subsidize it).

On the 2nd: Heh, just having a bit of fun with my fellow Free Stater. Still though, you can know quite a bit about a field and still be out in left field (case in point, me on several fields).


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## marlinspike (Jun 4, 2007)

Wayfarer said:


> Okay, now it is my turn to ask you if you have ever studied economics. There is "more money" then there is "enough more money to alter where my personal indifference curve sits".


I don't think 35% for dollars 200,000 through 300,000 (for instance, since I know somebody is going to come in and say "BUT THAT ISN'T THE CURRENT BRACKET ic12337 is enough to disincentivise making $300k as opposed to $30k.

Obviously many will disagree; there is no exact science to this aspect of it.


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## marlinspike (Jun 4, 2007)

Phinn said:


> The high housing prices you refer to (i.e., triple the rate of ordinary inflation, last I checked) is the direct result of federal programs that facilitate the extension of credit for buying houses. You do know that the market for housing loans is subsidized, yes? Well, that artificially-expanded housing credit _is_ inflation. It doesn't cause inflation. It is inflation.


Obviously the changes I noted wouldn't be the only changes I would make during the Glorious Revolution (get it...I'm in Williamsburg...where there is William & Mary...I'm here all week, folks). I would unsubsidize the lending market outside of education loans (and perhaps certain types of business loans would be subsidized, I'm still not sure).


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## Phinn (Apr 18, 2006)

> I would unsubsidize the lending market outside of education loans


What do you have against students? Why impose additional inflation in the education industry? You have seen what subsidized loan programs have done to tuition rates, haven't you?

Do you propose to correct this problem of ever-skyrocketing tuition (caused by the very program you profess to support) by some sort of universal government-funding for education?

You've turned out to be quite the punitive tyrant, in your role as Ruler of the World, Correcter of Self-Correcting Markets.


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## Wayfarer (Mar 19, 2006)

marlinspike said:


> I don't think 35% for dollars 200,000 through 300,000 (for instance, since I know somebody is going to come in and say "BUT THAT ISN'T THE CURRENT BRACKET ic12337 is enough to disincentivise making $300k as opposed to $30k.
> 
> Obviously many will disagree; there is no exact science to this aspect of it.


Well, even with that huge thing, do not make out like this is in a vacuum. Also, as I have tended bar before, you will make more than 30k (if you are good) and much of it will be cash 

Let us get more real world though. Your choice is work at a moderate level, 40 hour weeks, take six weeks of vacation that year, make 250k. Other choice is work your arse off, put in 50-60 hour weeks only take two weeks of vacation, make your 250k salary PLUS 100k bonus. Bonus is taxed at 40% federal, then you still have your Medicare AND the cap on SS contribution has been removed so you now have an additional 7.5 or so %...all told, that 100k turns into 50k take home. Is it worth it? That is the very real question, you yourslf my friend, might end up asking yourself in several years.


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## ksinc (May 30, 2005)

marlinspike said:


> I don't think you can turn all of the 70s on the tax structure. If you could, then during Clinton we would have seen unemployment shoot up and stay up since he added two tax brackets.
> 
> That said I would maintain indexing across the board (I realize I didn't say this).
> 
> Reagan, HW, and W all have done trickle down (or at least parts of it), and all we see are wider and wider income disparities.


I apparently made the error of taking you at face value. I thought you were discussing "preventing inflation" and not resolving income disparities like you said.

If you want to use taxes merely to redistribute income than, of course, you are correct. Doubly progressive taxes are a decent short term solution.

However, your statement that progressive taxes are a self-correcting mechanism that prevents inflation is incorrect. It is actually a self-reinforcing mechanism.


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## ksinc (May 30, 2005)

Phinn said:


> That's priceless.


Nothing is priceless. However, it was "precious."


