h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

"Einstein said 'problems cannot be solved by the same level of thinking that created them'.
All politicians are solving a problem brought into existence by debt by creating more debt. The only arguments between them are how willing they are to float more debt and how
aggressively they plan to cut taxes. The only exceptions are in countries like Brazil which have been ruined by debt within living memory." [InfiniteImp]

Would you like to have seen Obama name James Grant as his Treasury Secretary, then? Grant is certainly of a different mindset. In some of his essays, he writes almost affectionately about the days (prior to 1971) when the U.S. was on the gold standard. He does not seem
to have a mainstream view, though, because most economists that I've heard on the subject feel that the gold standard worsened the Great Depression of the 1930s. There is always a chance that restoring the gold standard would exacerbate this one as well. But I could be wrong. Peace.

"I've just stumbled across two articles in this morning's Independent (UK daily paper) that support my arguments. The first is by a journalist disappointed with the inauguration speech:
http://www.independent.co.uk/opinio...ssed-the-point-on-gaza-1488632.html

With all due respect, that particular article may support your views, but it isn't addressing the financial/economic problems that you and I had been discussing. It may well be true that Obama is misguided in his views on the Gaza situation, but I can't remember having said *anything* about that on this thread. I am just as frustrated about that as anyone else on the planet.

"The second one is a report on a former partner of George Soros, Jim Rogers, and his view on government-produced debt and its effect on the British economy:"
http://www.independent.co.uk/news/b...e-says-investment-guru-1488629.html
Though the main thrust of his argument criticises Brown and the Bank of England, he thinks the Fed is on the road to bankruptcy as well"

I love to read Jim Rogers! Thank you for the link. I've enjoyed some of his books and appearances on TV. I take some of his stuff with a grain of salt, though. He loves to ride his morotcycle through
various countries and make judgments about whether it makes sense to invest there. I don't know if his judgments have turned out to be accurate in retrospect. Peace.

Obama orders Guantanamo closure.

US President Barack Obama has ordered the Guantanamo Bay prison camp to be closed within one year.
Signing the order, Mr Obama said the US would continue to fight terror, but maintain "our values and our ideals".
At Mr Obama's request, military judges have already suspended several of the trials of terror suspects at the Guantanamo detention centre.

Read more and watch it happen at http://news.bbc.co.uk/1/hi/world/americas/7845585.stm

Jabs

Paul H,

1.I hadn't heard of James Grant before your posting, or Jim Rogers before this morning, though they both sound interesting. I'm not saying a return to the gold standard is right (or indeed wrong). I'm saying I don't like it when all politicians agree (remember Thatcher claiming “there is no alternative”?), and I'm uncomfortable with new leaders following old policies.

2.I didn't see this discussion as being limited to economics.

Jabs,

The Guantanamo news is very cheering. It's a shameful institution, and Blair describing it as "an anomaly" was a disgrace.

That's fine, InfiniteImp.

I'm hoping that we will see some new ideas from Obama, though maybe not right away. The first 100 days of a new President's term is traditionally considered his (eventually his/her) best shot at getting his programs going. It sometimes happens that events so force his hand that he finds himself doing very different things from what he had expected to do. Franklin Roosevelt, for instance, planned to reduce the budget deficit when he ran in 1932. Bill Clinton planned for a whole host of new programs, but ultimately had to reduce the deficit. It's conceivable that Obama may find himself eventually running a huge war effort. The future is unpredictable.

Some hope from Einstein - he also said one very able man could solve more problems than a whole team of less able ones. A dozen Bushes don't add up to one Obama.

Sorry, I've lost the quotation.

I take what Paul and Infie are saying, but the mention of Einstein reminded me of this.

And we need the very best men and women we can get in today's dreadfully hazardous, economically and politics abroad including terror, that we can get.

Jabs

I think that we may want to plug away at coping with this mess, keeping in mind that the leaders we admire made some unwise moves, and the ones we don't may have done some good. I agree that Bush made mistakes (how could he not?), and yet when I look further back, I see that some things his predecessors were praised for have turned out not to be as good as we thought at the time. From what I've been able to see, the abandonment of sensible standards for granting mortgages to home buyers started under Clinton. And, the economic problems faced by many lower-income families have their roots in Reaganomics. And there's some bad luck involved, too.

