The Fed Rescue Has Failed

[CaptainChewbacca]

Well, if the world is going to hell in a handbasket, I hope there will be a need for scientists - I really want a career in science, preferably physics, or astronomy if I can get it.

Maybe I should go for engineering instead. I'm just beginning to go back into education, so there won't be much of a problem if I have to switch over.

Whatever I do, I won't just let this bullshit just wash over me without a ripple.

That's why I'm glad I do environmental consulting. Its local, there's always a need for it, and it has to get done.

[cosmicalstorm]

Lets say the worst comes to pass. What would be a good idea to do on an individual basis, should I start hoarding canned food and build a shelter in the woods?

[DaveJB]

We may be in for a rough ride, but we're hardly going to do what the Golgafrinchans did and get rid of everyone who isn't either a genius or an intensive worker. Every job which exists today, so long as it's doing something legitimate, will continue to exist in the upcoming decades, unless things get so bad that civilisation starts falling apart completely. However, the opportunities for most jobs will drastically fall, which is the real problem.

[Knife]

Lets say the worst comes to pass. What would be a good idea to do on an individual basis, should I start hoarding canned food and build a shelter in the woods?

Oh for fucks sake. No, but you're super consumerism lifestyle is gone. Won't be able to go at whim to walmart to buy a loaf of bread and a lightbulb. A shitload of suburbia will dry up. Yeah, there will be a shit load of people from the middle class crashing down into the lower class. If you live in a McMansion, you won't anymore. Shit like that.

This whole thing is that the carcass of the US economy has been gutted and picked apart by predators for so long that there is little left there. The corpse will collapse. It's not the end of civilization as we know it, rather the end of superficial and spontaneous spending like a drunken sailor. While culturally we'll not be from the 50's, financially we very well might.

[GrandMasterTerwynn]

Lets say the worst comes to pass. What would be a good idea to do on an individual basis, should I start hoarding canned food and build a shelter in the woods?

No. That's only the right thing to do if civilization were to end very suddenly. The kind of end-of-civilization that would come at a decent-sized asteroid impact, for example. Not the sort of drawdown in civilization that would come if the worst global depression + peak fossil fuels + global warming predictions come to pass. That, however, is a different thread. Here, we're just stating the economy will tank, and will tank hard.

The best thing to do, on an individual basis, is to not spend money unless you absolutely have to, and to find ways to spend less on what you have to spend money on. (i.e. only buy it if not having it means death. Literal death, not "ZOMG, Imma die of embarrassment cuz the Jonesez have a 42" plasma TV and I've got a semi-functional 13" TV.) If you've got short-term debts, pay them off and get financially healthy while things are still shambling along. Save what you can, but know that your savings are going to lose a significant fraction of their value through the spectre of inflation. Learning to live on less money will cushion the blow when and if you find yourself being kicked downward on the economic totem-pole.

Try not to piss off too many people. You'll need those acquaintances if you find that your service industry job has been eliminated.

Don't be afraid of taking odd jobs. Picking strawberries and painting houses isn't glamorous work, but if it means you get to eat this week, then it's what you've got to do. On that note, stay healthy or get healthy. Being fit will give you an edge in taking odd jobs/making your money stretch should worst come to worst.

[HemlockGrey]

At what point does it become unwise to invest in oil company stock? Since the supply is plateauing, not necessarily diminishing, will profits keep going up and up as demand increases? Or will the strain start cutting into profits somehow? Basically I'm asking, is it too late to start buying up Exxon stock?

[Admiral Valdemar]

At what point does it become unwise to invest in oil company stock? Since the supply is plateauing, not necessarily diminishing, will profits keep going up and up as demand increases? Or will the strain start cutting into profits somehow? Basically I'm asking, is it too late to start buying up Exxon stock?

Perhaps too late for any private company, but for the nationalised ones, they seem to be the ones holding all the cards (some 95% of all oil left, it would seem). Whether they keep us on a knife edge in order to maximise profits and limit output is up in the air. OPEC just announced no production increase and possible cuts even, and oil has gone down from $104 to $99 today. That doesn't make a whole lot of sense.

[Darth Wong]

At what point does it become unwise to invest in oil company stock? Since the supply is plateauing, not necessarily diminishing, will profits keep going up and up as demand increases? Or will the strain start cutting into profits somehow? Basically I'm asking, is it too late to start buying up Exxon stock?

An awful lot of very influential money managers are pulling out of equities entirely, and sticking their money in cash and T-bills until the situation stabilizes. I don't think anyone is feeling particularly bullish about anything right now. Even Warren Buffett is warning his Berkshire investors not to expect great returns this year.

[Stuart Mackey]

(with a little help from a deluded and nonsensical capitalistic model now disintegrating before us).