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## marlinspike (Jun 4, 2007)

ksinc said:


> I'm sorry. I made the tragic error of taking you at face value. Therefore I thought you were discussing "preventing inflation" and not resolving income disparities.
> 
> If you want to use taxes merely to redistribute income than, of course, you are correct.
> 
> However, your statement that progressive taxes are a self-correcting mechanism that prevents inflation is incorrect. It is actually a self-reinforcing mechanism.


I don't want to prevent inflation, I want to prevent runaway inflation while at the same time promoting societal goods. I still say that indexed progressive taxes provide a correcting factor simply in that they cut back on consumer spending when people start to get a lot of money and let them spend as much as possible when they have little money. Of course, this assumes a government that when they get more tax money actually saves it rather than saying "what new thing can we spend this extra money on." Remember, I said if I ran things, which assumes a magical world of make-believe.


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## Wayfarer (Mar 19, 2006)

marlinspike said:


> I don't want to prevent inflation, I want to prevent runaway inflation while at the same time promoting societal goods. I still say that indexed progressive taxes provide a correcting factor simply in that they cut back on consumer spending when people start to get a lot of money and let them spend as much as possible when they have little money. Of course, this assumes a government that when they get more tax money actually saves it rather than saying "what new thing can we spend this extra money on." Remember, I said if I ran things, which assumes a magical world of make-believe.


And your magical world of make believe is coming to sound more and more like the People's Republic of Marlinspike. When you get to using the tax code to "promoting societal goods" and deciding who will have the cash for consumer spending and who will not, you just started the path to your Daily Minute of Hate (please face the telescreen Winston).


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## ksinc (May 30, 2005)

marlinspike said:


> I don't want to prevent inflation, I want to prevent runaway inflation while at the same time promoting societal goods. I still say that indexed progressive taxes provide a correcting factor simply in that they cut back on consumer spending when people start to get a lot of money and let them spend as much as possible when they have little money. Of course, this assumes a government that when they get more tax money actually saves it rather than saying "what new thing can we spend this extra money on." Remember, I said if I ran things, which assumes a magical world of make-believe.


Self-reinforcing means it would turn inflation into runaway inflation.

You have your paradigm completely backwards. Increased consumption by rich people does not increase demand as much as increased consumption by lower income people. Can you not see that consumption by rich people is somewhat inelastic?

Please refer to The Theory of Employment, Interest, and Money, by John Maynard Keynes. A regressive tax accomplishes your inflation goals. Surely you do not want that.

Unfortunately, you have decided you want a doubly progressive tax structure, but are at a loss to describe the "good" that it produces. There's a reason for that.


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## marlinspike (Jun 4, 2007)

Wayfarer said:


> Well, even with that huge thing, do not make out like this is in a vacuum. Also, as I have tended bar before, you will make more than 30k (if you are good) and much of it will be cash
> 
> Let us get more real world though. Your choice is work at a moderate level, 40 hour weeks, take six weeks of vacation that year, make 250k. Other choice is work your arse off, put in 50-60 hour weeks only take two weeks of vacation, make your 250k salary PLUS 100k bonus. Bonus is taxed at 40% federal, then you still have your Medicare AND the cap on SS contribution has been removed so you now have an additional 7.5 or so %...all told, that 100k turns into 50k take home. Is it worth it? That is the very real question, you yourslf my friend, might end up asking yourself in several years.


Are you implying with "cash" what I think you're implying? Everybody has to pay taxes. "Even businessmen, who rob and cheat and steal from people every day, even they have to pay taxes" (name the movie and win affirmation that you have seen the best comedy every made).

I think if the taxes were as I've indicated, there would be no need for a separate medicare tax (and if SS remained, it would have the current cap, because that's one thing where if you have to put in at all, it shouldn't be more than you can get out, since it's supposedly a savings fund for people who don't know how to save).

It'd be worth it to me. Not for the sake of having the extra 50k, but for the sake of knowing that I've made my maximum contribution. Quite frankly, if I ended up in charge at a firm, I would reduce my own salary and instead distribute it among the clerical staff (I remember one firm that was spending slightly over $100k/yr on the coffee break food/drink and was paying its clerical staff ~$30k/yr).


