Mid-Week Open Thread (2010-04-14)

Here is your open thread for the mid-week on April 14th, 2010. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.

Be sure to also check out the forums, and get your word in the user-driven discussions there!

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

50 comments:

  1. 1

    Tomorrow’s Tax Day

    I know folks like Pfft see a light at the end of the repression tunnel, but let’s look at the pragmatic IRS revenue history from April 2008-April 2010….this clearly defines Pfft’s light as a train coming to smash us.

    Fact: Federal Income Tax Revenue plunged 34% in April 2009 from April 2008; because of a massive decrease in personal incomes in America. Article in part:

    “…Federal tax revenue plunged $138 billion, or 34%, in April vs. a year ago — the biggest April drop since 1981, a study released Tuesday by the American Institute for Economic Research says.
    When the economy slumps, so does tax revenue, and this recession has been no different, says Kerry Lynch, senior fellow at the AIER and author of the study. “It illustrates how severe the recession has been.”

    For example, 6 million people lost jobs in the 12 months ended in April — and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago….”

    http://www.usatoday.com/money/perfi/taxes/2009-05-26-irs-tax-revenue-down_N.htm

    Well…..how are IRS Revenue projections for April 2010 compared to April 2009 looking? Article in part:

    “…The Congressional Budget Office projects that total federal revenues will be about $2.2 trillion in 2010, a 3.3 percent increase from 2009, under the assumption that current laws and policies will remain in effect. As a share of gross domestic product, revenues will edge up slightly, from a nearly 60-year low of 14.8 percent in 2009 to 14.9 percent in 2010 (see Figure 4-1). CBO expects that about 60 percent of the increase in federal revenues will come from increased remittances from the Federal Reserve System to the Treasury; those payments will rise markedly because of the Federal Reserve’s recent actions to stabilize financial markets to support the economy….”

    http://www.cbo.gov/ftpdocs/108xx/doc10871/Chapter4.shtml

    Golly gee, without the bailouts it would have got worse and hades, it really didn’t get much better at all, even with 2009 drunken sailor debt spending.

    And Pfft, before you ramble on and on about how Forbes or some other anomalous MSM news source you handpick, agrees with your recession’s over hogwash, please give me some non-political think tank facts to support your opinion [with links] like I did, not your spurious politically motivated allegations.

    More support the repression is worsening:

    2010 State taxes DOWN from reduced incomes in 2009. Article in part:

    “…The Nelson A. Rockefeller Institute of Government reported today that state tax revenues fell for the fifth consecutive quarter, down 4.1% for the final quarter of 2009:

    Corporate income tax: -5.8%
    Personal income tax: -4.5%
    Sales tax: -4.2%

    The decline was biggest in the Southwest (-18.1%); tax revenues increased 0.5% in New England. State tax revenues declined in 39 states:…”

    http://irsdispute.blogspot.com/2010/02/state-tax-revenues-continue-to-fall-5th.html

    Pfft, explain to me why falling 2010 tax receipts [or propped with short-term bailout debt to keep from falling, same thing] due to falling incomes, means the recession’s over and don’t use that pointless lagging indicator nonsense you’ve used the last year long, its ludicrous and nonsense; and I think you agree with me on that by now.

  2. 2
  3. 3
    Scotsman says:

    Under questioning today Bernanke stated that the U.S. will not be able to “inflate our way out” of the debt because of “the indexing of off-sheet liabilities” such as social security, Medicare, etc. and that the government would have to close the deficit gap through spending cuts and higher taxes.

    He knows there’s only one possible way out of the mess he and others have created, and it won’t be any fun, for a long time.

    I’ve always said the games would go on until the checks bounced- it looks like we may be closer to that point in the process than we thought. Today’s testimony represents quite a change in tactics for Mr. B.

  4. 4
    willcasp says:

    RE: softwarengineer @ 1

    Your assumption is that (total Federal revenue) = individual income tax.

