Jump to content
Sign in to follow this  
lockmat

U.S. Economic Crisis - All Things Related

Recommended Posts

We have two bailout threads, but this is for all things not related to them.

To start things off, here is the latest news on Obama's plan:

CHICAGO
Edited by lockmat

Share this post


Link to post
Share on other sites

I'm hopeful about the highway thing -- if it's done right. There are portions of the American freeway network that are atrocious. Of course, with one hand he's talking about expanding highways and with the other telling us we need to wean ourselves off of oil. If he was serious about putting together a cohesive transportation policy, he'd include a rail element.

The internet stuff is nothing new. Bill Clinton promised that exact same thing. Remember how all public buildings were going to be connected to the "Information Superhighway?" The plan went away when there were too many TV reports about schools hooked up to the internet that couldn't afford computers and schools where the kids had computers, but not desks and chairs and books.

I don't think installing new light bulbs will create all that many jobs.

Again, the stimulus thing might be good, but it should be broader. It should be more like the WPA, which created a diversity of items from bridges to parks to poetry.

Share this post


Link to post
Share on other sites
I'm hopeful about the highway thing -- if it's done right. There are portions of the American freeway network that are atrocious. Of course, with one hand he's talking about expanding highways and with the other telling us we need to wean ourselves off of oil. If he was serious about putting together a cohesive transportation policy, he'd include a rail element.

The internet stuff is nothing new. Bill Clinton promised that exact same thing. Remember how all public buildings were going to be connected to the "Information Superhighway?" The plan went away when there were too many TV reports about schools hooked up to the internet that couldn't afford computers and schools where the kids had computers, but not desks and chairs and books.

I don't think installing new light bulbs will create all that many jobs.

Again, the stimulus thing might be good, but it should be broader. It should be more like the WPA, which created a diversity of items from bridges to parks to poetry.

I know traveling to Arkansas this past year, 59 north is horrible.

But yes, I'm very interested in knowing how much trains and public transportation will be involved.

Share this post


Link to post
Share on other sites
Again, the stimulus thing might be good, but it should be broader. It should be more like the WPA, which created a diversity of items from bridges to parks to poetry.

I notice that most of what Obama is proposing is an investment that is intended to promote productivity growth. If he's giving us a kind of mission statement, here, then the overall strategy seems like a good one. These may not be very sexy avenues of investment, but they act to help the economy grow in the long term. Now realistically, I expect that very many of the individual projects that get undertaken won't even come close to penciling out in a realistic cost-benefit analysis, but the strategy is sound.

In contrast, parks and poetry are clearly intended as straight consumption items that will never feed back into higher economic output or tax revenue. They aren't going to help us pay down the massive burden of entitlements for baby boomers.

Another thing: many of the projects undertaken back then were intentionally constructed very inefficiently. There are buildings in Houston from that era where not a single window frame was set to the same dimensions. This was done to increase the employment numbers required and delay the completion of the project.

Share this post


Link to post
Share on other sites

Massive infrastructure spending, along with not allowing large firms to fail, was exactly how Japan reacted after the crash of their property bubble in 1989.

How'd that work out?

Share this post


Link to post
Share on other sites

If it is true and it really happens that this will be the "single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s," then, wow.

Some info I've found on that:

June 29, 1956. On this day the Federal-Aid Highway Act of 1956 set things rolling. $25 billion was earmarked for the project. Over 41,000 miles were planned, all with the following design standards:

a minimum of 2 lanes in each direction

a 12 foot width for each lane

right paved shoulders of 10 feet in width

design speeds of 50 to 70 mph

------------------------

While the initial cost estimate was $25 billion for building 41,012 miles of interstate over 12 years, both the costs and the necessary construction time climbed. By the early part of this, the 21st, century over 42,000 Interstate Highway miles had been completed at a cost of $129 billion. And new construction continues, but now on a much smaller scale.

