The Fed gave it's thumbs down to the Obama economy yesterday by announcing a debasement of the currency ,with $267 billion infusion of monopoly money in the form of extending "Operation Twist " .The plan began late last year ;and was supposed to end this month.It is basically the Fed buys and sells short-term and long-term bonds in an attempt to lower alreadty low interests rates .The new plan is to keep rates at net 0% until 2015, a year longer than the last estimate.

This seems like a punt. When interest rates are 0% already and the market still hasn't been sufficiently " stimulated " then what are they hoping to achieve ? Low interest rates do nothing . The Japanese tried that for 20 years . But I smell QEIII in the fall when the panic over reelect really kicks in.

Perhaps it is not the monetary policy ,but the adm, fiscal policies that need addressing .
The markets of course already have factored this move into their calculations ;and short and long term prospects for the Obama economy remain grim.
Here in NY ,unemployment is on an upward trajectory over the year and I'm pretty sure it is a national trend.

But take heart . The President recently achieved a mile-stone.
He played his 100th round of golf since he became POTUS .

Well Tom the Fed could try the time tested stimulatory affect of actually raising rates and thus expectations and confidence. Buying up old bonds doesn't seem to have had the desired effect but issuing new ones with a higher rate might.

You are in a very difficult position you have no room to move on interest rates and no ability to move on tax the two main tools a government has to regulate an economy. This leaves uping expenditure to stimulate the economy and there appears little hope of that. Could it be said that these are signs of a failed economy? A failed economic model?

Now I want you to know I'm just posing questions, because in your circumstances I don't have solutions short of some sort of large scale protectionist move imposting a high tarriff barrier in imports.

We could be doing a lot better here Clete if the conservative right wing loonies would stop playing pure hardball politics and clogging up the works, so they can extract more cash for their fat cat gods they worship. You ever see an elected official root for failure, and actually try to tank the country... AGAIN!!

They hate the Fed!

Tal how do you extract cash when the economy has tanked? Cash in a government sense can only come from one source OPM and that also holds true for industry and commerce.

It was once said that money was made round to go round and that means the medium of exchange must be exchanged. This point appears to be lost on politicians and the captains of industry who appear to be waiting for a number nine bus

The economy has only tanked for the middle class industrial worker, and poor and young people Clete. The rich are even richer, corporations make more than they ever have, and the banks are so flush with assets (trillions), they can't spend it all. We still have the richest, most expensive Army in the world, but its not enough for the greedy b@stards at the top of the money pile. They want a bigger tax cut, paid for by taking more from the least.

There is plenty of money for them to steal. 15 trillion to be exact!

I find it hard to agree with that number Tal. That is the sum that, in following your train of thought, they have already stolen.

Yes your industry is a malaise, this is because you have allowed those same persons to export your industries to the low cost economies and imported their unemployment. The answer to this is to raise interest rates so they are required to make their money work harder. This is the reverse of conventional economic thinking

We do that by taxation here Clete, and job creation by investments, that how the economy works here and the only reason it isn't is the political wars we are having because the rich guys don't have to sell anything to make money, as their wealth is over seas, and its cheaper to by congress and make new laws and loop holes to get fatter.

You are right though it's the reverse of what we should be doing and have done in the past, which was raise taxes by 4 or 5%, grow government by a few percentage points, and fix the stuff that's broken through out the nation, and help states hire cops, teachers, and firemen, garbage men and other city service workers. We have done this successfully many times before but until we end the political wars, we are on hold.

Don't worry, we will lock up the right wing loonies by the end of the year. Oh and the fed didn't give a thumbs down, they predicted slow growth because of the political wars going on, and in preparation for Europe getting screwed. You been listening to Tom again ain't you??

Yes makes a lot of sense .The rich want the economy to tank because their fortune is enriched that way . Do you even think about the stuff you write ?

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Originally Posted by talaniman

We do that by taxation here Clete, and job creation by investments, that how the economy works here and the only reason it isn't is the political wars we are having because the rich guys don't have to sell anything to make money, as their wealth is over seas, and its cheaper to by congress and make new laws and loop holes to get fatter.