    Your comment does not mention where the individual income tax is fitting into the total revenue equation. The statement does declare that 60% of the increase will come from movements involving the Fed and banking system. No mention of the other 40%, nor any mention of revenue that offsets the decline in individual income tax contributions.

    That being said. I completely agree with you on a conceptual level. I just don’t think this statement backs up your idea.

  5. 5
    pfft says:

    By softwarengineer @ 1:

    Tomorrow’s Tax Day

    I know folks like Pfft see a light at the end of the repression tunnel, but let’s look at the pragmatic IRS revenue history from April 2008-April 2010….this clearly defines Pfft’s light as a train coming to smash us.

    Fact: Federal Income Tax Revenue plunged 34% in April 2009 from April 2008; because of a massive decrease in personal incomes in America. Article in part:

    “…Federal tax revenue plunged $138 billion, or 34%, in April vs. a year ago â�� the biggest April drop since 1981, a study released Tuesday by the American Institute for Economic Research says.
    When the economy slumps, so does tax revenue, and this recession has been no different, says Kerry Lynch, senior fellow at the AIER and author of the study. “It illustrates how severe the recession has been.”

    For example, 6 million people lost jobs in the 12 months ended in April â�� and that means far fewer dollars from income taxes. Income tax revenue dropped 44% from a year ago….”

    http://www.usatoday.com/money/perfi/taxes/2009-05-26-irs-tax-revenue-down_N.htm

    Well…..how are IRS Revenue projections for April 2010 compared to April 2009 looking? Article in part:

    “…The Congressional Budget Office projects that total federal revenues will be about $2.2 trillion in 2010, a 3.3 percent increase from 2009, under the assumption that current laws and policies will remain in effect. As a share of gross domestic product, revenues will edge up slightly, from a nearly 60-year low of 14.8 percent in 2009 to 14.9 percent in 2010 (see Figure 4-1). CBO expects that about 60 percent of the increase in federal revenues will come from increased remittances from the Federal Reserve System to the Treasury; those payments will rise markedly because of the Federal Reserveâ��s recent actions to stabilize financial markets to support the economy….”

    http://www.cbo.gov/ftpdocs/108xx/doc10871/Chapter4.shtml

    Golly gee, without the bailouts it would have got worse and hades, it really didn’t get much better at all, even with 2009 drunken sailor debt spending.

    And Pfft, before you ramble on and on about how Forbes or some other anomalous MSM news source you handpick, agrees with your recession’s over hogwash, please give me some non-political think tank facts to support your opinion [with links] like I did, not your spurious politically motivated allegations.

    More support the repression is worsening:

    2010 State taxes DOWN from reduced incomes in 2009. Article in part:

    “…The Nelson A. Rockefeller Institute of Government reported today that state tax revenues fell for the fifth consecutive quarter, down 4.1% for the final quarter of 2009:

    Corporate income tax: -5.8%
    Personal income tax: -4.5%
    Sales tax: -4.2%

    The decline was biggest in the Southwest (-18.1%); tax revenues increased 0.5% in New England. State tax revenues declined in 39 states:…”

    http://irsdispute.blogspot.com/2010/02/state-tax-revenues-continue-to-fall-5th.html

    Pfft, explain to me why falling 2010 tax receipts [or propped with short-term bailout debt to keep from falling, same thing] due to falling incomes, means the recession’s over and don’t use that pointless lagging indicator nonsense you’ve used the last year long, its ludicrous and nonsense; and I think you agree with me on that by now.

    I am sorry that you don’t believe that tax collections is a lagging indicator but it is. deal with it!

    the recession ended last year in about August, even Paul Krugman says that.

    we’ve stopped jobs losses and even started to add jobs.

    it’s spring and people still are fixated on the rough winter. it’s 70 degrees out and people still think it’s going to snow…

    if things are so bad why has the stock market been going up? the stock market doesn’t always price things correctly but it did wake up in 2008.

