I've now read several NYT articles now that posture "recession recovery is here". But there are no signs of new (paying) work coming into our Chicago office. I suspect more layoffs will need to occur to keep our office solvent. Anyone see signs of "economic recovery" in their Chicago/Midwest architectural firms?
I think the Architectural Billings Index lags the general economy. Although don't misinterpret a stock market recovery as a recovery in the general economy. We still have hard times ahead us I'm afraid.
Northern Illinois and Iowa appearantly were standouts for new home sales and construction starts last month. However thats exurban development.
The city proper is still digesting the 10.25% sales tax as well as a few hundred thousand surplus condos. I have some friends who sell appliances in DuPage who said their sales have almost tripled since the Cook county sales tax was implemented. Likewise I was at Sears looking at electric ranges and there wasnt a single customer in the store. I asked the slaesman what was going on and He said same thing, " Stroger Tax".
The greater midwest like Kansas, Iowa, Oklahoma and Nebraska and even over to Denver is doing quite well actualy.
I know quite a few contractors who say they've never been busier, but they are doing repair work for large customers with multiple sites, such as banks and retailers. Unfortunately for us it's architectural work. These same contractors have also told me the same customers have no plans to expand once the economy recovers. In short, they are built out to capacity.
This sentence sums up our dillema as well, "But there are no signs of new (paying) work coming into our Chicago office".
We have work, but it's not paying. We are still fighting for money owed to us from 2 years ago yet continue to work for some of the same people in hopes of them getting their projects financed. If we werent at least doing that, we'd literally be doing nothing.
i've noticed a lot of the job boards have about three postings, as opposed to a few months ago when there were none. i think things have improved slightly, if only for the fact that they aren't getting any worse.
The only reference I have for any rise in Denver construction has to do with severe weather damage to homes and offices. Most of which has occured outside of the City and County of Denver in western suburbs and eastern plains. Other than that contractors, architects, engineers, and even building departments are looking for new work after the meter has run out on existing projects. Fortunately our office has work to keep us busy for a few more months, but what happens after that is anybody's guess.
doing repair work for large customers with multiple sites, such as banks and retailers. Unfortunately for us it's architectural work
jack, what do you mean by this? That the contractors are doing the designing and architects are not getting any of it? Or was that a misprint?
I'm a bit too slow for comfort right now, although perhaps that's just seller's remorse after, a couple weeks ago, declining a job we were afraid was going to be a huge clusterf*ck.
I meant to say "Unfortunately for us it's not architectural work".
However a lot of it does require architect's stamp but these contractors have guys on staff with stamps who just submit the required drawings. They arent designing buildings per se, but they do take care of the small work in house.
I have friends who got laid off months ago that are still looking for work. It seems though that our marketing guy has been busy in recent weeks writing up and sending out more RFQs, proposals, etc. One of our long term retail clients has us doing small projects for us which will keep us a float for the time being. Whether all these things are signs of recovery or much of the same is something that I'm still trying to figure out myself.
Minnesota is slow. went to a community college pre-proposal information meeting and there were over 80 folks in the room. that represents at least 30 offices and half that never did similar projects before... few years back, their would be a 1/4 the number of folks submitting proposals.
Largely left to its own devices, yes, the economy has been able to improve just a bit. I'm quite certain that now is the time to let that continue to occur. We need to skip any/all artificial "stimulus" programs, and concentrate for the next several years on stabilization/damage control, debt reduction, and market-driven growth.
This strategy is, of course, quite the opposite of the current plan of the Obama administration.
My concern is that Obama's unprecedented giant-scale spending plan -- the Recovery Act / Energy intitiatives / government HEALTH CARE -- will amount to unheard of levels of national debt, and the economy will sink even lower. Even more money is needed, and we continue to borrow globally. Then, at some point, as countries like China see no return on their investment, they eventually will no longer lend us any more money. Now what? Well, then the government reaches its least painful and last resort: the Federal Reserve is instructed to print money. The dollar devalues, and inflation soars. Everything you own is worth much less, and everything you have invested in will return devalued dollars.
Gee, no kidding, Beta? You're really missing the point -- seen the news, Beta? As in, Geithner getting quizzed by the Chinese? Why do you suppose that the Chinese are getting very, very worried? Because they have endless cash to fund Obama's spending plans? Hardly.