Because we couldn't put any blame on people in nations who cannot control their own spending habits and just gotsta have that 42' plasma TV and that new SUV to tow that new boat?

[Darth Wong]

(with a little help from a deluded and nonsensical capitalistic model now disintegrating before us).

Because we couldn't put any blame on people in nations who cannot control their own spending habits and just gotsta have that 42' plasma TV and that new SUV to tow that new boat?

Why can't you blame both? The problem was the absence of any mechanism to control those stupid and short-sighted impulses. If a system of government relies upon the preposterous assumption that people have prudent judgment and financial wisdom, how is it any better than a competing system which relies upon the equally preposterous assumption that people will happily and knowingly work hard for other peoples' benefit?

Stricter regulation could have helped, but we live in an age when the corporate plutocrats are in control, and they view regulations as restrictions upon their ability to fuck the pu- I mean do business with the public.

[Admiral Valdemar]

Actually, I am blaming government and personal economic habits. The public going out and spending as is their patriotic duty to keep society's gears well oiled is also what's leading to many crises appearing within the same time-frame. This idea that we must consume ever greater amounts year-on-year or the world ends needs to die. We aren't citizens anymore, we are "consumers".

It doesn't add to increased happiness, it doesn't redistribute wealth to the poor and it most certainly isn't sustainable.

[Keevan_Colton]

Actually, I am blaming government and personal economic habits. The public going out and spending as is their patriotic duty to keep society's gears well oiled is also what's leading to many crises appearing within the same time-frame. This idea that we must consume ever greater amounts year-on-year or the world ends needs to die. We aren't citizens anymore, we are "consumers".

It doesn't add to increased happiness, it doesn't redistribute wealth to the poor and it most certainly isn't sustainable.

But if you dont keep making more crap, how will the economy grow and allow investors to make money by having money?

[Admiral Valdemar]

Guess we need to rethink capitalism then. Because you can't have this growth forever. Something has to give, and I'm thinking our economic model will before the laws of physics do.

At least if we're going to carry on this way, we need to have manufacturing brought back our side of the world and not sent to China and the like. One cannot house, feed and power a country with lattes and IT online support.

[Stuart Mackey]

(with a little help from a deluded and nonsensical capitalistic model now disintegrating before us).

Because we couldn't put any blame on people in nations who cannot control their own spending habits and just gotsta have that 42' plasma TV and that new SUV to tow that new boat?

Why can't you blame both? The problem was the absence of any mechanism to control those stupid and short-sighted impulses. If a system of government relies upon the preposterous assumption that people have prudent judgment and financial wisdom, how is it any better than a competing system which relies upon the equally preposterous assumption that people will happily and knowingly work hard for other peoples' benefit?

Stricter regulation could have helped, but we live in an age when the corporate plutocrats are in control, and they view regulations as restrictions upon their ability to fuck the pu- I mean do business with the public.

Oh, you are quite correct, indeed, I would go further to suggest that the two are inseparable. The amount of buck passing on debt through 'the system' has been amazing in recent years, and the sheer blindness of 'the system' in somehow not realizing that debt is, in fact, debt that must be paid, is even more amazing, and its evident from top to bottom.
But to simply 'blame capitalism', is fallacious when there are a number of models out there all of which are impacted by the cultures of the nations involved. Heath care is a good example; you and I live with the vile evils of socialized medicine, and our cultures expect socialized medicine because its felt, rightly so imho, that medicine is an area that unrestrained capitalism is a negative impact on society as a whole.
If we have a culture that encourages debt, what can we expect? that the debt collector wont call?

[Stuart Mackey]

Guess we need to rethink capitalism then. Because you can't have this growth forever. Something has to give, and I'm thinking our economic model will before the laws of physics do.

Why rethink it? is it capitalism, or perhaps that we live beyond our means as a {western} culture?

At least if we're going to carry on this way, we need to have manufacturing brought back our side of the world and not sent to China and the like. One cannot house, feed and power a country with lattes and IT online support.

Why? don't the Chinese/Indians et al deserve the chance to have a higher standard of living? Why should they loose out because the west is pissing its opportunities into the wind. We wanted our latest and greatest consumer goods, at reasonable prices, the easier lifestyle, and this is the price we pay.

[Admiral Valdemar]

Why rethink it? is it capitalism, or perhaps that we live beyond our means as a {western} culture?

The version of capitalism we have which is influenced by our modern consumer society is what is at fault. If we accepted that we had to live more frugally and didn't need to buy a new TV every few years to go with a new car, PC and so on, then more emphasis may be put on better quality products and less waste.