  6. 6
    pfft says:

    clearly we are in recovery. if retail sales were a reason why the economy collapsed they must also be used as a reason as to why we are in recovery. if the stock market was an example of how bad the economy is it must also be an example of why the economy is getting better.

    Retail Sales increase sharply in March
    http://www.calculatedriskblog.com/2010/04/retail-sales-increase-sharply-in-march.html

    look at this chart. retail sales plunged and helped guide us into recession. now retail sales have bottomed and gone much higher. that is undeniable.

    http://calculatedriskimages.blogspot.com/2010/04/retail-sales-yoy-march-2010.html

  7. 7

    RE: pfft @ 5

    It Doesn’t Matter What You Think or What I Think

    We’re out of water, oil, trees and fish in America and in the world. If we could magically make more, it would turn this decline around, possibly.

  8. 8
    Scotsman says:

    RE: pfft @ 6

    I hope you’re right, and that recovery is on the way. I hope you make a ton of money this coming year, and in the future, so that you will be able to pay the taxes to support my new retirement. Went to the woods on the “back 40” of the old homestead and planted some good bud this morning. Downloaded the food stamps application and the social security forms needed to take the early activation of my retirement. Sun’s out, life is good. Might even go for a hike. But I’m done with working.

  9. 9

    RE: pfft @ 6

    I’d Check Your Source

    If it excludes auto sales it’s phony. Europe saw Feb 2010- Feb 2009 sales go down 1.3% when you include autos.

    Your source, Calculated Risk, doesn’t specify autos.

  10. 10

    RE: willcasp @ 4

    Likely Just Inventory Replacement

    We put off buying toilet paper, cleaners, etc in 2009 and at some point we had to restock. Now we can put off buying the stuff again, especially with a high commercial real estate vacancy rate [where the jobs aren’t] and companies not hiring.

  11. 11
    pfft says:

    By softwarengineer @ 7:

    RE: pfft @ 5

    It Doesn’t Matter What You Think or What I Think

    We’re out of water, oil, trees and fish in America and in the world. If we could magically make more, it would turn this decline around, possibly.

    are you trying to turn this into the comments section of the oil drum or LATOC?

    we have a sustained recovery around the world.

  12. 12

    RE: softwarengineer @ 9

    I Checked it For You

    US conglomerate auto sales up 24.3% from mar 2009- Mar 2010, still about 22% down from March 2008, since Mar 2008- Mar 2009 saw a 45% sales drop.

    Sounds like inventory replacements in 2009 that were put off the year before.

  13. 13

    RE: pfft @ 11

    I Thought You Were a Democrat for the Environment

    Fighting the good fight against global warming….perhaps not.

  14. 14
    pfft says:

    By Scotsman @ 8:

    RE: pfft @ 6

    I hope you’re right, and that recovery is on the way. I hope you make a ton of money this coming year, and in the future, so that you will be able to pay the taxes to support my new retirement. Went to the woods on the “back 40” of the old homestead and planted some good bud this morning. Downloaded the food stamps application and the social security forms needed to take the early activation of my retirement. Sun’s out, life is good. Might even go for a hike. But I’m done with working.

    Latest Data Hints at a Recovery in World Trade
    http://www.nytimes.com/2010/02/11/business/economy/11econ.html?ref=business

  15. 15
    One Eyed Man says:

    RE: softwarengineer @ 1

    I don’t dissagree that things are ugly SWE, but the statistics are turning up YOY on federal tax receipts:

    “· Real-Time tax withholding data shows that March wages and salaries grew an adjusted 4.3% y-o-y, the second consecutive month of positive gains.

    Read more: http://www.businessinsider.com/trimtabs-employment-is-surging-and-even-the-bls-doesnt-realize-how-good-it-is-2010-4#ixzz0l77VLFLT

    Tax reciepts are up YOY, but it just happened in February. Trim Tabs showed more employment gains in March than BLS, by over 100K but I think based upon the article that Trim Tabs over estimated the census hiring in March because they estimated based upon the hiring pattern in 2000.