Here's the deal -- in the light of Obama's monumental spending plans, they are indeed worried about ever getting repaid on the 800 billion we owe them. The Chinese see the state of our economy for what it is right now, and are smart enough to know that once Obama's spending heightens up our debt by another 10 trillion, we are a pile of toast. At some point -- like right now -- they are going to decide not to fund the crash of the U.S. economy, and in the process ruin their own for the sake of your "stabilization" fantasy.
So your "in-it-to-win-it-US-China" power team concept is yesterday's dream.
the minute the chinese stop lending us money is the minute when the united states stop buying chinese made products. who do you think buys 80 percent of the lead coat painted crap that's made in those sweat shops? and then china will have other worries, like a civil war.
Vado, you're describing the status quo and what's happened historically as a basis for what China can and can't do in the future. Well there's a new sherrif in town, and he likes to spend money. Other people's money.
The point is not that China and other countries need our trade, that's no different than any other time. The point is that China DOES NOT HAVE an endless supply of cash to fund Obama's spending programs. It sounds like you're saying 'yes, they do because they need to keep trade going'. Doesn't work that way.
so yeah, back to the thread topic. My question to the architects out there. As work continues to be a slow trickle at best, what to do about this massive surplus of unemployed architects in the midwest?? What else are they to do besides working the retail/resturant/census/real estate business. Move East? At least put our talents to good use.
The Indy market is still very slow, at least from what I'm hearing from the larger firms around town.
In general, it seems that things have stabilized, although it is eerily quiet. The competition for new work has noticeably increased and unfortunately, so has the pressure on fees.
I haven't heard of anyone re-hiring yet; several firms are still working on 4-day weeks and at least one I know of for sure has implemented quarterly 1-week furloughs for all staff.
Two old-line firms were already reeling before the recession took hold and one (or both) may not survive if this drags into 2010.
Similiar to the national storyline, the residential market is thankfully beginning to show signs of thawing.
I know of many mid to smaller firms in the midwest that are down to skeleton staffs with the potential of locking the doors if no new work comes in before years end.
So Illegit, I think you'll be needing to reconsider your outdated opinions, because I am with Fallows and not Niall's position. As Fallows pointed out in the NPR piece; Chinese say things for domestic consumption, and not for international strategies. They are placating the nationalistic urge within China.
What else are they to do besides working the retail/resturant/census/real estate business. Move East?
be entrepreneurial. rethink your business plan. rethink how you do architecture. be proactive. too many people seem down and out when this in fact is a great opportunity for innovation.
I'm pointing out the broader context we are all in, and will be in should the plans of the current admin spending plans get implemented -- in part or in whole.
Gin, we are talking about UNPRECEDENTED debt load resulting from that kind of spending. My concern is what then results. You sound like you are not at all worried about attempting to operate some semblance of a normal economy -- and run architecture offices -- under a crushing national debt load and double-digit inflation?
This should be an important issue for all of us. If I'm missing something, let me know.
Otherwise call me a wingnut and enjoy your smug sarcasm.
I think the one thing you might be discounting is that this massive spending you are describing seems to have AT THE VERY LEAST saved the banking industry... which, like it or not, is step 1 in an economic recovery. The inter bank trading indicies are steadily returning, and the all important ted spread has returned to normalcy.
You frame this debate as if the government just came unhinged from stress and started spending willy nilly... i dont think thats a fair assessment.
We faced, just 6 months ago, the REAL THREAT of a catastrophic banking system collapse... something our overall economy might never have recovered from.
Today, there are small signs of progress... banks are lending more openly, new housing starts are up, and housing values increased for the first time since 2007.
as for the chicago economy... there have been almost no signs of improvement at my office besides the return of 2 projects that went on hold. neither of which are in the US.
However, layoff tales from friends seemed to have stopped... though that might be due more to the fact that most offices are opperating at bare bones already and dont have many expendable employees left
"You frame this debate as if the government just came unhinged from stress and started spending willy nilly... i dont think thats a fair assessment."