Why? don't the Chinese/Indians et al deserve the chance to have a higher standard of living? Why should they loose out because the west is pissing its opportunities into the wind. We wanted our latest and greatest consumer goods, at reasonable prices, the easier lifestyle, and this is the price we pay.

Because when it comes down to the crunch, we need that support base to kick-start our economy again. When you're barely able to feed yourself and pay for petrol and heating, you don't go and blow your cash on the latest iPod or buy a year's subscription to WoW. Those things are luxuries which will be hit long before basic manufacturing and agriculture. If China hits a brick wall, which they will at some point likely down to food and energy restrictions, then they at least have the means installed to grow again. If we're relying on foreign nations and the crunch comes, we can't very well rebuild the industry with a service/consumer oriented economy.

Is it fair to Chindia and the Third World? No. Would it be practical for us to maintain a decent multi-purpose economy for weathering such a storm? Yes. On the other hand, should we all flounder, the Chinese and Indians etc. will feel it just as much given they sell to us. So them having such basic economies doesn't save them from these problems, it simply ensures that should such an event happen, they can gear up and get out of it quicker.

[Knife]

Why rethink it? is it capitalism, or perhaps that we live beyond our means as a {western} culture?

Indeed, that I think is what is going on. However we got to this point after a long chain of events that others would either have to recreate or by chance duplicate. It's not a given.

Why? don't the Chinese/Indians et al deserve the chance to have a higher standard of living? Why should they loose out because the west is pissing its opportunities into the wind. We wanted our latest and greatest consumer goods, at reasonable prices, the easier lifestyle, and this is the price we pay.

Deserve? Why would they deserve it? Earn it? Yes, after they put enough money and investment and infrastructure down. Absolutely.

This current 'model' wasn't by accident. Sure the current generation inherited the damn thing but that doesn't mean back in the day the tracks were't laid down. For some one else to recreate it, they can't wish upon a star, rather put down the necessary infrastructure and invest the money it takes. Who knows, twenty years from now, the rich of the world may be living in luxurary with cheaply built american goods, but it's not a forgone conclusion. America may ebb and flow but other nations must do something besides sit and wait for us to squander, to replace us on the food chain.

[Stuart Mackey]

Why rethink it? is it capitalism, or perhaps that we live beyond our means as a {western} culture?

The version of capitalism we have which is influenced by our modern consumer society is what is at fault. If we accepted that we had to live more frugally and didn't need to buy a new TV every few years to go with a new car, PC and so on, then more emphasis may be put on better quality products and less waste.

Your talking about a culture, not the system. Its become our culture to want the latest and greatest every other year, not the system. Of course that then begs the question of where does culture and system begin and end?

Because when it comes down to the crunch, we need that support base to kick-start our economy again. When you're barely able to feed yourself and pay for petrol and heating, you don't go and blow your cash on the latest iPod or buy a year's subscription to WoW. Those things are luxuries which will be hit long before basic manufacturing and agriculture. If China hits a brick wall, which they will at some point likely down to food and energy restrictions, then they at least have the means installed to grow again. If we're relying on foreign nations and the crunch comes, we can't very well rebuild the industry with a service/consumer oriented economy.

Is it fair to Chindia and the Third World? No. Would it be practical for us to maintain a decent multi-purpose economy for weathering such a storm? Yes. On the other hand, should we all flounder, the Chinese and Indians etc. will feel it just as much given they sell to us. So them having such basic economies doesn't save them from these problems, it simply ensures that should such an event happen, they can gear up and get out of it quicker.

So your solution is, what, fuck you, I'm all right thanks jack? But who cares, they are just brown/yellow people? And what do you mean by "us" I am pretty damn sure my country does not want to take a trip down memory lane to our 'golden years' of protected industry, I remember the after effects of that far to well to try that shit again thank you very much.
And what of the effect on the poor in western nations caused by protectionism, which you seem to be advocating? the basics that they can only just afford now just got unaffordable, or do you think reestablishing entire industries is done for free?
Honestly, what are you advocating here?

[Stuart Mackey]

Why rethink it? is it capitalism, or perhaps that we live beyond our means as a {western} culture?

Indeed, that I think is what is going on. However we got to this point after a long chain of events that others would either have to recreate or by chance duplicate. It's not a given.

True

Why? don't the Chinese/Indians et al deserve the chance to have a higher standard of living? Why should they loose out because the west is pissing its opportunities into the wind. We wanted our latest and greatest consumer goods, at reasonable prices, the easier lifestyle, and this is the price we pay.

Deserve? Why would they deserve it? Earn it? Yes, after they put enough money and investment and infrastructure down. Absolutely.

Good point, however I was referring to deserve because they do do the work, it also becomes deserve when 'we' penalize others because of our own foolishness or other, less than moral, reasons. I think a question we have to ask ourselves it do we deserve what we have? We have lived beyond our means, so we deserve everything we get.