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## Wayfarer (Mar 19, 2006)

marlinspike said:


> I think if the taxes were as I've indicated, there would be no need for a separate medicare tax (*and if SS remained, it would have the current cap, because that's one thing where if you have to put in at all, it shouldn't be more than you can get out, since it's supposedly a savings fund for people who don't know how to save).*


Bud, you really need to examine SS if that is what you think. The plan is specifically set up exactly the inverse of what you have just stated. It is a welfare plan, set up so that those that contribute the least, got the most back relative to contributions. There is no need to argue over this, if you are inclined to, as it is the simple fact of how the darn thing is set up to work!



marlinspike said:


> It'd be worth it to me. Not for the sake of having the extra 50k, but for the sake of knowing that I've made my maximum contribution.


Well if you are merely working for the sake of knowing you have made the maximum contribution, you could work for a flat rate, say 50k per year. And I will wait until I see the signed checks where you averaged 60 hours per week with only two weeks vacation and handed over all the money to the clerical staff. I have found in life, it is very easy to pontificate and make such promises when the need to keep them are far down the road and they are made to anonymous strangers on the 'Net to maintain the consistency of one's argument.

I have had nurses tell me many times they work because they "like to help people". I always tell them that is bull, they work for the money. When they argue, I tell them that is a great attitude, and a lucky one for me, as I just wrote a policy to eliminate all OT. Suddenly, 100% of the time, it is all about the money!

I have no problem being consistent as I freely admit, the main impetus for me showing up at work everyday is the paycheque. I do not lie to myself or anyone else about it. I wonder why so many people feel they have to hide this truth even from themselves?


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## marlinspike (Jun 4, 2007)

ksinc said:


> Self-reinforcing means it would turn inflation into runaway inflation.
> 
> You have your paradigm completely backwards. Increased consumption by rich people does not increase demand as much as increased consumption by lower income people. Can you not see that consumption by rich people is somewhat inelastic?
> 
> ...


I know what Keynes said, and I know what I say.

Why is it that trickle down economists always say the investments of the wealthy are very elastic so we can't tax them, but then say the spending of the wealthy is inelastic so taxing them won't cap anything. Ok ok, so I said consumer spending, so I'm not always thorough on an internet forum. It's going to cut back on their overall spending.

If you take money out of people's pockets they spend less, and as long as the government doesn't go and spend it you've cut back on total spending. Then, when the economy is on downturn, if in addition to pulling money from the surplus the government has built, the people have a larger portion of their money to spend (because at this end of the scale you probably have no savings), things swing back up (I'm more concerned with deflation than inflation to be honest).


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## marlinspike (Jun 4, 2007)

Wayfarer said:


> Bud, you really need to examine SS if that is what you think. The plan is specifically set up exactly the inverse of what you have just stated. It is a welfare plan, set up so that those that contribute the least, got the most back relative to contributions. There is no need to argue over this, if you are inclined to, as it is the simple fact of how the darn thing is set up to work!
> 
> Well if you are merely working for the sake of knowing you have made the maximum contribution, you could work for a flat rate, say 50k per year. And I will wait until I see the signed checks where you averaged 60 hours per week with only two weeks vacation and handed over all the money to the clerical staff. I have found in life, it is very easy to pontificate and make such promises when the need to keep them are far down the road and they are made to anonymous strangers on the 'Net to maintain the consistency of one's argument.
> 
> ...


Note I said supposedly (as in what they tell the public), and if we were in my magical world where I'm in charge we'd do what we tell the public.

Even though I wasn't compensated for it, I would often log in remotely from home in the evenings or on the weekends to get work done. Some people just like to work.

