Isn't economic 'growth' created by what Romney wants - just a bubble?

[applegrove]

Last edited Thu May 31, 2012, 08:35 PM - Edit history (4)

The Celtic Tiger in Ireland turned out to be nothing but a bubble. There is just so much speculation that more money will be made in the future with a 'friendlier business environment'. I mean Staples didn't create jobs it just made money for rich people, as opposed to mom and pop stores, and turned everyone else into clerks (some of them used to be middle managers). Deregulation just results in mid sized corporations and their jobs being destroyed. Efficientcy results in off-shoring or broken contracts. And Keynesian economic and a tight money policy both fought bubbles and crashes in the 20th century. Do Conservatives just like bubbles while the middle class does not? Makes sense. Rich people make higher risk investments. Middle class and the poor need to be more careful. So Romney wants the high risk bubble economy that reflects only the needs of the wealthiest amongst us.

[Drunken Irishman]

1. Bubble economics is easy...

It's like meth. Cheap to make for the high you get - but dammit, you'll crash sooner or later.

We've experienced three bubbles in the last 20 or so years. The first was the tech bubble, which burst in 2000, and then we had the stock market bubble & housing bubble that both popped at the same time in '08, leading to the mess we're currently in. Unfortunately, it's not just the Republicans who deserve the blame on this one. Pres. Clinton laid the foundation for bubble economics in the 1990s and Bush followed it to a T.

It's why, coming out of that tech bubble recession of the early 00s, we struggled to gain anything back and it wasn't until the full impact of the housing & stock market bubble that we actually really started seeing an economic recovery. Think back to '03 and '04, shortly after the economy had gone into a recession. It wasn't a spectacular comeback and even less impressive than what we've experienced the last three years under Obama. From '01-'04, job gain was minimal and it led to the worst overall jobs record for a first-term president (Bush) since Hoover. Things did pick up in '05 '06 and '07 at the height of those bubbles, but they popped and we pretty much lost everything gained from those bubbles.

That really is the underlying problem here. It's why bubble economics isn't worth it. You gain in the short term, but when the inevitable happens, and the bubble bursts, you're actually left in a worse spot than when you began (at least, most of the time).

I mean, recessions happen. You can't fight a recession. Economies grow and retract all the time. They'll never sustain perfect growth. But generally, we exit out of a recession and get back to a healthy rate where our economy isn't overly damaged. I mean, we had two recessions in the 1950s and still had a strong economy. Today? Every recession we've experienced the last 20 years has come at the tail end of a bubble and it has left a huge crater in the economy - so that the '01 recession wiped out a lot of the gains made from the 90s economic boom and then the '07-'09 recession threw us into an even bigger hole, as we weren't even remotely close to post-'01 recession levels by the time the economy went to shit again.

It's why I get so frustrated with Republicans who say the economy isn't improving fast enough. It isn't improving fast enough because it's still being bogged down by two epic recessions in the 00s that all came from bubbles bursting and left us in total economic disarray. The fact is, outside the Great Depression, our country has not experienced the hits it did from '01-'09 since, really, it became an economic power 100 or so years ago.

It's not easy climbing out of a 100-mile deep crater. It's going to take time. The American people need to realize this. What we've faced is unprecedented and even if you want to compare it to the Great Depression, it wasn't until World War II that unemployment fell to respectable levels and had there not been a war, unemployment probably remains far higher than what we eventually saw and the continued economic struggles continue well into FDR's third and fourth terms (if he even wins). So, it's not easy. In fact, I think it's pretty remarkable our economy is growing after the hit it's taken and the fact Europe and China are watching their economies go down in flames.

[Arneoker]

2. The economy isn't improving quickly because there was a financial collapse,

and those are harder to climb out of than a business bubble collapse, like the tech bust. People are conservative with their money because they are repairing their financial situations, which is a slow process. It could be accelerated by things like an aggressive write down of underwater mortgages. If Obama is to be faulted at all in his economic policies, it is that he has been far too timid in pursuing leftwing solutions such as that. Of course, he has the the most wretched Republican opposition in years to contend with.

One thing, if the worst happens and Romney gets elected, he has set himself up for failure. He said that the economy should be creating 500,000 jobs per month. Okay, so if he is elected, then if by August 1, 2013 the economy has not created 3 million additional jobs, we can judge his presidency to have already failed by his own standards. Being an honorable man he would of course resign.