Back in August 2007 when I was first formulating my idea of a "Slow Motion Bust" that would recreate the Panics of the 19th and early 20th centuries, but in multi-year s l o w m o t i o n, I wrote on the Big Orange Political Blog that business cycle research seemed to be making a resurgeance. In that blog post, I discussed the compelling data set forth by UCLA economist Edward Leamer in a paper presented at Jackson Hole earlier in August 2007 (warning: pdf).
To summarize that blog entry, according to Prof. Leamer, the 10 recessions that have occurred since World War II have followed a typical pattern. Housing declines first, well before the recession; then durable goods especially cars (which fall most precipitously during the recession); then consumer nondurables (generally retail sales); and finally at the end, consumer services:
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
The 2008 elections are upon us and as usual, 3rd party candidates get a pure media blackout. With the obvious corporate agenda infused in both major political parties, tonight's video is An Unreasonable Man, a exceptionally well done documentary on Ralph Nader. Regardless of whether you agree with his positions or blame him, hate him, Nader has been a tireless advocate for the citizens of the United States.
It's Halloween! As candy, costumes and parties parse the night, we have our own goblins, ghouls and ghosts haunting economic policy.
Our current trickster is Treasury Secretary Hank Paulson, with his keys to the treasury purse via the Congress approved bail out
The United Steelworkers President, Leo W. Gerard, spelled out in a letter how the US taxpayer is being robbed blind. He does not mince words. An excerpt:
The Chosen Ones. I flipped on the local news late last night and saw a local bank CEO announce they have received millions of money from the bail out even though they don't need it. Images and drawings trying to explain how giving taxpayer money to some of the most consumer unfriendly banks would help the taxpayer abounded from the infomercial newscast. Arrows and redirects flooded a white board where one could have written corporate public relations B.S. clip in it's place. Paulson is helping the worse bank in Oregon, notorious for old growth timber clear cutting. The CEO said he would probably use the money for acquisitions, consolidation.
Remember just 17 months ago when Fed Chief Ben Bernanke told us not to worry about housing?
The subprime mess is grave but largely contained, said Federal Reserve Chairman Ben Bernanke Thursday
Just one month before that Treasury Secretary Paulson said: "I don't see (subprime mortgage market troubles) imposing a serious problem. I think it's going to be largely contained. All the signs I look at" show "the housing market is at or near the bottom."
The biggest laugher of all, was Bernanke's prediction two months later, when he said: "Some estimates are in the order of between $50 billion and $100 billion of losses associated with subprime credit problems."
Currency pegs are being tested to destruction on the fringes of Europe’s monetary union in a traumatic upheaval that recalls the collapse of the Exchange Rate Mechanism in 1992.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
This evening I cannot help but revisit the 1930's. A famous film from the Great Depression is Our Daily Bread. Labeled pinko and capitalist propaganda at the same time, the story depicts communal living during the depression era.
Man oh man, if there ever was a prime example of a revelation of the greatest flaw in libertarian economic theory, it had to be Alan Greenspan's speech. For those not in the know, the former Federal Reserve Chairman spoke before a Congressional committee yesterday. Long one of the grand proponents of laissez fair capitalism, his decisions, ironically, probably has lead to the complete discrediting of such economics.
"Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity (myself especially) are in a state of shocked disbelief," said Greenspan, who stepped down from the Fed in 2006.
The above image is from the United States Treasury agreement (pdf) on how much it will pay the Bank of New York Mellon for running the auctions to buy up toxic assets as proposed in the bail out.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy! 
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