I agree, money is important, but where does it end? At some of these firms, partners are taking home 7 figures. As it is I give at least 10% of what I make to charity, though as a student I could say every bit helps. I don't even know what I'd do with excess of 200k take-home. I'm not saying I'd give everybody the same paycheck, but I do think some of the benefits are getting ridiculous (like the gym memberships that none of them use that could instead add several thousand dollars to the salary of each member of the clerical staff, or paying for the parking...what's the salary for?)

I would say nurses aren't completely in it for the money. You can make more as a manager at a Blockbuster's Video (I know a nurse who made this switch because of that). At least some portion of it has to be because they want to be there (or feel trapped in their current position...which is still a non-money motivator). I'd agree that it's a majority of it.

I agree that it's harder to be generous once you have the money to be generous (who am I to challenge Aristotle), but I will be making a conscious effort to try to remember these things, just in case I should find a magic wand.


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## Rossini (Oct 7, 2007)

Marlin, of course you are correct. There's a huge element of job satisfaction and "making a difference" in a lot of choices people make for what they do for a living. Long may it last.


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## ksinc (May 30, 2005)

marlinspike said:


> I know what Keynes said, and I know what I say.


That's precious too.


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## ksinc (May 30, 2005)

marlinspike said:


> If you take money out of people's pockets they spend less, and as long as the government doesn't go and spend it you've cut back on total spending. Then, when the economy is on downturn, if in addition to pulling money from the surplus the government has built, the people have a larger portion of their money to spend (because at this end of the scale you probably have no savings), things swing back up (I'm more concerned with deflation than inflation to be honest).


If you take money out of people's pockets, you are stealing.

As to the rest; the answer is no. But then; you know that because you know what Keynes, Friedman, & Hayek each said and which one won a Nobel Prize in 1974 and why.


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## Wayfarer (Mar 19, 2006)

marlinspike said:


> I would say nurses aren't completely in it for the money. You can make more as a manager at a Blockbuster's Video (I know a nurse who made this switch because of that).


LOL, you just proved my point. She was a nurse. She got more money. She stopped being a nurse. QED. However, that is one crappy nurse, I know someone that manages a Blockbuster and I employ, oh, about 200 RNs. Trust me, RNs make more.

And you are correct, no one holds any job, 100%, just for the money. If I said that, I was wrong and engaging in hyperbole. It is certainly a money/what is expected of me ratio. Exactly what I was saying in the above concerning taxes. Tip the money/what is expected of me ratio through taxation, change my behavior.


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## Laxplayer (Apr 26, 2006)

marlinspike said:


> Note I said supposedly (as in what they tell the public), and if we were in my magical world where I'm in charge we'd do what we tell the public.
> 
> Even though I wasn't compensated for it, I would often log in remotely from home in the evenings or on the weekends to get work done. Some people just like to work.
> 
> ...


You're kidding right? Or are you thinking of a CNA? I know LPNs that make more than Blockbuster managers ($30-40k). I know quite a few RNs that make somewhere between $80-$100k.


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## Wayfarer (Mar 19, 2006)

Laxplayer said:


> You're kidding right? Or are you thinking of a CNA? I know LPNs that make more than Blockbuster managers ($30-40k). I know quite a few RNs that make somewhere between $80-$100k.


I have reviewed year-end payroll reports where LPNs were cracking 60k. And yup, an RN at 90k, while not an everyday thing, is not an uncommon thing.


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## Laxplayer (Apr 26, 2006)

Wayfarer said:


> I have reviewed year-end payroll reports where LPNs were cracking 60k. And yup, an RN at 90k, while not an everyday thing, is not an uncommon thing.


That doesn't surprise me. I'm sure it is the ones who are willing to work more than the 3 12's.


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## Phinn (Apr 18, 2006)

> I don't even know what I'd do with excess of 200k take-home.


Compared to the way that lower-level dollars are typically spent, a larger portion of that higher strata of income gets invested, i.e., spent on capital goods rather than on consumption.

Of course, it can only be invested when it's not taken via taxation.

When it is taken via taxation, it is diverted to a government employee, or used to buy the crap that government buys.