Well, hmm... If I could rephrase my characterization, would we be any less headed for massive debt? If I phrase it with a happy face or with a scary face, either way, we're still facing the fact of a debt load that will reach a multiple -- a MULTIPLE ! -- of anything we've ever seen. Seems like a problem to me.
the other thing is, llettdownl -- I'm not too convinced that your we "saved the banking industry" statement reflects as pure fact quite yet. You'd find a great number of folks looking at historical precedents and projecting that all that money will have ultimately done nothing but prolong some inevitabilities.
As I posted earlier, why would we choose to up spending in an economic context like ours? And go further into debt? Don't we need to concentrate for the next several years on stabilization/damage control, debt reduction, and market-driven growth?
At a basic, pull-our-heads-out level, would we run our personal lives this way? Doubtful, because you'd ruin yourself or your business. So why would it work collectively?
Infrastructure, health care programs, energy intiatives, etc., general consumption without production -- good, bad, or indifferent -- these don't build the wealth of a nation.
I'll quit ranting -- but I'm more than a little baffled by the seeming complacency from most on this website, because the fallout from this kind of spending will affect every one of us.
fair enough, my assertion that the banking industry has been stabilized by the bailout funds is not fact... it is however supported a good number of reliable indicies which we can discuss if youd like.
As for framing the debate in a positive or negative light, im not arguing for either. All i was pointing out is that your charachterization of the spending done being completely pointless or worthless is not fact either. I was just urging you to consider that there are indications that the bailouts and stimulus DID INDEED stabalize the banking industry and the greater economy more quickly than might have otherwise been.
This is obviously something no person can say with certainty. there is no way to tell if the bailouts or stimulus worked or are working. Anyone who can claim to know that is flat out lying.
As for deficit spending...
This is a pretty simple fundamental disagreement. You seem to be arguing that we would have been better off not spending the money to help plug the hole purging trillions from our economy. If thats incorrect... correct me. What i dont understand is what stabalization/damage control means? What is the stimulus package if not stabalization/damage control? If the economy is missing a trillion dollars due to recession, and is given a portion of that in an attempt to balance it out, is that not damage control?
What i dont understand is how doing nothing is better than doing something?
Say we did nothing, and the banks failed... business have no where to borrow and go out of business... familys lose their jobs, houses, cars... complete economic collapse ensues with great depression era unemployment.
How inflated do you think the deficit would get then with that loss of revenue?
i might also point out that the recession has hit china as hard if not harder than it has hit the US... they have out Keynsed us by a long long shot devoting something like 8% of their GDP to plug the gap in their economy. China's economy will still record positive growth this year.
obviously not the most perfect example... but something to consider
i don't really want to get involved with this, but what you don't seem to understand, ill, is that this country is in the midst of the worst economic recession since the great depression. fiscal conservatism is great under normal circumstances, but these are not normal circumstances. i would argue that obama's actions to increase spending on infrastructure, health care, and energy are precisely what is needed to spur economic growth to the point where true fiscal conservatism can be practiced. now is not the time to act on principle divorced from the realities of our economy.
The banking bailout and Stimulus package are two very different issues. The bailout is to be paid back, the Government offered guranteed loans and support to be paid back with intrest.
The stimulus is pure spending. Wether you think its spent wisely or foolishly is matter of debate. I hope it gets spent in Chicago. To the victor goes the spoils. Maybe then we can see an upward surge in work.
I was out this past weekend and from what I can tell this is hardly the worst economy since the great deppresion. Restaraunts are packed, nightclubs are packed, Michigan Avenue was wall to wall people shopping. For those of us who lived through the 2 ressessions of the 1970s this seems rather timid actualy. In the 70's 8-9% unemployment was concidered full employment.
I actually do not like obama's infrastructure or energy spending outside of like two projects. The whole "shovel ready" idea is frankly dog poop. It is mostly reinforcing terribly planned and terribly conceived projects that were more than likely designed and planned with the mentality of a few years ago.
Most of the projects spurred by the stimulus is new construction instead fix the laundry list of problems. So, uh, I don't know how this one is going to work.
I also hate his approach to cars-- we need to have less of them than better new ones.
Kurt, I would hazard to guess that Debt as % of GDP is no where close to The Depression, and even if it is, most economists don't think it's problem. As for the theory, you have to start recognizing the histrionics, and stop dealing in empty rhetoric. Fallows cites history; recent and past to suggest why China is not the same as Japan...
that was fair, lletdownl. Thanks for the response.
