The Economist: Republicans "economically illiterate and disgracefully cynical"

Discussion in 'Politics, Religion, Social Issues' started by Gelfin, Jul 9, 2011.

  1. Gelfin macrumors 68020

    Gelfin

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    #1
    Notable for the source. Conservative supply-siders, you should pay attention when your staunchest cheering section is saying things like this:

    http://www.economist.com/node/18928600?fsrc=scn/tw/te/ar/shameonthem
     
  2. Ugg macrumors 68000

    Ugg

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    #2
    Hades hath frozen over.

    When the Economist starts criticizing the Republicans, it should be obvious to everyone that Repubs have become extremists without a cause. Let's hope that Obama is willing to capitalize on this in 2012 and that the Repugs return to minority status.
     
  3. AP_piano295 macrumors 65816

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    #3
    For the life of me I cannot understand where/how Republican's developed their theories of economics or social behavior in general.

    They're is basically zero evidence to support republican's economic agenda.
     
  4. CalBoy macrumors 604

    CalBoy

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    #4
    I read this on Friday morning as well, and I could only think of one inexorable fact: a solid third of the electorate still believes what the GOP throws out. A position this extreme should be a cult, not the other side of the bargaining table.

    You know you're in trouble when Saint Ronnie is considered too far to the left...
     
  5. Pachang macrumors regular

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    #5
    Number of people at the economist that accurately predicted the financial crisis: 0

    Yet you all seem to take it as given that they know what they are talking about.
     
  6. Thomas Veil macrumors 68020

    Thomas Veil

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    #6
    What The Economist said is obvious to everyone but the tea party bunch...and that's who's running the Republican party these days.

    Reading between the lines, it seems even Boehner is open to working something out with Obama and the Dems...but he lives in fear of his own party's extremist wing.

    It's a ridiculous situation which makes one almost long for the days when politicians cut deals based on their own needs or the needs of their corporate donors. They were often bad deals, but at least they were deals. These people are starry-eyed fanatics who believe in fantasy economic policies which are the equivalent of one of those diets where you eat all the ice cream and pizza you want and still lose weight.

    Moreover, the rest of the Republicans have thoroughly thrown in with these fools, as if their argument carries some sort of political weight. It does not. Ask 10 people what's more important, protecting tax breaks for corporations or protecting their own Social Security and Medicare benefits, and at least 7 or 8 of them would say the latter.

    So it's not like they've got the public on their side. What's frustrating is that

    1. President Milquetoast, despite being the one holding the upper hand here, still seems inclined to compromise and capitulate;
    2. the tea party types really don't give a damn if most of the country doesn't agree with them; they're not motivated by what people want, they're motivated by doing what they "know" is right and are willing to drive America off a cliff to prove themselves "right";
    3. deep down this is all our fault because we the people elected these damn fools.
     
  7. Scepticalscribe Contributor

    Scepticalscribe

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    #7
    Yes, I agree with you, it should flag a fairly significant warning on this matter to anyone with eyes in their head.
     
  8. rdowns macrumors Penryn

    rdowns

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    #8

    Nice try. The Economist was touting a housing bubble and the problems associated with it since 2003.

    http://www.economist.com/node/1794873
     
  9. kavika411 macrumors 6502a

    kavika411

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    #9
    "housing bubble"? - check

    "financial crisis"? - _____
     
  10. Huntn macrumors G5

    Huntn

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    #10
    I realize this may be extreme, but I'm getting out of the market for a while... I've got less than 2 years to retire. I don't particularly feel like riding this one down. It's arguable that the GOPpers will blink, but if they don't, look out.
     
  11. Ugg macrumors 68000

    Ugg

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    #11
    The Economist pointed out often enough that the banks were getting in over their heads, that Greece was a basket case and Spain's property bubble was going to bite it in the butt. Did it predict every last detail or the gross malfeasance of so many financial companies or even Madoff? No, of course not.

    T
    I don't always agree with the Economist of the FT, but I know that I can respect its journalistic integrity, unlike Murdoch's increasingly harpish and ultra political WSJ.
     
  12. Scepticalscribe Contributor

    Scepticalscribe

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    #12
    Oh yes, amen to that. They also pointed out (several years ago) that Ireland was far too exposed to the construction industry which itself was over-heating exponentially.

    Like you, I don't always agree with them but equally, I respect their journalistic integrity, and thus, that whatever mistakes they make in calling something is an honest mistake.

    Couldn't agree more re all of RM's media empire. Just now, I'm reading The Observer between keeping an eye on MR forums on a wet Sunday afternoon; the NOTW story is an obscenity and an outrage, at every level.
     