In other words, taxation diverts these dollars away from the capital goods they would have bought, and converts them into dollars for immediate consumption. That makes the economy as a whole poorer.

As for the income disparity you keep harping on about, this recent article discusses how income inequality is a predictable result of the inherently-inflationary activities of the Federal Reserve.

In other words, the Fed (which you support and promote without even entertaining the idea that it might be harmful) is actually a primary contributor to the growing income inequality that you so passionately resent.


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## marlinspike (Jun 4, 2007)

Laxplayer said:


> You're kidding right? Or are you thinking of a CNA? I know LPNs that make more than Blockbuster managers ($30-40k). I know quite a few RNs that make somewhere between $80-$100k.


You'd be surprised at how low pay is for RNs (the one who I know who actually did make the switch had been an RN for 15 years) at hospitals in rural areas and how some Blockbuster managers actually do make decent pay (60-80k...there's something more required to get in at this pay level though, you have to go through some training at a regional headquarter and you take on more duties than a typical manager...it was explained to me, but I didn't bother to remember most of it).

I know they can make more, but in a rural hospital the base pay is quite low (IIRC around here...well, down in Newport, which isn't all that rural, it's in the upper 30's-low40's).


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## Wayfarer (Mar 19, 2006)

marlinspike said:


> You'd be surprised at how low pay is for RNs (the one who I know who actually did make the switch had been an RN for 15 years) at hospitals in rural areas and how some Blockbuster managers actually do make decent pay (60-80k...there's something more required to get in at this pay level though, you have to go through some training at a regional headquarter and you take on more duties than a typical manager...it was explained to me, but I didn't bother to remember most of it).
> 
> I know they can make more, but in a rural hospital the base pay is quite low (IIRC around here...well, down in Newport, which isn't all that rural, it's in the upper 30's-low40's).


Newport in what State? I'll ask my HR Veep if she can get a wage report easily on the area. If she can find one fast, I will report back, I do not want her wasting time or asking why I want it  Edit: FYI, traditionally rural hospitals have always paid perks to get personnel, such as student loan repayment, re-lo fees, even subsidized rent/mortgages. These monies tend to come from gov. sources to aid in recruitment. Do not go by wage alone.


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## marlinspike (Jun 4, 2007)

Wayfarer said:


> Newport in what State? I'll ask my HR Veep if she can get a wage report easily on the area. If she can find one fast, I will report back, I do not want her wasting time or asking why I want it  Edit: FYI, traditionally rural hospitals have always paid perks to get personnel, such as student loan repayment, re-lo fees, even subsidized rent/mortgages. These monies tend to come from gov. sources to aid in recruitment. Do not go by wage alone.


Newport News over here in VA.

I'll admit, this is info that I have second hand (I also heard similar things from a couple of people who were RNs switching into being a paralegal back in my HR days).


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## Laxplayer (Apr 26, 2006)

marlinspike said:


> Newport News over here in VA.
> 
> I'll admit, this is info that I have second hand (I also heard similar things from a couple of people who were RNs switching into being a paralegal back in my HR days).


You may be right, but maybe they also didn't like the field of nursing. I also know a few that don't make that much, but they also only work part time. As Wayfarer said before, it all depends on how much one is willing to work, or whether or not they are willing to relocate. There's a huge nursing shortage nationwide, if it was just about salary, I'm sure they could have found a higher paying job, or worked towards an advanced degree.


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## marlinspike (Jun 4, 2007)

Laxplayer said:


> You may be right, but maybe they also didn't like the field of nursing. I also know a few that don't make that much, but they also only work part time. As Wayfarer said before, it all depends on how much one is willing to work, or whether or not they are willing to relocate. There's a huge nursing shortage nationwide, if it was just about salary, I'm sure they could have found a higher paying job, or worked towards an advanced degree.


