'Wealth Effect' in Reverse

The Great Depression had a profound effect on America's spending habits and the current crisis will as well.
Obama will create jobs and we may see some increase in the spending, but it will fall short of keeping the huge number of retail establishments open and as they close or downsize as many have it will only add to the unemployment rolls and the ripple effect to the manufacturers who in turn will downsize or close their doors.
The term "supply side economics" used by the Bush administration actually would work but the fact is the supplier is the manufacturer not the retailer, and as we all know the manufacturer is China and India. True to form the ripple effect has reached those manufacturers.
The American consumer who has been under wage pressure since Nixon has had a false economy to rely on, principally the equity in their homes to sustain their life style and buying habits. That equity is gone and with it the economy.
Bush and Paulson seem not to realize this fact and keep pumping money into the banks in hope are at least the stated desire, banks will loan money and the next economic reports will look more favorable,
When you have an administration whose vision for America is limited to the next economic report and who think cheap junk is the future of America, I suppose we should not be at all surprised the money has essentially run out, and things will get worse before they get better.

already entered, hope you got it! pete welch. it's regarding the gov selling fixed annuities with an inflation kicker in $50000 increments. it wou ld help the deficit, and help retired who have lost faith in traditional
annuity sellers.why trust prudential when you can deal with uncle sam!!!!

Klebrun..
With the new administration, just take that story and change a few words around:
The latest rumor is that a local government is willing to buy America back for who knows how many trillions of dollars and nationalized healthcare system. The plan to securitize the deal, insure it with treasury bills, pay out millions in bonuses to new government programs where people will have no choice but to work there and they won't have to apply for a bailout because they will just get it from the government who took it from someone else is to successful.

Geihner, (Paulson's buddy who has made almost every decision with Geihtner) is said to have been named treasury secretary and is on board to continue to interupt free markets by puting an artificial floor under our economy.

Klebrun..
With the new administration, just take that story and change a few words around:
The latest rumor is that a local government is willing to buy America back for who knows how many trillions of dollars and nationalized healthcare system. The plan to securitize the deal, insure it with treasury bills, pay out millions in bonuses to new government programs where people will have no choice but to work there and they won't have to apply for a bailout because they will just get it from the government who took it from someone else is to successful.

Geihner, (Paulson's buddy who has made almost every decision with Geihtner) is said to have been named treasury secretary and is on board to continue to interupt free markets by puting an artificial floor under our economy.

The latest rumor is that a local Indian tribe is willing to buy Manhattan back for $24 and a hand full of beads. They plan to securitize the deal, insure it with worthless credit default swaps, pay out hundred million dollar bonuses to the chieftans and then apply for a bailout to fund the bonuses.

Paulson is said to be on board for the bailout but wants to expedite to avoid a crisis.

We borrowed and spent at an economically unjustifiable level which created millions of new jobs. The continued borrowing to fund the bailout will only cushion the fall. We are unlikely to return to recent employment levels anytime soon.

It is unfortunate that the ship of state did not have a skipper at the helm as it navigated into troubled waters.

"Every major episode of this crisis???from Bear Stearns's failure to General Motors' possible bankruptcy???has come as a surprise. " - Only to Walls St shills like you Samuelsom! Check out
http://www.financialsense.com/
http://www.dailyreckoning.com/
Read and learn from guys who PREDICTED the bust, Bear Stearns, AIG, Fanny and Freddy, Citi, and GM.

Or listen to con men like Samuelsom. His "cure" is to borrow and spend! More debt and more consumerism. Well wake up, those are the two things responsible for the current crises leading us to the Greater Depression. Not only that, he wants thrifty Asians to destroy their economies by doing the same! And why not, it serves to enrich Samuelsom and his masters, the wealthy financiers.

The real cure is simple. Stop spending what you do not have. Form lynch mobs for all the bankers and CEO's and politicians that created this mess to steal from working people. I include Samuelsom on that list.

As if the collapse of the "Big Bubble" isn't bad enough, now both the current and incoming administrations are proposing to spend upwards of $1.5 TRILLION (yes Trillion! -- again, that's Trillion [$1,500,000,000,000]) in bailouts and additional stimulus efforts. Are they crazy? That will just prolong and intensify the agony the middle class is about to suffer. WHY? Will somebody please tell me? WHY?

As if the collapse of the "Big Bubble" isn't bad enough, now both the current and incoming administrations are proposing to spend upwards of $1.5 TRILLION (yes Trillion! -- again, that's Trillion [$1,500,000,000,000]) in bailouts and additional stimulus efforts. Are they crazy? That will just prolong and intensify the agony the middle class is about to suffer. WHY? Will somebody please tell me? WHY?

Don't expect a fast recovery. People have lost $Trillions in "perceived" income thru the stock market and house equity declines, so they'll be in a savings mood for some time to come. Even a huge stimulus package will probably go primarily into savings to make up for these "perceived" losses. It should be interesting to see how this plays out.

Ameican poilitics is but a house of cards, and sofisticated shell game.Time it seems to me has run out for all concerned. Obama and his troops may put a bandade on our problems, but is NEVER going to cure the universal GREED than now runs ALL AMERICANS crazy. The results down the road will prove beyond anyones doubt, that this country has lost its way. The funeral is not yet, but the hearse awaits, with its motor running. Weep, cry, bash your head against the wall, but get your marrying and burying suit ready.

For years, an occasional news story would report on the abysmal savings habits of Americans in comparison to the rest of the developed world, often opining that an increase in the rate could forestall household budget collapse in the wake of a layoff or unexpected large expense. Naturally, this had little effect on behavior, what with the bombardment of advertising and the practically explicit admonishment that spending was the patriotic duty of real Americans. One is reminded of the classic quotation by a Wisconsin senator who, upon learning that cheese consumption had flattened in his state without a concomitant reduction in production and an increase in inventory, said "the problem is not too much cheese produced, but too little cheese consumed."

Now, at the very time that the chickens have come home to roost, it is urged that we spend anyway--with the housing market still falling, jobs being lost, etc. Seems Samuelson would suffer if readers had to stop their Newsweek subscriptions.

Still waiting to put some of these bozos in jail. Oh, maybe we should wait because W will pardon them before he leaves office.

Excess spending is what got us into this mess. The avg. consumer has spent way more than they should have for the last 10-15 years, and we are starting to see the results now. People have taken money out of their houses by taking 2nd mortgages, and then they've spent all of it on crap like big SUV's and totally worthless stuff -- totally blown it all. Now look at what it has brought us. We need to recognize that an economy built on consumer spending and constant real estate growth is just a pipe dream. It is not reality. We will end up paying the price for excess spending either now or later. Later will be worse than now, but it looks like that's the way we are heading.