Couple that stand out...
"If the economy is missing a trillion dollars due to recession, and is given a portion of that in an attempt to balance it out, is that not damage control?"
This is ultimately asking the taxpayers to pay twice. Once for participation in the still relatively free market, and once again for the artificial one created by the government via the stimulus.
"What i dont understand is how doing nothing is better than doing something?"
There are many times that inaction has saved the day. Wrong procedures in so many arenas can be catostrophic. And, at the scale we're discussing, Obama really is gambling everything. "All in", poker fans. But I'd also suggest that there are many things that could be done in the space between doing nothing, and grand historic leaps of spending. Why does Obama insist on all or nothing? For whatever reason, you've bought into it at least a bit, but I'd suggest that right now there is no reason to torch the brdige behind us.
A lot of your argument is based on assuming that spending our way out is not only possible but the correct thing to do to taxpayers. I just dont' see it. History doesn't support your view very well.
Well, for 1...
Obama is not going all in... many of the most prominant economist, and many of Obama's closest confidants say that the stimulus was far too small, and that if it fails, it fails because we didnt go big enough.
Spending ones way out of recession is a basic tenant of Kensyiann economic principles which in essence rely on a ground up approach to wealth creation, or demand side economics, as opposed to the supply side "trickle down" economics we have been more or less following since reagan. This is an over simplification, clearly, but its meant to show that you are wrong in saying history doesnt support this concept. In fact, for much of the 20th century, this thought process was the predominant economic theory. Economic hardships which many believe started with natural resource scarcity in the 70's paved the way for the supply side politicians to change our economic course, which is why we are where we are...
History has many examples of spending ones way our of recession... WWII being the most glaring example, as the government spent incredible sums of money building tanks planes and highways, catapulting the US from economic power to economic super power.
History also provides Japans burst in the 80's as an example of what slow response to economic hardship can often mean. Many attribute japans bust and extremeley slow (decades) recovery to the fact that the government did not do enough to sure up financial institutions or stave off falling demand and production.
that's a good way to look at the debt, Beta. Actually, we will end up much higher than the Depression. Of course, things really went nuts during WWII, and that is really the highest thus far... but we're projected to surpass those percentages.
Histrionics? Empty rhetoric? It's just the other side of the world from your view, Beta. Lots of people there, too.
"most economists don't think it's problem"... Hah. Well, good luck with that one outside of Archinect! :-)
this is not a gamble. the infrastructure is in shambles.
pay now or pay later.
labor and construction costs are down now, so do it now. it's going to be a hit, no doubt, but the cost of waiting til all the stars align is like waiting for your Powerball numbers to hit.
"Many attribute japans bust and extremeley slow (decades) recovery to the fact that the government did not do enough to sure up financial institutions or stave off falling demand and production."
Wait a second -- japan went nuts with exactly that kind of spending and it resulted in the infamous Lost Decade.
I'm not saying it hasn't been implemented historically, I'm saying it's seldom worked at all throughout history.
beta is partially right about the debt as percentage of GDP...
notice that during WWII and directly after, we were spending double what we are now. Those happen to coincide with some of our most prosperous years, and a very speedy recovery from previous economic downturn
Sure, Beta, as general "maintenance" timely repair is the way to go. But we're in a recessiona and need to grow the economy. You can't be saying infrastructure spending will wildly spur the economy? Wouldn't be my first choice as Step One toward a better economy.
Recession Recovery - Any Signs in Midwest?
I've now read several NYT articles now that posture "recession recovery is here". But there are no signs of new (paying) work coming into our Chicago office. I suspect more layoffs will need to occur to keep our office solvent. Anyone see signs of "economic recovery" in their Chicago/Midwest architectural firms?
I think the Architectural Billings Index lags the general economy. Although don't misinterpret a stock market recovery as a recovery in the general economy. We still have hard times ahead us I'm afraid.
Northern Illinois and Iowa appearantly were standouts for new home sales and construction starts last month. However thats exurban development.
The city proper is still digesting the 10.25% sales tax as well as a few hundred thousand surplus condos. I have some friends who sell appliances in DuPage who said their sales have almost tripled since the Cook county sales tax was implemented. Likewise I was at Sears looking at electric ranges and there wasnt a single customer in the store. I asked the slaesman what was going on and He said same thing, " Stroger Tax".