Well, that was my point, that if they didn't care about the nursing side there'd be a lot more nurses doing what these few nurses I've talked to have done (as it is you can't find an employable RN-paralegal who is looking for work to save your life).


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## ksinc (May 30, 2005)

marlinspike said:


> Well, that was my point, that if they didn't care about the nursing side there'd be a lot more nurses doing what these few nurses I've talked to have done (as it is you can't find an employable RN-paralegal who is looking for work to save your life).


While someone might be able to make more temporarily at BlockBuster the half-life of BlockBuster B&Ms will be about three more years; if that. Frankly, I thought BB was already out of business. All the ones around here are.

Haven't you heard about the new Apple TV and movie rentals?

OTH, HealthCare could have a long and prosperous future. The next year will tell us for sure.


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## Laxplayer (Apr 26, 2006)

ksinc said:


> While someone might be able to make more temporarily at BlockBuster the half-life of BlockBuster B&Ms will be about three more years; if that. Frankly, I thought BB was already out of business. All the ones around here are.
> 
> Haven't you heard about the new Apple TV and movie rentals?
> 
> OTH, HealthCare could have a long and prosperous future. The next year will tell us for sure.


There's not many around here anymore either. I think they have gone more towards the Netflix route and focusing on mail order rentals. I can't remember the last time I was inside a video store. We usually use On Demand if we want to watch a new release.


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## marlinspike (Jun 4, 2007)

ksinc said:


> While someone might be able to make more temporarily at BlockBuster the half-life of BlockBuster B&Ms will be about three more years; if that. Frankly, I thought BB was already out of business. All the ones around here are.
> 
> Haven't you heard about the new Apple TV and movie rentals?
> 
> OTH, HealthCare could have a long and prosperous future. The next year will tell us for sure.


I do Netflix, but I think there will always be some blockbusters so satisfy the situation where the wife calls at 5pm and says can you pick up a movie on your way home.


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## Wayfarer (Mar 19, 2006)

marlinspike said:


> Newport News over here in VA.
> 
> I'll admit, this is info that I have second hand (I also heard similar things from a couple of people who were RNs switching into being a paralegal back in my HR days).


She handed me a print off for a position being offered for a dialysis RN. $33 an hour, tuition reimbursement, re-lo, and the ubiquitous "opportunity for advancement" 

JHG Dialysis.


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## ksinc (May 30, 2005)

marlinspike said:


> I do Netflix, but I think there will always be some blockbusters so satisfy the situation where the wife calls at 5pm and says can you pick up a movie on your way home.


Yep; and here it is:

Apple CEO Steve Jobs said iTunes should have more than 1,000 films by the end of February, with new releases available 30 days after the DVD is released.

Jobs unveiled a long-rumored movie rental service through Apple's iTunes Store during his keynote speech Tuesday at the Macworld Conference & Expo. But he added the surprise that the service included films from each of the major studios, and that an upgrade to the Apple TV set-top box would let users order digital movies directly from their televisions via remote control.

"I think we got it all together," Jobs said. "There is no computer involved here. They are doing it on their couch on their wide-screen TV."

https://www.latimes.com/technology/la-fi-apple16jan16,1,243744.story?coll=la-headlines-technology


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## Laxplayer (Apr 26, 2006)

ksinc said:


> Yep; and here it is:
> 
> Apple CEO Steve Jobs said iTunes should have more than 1,000 films by the end of February, with new releases available 30 days after the DVD is released.
> 
> ...


Sounds good to me.


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## marlinspike (Jun 4, 2007)

ksinc said:


> Yep; and here it is:
> 
> Apple CEO Steve Jobs said iTunes should have more than 1,000 films by the end of February, with new releases available 30 days after the DVD is released.
> 
> ...


I still say Blockbuster will be around for more than a few years. I know neither my parents nor any of their friends will ever buy the Apple service and neither will the generation above them.