    Happy days may not be here again. But in the words of Lennon and McCartney:
    I have to admit its getting better, a little better all the time, It can’t get no worse.

    http://www.businessinsider.com/trimtabs-employment-is-surging-and-even-the-bls-doesnt-realize-how-good-it-is-2010-4

  16. 16
    pfft says:

    By softwarengineer @ 12:

    RE: softwarengineer @ 9

    I Checked it For You

    US conglomerate auto sales up 24.3% from mar 2009- Mar 2010, still about 22% down from March 2008, since Mar 2008- Mar 2009 saw a 45% sales drop.

    Sounds like inventory replacements in 2009 that were put off the year before.

    the green shoots pessimists never told us beforehand that there would be any restocking…

  17. 17
    pfft says:

    By One Eyed Man @ 15:

    RE: softwarengineer @ 1

    I don’t dissagree that things are ugly SWE, but the statistics are turning up YOY on federal tax receipts:

    “· Real-Time tax withholding data shows that March wages and salaries grew an adjusted 4.3% y-o-y, the second consecutive month of positive gains.

    Read more: http://www.businessinsider.com/trimtabs-employment-is-surging-and-even-the-bls-doesnt-realize-how-good-it-is-2010-4#ixzz0l77VLFLT

    Tax reciepts are up YOY, but it just happened in February. Trim Tabs showed more employment gains in March than BLS, by over 100K but I think based upon the article that Trim Tabs over estimated the census hiring in March because they estimated based upon the hiring pattern in 2000.

    Happy days may not be here again. But in the words of Lennon and McCartney:
    I have to admit its getting better, a little better all the time, It can’t get no worse.

    http://www.businessinsider.com/trimtabs-employment-is-surging-and-even-the-bls-doesnt-realize-how-good-it-is-2010-4

    I like turn turn turn.

    To Everything (Turn, Turn, Turn)
    There is a season (Turn, Turn, Turn)

    a time(or season) for growth after a time of recession, no?

  18. 18
    Scotsman says:

    RUSSIAN’S SNUB OBAMA

    Watch this 10-second video where a lineup of leading Russians refuse to shake his
    hand. Did you see this on ABC, CBS, NBC, CNN or MSNBC?

    This is “hard ball”, Soviet Style. After the third handshake refusal,,,
    it becomes obvious. The facial expression is priceless. “I guess we’re no longer in Chicago “. And, how in the world did Katie Couric, Charlie Gibson, Diane Sawyer et al,
    miss this?

    https://login.wwdb.org/mcall/0070222169314568/ObamaHandshakeSnubbed1.wmv

  19. 19
  20. 20
    Scotsman says:

    Ouch. I’m 0 for 2 here. I never would have guessed, his facial expressions sure make it look like a snub. Maybe he’s just grumpy.

    Oh well, I’m off to CA for some time, see ya’ll later.

  21. 21
    The Grinder says:

    All that happened is that we inflated (via massive money giveaways to the central bankers) our way out of our mess, and then we deflated the money supply to counteract the immediate effects of massive dilution.

    It’s like controlling your body by injecting liquified cocaine to pick yourself up, and then injecting heroin to calm yourself back down, so you are “balanced.” The illusion of balance has been maintained, but the body is being destroyed underneath.

    Complete control of the economy via these kinds of injections is necessary to get people to believe that central banker agenda 21 is good for you and the planet. The owners of the central banks don’t need a healthy world economy anymore because they want omnipotent power, and they will manipulate the economy in any way to achieve this goal.

  22. 22
    pfft says:

    We can surely see recovery in the earnings reports of CSX, alcoa and UPS. the IYT was up 2.44% today. railroad traffic was up.