The greater midwest like Kansas, Iowa, Oklahoma and Nebraska and even over to Denver is doing quite well actualy.
I know quite a few contractors who say they've never been busier, but they are doing repair work for large customers with multiple sites, such as banks and retailers. Unfortunately for us it's architectural work. These same contractors have also told me the same customers have no plans to expand once the economy recovers. In short, they are built out to capacity.
chicagoarchitect,
This sentence sums up our dillema as well, "But there are no signs of new (paying) work coming into our Chicago office".
We have work, but it's not paying. We are still fighting for money owed to us from 2 years ago yet continue to work for some of the same people in hopes of them getting their projects financed. If we werent at least doing that, we'd literally be doing nothing.
It's a hopeful feeling to say the least.
But signs would be pointing to no since the general consesus is that labor figures are between 6 to 9 months after the S&P hits the lowest point.
So, until December... employment can really only get worse.
i've noticed a lot of the job boards have about three postings, as opposed to a few months ago when there were none. i think things have improved slightly, if only for the fact that they aren't getting any worse.
The only reference I have for any rise in Denver construction has to do with severe weather damage to homes and offices. Most of which has occured outside of the City and County of Denver in western suburbs and eastern plains. Other than that contractors, architects, engineers, and even building departments are looking for new work after the meter has run out on existing projects. Fortunately our office has work to keep us busy for a few more months, but what happens after that is anybody's guess.
jack, what do you mean by this? That the contractors are doing the designing and architects are not getting any of it? Or was that a misprint?
I'm a bit too slow for comfort right now, although perhaps that's just seller's remorse after, a couple weeks ago, declining a job we were afraid was going to be a huge clusterf*ck.
I meant to say "Unfortunately for us it's not architectural work".
However a lot of it does require architect's stamp but these contractors have guys on staff with stamps who just submit the required drawings. They arent designing buildings per se, but they do take care of the small work in house.
I am waiting for payment too. Banks seem to be continually screwing people, which has the snowball effect and everyone feels the pain.
I have not seen any sign that things are getting any better, anywhere.
I have friends who got laid off months ago that are still looking for work. It seems though that our marketing guy has been busy in recent weeks writing up and sending out more RFQs, proposals, etc. One of our long term retail clients has us doing small projects for us which will keep us a float for the time being. Whether all these things are signs of recovery or much of the same is something that I'm still trying to figure out myself.
Minnesota is slow. went to a community college pre-proposal information meeting and there were over 80 folks in the room. that represents at least 30 offices and half that never did similar projects before... few years back, their would be a 1/4 the number of folks submitting proposals.
Largely left to its own devices, yes, the economy has been able to improve just a bit. I'm quite certain that now is the time to let that continue to occur. We need to skip any/all artificial "stimulus" programs, and concentrate for the next several years on stabilization/damage control, debt reduction, and market-driven growth.
This strategy is, of course, quite the opposite of the current plan of the Obama administration.
My concern is that Obama's unprecedented giant-scale spending plan -- the Recovery Act / Energy intitiatives / government HEALTH CARE -- will amount to unheard of levels of national debt, and the economy will sink even lower. Even more money is needed, and we continue to borrow globally. Then, at some point, as countries like China see no return on their investment, they eventually will no longer lend us any more money. Now what? Well, then the government reaches its least painful and last resort: the Federal Reserve is instructed to print money. The dollar devalues, and inflation soars. Everything you own is worth much less, and everything you have invested in will return devalued dollars.
Sound good? Then Obama is on the right track.
China does not want to destabilize Uncle Sam. China and USA are in it to win.
the cubs are in first place...
Gee, no kidding, Beta? You're really missing the point -- seen the news, Beta? As in, Geithner getting quizzed by the Chinese? Why do you suppose that the Chinese are getting very, very worried? Because they have endless cash to fund Obama's spending plans? Hardly.
Here's the deal -- in the light of Obama's monumental spending plans, they are indeed worried about ever getting repaid on the 800 billion we owe them. The Chinese see the state of our economy for what it is right now, and are smart enough to know that once Obama's spending heightens up our debt by another 10 trillion, we are a pile of toast. At some point -- like right now -- they are going to decide not to fund the crash of the U.S. economy, and in the process ruin their own for the sake of your "stabilization" fantasy.