-----------------------

The initial cost estimate for the system was $25 billion over 12 years; it ended up costing $114 billion (adjusted for inflation, $425 billion in 2006 dollars[14]) and taking 35 years to complete

-----------------------

Sources:

http://www.loti.com/fifties_history/1950s_...hway_system.htm

http://en.wikipedia.org/wiki/Interstate_Highway_System

Share this post


Link to post
Share on other sites

More numbers thrown around by the economists.

http://www.chron.com/disp/story.mpl/business/6157114.html

I looked at the Bureau of Labor Statistics numbers last week. Though the two numbers that are always reported are the layoffs (533,000 in November) and the unemployment rate (6.7%), if you look at the number of unemployed/part-time/not looking for work but would like to numbers, 1 in 8 workers or wannabe workers is out of work or can only find part-time or under-employment. And all predictions are that it gets worse through at least March.

Share this post


Link to post
Share on other sites

This statistic is a little frightening...

Thirty-six buildings totaling 7.68 million sq. ft. are currently under construction. Of these, eight buildings consisting of 1.73 million sq. ft. (22.5%) are build-to-suit projects, while the remaining 5.95 million sq. ft. (77.5%)

(from CBRE's office outlook report)

Also...

Seventeen buildings were planned to deliver this quarter; however, only nine buildings, or 1.25 million sq. ft., were completed with 238,000 sq. ft., or 19.1%, having been leased. No office construction broke ground this quarter and it is anticipated that very few proposed projects, if any, will commence during 2009.

Also...anyone know where the healthiest market(city) in the US is right now? Any predictions who it will be in 8-12 months?

Edited by lockmat

Share this post


Link to post
Share on other sites

Thanks for posting that Brian.

My question is, when will the breaking point be? If the current deficit hasn't made the govt. crumble , when will it? Is it a magic number? I think part of the reason the govt is so irresponsible with the money is they have never seen any real consequences. This video says our debt is the scariest thing behind a terrorist with a nuclear weapon, but how so? Look...we're still here. Sure we're in a recession now, but most people seem to think we'll pull out of it. I'm not saying it's not going to bite us in the butt, but it's almost like the fiscal conservatives are crying wolf. If the nation has only not had a surplus once, what makes anyone think we're actually going to go under now? To me, it's almost all a lie. Will it be when a country we haven't paid back is fed up and decides to attack us? This is an honest question. If we're really in trouble, when will we see this trouble? In what form will it take place?

Another question...anyone know of a website that shows all countries and their deficits/surplus'? How many other countries are in a similar problem?

Share this post


Link to post
Share on other sites

Debt as percentage of GDP

The problem with that list, however, is that it is from 2007. The crisis exploded in mid 2008. The US debt, for instance, was up to about 69% BEFORE the bailouts started. It is probably over 80% now, and likely will exceed 100% by the end of 2009.

Share this post


Link to post
Share on other sites
Thanks for posting that Brian.

My question is, when will the breaking point be? If the current deficit hasn't made the govt. crumble , when will it? Is it a magic number? I think part of the reason the govt is so irresponsible with the money is they have never seen any real consequences. This video says our debt is the scariest thing behind a terrorist with a nuclear weapon, but how so? Look...we're still here. Sure we're in a recession now, but most people seem to think we'll pull out of it. I'm not saying it's not going to bite us in the butt, but it's almost like the fiscal conservatives are crying wolf. If the nation has only not had a surplus once, what makes anyone think we're actually going to go under now? To me, it's almost all a lie. Will it be when a country we haven't paid back is fed up and decides to attack us? This is an honest question. If we're really in trouble, when will we see this trouble? In what form will it take place?

Another question...anyone know of a website that shows all countries and their deficits/surplus'? How many other countries are in a similar problem?

A government entity is not run in the same way as a private enterprise, does not use the same accounting rules, and is not subject to the same legal treatment.

If you default on a note, your creditor has a right to repossess your assets. If the government of Chad defaults on its debt to Saudi Arabia, the Saudis shrug and stop lending to Chad. Nobody invades anybody over unpaid foreign debt. It does not happen. Look at how much it has cost the world's largest superpower to invade Iraq for the purposes of ousting a dictator and setting up a democracy; how long would it take for us to recoup the expense of war (probably a much longer and bloodier war) much less foreign debt that was defaulted on by even a country rich in resources!? It just doesn't make sense.