    Rail Traffic increases in March
    http://www.calculatedriskblog.com/2010/04/rail-traffic-increases-in-march.html

  23. 23
    pfft says:

    By The Grinder @ 21:

    All that happened is that we inflated (via massive money giveaways to the central bankers) our way out of our mess, and then we deflated the money supply to counteract the immediate effects of massive dilution.

    It’s like controlling your body by injecting liquified cocaine to pick yourself up, and then injecting heroin to calm yourself back down, so you are “balanced.” The illusion of balance has been maintained, but the body is being destroyed underneath.

    Complete control of the economy via these kinds of injections is necessary to get people to believe that central banker agenda 21 is good for you and the planet. The owners of the central banks don’t need a healthy world economy anymore because they want omnipotent power, and they will manipulate the economy in any way to achieve this goal.

    when have we never inflated our way out of a mess?

  24. 24
    David Losh says:

    RE: pfft @ 23

    You lost me. Inflation is no longer possible. We missed the chance at hard inflation with the election of Obama.

    It amazes me that the Conservative Movement afoot today, in particular the Tea Party, has missed the idea that what we had wasn’t working. True conservatives, and in my opinion, the majority of right thinking Americans want Obama to go after these banker crooks, and grind them to dust. Obama is way to nice, way to bipartisan, to do that. He keeps caving into the Republican whining.

    So what we end up with is this slow process of correction. Inflation, if it ever rears it’s head, will be restrained by massive interest rate hikes.

    The only play left is to attack the deficit which Bernanke has set us up for in repeated government hearings. Slow, painful, belt tightening, and a reorganization of the tax codes. Live with it.

  25. 25
    pfft says:

    a great comment in the comments section from this article I just read.

    “While it is certainly true that “The market, at times, does not give a damn about logic, or consistency, or rationality,” don’t lose sight of the fact that the market may be acting totally logically and rationally, but that you just don’t get it. There was a winner on the other side of every one of those losing trades.”

    Lessons From a Humbled Bear
    http://seekingalpha.com/article/198439-lessons-from-a-humbled-bear?source=yahoo

  26. 26
    Daniel says:

    By David Losh @ 24:

    It amazes me that the Conservative Movement afoot today, in particular the Tea Party, has missed the idea that what we had wasn’t working.

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

    You could also ask why the run down tiny houses in less desirable neighbourhoods have the biggest flag poles or why some of those suffering most from the lack of affordable health insurance reject the idea of a public single payer insurance so strongly. It does not fit with the beliefs in which they were raised.

    Of course education would help but one only needs to look at this slideshow to understand why it does not:

    http://www.flickr.com/photos/pargon/sets/72157623594187379/show/

  27. 27
    Sottocapo says:

    Love that slideshow Daniel! Yet Teaparty members are better educated than the average American according to an NYT poll.

  28. 28
    EconE says:

    RE: Daniel @ 26

    I’m apolitical.

    That being said…

    http://errorlevelanalysis.com/permalink/5a2220d/

    It was pretty funny however.

  29. 29
    David Losh says:

    RE: pfft @ 25

    That’s another thing about the stock market. Twice in fifteen years stock market exhuberance has inflated then crashed. Once with tech stocks, then again with banking, and financial stocks.

    I’m really not sure what indicator the stock market is anymore. Let’s take General Electric. Can anyone here tell me what General Electric does? Seriously, look it up, then give me the links to what you think, or the opinion of some one else. My point is that it is so big, so many tenacles, so many investments, so many holding companies, it would take years to sort it all out.

    AIG, in my opinion was pretty tame compared to some of the the companies we have in America today. Wealth is it’s own market place. Massive amounts of individual, then corporate, then investment fund wealth can turn the stock market. So I don’t really think pointing at the stock market is doing anything for anybody.

  30. 30

    RE: pfft @ 17

    Exclude Temporary Employment Like Census Workers

    And your house of cards comes tumbling down.