You are right though its the reverse of what we should be doing and have done in the past, which was raise taxes by 4 or 5%, grow government by a few percentage points, and fix the stuff thats broken thru out the nation, and help states hire cops, teachers, and firemen, garbage men and other city service workers. We have done this successfully many times before but until we end the political wars, we are on hold.

Don't worry, we will lock up the right wing loonies by the end of the year. Oh and the fed didn't give a thumbs down, they predicted slow growth because of the political wars going on, and in preparation for Europe getting screwed. You been listening to Tom again ain't ya???

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Taxation is a different economic measure to Interest Tal, yes I agree that it is time in many parts of the world to contribute to economic growth and this must be done by reversing the damaging policies and effectively dealing with the problems of our societies. Those who derive the most benefit from the society should be those who contribute the highest rate of tax. I know the conservatives hate this sort of thinking but they are also the greatest consumer of services since it all facilitates maintaining their lifestyle.

I see the following policies as damaging. Removal of tariff barriers, free trade, zero interest rates, low tax regimes, subsidies to inefficient industries. Each nation should be as self sufficient as is possible and protect its own internal industries. Now I know that what I say flies in the face of the trade policies of the US and others but they sowed the wind and reaped the whirlwind.

Competition is what should drive prices and interest rates, and rich guys don't consume enough to support an economy as large as ours.

Now lets get some good paying jobs going and stop a few rich guys from buying politicians, and we may get off the ground with this wounded duck, and fix a bridge or two.

The conservatives have been pushing their oligarchy by privatizing every thing in sight for decades and they are really ramped up now, if they can keep the loonies, and low informed hyped up and active.

Yes these red necked politicians are a problem and so are their patrons. The red necks like to drive over bridges on the way to the airport but they don't want to maintain them. They forget it is taxes that put the highways there and taxes that fill in the potholes. They think because they have exported all the jobs to a low cost country that things at home can be done cheaper too. That makes them cheapskates

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The answer to this is to raise interest rates

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We do that by taxation here

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Hello ? Recession reduce taxes not raise taxes . You and your progressives have taxed us out of competitiveness. I mention NY unemployment earlier. The Hudson Valley used to be a hi tech hub. IBM and others had their corporate HQ here. Before these jobs get outsourced overseas they get outsourced out of state . We lost them because NY thought the way to go was to squeeze the last nickel out through taxation. You really do have to lose this notion that you can tax your way to prosperity . Jobs go where there is a favorable business environment ;not the highest taxed areas .
Maybe you think that a sluggish 0-2% growth and unemployment close to double digit is the new normal . If you want a growth economy then both the President's and the Fed's approach are counter-productive. Bernanke's trying .He can't make the government change it's burdensome regulations ;he wasn't the one who pumped billions of dollars into failed stimulus schemes . But he should know by now that lower interest rates don't work. I already gave the Japanese example . They tried it for a decade . You want to know who gets screwed ? The retiree and responsible people who save; that's who.
If policy makes it cheaper to mfg. in California than NY it will happen. If policy makes it cheaper to mfg. in Texas than in California, it will happen. If policy makes it cheaper to mfg. overseas than in the US, it will happen.

World stocks fall amid US jobs, housing gloom - Yahoo! News
Another example of rich people (who lost $millions in wealth value yesterday )screwing everyone no doubt. Yeah they want a bad economy because they get richer when the economy sucks . I get it.

Speaking of policies that force corporations to look for more friendly confines, ask French businesses how they feel about their prospects with the new all Socialist government?

French businesses fear "systematic strangling"

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Bracing for a less business-friendly government, Medef President Laurence Parisot said employers' concerns were falling on deaf ears in the government as they faced what she described as unprecedented uncertainty due to Europe's debt crisis.

She warned margins were tumbling, orders collapsing and cashflow dwindling as investment and hiring were put off or cancelled outright in the face of the uncertain economic outlook.

"We've had many meetings with the staff in ministries to explain what's happening, but we are becoming deeply distressed. We fear a systematic strangling," Parisot told a news conference.

The government of President Francois Hollande, who was elected last month on pledges to fight unemployment and revive growth, is preparing to hike taxes on large companies and make firing workers more costly for employers to discourage layoffs...