The consequence of too much foreign debt is that demand for our debt declines and that interest rates must go up in order to entice continued debt issuance at high levels. As interest rates increase, it looks less attractive to borrow money than it does to tax our own citizens and so the government borrows less and taxes more to pay its bills. Ceteris paribus, it makes us somewhat worse off. At the Federal level, seigniorage is also an option, which basically makes everyone's Dollars worth less in real terms, has the short-term effect of stimulating consumer spending, screws owners of debt and rewards those that owe debt.

One way or the other, however, the citizens of the United States should not concern themselves with the government going bankrupt (it'd only print more money--because it can) or with another country invading us in some kind of militaristic repo scheme (because the repo would be more expensive than the repoed assets). There are plenty of other related and valid concerns; these aren't among them.

Share this post


Link to post
Share on other sites
Debt as percentage of GDP

The problem with that list, however, is that it is from 2007. The crisis exploded in mid 2008. The US debt, for instance, was up to about 69% BEFORE the bailouts started. It is probably over 80% now, and likely will exceed 100% by the end of 2009.

Yep. And look who is #3 on that list... Japan. Another picture... showing "total" US debt as % of GDP...

usdebt.serendipityThumb.jpg

Share this post


Link to post
Share on other sites
Sure we're in a recession now, but most people seem to think we'll pull out of it.

Actually, most people do not think about it, or have the mindset that the US is some sort of magical economy that cannot be defeated. 25 years of free credit will do that to you. But, credit is still tight, housing starts are plunging, credit limits are shrinking, and a consumer driven economy that needs cheap credit to continue functioning will contract as long as those realities continue. The fact that you may hear some people talk as if the recession is not hurting them does not mean that it is true. There have been numerous polls over the years showing that most people lie about their financial well being. In a country that has tied self worth to net worth, it is not hard to figure out why. Most of the big effects on consumers are less than 6 months old. It will take a while before the new austere reality sets in.

That said, we probably will pull out of it, but we will look different once we do.

Share this post


Link to post
Share on other sites
Actually, most people do not think about it, or have the mindset that the US is some sort of magical economy that cannot be defeated. 25 years of free credit will do that to you. But, credit is still tight, housing starts are plunging, credit limits are shrinking, and a consumer driven economy that needs cheap credit to continue functioning will contract as long as those realities continue. The fact that you may hear some people talk as if the recession is not hurting them does not mean that it is true. There have been numerous polls over the years showing that most people lie about their financial well being. In a country that has tied self worth to net worth, it is not hard to figure out why. Most of the big effects on consumers are less than 6 months old. It will take a while before the new austere reality sets in.

That said, we probably will pull out of it, but we will look different once we do.

A good 50% or more (my estimate) of the news outlets seem to be reporting that things are stabilizing and could get better in 2009.

I agree, that we have not seen the worst of this and things are going to get MUCH worse before they get better.

Combined with the fact that gasoline is getting more expensive (up 12 cents in the past 2 weeks) and we're in for a roller coaster ride. The DOW seems to be a bit more stable, but even it's up and down daily.

Share this post


Link to post
Share on other sites

Found this chart on wikipedia. Sorry for my ignorance, but this is basically who's lending us money, right?

A couple other questions:

1. Does a country need a surplus in order to lend money? Even though in debt, can/does the US lend? If able to, how is that possible?

2. Why would a country lend to the US? I guess they're banking on the fact that we will eventually pay them back, and b/c it will take so long, the added interest will surely give them a boost?

Edited by lockmat

Share this post


Link to post
Share on other sites
A good 50% or more (my estimate) of the news outlets seem to be reporting that things are stabilizing and could get better in 2009.

I agree, that we have not seen the worst of this and things are going to get MUCH worse before they get better.

Combined with the fact that gasoline is getting more expensive (up 12 cents in the past 2 weeks) and we're in for a roller coaster ride. The DOW seems to be a bit more stable, but even it's up and down daily.

Two things are happening though. The worst of the financial panic seems to have passed. Credit indicators are improving daily and for some numbers are nearing pre-crunch levels. The past couple of weeks have seen huge drops in CDS prices and spreads for lower grade credits have also improved markedly. This seems to indicate that bank lending will start to free up.