    BTW, historical depression unemployment statistics included severely underemployed (current U6 BLS data does too), this 17% U6 unemployment figure went up in March 2010. Stop using the 10% U2 unemployment to compare to the last depression, use U6 [you’re comparing apples to oranges]. Another add-on needed to match depression era history records: count the giveups and youth not employed yet….I call it ghost unemployment….I estimate 22-29% unemployment if you do it without your political blinders on. The Great Depression was about 25% too.

    But if you want to be in mathematical/historical depression era denial, keep using your low-balled U2 data, which excludes ghost unemployment :-)

  31. 31

    RE: One Eyed Man @ 15

    Are You One of the Rich Elite?

    If you are, I can understand you. Article in part:

    “…The 400 American households with the highest incomes also have enjoyed a much faster pace of income growth than the vast majority. And, because tax rates applied to their income have fallen by a third, their after-tax incomes grew substantially faster than their pre-tax incomes. …”

    http://www.epi.org/economic_snapshots/entry/where_has_all_the_income_gone_look_up/

    Also, with household income stuck at about $50K the last 10 years remember, the $50K figure came by averaging in the rich elite 450% household income gains. Also, consider too, the bottom 98% of household incomes are recession cohabitating with family/friends lately, with obviously more wage earners per household today and are still flat. LOL

  32. 32

    RE: softwarengineer @ 30

    Unemployment Claims Surge 2nd Week in a Row in April 2010

    Article in part [BTW, stocks are going down right now, not up]:

    “…The Labor Department says initial claims for unemployment benefits rose unexpectedly for a second straight week….”

    http://finance.yahoo.com/news/Stocks-drift-on-higher-apf-4094603726.html?x=0&sec=topStories&pos=main&asset=&ccode=

  33. 33

    RE: One Eyed Man @ 15
    In honor of April 15th, , from the Beatles “Taxman”:
    (If you drive a car ), I’ll tax the street,
    (If you try to sit ), I’ll tax your seat,
    (If you get too cold ), I’ll tax the heat,
    (If you take a walk ), I’ll tax your feet.

  34. 34

    RE: softwarengineer @ 32

    With Car sales Up 24% YOY, Why More Unemployment?

    Besides auto sales still down about 22% from 2008:

    Ask Chrysler, an American engineered/managed automobile, with an 8% decrease in sales….LOL

  35. 35
    Daniel says:

    By EconE @ 28:

    RE: Daniel @ 26

    I’m apolitical.

    That being said…

    http://errorlevelanalysis.com/permalink/5a2220d/

    It was pretty funny however.

    Thank you for the link! I will try this with some family photos that have been converted, resized, filtered but not tampered with to see how reliable this is.

    I just looked at a bunch of the tea party ones and some were completely unsuspicious. I also found some family photos with bright areas in regions of strong edges and before pure white or pure black background. An effect like the example you posted seems hard to get without tampering so I believe this one is fake.

  36. 36
    Tom Harrington says:

    So what are the potential pitfalls and drawbacks to “walking away” from an underwater mortgage? I have two acquaintances that are thinking of doing that… they want to know. Thanks.

  37. 37

    RE: Tom Harrington @ 36

    The perceived negative of walking away from a mortgage is that it gives one bad credit. That a lot of people are doing it makes it appear as though it might not look so bad in the future.
    Rather than simply ” walk away”, there are alternatives. One is to get in contact with the lender and let them know you want to do a ‘ deed in lieu of foreclosure”, which essentially means just giving the house back to the bank,walking away with their permission. It’s less costly to them than letting it foreclose, and doesn’t look as bad. Another option is to find a real estate agent experienced in listing short sales, and have the home sold that way. The result, of course, is the same: Your acquaintances will lose their home, and will make no money from it. The short sale can be more lengthy and complicated, but my listing agent pals tell me they’re getting approved more quickly, and the bad credit won’t be quite as bad.
    What would I do in their situation? Not knowing their circumstances, probably pursue deed in lieu of foreclosure. They might want to consult with an attorney first.