  13. SactoGuy18 macrumors 68030

    SactoGuy18

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    #13
    I kind of don't trust The Economist because being a British-based publication heavily, their editorial stance is used to bigger government intervention and higher taxation on both income and consumption sides that is common in Western Europe. And you wonder why Europe--which has a lot of government-owned companies and high taxation rates--is on the verge of economic collapse due to problems in the PIIGS countries (Portugal, Ireland, Italy, Greece and Spain).
     
  14. Scepticalscribe Contributor

    Scepticalscribe

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    #14
    Actually, if you read The Economist, that is not, in fact, their stance. Historically, and currently, they favour the idea of Free Trade and deplore any impediment to this. Thus, by European standards they would lie a bit on the right economically (get the 'government' out of the boardroom) and left (get the 'government' out of the bedroom) on social issues, i.e. a classic 19th century European Liberal, (rather than left) stance.

    I respect them because they treat stories with intellectual rigour, - are independent, are not the paid mouth-piece of any large interst group - and are not afraid to tweak their own prejudices in the face of fresh facts which demand that a story be looked at from a different perspective.

    For what it is worth, I don't always agree with them.

    Your analysis of what is wonky in Europe at the moment is a bit simplistic and, I think, lacks a proper understanding of what has gone on; the problems in Ireland (where I'm from), Portugal and Greece have more to do with too little regulation rather than too much. Likewise, Ireland, certainly, followed the absurd US neocon model of low taxation for far too long. Outright mendacity (in the case of Greece faking the figures in order to be accepted into the Euro), lax regulation, poor corporate governance, property and other bubbles, gross and grotesque levels of corruption, all contributed to the mess currently experienced in Ireland, Portugal and Italy.

    The Economist was one of the few - very few - publications to signal alarm some years ago at a number of the political and economic choices which were made by ruling, influential and governmental elites.

    Cheers
     
  15. Ugg macrumors 68000

    Ugg

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    #15
    Murdoch is in large part to blame for the extreme divisiveness in American politics and I look forward to the end of his empire.

    Italy and Spain will be just fine. Ireland is making serious headway although their anti-tax policy will only extend their suffering. Portugal needs some help but their economy is too small to bring down the EU. Greece's problems stem from their former Ottoman overlords' corruption. Greece will pull through and join the rest of the world in paying taxes instead of relying on graft to get things done.

    Schroeder started the process of weaning Germany away from its post-reunification property bubble and Merkel has succeeded in making Germany ultra-competitive in global markets despite very high taxes. Taxes are not a drag on the economy as long as there is a unified voice in charge.

    The Netherlands, Denmark, Norway, Sweden, Finland, France, Poland have all weathered the financial because of their tax structure, not despite of it. You'll simply have to find another drum to beat, the all taxes are bad simply doesn't cut it anymore.

    Cameron's Big Society plans will extend the UK's fiscal pain long beyond what it should have been and will benefit only the wealthy. Instead of investing in his country, he's only penalizing the poor. I don't doubt that the UK will have more serious problems than Spain or Italy amongst the disenfranchised. The political and social climates are simply too vicious.
     
  16. Eraserhead macrumors G4

    Eraserhead

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    #16
    Number of people at $MAJOR_BANK who accurately predicted the financial crisis: 0.
     
  17. kavika411 macrumors 6502a

    kavika411

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    #17
    Number of $MAJOR_BANKs quoted in OP: 0.

    Number of $MAJOR_BANKs defended by Pachang: 0.
     
  18. SactoGuy18 macrumors 68030

    SactoGuy18

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    #18
    I think of all the PIIGS countries, the three that will pull down Europe are Portugal, Italy and Greece. Why these three countries? I cite the following:

    1. Portugal doesn't have the resources to produce their way out of debt, unlike next-door Spain, which has substantial agricultural and industrial assets and the Spanish fishing fleet is a big moneymaker, too.

    2. Greece--no thanks to its gigantic problems with graft and corruption--may be too far gone to actually save.

    3. Italy has a debt load that makes Greece seem like a minor problem. It's so big that even Italy's substantial agricultural and industrial output may not be enough to produce their way out of that debt.

    By the way, Germany is doing well because of strong exports to China (Audi, BMW and Mercedes-Benz are making boatloads of Euros selling luxury cars to the nouveau riche Chinese) and the fact Germany has a reasonably business-friendly income tax policy that encourages Germany companies to keep as much of their production inside Germany.

    I think in the end, I think Europe will suffer some pain because they're going to have to declare a partial default of Greek finances, and I expect the European Commission and the European Central Bank to enact major reforms to stabilize the European economy in the long run.
     
  19. Eraserhead, Jul 10, 2011
    Last edited by a moderator: Jul 10, 2011

    Eraserhead macrumors G4

    Eraserhead

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    #19
    If no banks got it right it's not really reasonable to expect anyone else to get it right either.