All that said, the "traditional" recession trailing the financial panic may not be near bottom yet. In general though policy makers are probably more confident about the playbook for dealing with a recession than they were with the panic, which was new ground. The bad news is that recessions following financial crises tend to be deeper and last longer, but it is still too soon to make an assessment here.

Share this post


Link to post
Share on other sites

Now this is depressing:

From the Fed's Beige Book survey:

Commercial real estate transactions in the Dallas District (which includes Houston) have reportedly ground to a halt.
Construction-related manufacturing contacts in the Dallas District reported that demand from commercial construction is shrinking rapidly.

Share this post


Link to post
Share on other sites
Found this chart on wikipedia. Sorry for my ignorance, but this is basically who's lending us money, right?

A couple other questions:

1. Does a country need a surplus in order to lend money? Even though in debt, can/does the US lend? If able to, how is that possible?

2. Why would a country lend to the US? I guess they're banking on the fact that we will eventually pay them back, and b/c it will take so long, the added interest will surely give them a boost?

1. A government can allocate its resources in any way that it decrees to be legal. Lenders to governments are typically private enterprises, and insofar as private enterprises do not consider there to be any material default risk or inflation risk as a consequence of lending during a deficit, the only consequences are relatively minor market distortions. Most assuredly, too much government lending could conceivably induce a deficit or worsen it, and possibly to the point at which private lenders to the government would re-evaluate risk on the basis of such a policy. But the odds seem really remote, barring some kind of gross/blatant/malicious/criminal fiscal mismanagement on the part of a government.

2. There are several contributing factors. A) For third-world countries, we are the debtor of first resort. Notes issued by the U.S. Treasury are considered to be the safest kind of investment there is with essentially negligible default risk or political risk. Unless the governments of those countries intend to do something we don't like, we usually don't freeze or nationalize assets; we don't have coups; and because the economies of many third-world countries either use US Dollars or peg their currency to the Dollar, unpredictable currency exchange rates aren't as much of a factor. B ) China, specifically, is propping up the value of the US Dollar. This is part of their national policy. A stronger Dollar makes goods denominated in foreign currencies appear less expensive to U.S. consumers, enticing us to purchase more of their goods and services. In so doing, China has a larger market for its goods, justifying industrial expansion, and U.S. consumers benefit by way of less expensive goods. Very few countries are large enough to have the leverage that China has. Such a strategy would be ineffective if carried out by a smaller economic power. C) Some countries purchase U.S. debt as a hedge against their own economic circumstances. Oil-rich countries, for instance, which endure highly volatile cycles of feast or famine are huge purchasers of U.S. debt. They use it as a sort of national savings account. D) The most important thing about foreign debt is that most of it is not issued to government entities, but instead to private entities. Their motive for buying our debt is essentially the same as the private domestic entities that purchase the majority of U.S. debt.

Share this post


Link to post
Share on other sites

Man, when porn, gambling, booze and cigs are hurting, you know times are tough.

http://articles.moneycentral.msn.com/Inves...ers.aspx?page=1

Actually, the headline is slightly misleading, as booze and cigs are still selling, but people are swilling the rotgut booze instead of the good stuff these days. And, though it is not setting the world on fire, my Altria stock is trading 14% higher than when I bought it. Financing my smoke habit with my stock dividends...now that's living! :)

Share this post


Link to post
Share on other sites
Man, when porn, gambling, booze and cigs are hurting, you know times are tough.

http://articles.moneycentral.msn.com/Inves...ers.aspx?page=1

Actually, the headline is slightly misleading, as booze and cigs are still selling, but people are swilling the rotgut booze instead of the good stuff these days. And, though it is not setting the world on fire, my Altria stock is trading 14% higher than when I bought it. Financing my smoke habit with my stock dividends...now that's living! :)

The phrase 'flight to quality' in the context of Rick's is the funniest thing I've read all day.

Me, I quit smoking, so now I have more money for drinking and porn. Priorities, you know!

Edited by crunchtastic

Share this post


Link to post
Share on other sites
Two words: Fat chicks.