This current 'model' wasn't by accident. Sure the current generation inherited the damn thing but that doesn't mean back in the day the tracks were't laid down. For some one else to recreate it, they can't wish upon a star, rather put down the necessary infrastructure and invest the money it takes. Who knows, twenty years from now, the rich of the world may be living in luxurary with cheaply built american goods, but it's not a forgone conclusion. America may ebb and flow but other nations must do something besides sit and wait for us to squander, to replace us on the food chain.

Thats just it, other nations are not waiting around and it infuriates me when I see people blaming Chindia etc for our own actions, but its worse when there are suggestions that Chindia should somehow be deprived for doing those things that we in the west have done ourselves, and thats a moral question that we have to answer honestly when talk of protectionism comes up.

[Keevan_Colton]

Your talking about a culture, not the system. Its become our culture to want the latest and greatest every other year, not the system. Of course that then begs the question of where does culture and system begin and end?

The system requires consumers, it requires that more people spend more tomorrow than did today in order to offset todays debts. It's like some sort of absurd pyramid scheme. The fundamental nature of capitalism and the corporate brand we're deeply mired in, is to make a profit. To create excess to be skimmed off the top...now, economists have some interesting ideas on this about reinvestment and growth, but the simple fact is they always need more consumption to keep generating that excess...without it there is no profit.

Douglas Adams had it wonderfully put in the 'Guide, since we've had the golgafrinchens mentioned already. The notion of a company that made a product that was perfect, and thus went out of business because since it never broke down, and never needed replaced, there was no profit.

I wish sometimes I could take economists and leaders into a small room with a pistol and ask them one at a time if infinite growth is possible in a finite universe. Even the stars will die, that means sooner or later you have to stop putting the payment off.

So your solution is, what, fuck you, I'm all right thanks jack? But who cares, they are just brown/yellow people? And what do you mean by "us" I am pretty damn sure my country does not want to take a trip down memory lane to our 'golden years' of protected industry, I remember the after effects of that far to well to try that shit again thank you very much.
And what of the effect on the poor in western nations caused by protectionism, which you seem to be advocating? the basics that they can only just afford now just got unaffordable, or do you think reestablishing entire industries is done for free?
Honestly, what are you advocating here?

That "we" as in the first world nations, need something for people to do other than shuffle paper about in the hopes that they'll get by. We need to ensure that we retain and recover a capacity to actually make our own shit. Busy work which builds things will help the world recover, busy work which involves people just doing paperwork and serving coffee will mean things ending up far worse. We need to have something practical for people to do to keep them from starving if the worst comes to the worst. With industry we can make things to help feed people, as Vald put it before...you cant eat google. Build a water pump, or a tractor and it can help feed you.

[Darth Wong]

Stuart, the problem is not that capitalism is necessarily good or bad; the problem is that the worship of capitalism is bad. America has gotten itself into a cultural space where capitalism is no longer merely one end of a spectrum of socio-economic policies; it has become deified. People literally trust the mysterious guiding hand of capitalism to solve all problems on its own, as if the public need not concern itself with such things. That's how we came to this.

If people could recognize that capitalism vs socialism is not good vs evil, then stupidity like this would not happen. The "Reagan Revolution" would have lost steam. The idea that regulations are intrinsically bad would never get anywhere. But capitalism has become a deity of sorts; we worship it, we trust it to take care of us, and we are even willing to make sacrifices for it.

[The Yosemite Bear]

Well here in Tourism fueled land, it's business is booming, seems that the Dollar in freefall, has everyone visiting the states for their holiday, and us who work here, deeply in debt, due to not having any purchase power for nessessities....

[Pelranius]

Would going to total war with China, Russia, Iran, India et al (or somehow shifting to a complete war economy) be enough to reverse or at least halt a recession?

Not that I'm actually advocating committing suicide to avoid cancer.

[DaveJB]

Would going to total war with China, Russia, Iran, India et al (or somehow shifting to a complete war economy) be enough to reverse or at least halt a recession?

If we went to war with another nuclear power, it'd certainly prevent a recession from biting you in the butt... question is, do you think that "being dead" is a reasonable alternative to sitting out a recession?

[Einhander Sn0m4n]

Would going to total war with China, Russia, Iran, India et al (or somehow shifting to a complete war economy) be enough to reverse or at least halt a recession?

If we went to war with another nuclear power, it'd certainly prevent a recession from biting you in the butt... question is, do you think that "being dead" is a reasonable alternative to sitting out a recession?

Like a sudden sledgehammer-blow to the teeth, I am immediately reminded of 95% of the drug commercials on the fucking tube, the other 5% being anti-marijuana propaganda.