So your "in-it-to-win-it-US-China" power team concept is yesterday's dream.
the minute the chinese stop lending us money is the minute when the united states stop buying chinese made products. who do you think buys 80 percent of the lead coat painted crap that's made in those sweat shops? and then china will have other worries, like a civil war.
I like where this thread is going.
Vado, you're describing the status quo and what's happened historically as a basis for what China can and can't do in the future. Well there's a new sherrif in town, and he likes to spend money. Other people's money.
The point is not that China and other countries need our trade, that's no different than any other time. The point is that China DOES NOT HAVE an endless supply of cash to fund Obama's spending programs. It sounds like you're saying 'yes, they do because they need to keep trade going'. Doesn't work that way.
iceland is in the midwest, right?...because there are signs of recovery there
unfortunately the article makes no mention of how the minnesota kroner is doing...but i'd assume it's recovering too
jk3hl, assuming that was sarcasm, I'm totally wiht you.
I love how wingnuts suddenly transform into deficit hawks the minute a Democrat takes office. I'm surprised they don't get whiplash.
so yeah, back to the thread topic. My question to the architects out there. As work continues to be a slow trickle at best, what to do about this massive surplus of unemployed architects in the midwest?? What else are they to do besides working the retail/resturant/census/real estate business. Move East? At least put our talents to good use.
The Indy market is still very slow, at least from what I'm hearing from the larger firms around town.
In general, it seems that things have stabilized, although it is eerily quiet. The competition for new work has noticeably increased and unfortunately, so has the pressure on fees.
I haven't heard of anyone re-hiring yet; several firms are still working on 4-day weeks and at least one I know of for sure has implemented quarterly 1-week furloughs for all staff.
Two old-line firms were already reeling before the recession took hold and one (or both) may not survive if this drags into 2010.
Similiar to the national storyline, the residential market is thankfully beginning to show signs of thawing.
What are others experiencing?
I know of many mid to smaller firms in the midwest that are down to skeleton staffs with the potential of locking the doors if no new work comes in before years end.
fancy this topic coming on the same day as i was listening to the Aspen Ideas Festival on NPR yesterday
James Fallows| More Chimerica, Ferguson, Fallows, Kaiser Wilhelm, etc
So Illegit, I think you'll be needing to reconsider your outdated opinions, because I am with Fallows and not Niall's position. As Fallows pointed out in the NPR piece; Chinese say things for domestic consumption, and not for international strategies. They are placating the nationalistic urge within China.
be entrepreneurial. rethink your business plan. rethink how you do architecture. be proactive. too many people seem down and out when this in fact is a great opportunity for innovation.
I'm pointing out the broader context we are all in, and will be in should the plans of the current admin spending plans get implemented -- in part or in whole.
Gin, we are talking about UNPRECEDENTED debt load resulting from that kind of spending. My concern is what then results. You sound like you are not at all worried about attempting to operate some semblance of a normal economy -- and run architecture offices -- under a crushing national debt load and double-digit inflation?
This should be an important issue for all of us. If I'm missing something, let me know.
Otherwise call me a wingnut and enjoy your smug sarcasm.
Sure, beta -- but all that theory eventually runs out too if we're 10 trillion in debt. Ya know?
Like my new name?
Kurt
I think the one thing you might be discounting is that this massive spending you are describing seems to have AT THE VERY LEAST saved the banking industry... which, like it or not, is step 1 in an economic recovery. The inter bank trading indicies are steadily returning, and the all important ted spread has returned to normalcy.
You frame this debate as if the government just came unhinged from stress and started spending willy nilly... i dont think thats a fair assessment.
We faced, just 6 months ago, the REAL THREAT of a catastrophic banking system collapse... something our overall economy might never have recovered from.
Today, there are small signs of progress... banks are lending more openly, new housing starts are up, and housing values increased for the first time since 2007.
as for the chicago economy... there have been almost no signs of improvement at my office besides the return of 2 projects that went on hold. neither of which are in the US.
However, layoff tales from friends seemed to have stopped... though that might be due more to the fact that most offices are opperating at bare bones already and dont have many expendable employees left
lletdownl... hey.