Let's keep it on topic here please. You can always carry on your personal conversations by PM.

Share this post


Link to post
Share on other sites

A moderator asked everyone to keep this on-topic, yet some people decided to keep on chatting off-topic. Those posts have been deleted. More posts will be deleted if you can't keep it on time. You're just wasting your own time.

Share this post


Link to post
Share on other sites

The Q4 GDP estimate is preliminary only and there seems to be some expectation that it will be revised downward in February.

The bad news about the inventory build up is that is means production cuts are likely this quarter.

On the positive side of things, a couple of leading indicators are starting to trend upwards, albeit very feebly and from low bases. It's still way too soon to be ringing bells about it though - there are too many risks on the downside.

Share this post


Link to post
Share on other sites

Found this on market-ticker.org...

spx-long.png

...the voo-doo chart doctors call this a double top, looks like an "M" ... and some claim that the right part of the M will mirror the left. Which would translate into S&P 400.... which would also translate to DOW 2000 (go ahead and reduce your 401K balance by another 50%)? Something like that. I can see DOW 7000, I've been rooting for that, but... hopefully not much lower than that. If we can stay around DOW 7000, and dig up from there... maybe then the chart/technical/voo-doo mouth breathers will finally shut their pie holes.

Chart does show two areas of irrational exuberance. 2000-ish with the .dot mania. And then a little after 2005 with housing mania. And America's retirement system is tied to that kind of craziness. What a shame, for our country.

EDIT: Look at the build up to, and the correction, in 1987. Peanuts compared to what was going to happen 10 years later, in terms of build up... and then collapse.

Edited by BryanS

Share this post


Link to post
Share on other sites
Found this on market-ticker.org...

spx-long.png

...the voo-doo chart doctors call this a double top, looks like an "M" ... and some claim that the right part of the M will mirror the left. Which would translate into S&P 400.... which would also translate to DOW 2000 (go ahead and reduce your 401K balance by another 50%)? Something like that. I can see DOW 7000, I've been rooting for that, but... hopefully not much lower than that. If we can stay around DOW 7000, and dig up from there... maybe then the chart/technical/voo-doo mouth breathers will finally shut their pie holes.

Chart does show two areas of irrational exuberance. 2000-ish with the .dot mania. And then a little after 2005 with housing mania. And America's retirement system is tied to that kind of craziness. What a shame, for our country.

EDIT: Look at the build up to, and the correction, in 1987. Peanuts compared to what was going to happen 10 years later, in terms of build up... and then collapse.

Good God, man. Why would anyone root for the Dow to fall another 1000 points? Aren't things grim enough as it is?

I do agree though that the "technical analysts" looking for magic patterns are a bit much to take.

Share this post


Link to post
Share on other sites

I've seen a couple of takes on the chart and the search for the magic new pattern. People are really reaching, man.

Wouldn't say I'm rooting for the Dow to drop more, but like Bryan, I do not think it's seen bottom. I envision 7200-7300. Likewise, I don't think housing is even close to bottoming out yet. All that with unemployment being a lagging indicator (and insufficiently reported to boot), I think it means steady or increasing financial pain for pretty much all sectors this year.

Share this post


Link to post
Share on other sites

If my eyes saw correctly, the Lamborgini of north houston's lot was empty this morning.

Share this post


Link to post
Share on other sites

We're so focused on what the USA is doing to overcome this, and rightly so, but I'm wondering what other suffering countries are doing to keep their heads above water. Of course, their problems may be slightly different and therefore solved with different solutions. Are they creating stimulus and bailout bills? Is the govt trying to create jobs, stimulate the economy or are they letting the natural market fix things?

I plan on doing some of this research on my own at home, but was wondering if anyone had any current knowledge they could share about this.

Share this post


Link to post
Share on other sites
We're so focused on what the USA is doing to overcome this, and rightly so, but I'm wondering what other suffering countries are doing to keep their heads above water. Of course, their problems may be slightly different and therefore solved with different solutions. Are they creating stimulus and bailout bills? Is the govt trying to create jobs, stimulate the economy or are they letting the natural market fix things?

