Can an economist explain to me....

thegamerslink · 03-24-2008, 07:20 AM

Someone with a real knowledge of economy, can you explain to me, in laymen terms what the real definition of a recession is?
The way that I always understood it, and correct me if I'm completely off is a recession was caused mostly by the slowing of money flow?

thegamerslink · 03-25-2008, 04:02 AM

The point I'm wanting to make is, if my thinking is right, a recession is the slowing of cash flow from the consumer, which in turn causes business' and corporations to slow down and start laying people off, closing jobs, hell even some going out of business all together. The reason that people stop spending is caused mostly out of fear of an unclear future or economic environment. Meaning if they are being advised or they hear from each other, the new, past treasury officials that a recession is coming, what do they do? they stop spending the money that they had been spending before.....then what happens...you get a recession......

Zap · 03-25-2008, 05:45 AM

I think you pretty much got it.

The slowing of the movement of money.

thegamerslink · 03-25-2008, 10:27 AM

So it would be safe to say, that in the off chance that some people, such as, I don't know let's say Democrats for instance want to make a sitting administration look bad, or tilt things in a way they can take advantage of, they all get together and start talking about recession this recession that, the recession is coming and it's coming soon, your going to be facing a recession, your neighbors and friends are having a hard financial times......would that not actually start and/or progress a recession into happening??

Zap · 03-25-2008, 08:20 PM

I think more is required than that for most people.
When a recession hits, it's an accumulation of hearing all the buzzwords ("recession", "slow down", "volatility", "slump"), hearing several financial analysts (one after the other) give advice that you would typically hear during a recession and seeing the numbers support it.
I don't think there are enough people from any one political party with enough muscle to make it happen when all other indicators point to good times. I just don't see that happening.
The average Joe (I would hope) would take a look around them and put two and two together to come up with their own conclusion. It's kind of difficult to tell someone there's a recession when he just sold his house for 20% more than he paid for it five years ago and he can point to 3 of his friends that have recently done the same.
That also doesn't take into account the fact that recession is bad for everyone, not just the ruling party. If Democrats try to will the population into a recession and they are successful, then their friends and families will suffer for it along with Republicans. They may be on opposite sides of the fence inside the US, but the whole country feels it and is worse off for it. It just doesn't make a lot of sense, even if it were possible.
I think a recession is truly a case where the people have the power over any government agency or group. The population decides to spend their money or not.

thegamerslink · 03-28-2008, 09:26 AM

But the Democratic party does have the muscle, as they have the drive by media in their pockets. MSNBC, CNN, ABC etc, they are very swayed by the democratic party, the Clintons and others. The market I remember a few months ago drastically dropped one day just because Greenspan who was no longer in office, was in Japan and made a statement saying that America may be facing a recession, as soon as that was aired the market dropped over 500 points.
The Democrat party decided in a back room after the 2000 election that they were going to retake power any way possible. They since then have been running a hate Bush, hate Republicans type campaign on a scale that I have never even heard of before, let alone seen in my lifetime. The sad part about it is that it has worked in belittling the success that has taken place in the last 8 years, and at the same time it has and is undermining everything that is being done to try to make progress in almost all areas such as the economy, and the war in Iraq. It's pathetic in my view and I only wish that it would be more publicized how it really is.
I guarantee you won't hear the positives of any thing about the economy, the Iraq war, or anything else that makes anyone except for the Democrats look good.

thegamerslink · 03-28-2008, 09:47 AM

I forgot to add one of the largest things happening at the moment......both Obama and Clinton are going all over the news, and the country telling everyone how bad the economy is, and how much worse it's going to get. That too adds to the impact all the previous people in institutions have had.
Then on top of that you have banks making stupid mistakes or doing business in a stupid way causing them to go out of business, or having to foreclose on all these people who should have never been given loans in the first time. The biggest problem for most people isn't that they can't afford to live, but that they are making $30-$60 thousand a year and trying to live like they are making $100 thousand a year, and then listen to everyone blaming the government for the economy and find it a lot easier and better sounding to blame the government for them not being able to pay their bills other than their own stupidity.

The American Voters · 03-29-2008, 01:53 AM

Well we've been at the beginning stages of a recession for a while. It's like we're fouling with less than a minute to go down by 20. No point to foul but you do it to keep morale high and hopes alive. Who knows, maybe we will be able to get out with going into a full blown recession.

Some argue that we are already in a recession. That maybe so but I haven't seen effects of it here in my county or city yet. There's over 200 jobs in the classifieds now and usually there's only 75% of that. I haven't heard of any friends or family being laid off besides people that were in the real estate industry. Our real estate market was inflated before the big fiasco. Homes that were bought 2 years ago for 125k were going for 300k plus.

I went off topic there, sorry. I haven't been hit by a recession personally. It can hit the working class and lower to mid-middle class first and harder than other classes as they are more likely to live pay check to pay check so any increase or disruption can cause problems.

Are we in a recession now? I don't think you could say it's nationwide but definitely in some areas you can see a recession or the characteristics of one but is it enough to effect the overall GDP or make a real negative economic growth. I think if we don't do something quick, everyone will soon see the effects of it though besides those that have a ton of money. Not just the working class or middle class. Those that aren't rich but above the middle class could see some changes in their life style if they're not ready. But is it affecting enough people in the country to be called a recession? I guess so. And how long has the problem been going on? I thought recession traits had to be there for 2 consecutive quarters to be a recession.