"Let's be careful not to transform our country into a super-rigid enclave completely out of touch with the functioning of market economies as found everywhere else," Parisot said.

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And the money quote?

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British Prime Minister David Cameron said at a G20 meeting in Los Cabos Mexico that Britain would roll out the red carpet for French companies seeking refuge from the French taxman.

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Need I say more?

Its one thing for states to compete against each other, but quite another when we compete against sweat shops. Seems to me the rest of the world should be chasing US, not the other way around.

What we should work for a sweat shop here? Then Apple would come here right? Still waiting for that list of regulations that stop big business from creating jobs.

I will not create a list .That would take too long . The volumes of pages that represent the law in this country is too massive ;and the individual rules divined out of the mind of the interpretation of the law by the individual regulatory agencies is beyond belief. A lot of my time is spent making sure the documentation coming out of my dept complies with some inspector's interpretation of these agencies interpretations of the volumes of rules published to interpret the thousands of pages of law created by Federal ,State and local governments.
In fact ,one of the biggest and fastest growing areas of my company are the ones that are regulatory compliance related .

Now ,since you asked ,I'll give you one of the silliest ones I've read about recently. It involves cellulosic ethanol . You remember ,in the middle of the last decade President Bush started making speeches about biofuels ;he often referred to switchgrass . Well Congress passed a law to basically subsidize this by mandating that refiners begin to include a percentage of this fuel into the mix. The mandate for 2012 is 500 million gallons. It rises to 3 billion gallons in 2015 and then 16 billion gallons in 2022.The EPA was given enforcement .

The assumption was that cellulosic ethanol would actually be available as an additive by 2012 . The assumption was wrong.

However ,that has not stopped the EPA from fining refineries for non-compliance anyway ,even though the law gives them discretion .

So now the refiners have a choice ,pay the fines ,or challenge the EPA in court. They opted for a court challenge ,which means they get to waste money in the challenge ;and we the people get to waste tax dollars defending the EPA. Look and you will find many such examples .

This one is a bit extreme ;but it does accurately represent the challenges that business has in regulatory compliance. Good sound regulation is necessary. Burdensome over regulation is a business killer, New regulations proposed in the 1990s took effect in my industry last decade. Since then the predictable happened . Many of the smaller companies have dropped out of the game ;and the business has consolidated into the few larger companies that had the resources to comply. Yes we hired more people . But the numbers we hired does not make up for the numbers displaced when the smaller companies closed shop.

Bureacracy gone mad and it was a republican what done it, go figure they can actually do something when they try

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Originally Posted by paraclete

bureacracy gone mad and it was a republican what done it, go figure they can actually do something when they try

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I support them only because they are slightly better than the Dems.The problems in this country resulting from bad governance have been a bipartisn effort. Too many Repubics think their mission is to be better managers of the nanny state . They have a different party identification ;but they are still statists at heart.

Tal, I have to deal with codes and regulations from OSHA, DOT, state and local fire marshals in 3 states, MSHA, NFPA, NEC, CGA, NICET and God knows what else. It is literally mind boggling.

Several large corporations we serve use a third party to certify safety compliance of their contractors. Most require confined space training. We don't do confined spaces so we request exemptions on that program. One rejected our request because our techs have to work on ladders. In an aircraft hangar. How much less of a confined space can an aircraft hangar be? But yes, federal regulations include some jobs where the possibility of falling exists under confined spaces. Silly me, I thought that fell under ladder safety and/or fall protection. Do you understand the complexity and cost between ladder safety and fall protection compliance and confined space compliance? All to stand on a ladder and check a smoke detector?

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Originally Posted by tomder55

I support them only because they are slightly better than the Dems.The problems in this country resulting from bad governance have been a bipartisn effort. Too many Repubics think their mission is to be better managers of the nanny state . They have a different party identification ;but they are still statists at heart.

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Tom free the purse strings and watch growth come back increase interest rates and taxation and watch the dollar appreciate The old ideas of economic management arnt working there can be no growth at zero interest and lower tax just grinding everything down