"You frame this debate as if the government just came unhinged from stress and started spending willy nilly... i dont think thats a fair assessment."
Well, hmm... If I could rephrase my characterization, would we be any less headed for massive debt? If I phrase it with a happy face or with a scary face, either way, we're still facing the fact of a debt load that will reach a multiple -- a MULTIPLE ! -- of anything we've ever seen. Seems like a problem to me.
the other thing is, llettdownl -- I'm not too convinced that your we "saved the banking industry" statement reflects as pure fact quite yet. You'd find a great number of folks looking at historical precedents and projecting that all that money will have ultimately done nothing but prolong some inevitabilities.
As I posted earlier, why would we choose to up spending in an economic context like ours? And go further into debt? Don't we need to concentrate for the next several years on stabilization/damage control, debt reduction, and market-driven growth?
At a basic, pull-our-heads-out level, would we run our personal lives this way? Doubtful, because you'd ruin yourself or your business. So why would it work collectively?
Infrastructure, health care programs, energy intiatives, etc., general consumption without production -- good, bad, or indifferent -- these don't build the wealth of a nation.
I'll quit ranting -- but I'm more than a little baffled by the seeming complacency from most on this website, because the fallout from this kind of spending will affect every one of us.
it's not complacency. it's simply that most here believe your perspective is wrong.
In what way, jaf? There is just no discussion of it.
Why the assumption that the U.S. can not only handle the resultant debt load, but that it will somehow create jobs and national wealth?
fair enough, my assertion that the banking industry has been stabilized by the bailout funds is not fact... it is however supported a good number of reliable indicies which we can discuss if youd like.
As for framing the debate in a positive or negative light, im not arguing for either. All i was pointing out is that your charachterization of the spending done being completely pointless or worthless is not fact either. I was just urging you to consider that there are indications that the bailouts and stimulus DID INDEED stabalize the banking industry and the greater economy more quickly than might have otherwise been.
This is obviously something no person can say with certainty. there is no way to tell if the bailouts or stimulus worked or are working. Anyone who can claim to know that is flat out lying.
As for deficit spending...
This is a pretty simple fundamental disagreement. You seem to be arguing that we would have been better off not spending the money to help plug the hole purging trillions from our economy. If thats incorrect... correct me. What i dont understand is what stabalization/damage control means? What is the stimulus package if not stabalization/damage control? If the economy is missing a trillion dollars due to recession, and is given a portion of that in an attempt to balance it out, is that not damage control?
What i dont understand is how doing nothing is better than doing something?
Say we did nothing, and the banks failed... business have no where to borrow and go out of business... familys lose their jobs, houses, cars... complete economic collapse ensues with great depression era unemployment.
How inflated do you think the deficit would get then with that loss of revenue?
i might also point out that the recession has hit china as hard if not harder than it has hit the US... they have out Keynsed us by a long long shot devoting something like 8% of their GDP to plug the gap in their economy. China's economy will still record positive growth this year.
obviously not the most perfect example... but something to consider
i don't really want to get involved with this, but what you don't seem to understand, ill, is that this country is in the midst of the worst economic recession since the great depression. fiscal conservatism is great under normal circumstances, but these are not normal circumstances. i would argue that obama's actions to increase spending on infrastructure, health care, and energy are precisely what is needed to spur economic growth to the point where true fiscal conservatism can be practiced. now is not the time to act on principle divorced from the realities of our economy.
The banking bailout and Stimulus package are two very different issues. The bailout is to be paid back, the Government offered guranteed loans and support to be paid back with intrest.
The stimulus is pure spending. Wether you think its spent wisely or foolishly is matter of debate. I hope it gets spent in Chicago. To the victor goes the spoils. Maybe then we can see an upward surge in work.
I was out this past weekend and from what I can tell this is hardly the worst economy since the great deppresion. Restaraunts are packed, nightclubs are packed, Michigan Avenue was wall to wall people shopping. For those of us who lived through the 2 ressessions of the 1970s this seems rather timid actualy. In the 70's 8-9% unemployment was concidered full employment.
fiscal conservatism= privatize success, socialize failure.
Yeah, that doesn't exactly work out all the time.
I actually do not like obama's infrastructure or energy spending outside of like two projects. The whole "shovel ready" idea is frankly dog poop. It is mostly reinforcing terribly planned and terribly conceived projects that were more than likely designed and planned with the mentality of a few years ago.