I plan on doing some of this research on my own at home, but was wondering if anyone had any current knowledge they could share about this.

It will only take a quick search for your anwers--but the short version is, Europe and Britain have been bailing out their own financial institutions like we have. Some feel Britain is near the verge of fully nationalizing its banks. They've also dropped interest rates to nearly zero like we have (the EU has not, incidentally). There is quite a bit of ill will in the world that now everyone suffers because of Wall Street (look up Putin speaking at Davos, and recent French riots).

Edited by crunchtastic

Share this post


Link to post
Share on other sites
It will only take a quick search for your anwers--but the short version is, Europe and Britain have been bailing out their own financial institutions like we have. Some feel Britain is near the verge of fully nationalizing its banks. They've also dropped interest rates to nearly zero like we have (the EU has not, incidentally). There is quite a bit of ill will in the world that now everyone suffers because of Wall Street (look up Putin speaking at Davos, and recent French riots).

Thanks for the info, but isn't news that they're doing a financial bailout pretty old news? I guess I'm wondering if anyone else is creating a stimulus package like us, as opposed to a "bailout."

Share this post


Link to post
Share on other sites
Thanks for the info, but isn't news that they're doing a financial bailout pretty old news? I guess I'm wondering if anyone else is creating a stimulus package like us, as opposed to a "bailout."

the EU stimulus package is ginormous, yes.

Share this post


Link to post
Share on other sites
We're so focused on what the USA is doing to overcome this, and rightly so, but I'm wondering what other suffering countries are doing to keep their heads above water. Of course, their problems may be slightly different and therefore solved with different solutions. Are they creating stimulus and bailout bills? Is the govt trying to create jobs, stimulate the economy or are they letting the natural market fix things?

I plan on doing some of this research on my own at home, but was wondering if anyone had any current knowledge they could share about this.

This was a headline today. "Moscow abandons bail-outs for bank aid" I didn't read the article though.

http://www.ft.com/cms/s/0/5b3cf80a-f2ac-11...00779fd2ac.html

Share this post


Link to post
Share on other sites

Ireland and Iceland have been nationalizing banks. I think Britain has been either threatening to do so, or doing so on a limited basis. We have some EuroHAIFers on here who might be able to shed some light on the situation.

Share this post


Link to post
Share on other sites
There is quite a bit of ill will in the world that now everyone suffers because of Wall Street (look up Putin speaking at Davos, and recent French riots).

Whoa. Good thing I saved my backpack with the Canadian flag on it.

Share this post


Link to post
Share on other sites

I'm starting to gather some info/data: (not quite as easy as crunch said, or maybe i'm just really bad at researching)

France:

the president is expected to stick to his guns, and say that 26 billion euros (

Share this post


Link to post
Share on other sites
Whoa. Good thing I saved my backpack with the Canadian flag on it.

You think the riots could happen here? I wonder if we'd ever really march in the streets over our economic situation. We seem too self-absorbed in my opinion.

Share this post


Link to post
Share on other sites
You think the riots could happen here? I wonder if we'd ever really march in the streets over our economic situation. We seem too self-absorbed in my opinion.

Close.....too repressed, in my opinion. I see rioting as as more emotional than political. An angry american may talk about his guns or taking back his country, but to join crowds of strangers in the streets would bring shame. (I think.) We are the nation of rugged individualism, after all. When you join the mob, you admit you can't fix your problems on your own.

Share this post


Link to post
Share on other sites

I'm starting to gather some info/data: (not quite as easy as crunch said, or maybe i'm just really bad at researching)

nice job.

It's just a matter of knowing where to start looking. For a good all-over euro source, start reading The Economist. They have their own political/philosophical bent, but the reporting is first class and they largely keep their editorial separate from it.

Share this post


Link to post
Share on other sites
Close.....too repressed, in my opinion. I see rioting as as more emotional than political. An angry american may talk about his guns or taking back his country, but to join crowds of strangers in the streets would bring shame. (I think.) We are the nation of rugged individualism, after all. When you join the mob, you admit you can't fix your problems on your own.

I disagree. Americans have a long legacy of rioting. And really, you can link mob mentality to the Anglo Saxon heritage going back much further.