  38. 38
    The Tim says:

    Wow, EconE, it seems you’ve really made a pal for life in JB.

  39. 39
    matsayswhat says:

    By The Tim @ 38:

    Wow, EconE, it seems you’ve really made a pal for life in JB.

    Lol, that’s awesome. I’m really enjoying the added commentary and post titles.

  40. 40
    pfft says:

    want evidence of a recovery? pulp prices. lumber prices.

    “Pulp prices hit a 15-year high yesterday as the effects of February’s earthquake in Chile continued to squeeze the market.”

    http://www.ft.com/cms/s/0/59e88b2e-475e-11df-b253-00144feab49a.html

    Lumber Rises to Highest Price Since 2006 on Economic Outlook
    http://www.businessweek.com/news/2010-04-15/lumber-rises-to-highest-price-since-2006-on-economic-outlook.html

    pulp prices plunged during the recession.

  41. 41
    Ross Jordan says:

    By Tom Harrington @ 36:

    So what are the potential pitfalls and drawbacks to “walking away” from an underwater mortgage? I have two acquaintances that are thinking of doing that… they want to know. Thanks.

    – Credit/FICO score will drop
    – In case of judicial foreclosure, can still be liable for any losses, interest and fees
    – Avoid signing papers from the bank without attorney review; banks are going after some strategic defaulters: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aIf_vUQZFt.s
    – If you have other assets which you are trying to protect, don’t let the bank know about them (and understand how they could be discovered)
    – Morality?

  42. 42
    One Eyed Man says:

    RE: softwarengineer @ 31

    SWE, I don’t think we necessarily disagree, but sometimes I think we’re talking about 2 different things. I agree with you that the standard of living for the majority of americans is deteriorating and probably will continue to deteriorate. But tax receipts and GDP are up. Job losses have slowed and some think employment has turned net positive (or soon will be) without the inclusion of census jobs. Corporate profits are up, the financial sector is much healthier and manufacturing appears to be up, etc.

    Those items are all signs of economic recovery. Unfortuantely you are right that the economic plight of the majority of americans probably isn’t improving even in the midst of an improving economy. It appears to be a slow, crappy, jobless recovery, but if GDP is growing and it appears it will continue to do so that’s economic recovery.

    But whether I see it as recovery or not doesn’t mean I’m not aware of the increasing inequity in the US economy and doesn’t have anything to do with my personal economic condition or whether I’m an elitist prick. I agree with you that the inflation adjusted after tax incomes of most americans dropped in the last 10 years while that of the “rich” increased. A couple of weeks ago when Scotsman or someone else was ranting once again that the top few percent pay most of the US income tax I linked a site showing that the rich were the only ones whose inflation adjusted after tax incomes improved. I also pointed out that that doesn’t even take into account that all those people in the bottom 95% are responsible for most of the FICA and arguably the accompanying employment taxes paid by their employers which constitutes a huge part of the US tax burden. I even tried to point out how unfair I thought the Bush tax cuts were by thanking everyone for the tens of thousands of dollars that I (probably unfairly) got and they didn’t. And I believe I also pointed out that the idea that rich people wouldn’t invest if you didn’t cut capital gains taxes was total bull shit.

    Unfortunately, I don’t know how to create more decent paying jobs in America. I think the Picken’s Plan would help by decreasing reliance on foreign oil and requiring investment in US energy related infrastructure which would create jobs here. But I don’t know how to keep US jobs from being out sourced in a world of global capitalism where foreign labor markets can underprice us. If I were king, I’m probably institute an R & D tax credit and an investment tax credit (for manufacturing equipment) along with infrastructure spending and a comparatively huge domestic energy program.

    But I’m an open borders kind of a guy (for reasons of personal liberty not economics) and I don’t know how to keep our standard of living from being diluted to a new lower equilibrium with the lower standard of living in the emerging market countries.

