Blackspeare:

I agree with all points but one. I’m not entirely sure that all of this is “cyclical.” This game has been played time and again throughout our history.

Money is created from debt and those who create it, namely the Fed/banks, know how to manipulate it. When the Fed/banks enact long periods of easy credit, they know what they’re doing. When those debt bubbles increase to an unsustainable level and those same banks contract the currency by refusing to lend, they know what’s going to happen. And when they contract the currency and the economy collapses they know they’ll be able scoop up the assets that our labor produced for pennies on the dollar. As smaller banks fail, those assets float up to those who created the problem in the first place.

Why is that every major financial shift in our history has been precipitated by some emergency that the banks took upon themselves to declare? What we’ve just witnessed is the 21st century version of an old fashioned bank scare. Let’s not forget that the only reason the Fed is here is because JP Morgan spread rumors in the papers of pending bank failures which caused a run on the banks. Next thing you know, JP Morgan finds himself as one of the primary stockholders of Federal Reserve Inc.

Then there’s the Great Depression which was sparked when the Fed sent out margin calls after a decade of easy credit and partying. The stock market went into panic and stocks plummeted. Then, in true banker fashion, they contracted the currency and the rest of the economy went with it. All the homes and farms that had been in families since the west was settled floated right up to the very banks begging for bailouts today.

Wealth is not currency. Wealth = Land (resources) + labor. That is the economic definition of it. So to be truly wealthy, we must own the land/resources and control labor. Currency is just a tool to foster the exchange of that wealth.

Personally, I think they quit creating depressions because full blown depressions threaten to bring the entire system down. I might be wrong on that one though…

All economic systems undergo cycles of one sort or another.  However, the current slump in the US is much more serious than the ones in the past even the Great Depression due to the amount of debt the US is accumulating.  Very soon, just the interest payment, will be overwhelming and then there will be the obligatory currency problem with the associated inflationary spiral.  Then the US will look back on these days as the “good old times.”  The US is in for some rocky times which may result in the appearance of a viable third party.

Krugman is too CMSM so one time when he mentioned the Great Depression (1929) he referred to it as “the Great Recession” and that should let you know what is between the lines here. We are in a Great Depression with a Greater Depression just on the other side of the brink. The one we are at present sitting at. The Obama Administration has done nothing to change it one iota. Not one and that is the threat.

More long time businesses closing in Houston, so many vacant houses, rundown abandoned apartment complexes and more people losing there jobs. We are trapped in a world where the idea of happy talk is considered better than the truth. If you aren’t smiling something is wrong with you. Psychological tests have shown that if you are one of those who are literally happy all the time you are more susceptible to suggestion and to doing what those in authority say to you to do. No wonder motivational speakers and corporations want it everywhere.

“Thoughtcrime does not entail death. Thoughtcrime IS death”.

“The Ministry of Peace concerns itself with war, the Ministry of Truth with lies, the Ministry of Love with torture and the Ministry of Plenty with starvation”.

“War is Peace”

“Freedom is Slavery”

“Ignorance is Power”

(and now i guess)

Poverty is Wealth

Unemployment is Recovery

Princeton is Mainstreet

Insecurity is Confidence

Anyone else care to chime in?

Krugman hangs around in neighborhoods of the elite of the elite. Princeton, N.J. is no ordinary town. Manhattan, please, let’s not even go there. So he sees a trendy shop open with Pop and Mom’s bonus or inheritance, and a new addition on a millionaire’s home and thinks things are looking up. Isn’t this what we always hear from the elite, just how swell everything is at the top. Please, let’s not go there.

The economy right now is a like a game of Russian Roulette combined with musical chairs, the band plays, while everyone looks around to see who gets the next bullet.

It could be you, your neighbor, or your whole town for that matter. Words fill the air, along with a surreal stock market, that’s thumbing it’s nose in the face of people who use their money to buy groceries, unlike those who use it to build castles in the air.

Those castles in the Air keep mounting up. At this point Mr. Krugman is a little like Yertle the Turtle, pointing his finger at the sky, until the whole thing comes crashing down, yet again.

I live in NYC and I walk all over this city—partly due to the fact that I can’t find work. In every neighborhood, I see empty commercial spaces—large, small and even entire blocks are empty of businesses. More banks are opening, but I’m not sure we need more banks in this city. Even Madison Avenue has quite a number of empty commercial spaces. And, developers are building additional commercial spaces as I am writing this post. I’d like to know who will lease the newly constructed spaces? Do they already have tenants?

In my neighborhood, East Harlem, over the past few years, developers have built countless, or so it seems, luxury apartments and condos, most of which are sitting empty. Every day, I see more windows with “for rent” signs, and building that are for sale.

You may recall the celebrations about three years ago when Jerry I. and Rob Speyer, with their partner BlackRock Realty, paid $5.4 billion for 110 red-brick apartment buildings at Styvesant Town and Peter Cooper Village here in Manhattan—the biggest real eststate deal in history! Today, those buildings have been reaccessed at a value of $2.13 billion, less than half of what the buildings had been worth. Not only are the buildings worth less, but the Speyers and BlackRock Realty are about to default according to several stories (NY Times - Charles V. Bagli - Sep. 10, 2009) I have read. In addition, the parties involved illegally deregulated many of the apartments, and that case has already made its way through the NY court system, and might cost the owners as much as $200 million.

It’s not a rosy picture here in NYC—the unemployment rate is above the national average, and when the new Penny’s store came into the city, 15,000 people applied for 400 jobs.

I’m not as hopeful, or blind, as Paul Krugman seems, but then, my financial situation isn’t as stable as his.

I suspect there will never be a “full” recovery.  Whole classes of Americans are being permanently pushed under the bus.  Too old, too undereducated, too female and too young are all victims.  Some might recover eventually but the economic fundamentals do not support full employment.  How can we employ a growing workforce with a shrinking job base?  It is not possible.  And the outflow continues as I speak.  Unless we reverse this trend, there is little hope for the country to recover ever.  So Krugman’s assessment is wrong and I think he knows it.  Most economists know there are serious problems in this country but they don’t want to wave the red flag for fear their grants will be terminated.  There is no recovery now or in the foreseeable future!  Only the rich is doing well.

Here in Palm Desert, CA, the houses are worth 30% of what they were 5 years ago.  So many are empty. Fresh lay offs announced at work today.

Barf, Krugman—I just found out that MY neighborhood is one of the 10 “emptiest in the country”! I thought thats what I saw…no permanent neighbors anymore, no bars, no little stores…just boarded up buildings and renters…and my city just elected an angry gay “conservative” mayor with a huge diamond earring…(he believes in the FREE MKT! he will tell you!)gawd help us, but Dems have no one to blame but themselves..they dont feel there is any reason to show up. Except to vote in a casino…sigh..USANs stil think they can “get rich quick”

I’d love to see his conclusions upon taking a stroll around my own very modest neighborhood.  $100,000 homes sit vacant because there’s no jobs that pay well enough to satisfy a mortgage, and the banks that should have been bankrupt continue to foreclose on families while turning the streets into a ghost town. 

If this is the recovery, I say no thanks!

Around my neighborhood in the Bay Area it’s still on the way down. Restaurants
still closing. Store fronts empty. Much less foot traffic.

But there’s more billboards than ever announcing sales at megastores for goods
made in China!

Heck, these people make Marie Antoinette look like mother f-ing Teresa. Let them eat cake my ass, they won’t even give us week old dinner rolls.

Yes, funny money is still driving some gentrification in New York City, and bankers and brokers are still breaking out $1000 bottles of champagne for brunch.

“Let them eat cake.”