There were probably up to a couple hundred different riots in various cities back when we were still colonies. Remember the drawing in every American History textbook of a British tax collector that had been tarred and feathered, then forced to drink tea while the Boston Tea Party took place in the background? Throughout the west--from the time when the west included most of Massachusetts to when Mormons settled Utah--there have been rural riots. George Washington had to raise an army to put down Shay's Rebellion, an issue created from economic hardship. The Texas Revolution was sparked from rabble rousing in Anahuac. A riot against Mormons in Missouri prompted many to migrate to Utah, where rumors of a Federal army marching on a rumored Mormon rebellion prompted Mormons to massacre a party of travelers on their way to California. 'Bleeding Kansas' is also worthy of note as an example of when conflicting political views created conflict. Riots were endemic during Reconstruction. The labor movement gave rise to several instances that I can recall off-hand of armed conflict on a reasonably large scale; Blair Mountain is the only one I can name, though. During World War One there were riots against Germans. After World War One, there was a riot by veterans (calling themselves the Bonus Army) on Washington D.C.; they demanded money from the government but were instead attacked by the real U.S. Army. Non-violent and peace-loving though thought to be, hippies were actually quite disruptive; certainly the 1968 Democratic Convention in Chicago should ring some bells in light of the concern over the safety last year's convention. More recently, we've witnessed riots in Seattle against the WTO. ...and I haven't even hit on race riots yet, carried out by persons of all varying degrees of skin pigmentation, often with disorderly and violent ends.

It is true that our riots are tamer and typically much more structured than they used to be, and open violence is less common. But then again, it isn't like we've been subjected to a whole lot of civil strife, to a breakdown in law and order, to speculation and distrust of neighbors, or to a major economic disaster (until recently) for a couple of generations now. The folks who last had any kind of meaningful experience with this kind of thing are too old to really give a damn, and most of them (hippies in a former life) now just want to preserve the mechanisms that will allow them to retire as a burden to their children.

As near as I can tell, rugged individualists are and always have been a rare breed in American society. IMO the mob is the prevailing condition of western civilization. Even those that would seek to undermine the mob operate as a mob. It is frustratingly inescapable.

The difference between a protest and a riot is structure. Introduce an element that shakes the established order--such as young adults who were brought up pampered suddenly finding themselves unable to afford internet, cable television, or cell phone service, perhaps even resorting to staple foods of their 'rugged' parents' generation...then see what happens. They thought they were entitled to Pei Wei but are eating Ramen noodles instead. That won't go over well. ...then somebody assassinates Obama.

...that's all it'll take is a bunch of pissed-off youth with no concept of how much they actually have that they might lose.

Share this post


Link to post
Share on other sites
I disagree. Americans have a long legacy of rioting. And really, you can link mob mentality to the Anglo Saxon heritage going back much further.

As near as I can tell, rugged individualists are and always have been a rare breed in American society. IMO the mob is the prevailing condition of western civilization. Even those that would seek to undermine the mob operate as a mob. It is frustratingly inescapable.

The mob-ish western civilization part has a lot of merit, but you cite mostly pre-20th century history. Compare postwar Europe with postwar America, I think it's more relevant. This is the postmodern pyschology I'm getting at; the myth of the rugged individualist as exploited by the modern politican and media. I could be wrong, but I still think we're too much the believers of our own collective national identity/fantasy to riot like the Euros. Or maybe we just don't have enough immigrants to fully take to the streets yet. Violent xenophobia is an increasing occurence in central Europe. How bad would the economy have to get for it to spread here, in earnest? I don't see it, but then I probably underestimate how crappy ramen noodles are after one is used to PF Changs.

Share this post


Link to post
Share on other sites
I disagree. Americans have a long legacy of rioting. And really, you can link mob mentality to the Anglo Saxon heritage going back much further.

If the current administration were doing nothing, or doing things completely contrary to the popular will, I'd tend to agree with you. In this case, whether we agree that the stimulus is correct or effective or good, the populace sees it as generally necessary and sees it as action by the government. That will probably forestall riots in the near term. If the administration took the GOP tack of letting the recession burn itself out, and unemployment numbers shot up with no safety nets, the feeling of government letting it happen would probably cause riots.