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## marlinspike (Jun 4, 2007)

Wayfarer said:


> She handed me a print off for a position being offered for a dialysis RN. $33 an hour, tuition reimbursement, re-lo, and the ubiquitous "opportunity for advancement"
> 
> JHG Dialysis.


First...what are those acronyms. I know Munchausen and dialysis, but what are JHG and ITG?

So, that makes about 66k if there is no OT, and tuiitoin reimbursement and re-lo hardly mean anything to someone who has been doing it for a while. Still, that's more than I had heard, maybe because they had been out of the field for a couple of years?


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## Laxplayer (Apr 26, 2006)

marlinspike said:


> First...what are those acronyms. I know Munchausen and dialysis, but what are JHG and ITG?
> 
> So, that makes about 66k if there is no OT, and tuiitoin reimbursement and re-lo hardly mean anything to someone who has been doing it for a while. Still, that's more than I had heard, maybe because they had been out of the field for a couple of years?


Yeah, but that is $66k with a two year degree and little experience. With all the overtime they are offered, this would add up very quickly. That's about what my friends get, but they go ahead and work 60 hour weeks rather than 3 12 hour days. $66k is darn good for working 3 days out of the week. Also, I don't know how it works there, but here they would get a higher rate if they didn't have tuition reimbursement.


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## Wayfarer (Mar 19, 2006)

Laxplayer said:


> Yeah, but that is $66k with a two year degree and little experience. With all the overtime they are offered, this would add up very quickly. That's about what my friends get, but they go ahead and work 60 hour weeks rather than 3 12 hour days. $66k is darn good for working 3 days out of the week. Also, I don't know how it works there, but here they would get a higher rate if they didn't have tuition reimbursement.


Also, think of buying power. 66k in a rural, low cost of living area is more than 150k in NYC, Chicago, or the like. Raw numbers do not tell the whole story.

Marlin: ITG = internet tough guy. A certain poster posted that he hopes I get the thrashing I deserve from someone. I then created a new entry in the DSM in my signature. JHG was just the name on the print off of the dialysis company, no idea what it stands for. Heck, it could even be the job code and not the company name.


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## printemps2001us (Dec 20, 2007)

Firstly, the US is not in a recession. A recession is 2 consecutive quarters of negative GDP. Secondly, a fall in the stock market is not an indicator of a recession. Sure, a recession tends to reduce corporate earnings which will generally lead to market weakness. 

Will the US go into recession? That's up in the air at this point. But one thing is for sure, a recession is a macroeconomic condition. A normal equity market correction (or even a bear market) is a totally separate item.


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## Wayfarer (Mar 19, 2006)

printemps2001us said:


> Firstly, the US is not in a recession. A recession is 2 consecutive quarters of negative GDP. Secondly, a fall in the stock market is not an indicator of a recession. Sure, a recession tends to reduce corporate earnings which will generally lead to market weakness.
> 
> Will the US go into recession? That's up in the air at this point. But one thing is for sure, a recession is a macroeconomic condition. A normal equity market correction (or even a bear market) is a totally separate item.


This is all correct. A recession is simply a definitional thing and you have defined it correctly. The thing to remember is, GDP is a lagging indicator, so by the time it is known the US is in a recession, it has been there for some time.

Again, the market is not a good indicator. It has gone up in recessions, stayed flat, gone down...basically market behavior is not a good indicator.


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## eg1 (Jan 17, 2007)

*marlinspike*, why don't you just move to Canada?


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## Wayfarer (Mar 19, 2006)

eg1 said:


> *marlinspike*, why don't you just move to Canada?


Yeah, I hear real estate is very cheap wherever the Big 3 are/were the major employer :devil:

Can you just see Marlin out in the oil sands? :icon_smile_big:

OTOH, I am sure GTA could use another lawyer!


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## marlinspike (Jun 4, 2007)

Wayfarer said:


> Yeah, I hear real estate is very cheap wherever the Big 3 are/were the major employer :devil:
> 
> Can you just see Marlin out in the oil sands? :icon_smile_big:
> 
> OTOH, I am sure GTA could use another lawyer!