    Italys debt is owed to italians sort of in lieu of taxes. I think they will be OK.
     
  20. kavika411 macrumors 6502a

    kavika411

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    #20
    Then I assume you find no fault with the so-believed Republican/conservative/free market deregulation that supposedly caused the recession? (I don't ask rhetorically.)
     
  21. Eraserhead macrumors G4

    Eraserhead

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    #21
    Fair point. I think that is probably reasonable.
     
  22. kavika411 macrumors 6502a

    kavika411

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    #22
    I don't like it when we agree. ;)
     
  23. citizenzen macrumors 65816

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    #23
    I hope you two aren't agreeing that nobody foresaw problems in deregulating the financial markets ... because then you'd both be wrong.

    Looks like the evil socialists knew that it was a bad idea.

    But then, who listens to socialists?

    Excerpts from the World Socialist Website [source] ...


    Clinton, Republicans agree to deregulation of US financial system
    By Martin McLaughlin
    1 November 1999


    Legislation first adopted to save American capitalism from the consequences of the 1929 Wall Street Crash is being abolished just at the point where the conditions are emerging for an even greater speculative financial collapse. The enormous volatility in the stock exchange in recent months has been accompanied by repeated warnings that stocks are grossly overvalued, with some computer and Internet stocks selling at prices 100 times earnings or even greater.

    And there is a much more recent experience than 1929 to serve as a cautionary tale. A financial deregulation bill was passed in the early 1980s under the Reagan administration, lifting many restrictions on the activities of savings and loan associations, which had previously been limited primarily to the home-loan market. The result was an orgy of speculation, profiteering and outright plundering of assets, culminating in collapse and the biggest financial bailout in US history, costing the federal government more than $500 billion. The repetition of such events in the much larger banking and securities markets would be beyond the scope of any federal bailout.
     
  24. Gelfin thread starter macrumors 68020

    Gelfin

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    #24
    On the contrary, I blame both. They both epitomize the famous Upton Sinclair quote, "It is difficult to get a man to understand something when his salary depends on his not understanding it." I have no problem doing this given that starting around 2003 I myself predicted economic disaster, emerging from the housing sector, and based on easily available observation, simple math and common sense.

    I may have been in a niche position that allowed this perspective. I make substantially more than the median income in California, know enough about personal finance to know how much money I can afford to borrow reasonably, and thus knew I could not come close to affording a median-priced home. Meanwhile people making half what I did were blithely purchasing ever-more expensive homes, and bragging about how smart they were to have found "deals" that, when described, sounded more like money laundering schemes than mortgages.

    Simple inductive reasoning meant the scheme could not work as it had been sold to the borrowers. The ever-increasing home prices that were giving recent buyers orgasms made for an ever-shrinking pool of potential buyers to take those homes off the buyers' hands before their loans reset. The only people who could afford to do so would be those sitting on equity from their own ill-considered home purchases, except they weren't building equity because they had accepted the same ridiculous loan terms. But if they did have equity, they'd be effectively "trading down," selling the entry-level home they'd soon be unable to afford to buy another entry-level home with two or three additional years of double-digit price inflation added to the price. Why would they do that? And since the rest of us would by that time be "priced out forever," as the threat went at the time, there would be nobody to buy.

    Either the lenders were planning on maintaining the loan practices they'd offered to California buyers, and thus setting themselves up as perpetual de facto landlords taking subprime "rent" on progressively bad loans against home prices that no longer meant anything, and building a notional pile of bad consumer debt they'd never actually realize, or this scheme would fall apart and a huge number people who bought before 2003 would go bust by 2008. There was no financial advantage to anyone in the former, so the latter was the most likely conclusion. And so it was.

    Add to that that all the displaced dot-com casualties I knew were at that time calling themselves some variety of real estate professional, or training to become one, and I concluded that real estate was the rug under which we had swept the unresolved economic damage of the dot-com bust and 9/11. I didn't need to know a damned thing about CDOs or regulatory changes to predict a problem. The information readily available on the street was sufficient to see that this trend was unsustainable, whatever its ultimate causes, and that there was no obvious failsafe.

    I gave my conclusions no real credit at the time because I have no formal economic training, so who the hell am I, but it all fell apart in pretty much the way I had been describing to my friends over a pint for years before it actually happened. And in hindsight, everything I could see was just as visible to the people who were enabling the problem, both financially and politically. So yeah, I blame the "smartest guys in the room" for not seeing this coming. I think they did. They just didn't care. They knew they would come out of the rubble richer than the suckers they'd buried.
     
  25. Eraserhead macrumors G4

    Eraserhead

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    #25
    Nassim Taleb did as well. But there weren't very many people in that camp.
     

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