    If you can educate me on a better way, I’ll listen. My main reason for coming to the Bubble is to learn and exchange ideas.

  43. 43
    Daniel says:

    By One Eyed Man @ 42:

    I agree with you that the standard of living for the majority of americans is deteriorating and probably will continue to deteriorate. But tax receipts and GDP are up. Job losses have slowed and some think employment has turned net positive (or soon will be) without the inclusion of census jobs. Corporate profits are up, the financial sector is much healthier and manufacturing appears to be up, etc.

    What does this tell you? My conclusion for a long time has been that we use the wrong metrics for assessing economic prosperity. I have tried to raise this issue in countless discussions but usually I notice I speak a different language than others so I do not pursue it. I guess a model or a theory with both, a wrong short and a wrong long term behavior (and a questionable window of applicability in between) is unsatisfactory to me just like a physics model or theory with wrong asymptotic behavior is.

  44. 44
    EconE says:

    RE: The Tim @ 38

    LOL!

  45. 45
    EconE says:

    RE: Daniel @ 35

    Oddly enough, that was in the comment section on the flickr site. I tried a few also and found the same thing you did. Some seemed “fake?” Some “real?”.

  46. 46
    S-Crow says:

    From the trenches:

    Today, met another who is doing a strategic default, not necessarily to walk a way, but to get the attention of the lender who is not listening unless you are missing a payment or two or three. Wonder how much this type of “OK, then I’ll just not pay” is costing Banks. Has to be large.

    I wonder when Banks will be proactive and just say, “I’m here to listen to what you have to say right now vs. call me when you are delinquent.”

    On another front, spoke with a title officer who indicated they have paid out around $60 Million in claims due to sub-contractor liens being filed against General Contractors not paying up. The ripples of this “recession” are far and wide and deep.

    Glad to hear some on this board feel that recovery is on the way and that the world economies are clearly recovering. Hope you’re right.

  47. 47
    ray pepper says:

    RE: S-Crow @ 46

    if you watch those regionals you’d think we r recovering BIG TIME: BANR, CTBK, TSBK…way up from bottoms. Most up over 200%

  48. 48
    One Eyed Man says:

    RE: Daniel @ 43

    “we use the wrong metrics for assessing economic prosperity”

    I agree Daniel. For once I’ll restrain myself and leave it at that. I just erased 6 paragraphs of editorial comment because I’m pretty sure no one really needs to be subjected to more of my ranting.

  49. 49

    By Tom Harrington @ 36:

    So what are the potential pitfalls and drawbacks to “walking away” from an underwater mortgage? I have two acquaintances that are thinking of doing that… they want to know. Thanks.

    They should talk to an attorney. It can depend on what state they’re in, but they could still owe the balance on the loan in a number of situations. Also, their ability to get a loan in the future is something that cannot be known until the future. Guidelines change.

    They should also look at other options. For example, in many places if they have an 80/20 loan package they could file a Chapter 13 and wipe out the 20 if the facts are right. And there are a few people who actually qualify for loan modifications that make sense (but those are probably very rare).

  50. 50
    Shameer says:

    RE: softwarengineer @ 1 – To me the interesting part of the first post is: “As a share of gross domestic product, revenues will edge up slightly, from a nearly 60-year low of 14.8 percent in 2009 to 14.9 percent in 2010”

    We are being (collectively) taxed at the lowest rate in two generations, although it may not feel like that to many. I think a lot of it has to do with the fact that capital gains (and the resulting taxes) are way down from what they normally are. Since the free fall in stock and real estate (talking nationally and in nominal terms) is pretty much over, capital gains tax revenue will starting picking up albeit slowly. Other drags on revenue are unemployment compensation (unfortunately no quick end in sight) and companies getting tax refunds for losses by adjusting them against previous years’ profits (which should also end soon because a lot of companies are returning to profitability).

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