Isn't GTA just an extension of the US pretty much?

But no, I believe too much in the democratic process. I tell my ideas to people who will listen, and if people agree with it they'll hopefully tell others, and if they are good ideas eventually a large enough majority will want them and they will be implemented. If that never happens, I'll just assume they weren't good enough or popular enough, and losing is part of playing.

We had some board members at my undergrad resign from the board after a proposal passed that allows up to 20% of the board to be non-Christians (there were no non-Christians waiting in the wings to join, and there are none so far). That has marked those board members as sore losers in my mind, and as a result I don't buy from the clothing store that one of them owns (well...I probably wouldn't anyways except maybe socks/underwear).


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## Wayfarer (Mar 19, 2006)

marlinspike said:


> Isn't GTA just an extension of the US pretty much?


LOL, you probably could not be more wrong. Torontonians call it "The City" and feel it is the very heart of Canada. Spend some time there, it is a great city by any measure and no, it is distinctly Canadian. That is a topic for a whole other thread btw. Straddling both cultures and countries as I do, I can tell Canada and the US are definitely distinct cultures and the both countries are so huge, there is distinct regional cultures too. The culture and my life in Tucson is nothing like that of the Detroit area and the Detroit area is nothing like Essex County, just across a little river.


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## marlinspike (Jun 4, 2007)

Wayfarer said:


> LOL, you probably could not be more wrong. Torontonians call it "The City" and feel it is the very heart of Canada. Spend some time there, it is a great city by any measure and no, it is distinctly Canadian. That is a topic for a whole other thread btw. Straddling both cultures and countries as I do, I can tell Canada and the US are definitely distinct cultures and the both countries are so huge, there is distinct regional cultures too. The culture and my life in Tucson is nothing like that of the Detroit area and the Detroit area is nothing like Essex County, just across a little river.


Hmmm, every time I've said in jest to a Canadian that Canada wishes it were the US they always say back "you just say that because you've only been to Toronto!" (these are mostly Canadians from Newfoundland, though one has been from Nova Scotia and one from Alberta).


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## Wayfarer (Mar 19, 2006)

marlinspike said:


> Hmmm, every time I've said in jest to a Canadian that Canada wishes it were the US they always say back "you just say that because you've only been to Toronto!" (these are mostly Canadians from Newfoundland, though one has been from Nova Scotia and one from Alberta).


Odd that most Canadians you know would be from Newfoundland. Very odd. Maybe they say that because GTA is so close to the border or that it is the business center of Canada? No idea, but trust me, GTA folks would happily pick up a hockey stick and crack anyone that says GTA is part of the US. As I also said, there is distinct regionalism in Canada too, just like the US, where certain regions do not even really hold themselves truly part of the US, i.e. Hawaii, parts of the deep south, etc. Heck, even where I live there are large numbers of people that do not feel Arizona should be part of the US.


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## marlinspike (Jun 4, 2007)

Wayfarer said:


> Odd that most Canadians you know would be from Newfoundland. Very odd.


Yeah, I think I know all 8 of them.

I've also been to Niagara Falls. That poor poor city...
It has a decent German restaurant though (Swiss German chef, but really that just makes it better).


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## ksinc (May 30, 2005)

snipits follow ...

Senator Hillary Rodham Clinton said that if she became president, the federal government would take a more active role in the economy to address what she called the excesses of the market and of the Bush administration.

...

"If you go back and look at our history, we were most successful when we had that balance between an effective, vigorous government and a dynamic, appropriately regulated market," Mrs. Clinton said. "And we have systematically diminished the role and the responsibility of our government, and we have watched our market become imbalanced."

She added: "I want to get back to the appropriate balance of power between government and the market."

...

https://www.nytimes.com/2008/01/21/...int&adxnnlx=1200928439-mxEiVhi4aKSLoQnTEso7jw

Another expert in basic economics strikes!


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