There's a new book that argues the case for big government. Far from being a prescription for disaster, deficit financing by governments has been associated with prosperity quite often. I will get more information about this book....

I'm pretty excited about Obama. I espesialy hope that he will really lead to more open goverment.

I'm pretty excited that Obama's plan will channel a lot of money into alternative energy sources. He seems to have some definite ideas about how things shall be done, and there's lots of fine print to read in order to discover what he is all about.

I'm very happy to see Obama in the White House.

There's another important point. He got his campaign millions from ordinary folks through the internet, so he's not beholding to the big corporations like his predecessors were.

That's already a profound change in American politics.

Jabs

Yep, unfortuanly various factors will still give them some ways to manipulate him but between that and the new anti-lobbying measures it won't be nearly as bad as with most adminastrations.

I still think we're going to need more soup kitchens and homeless shelters. It's a pity, too, because we didn't have to reach this kind of crisis level. Retail stores closing 17,000 stores this year (in U.S.)? Well, the economy has been kept afloat for years by consumers, who accounted for 70% of the Gross Domestic Product. The stores can't stay in business if they don't sell enough, and that means more people in unemployment lines. When people don't have jobs, they have trouble paying their credit card balances, which hurts the banks that issued those cards. The banks have less money to lend, and this hurts businesses that need loans in order to survive. There's a self-perpetuating effect.

Remember a few months ago, when some people were saying that we should just let the companies that acted unwisely fail? Remember how this was likely to cause a 2% decline in GDP for 2009, followed by positive terrirtory after that? Looking back, I see that as too optimistic. Obama was not optimistic either. He said that things will get worse before they get better.

I'm already seeing more and more empty storefronts in the shopping malls I visit.

There are some money managers who prefer to invest in companies that have a lot of cash on their balance sheets. In this environment, those companies are the ones that could pull through without bank loans.

I agree about the soup kitchens and homeless shelters, Paul H.

Behind the failure of the retailers is an even bigger problem. Many of those retailers were selling products made by low-paid or even slave labour in Asia. What will happen to them when there's no American consumer (or in fact British, Australian, French or German consumers) to buy what they make doesn't bear thinking about.

I fear for the future of China over the next few years.

I've read several article about the effect of the downturn on china and it's not looking good for them.

I worry about those people too, InfiniteImp. There were food riots in Indonesia because of the spikes in the price of basic grains that are staples of their diets. China's industrial activity has been polluting their air and water. I hope this won't cause crop failure (besides rice, they grow a lot of wheat and potatoes in that country). The Chinese are basically vegetarians. I assume that soybeans will still grow there, but I worry about the ones who have grown used to having an occasional bite of meat or even egg.

Very interesting, Paul H.

Someone even gloomier than me is Nouriel Roubini, an economist known as Dr Doom. In 2006 he made an address to the IMF in which he predicted that, among other things, the US economy was at risk of a housing bust and deep recession that would have dire consequences for the rest of the world. On another occasion, he predicted that two major broker dealers would go bust (they turned out to be Bear Stearns and Lehman)

He has high hopes for Obama and his aides, but believes the problems they're facing are daunting. He says: "It's an excellent team, they're very serious. But the recession train has left the station; even if they do everything right, perfectly, the benefits may only be seen in 2010."

That's rather encouraging, Infie. Though everything is bad, and will get worse, for Obama's team to get the backing of a man who so evidently knows what he's talking about is at least a sliver of good news.

The train may have left the station, but there's no-one better than Obama and his team to make sure it doesn't go completely off the rails, or at least to have the best shot at it.

Paul and the rest of you aren't being gloomy: you're just saying it like it is, unfortunately. Brown and Mervyn King (Governor, Bank of England) are already talking about printing more money . There goes the pound, and peoples' savings too.


Jabs(gotta keep on smilin - what else can we do)

http://www3.allaroundphilly.com/blogs/pottstown/TonyAP/uploaded_images/obama-mad-magazine-cover-751229.jpg