To emphasize, this is not to comment on whether the stimulus package will work, only that to the populace it appears that they are trying. Riots occur when government is not trying.

Share this post


Link to post
Share on other sites
Ireland and Iceland have been nationalizing banks. I think Britain has been either threatening to do so, or doing so on a limited basis. We have some EuroHAIFers on here who might be able to shed some light on the situation.

The Icelandic banks all effectively collapsed, along with the economy. One smallish Irish bank has been nationalized, along with a couple large UK ones, including RBS, one of the biggest. Overall the British economy is the worst in Europe (measured by GDP growth).

The mob-ish western civilization part has a lot of merit, but you cite mostly pre-20th century history. Compare postwar Europe with postwar America, I think it's more relevant. This is the postmodern pyschology I'm getting at; the myth of the rugged individualist as exploited by the modern politican and media. I could be wrong, but I still think we're too much the believers of our own collective national identity/fantasy to riot like the Euros.

Britain has had protests but not riots. Correction said, I simply can't see Americans taking to the streets. I wouldn't go so far as to chalk it up to "rugged individualism" whatever that is (Americans don't strike me as particularly rugged individualists). It's a cultural thing - we aren't public protesters. Europeans on the other hand don't see much wrong with it.

It's just a matter of knowing where to start looking. For a good all-over euro source, start reading The Economist. They have their own political/philosophical bent, but the reporting is first class and they largely keep their editorial separate from it.

I would say they bring their editorial values in at just about every turn, which makes it a good read.

For daily financial news, it's Financial Times of course. There's nothing else remotely comparable.

Share this post


Link to post
Share on other sites
If the current administration were doing nothing, or doing things completely contrary to the popular will, I'd tend to agree with you. In this case, whether we agree that the stimulus is correct or effective or good, the populace sees it as generally necessary and sees it as action by the government. That will probably forestall riots in the near term. If the administration took the GOP tack of letting the recession burn itself out, and unemployment numbers shot up with no safety nets, the feeling of government letting it happen would probably cause riots.

To emphasize, this is not to comment on whether the stimulus package will work, only that to the populace it appears that they are trying. Riots occur when government is not trying.

What you're saying does have a lot of parallels with the Bonus Army that Hoover faced during the Great Depression and the circumstances encountered by FDR when he took office.

But what happens when the pork doesn't cure everything or (more likely) causes unforseen problems of its own? FDR had a much more controllable media with fewer and less sophisticated channels. The American public didn't even know that their president was a cripple. Obama does not have any such luxury. Yet, instead of projecting a comforting image of someone who is in control like FDR did with his calm 'fireside chats', he seems to be anything but in control. The speech he gave earlier this evening was a departure from what we saw of his campaign speeches. It had some well-scripted zingers, but he slipped up a couple times nervously and came across as really quite pissed off with the opposition party and cable news media--and people that get pissed off obviously aren't in control.

If Obama is frustrated, so will be his ardent followers. And certainly there are enough of his frustrated opponents and centrists to keep him frustrated. Everybody's pissed off and it seems to everybody as though nobody is really in control. That's when the tinder has been lit. I don't know what will be the kindling; it could be one of many things. Who'd have guessed that a riot would erupt at the WTO meetings? Who'd have guessed that LA would've burned in 1992? Or that Woodstock 99' would degenerate into the very antithesis of its predecessor event? Neo-nazis marched in Toledo in 2005 and caused a riot of 600 people; the flash point was merely verbal insult.

The specific cause that takes frustration to the next level could be more or less random. Maybe a natural disaster. Maybe an assassination. Probably something else entirely. But it doesn't even necessarily matter; once there's rioting during times that people feel desperate and helpless, prospective rioters no longer really need a cause to join in. Mob mentality sets in and so people riot for its own sake. They can so they do. And I'm reasonably confident in saying this because I know my generation and we're mostly just a bunch of weak-minded followers. It only takes a few people setting the example and we follow it. We don't bother to think on our own. We've been taught not to.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

×
×
  • Create New...