Most of the projects spurred by the stimulus is new construction instead fix the laundry list of problems. So, uh, I don't know how this one is going to work.
I also hate his approach to cars-- we need to have less of them than better new ones.
Oh, the I-88 / I-290 expansion and repavement projects are suppose to be done soon.
That'll give Chicago a boost for 5 to 7 years until the capacity gets maxed out again.
Kurt, I would hazard to guess that Debt as % of GDP is no where close to The Depression, and even if it is, most economists don't think it's problem. As for the theory, you have to start recognizing the histrionics, and stop dealing in empty rhetoric. Fallows cites history; recent and past to suggest why China is not the same as Japan...
that was fair, lletdownl. Thanks for the response.
Couple that stand out...
"If the economy is missing a trillion dollars due to recession, and is given a portion of that in an attempt to balance it out, is that not damage control?"
This is ultimately asking the taxpayers to pay twice. Once for participation in the still relatively free market, and once again for the artificial one created by the government via the stimulus.
"What i dont understand is how doing nothing is better than doing something?"
There are many times that inaction has saved the day. Wrong procedures in so many arenas can be catostrophic. And, at the scale we're discussing, Obama really is gambling everything. "All in", poker fans. But I'd also suggest that there are many things that could be done in the space between doing nothing, and grand historic leaps of spending. Why does Obama insist on all or nothing? For whatever reason, you've bought into it at least a bit, but I'd suggest that right now there is no reason to torch the brdige behind us.
A lot of your argument is based on assuming that spending our way out is not only possible but the correct thing to do to taxpayers. I just dont' see it. History doesn't support your view very well.
Well, for 1...
Obama is not going all in... many of the most prominant economist, and many of Obama's closest confidants say that the stimulus was far too small, and that if it fails, it fails because we didnt go big enough.
Spending ones way out of recession is a basic tenant of Kensyiann economic principles which in essence rely on a ground up approach to wealth creation, or demand side economics, as opposed to the supply side "trickle down" economics we have been more or less following since reagan. This is an over simplification, clearly, but its meant to show that you are wrong in saying history doesnt support this concept. In fact, for much of the 20th century, this thought process was the predominant economic theory. Economic hardships which many believe started with natural resource scarcity in the 70's paved the way for the supply side politicians to change our economic course, which is why we are where we are...
History has many examples of spending ones way our of recession... WWII being the most glaring example, as the government spent incredible sums of money building tanks planes and highways, catapulting the US from economic power to economic super power.
History also provides Japans burst in the 80's as an example of what slow response to economic hardship can often mean. Many attribute japans bust and extremeley slow (decades) recovery to the fact that the government did not do enough to sure up financial institutions or stave off falling demand and production.
that's a good way to look at the debt, Beta. Actually, we will end up much higher than the Depression. Of course, things really went nuts during WWII, and that is really the highest thus far... but we're projected to surpass those percentages.
Histrionics? Empty rhetoric? It's just the other side of the world from your view, Beta. Lots of people there, too.
"most economists don't think it's problem"... Hah. Well, good luck with that one outside of Archinect! :-)
this is not a gamble. the infrastructure is in shambles.
pay now or pay later.
labor and construction costs are down now, so do it now. it's going to be a hit, no doubt, but the cost of waiting til all the stars align is like waiting for your Powerball numbers to hit.
"Many attribute japans bust and extremeley slow (decades) recovery to the fact that the government did not do enough to sure up financial institutions or stave off falling demand and production."
Wait a second -- japan went nuts with exactly that kind of spending and it resulted in the infamous Lost Decade.
I'm not saying it hasn't been implemented historically, I'm saying it's seldom worked at all throughout history.
beta is partially right about the debt as percentage of GDP...
notice that during WWII and directly after, we were spending double what we are now. Those happen to coincide with some of our most prosperous years, and a very speedy recovery from previous economic downturn
Sure, Beta, as general "maintenance" timely repair is the way to go. But we're in a recessiona and need to grow the economy. You can't be saying infrastructure spending will wildly spur the economy? Wouldn't be my first choice as Step One toward a better economy.
japans lost decade is often attributed to the governments lack of action when the bubble burst.
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