My line of work, I'm lucky. Doesn't matter about recession. Businesses need utilities to conduct their business so they pay their bills. People need their utilities to stay warm, take hot showers, cook, etc so they pay their bills. So I'm not affected as much as other industries, like hotels, mom and pop stores that thrive on tourism, etc.

Any ideas on how to turn it around?

thegamerslink · 03-29-2008, 07:54 AM

This actually is somewhat funny, I went to the bedroom just now, I have the tv in my bedroom on and Cavuto Business is on, so I'm listening to them talking about the effect of the media on the economy and 3 out of the 5 on there were arguing that we are in the same state as we were last year and that the media is using fear to try and push a political agenda. LoL.....seeing as that is what this conversation has been about for the last several days I find it funny and reassuring that I'm not the only one with these thoughts, better yet they are shared by some that have a lot more ability to spread the word on it.

How can we turn it around? Well, back in 2000 when Clinton left office, we were the closest to a recession that we had been in years. Then 9/11 happened and we headed even closer to it, the government stepped in (Bush Administration) and with the tax cuts and stimulus nipped it in the butt. The economy has been beyond good since then, it's heading in the wrong direction now, but if you think about it, it's headed that way because of the negative media, and the fact that you hear nothing but negative from the presidential candidates and there is a standard knowledge that the 2001 tax cuts that made the economy so strong are not going to be extended so we are once again going to have the thumb screws turned on to us.
This economy has been a positive economy for the last 7+ years even through 9/11, Katrina, Major forest fires across the country and countless other disasters.
How do we keep the positives, make the tax cuts permanent, all the way across the board, get rid of earmarks and party in fighting in the congress and senate. Decrease the glass half empty mentality of the run by media and moveon.org types out there. Make the consumer feel confident that things aren't going to suddenly be worse than they ever have been when they wake up in the morning.

Thanol · 03-29-2008, 08:14 AM

There are going to be some issues making people feel better when banks are hemorrhaging money left and right. Tax cuts aren't going to fix the credit crisis. Oh and the media isn't quite as liberal biased as you make it out to be. You have to keep in mind that the people at the head of the Media conglomerates are generally conservative. If they don't like what they're putting on air, it'd be yanked off. Remember Donahue on MSNBC? He got booted because he didn't support the war.

thegamerslink · 03-29-2008, 08:25 AM

You have got to be kidding me right??? MSNBC/NBC is the most Liberal Biased network out there. LoL!, they have been so left for so long their noses are permanently crooked LoL. I'll watch CNN way before I'll watch MSNBC and for me that is saying A Lot.

The American Voters · 03-29-2008, 09:34 PM

FoxNews is the most un-biased.

That was a joke, FYI.

jdspc · 03-30-2008, 02:24 AM

Slam me and I mean it, but...

Why cant I work with my neighbor to herd my cattle via cowboys instead of trucks...we have done it before...and actually the meat is more lean...hmmm...
Seriously...break down a few fences, combine revenue and herd the shit....

Commerce is a great thing, but damn, if it cost everyone, let us break it down and share the cost a bit...cut some fences....

Questions? sure...I could answer them
Solutions?... hell yeah!...lets talk....

Zap · 03-31-2008, 07:40 AM

Quote:

Originally Posted by thegamerslink

But the Democratic party does have the muscle...

I think you're reading way too much into things and maybe even starting to sound a little bit paranoid. Don't forget that economies are cyclic in nature. Recessions have happened in the past and they'll continue to happen. That doesn't mean that there's some Democratic (or Republican) puppetmaster controlling all of this.
Really poor fiscal policies can cause a recession and/or depression but to do that on purpose would be treasonous as well as stupid as the repurcussions are felt by everyone, dems and repubs alike.
And, you can try and scare the people all you want, but if they are seeing different with their own eyes, then you will have a hard time convincing them.
If I am doing well and my income is steady or increasing, then I'm not going to refrain from buying that new TV I want, just because some politician tells me not to.

thegamerslink · 03-31-2008, 07:58 AM

I guess what I am really trying to say, and you are right treasonous and that is exactly what a lot of people in office have been the last 6 years.
What I am really trying to say is, when you have a problem, say recession, and with everything that has happened in this country over the last 7 years it is really a miracle that we haven't already seen one, but when things are a little rough and you have on top of that presidential candidates, speaker of the house, senate majority leader, other senators and congressman, drive by media, moveon.org type organization with large followings go out of their way to undermine the attempts to keep things going or to improve the situation. Be it because they really don't believe in the attempt to fix it, as I am sure is the case with some senators or congressmen, but in the real case it's because anything the other side does that is good deflates their stance about how bad they are or gives less reason why there should be change in power from one party to the other....you would be snowed if you don't think this to be a common practice on any scale. It's not so easy to win if the one you are opposing is doing a good job and people keep that in mind. If you shout long enough and you shout loud enough others will start to listen and believe as others start to listen they to bring in others. etc etc etc.....

Zap · 03-31-2008, 08:07 AM

Quote:

Originally Posted by thegamerslink

Be it because they really don't believe in the attempt to fix it, as I am sure is the case with some senators or congressmen, but in the real case it's because anything the other side does that is good deflates their stance about how bad they are or gives less reason why there should be change in power from one party to the other....you would be snowed if you don't think this to be a common practice on any scale. It's not so easy to win if the one you are opposing is doing a good job and people keep that in mind. If you shout long enough and you shout loud enough others will start to listen and believe as others start to listen they to bring in others. etc etc etc.....

Yes, but knocking down your opponent is a far cry from intentionally trying to cause a recession where none exists.