Obama Will Spend $6 Billion On Broadband

My post got bumped down =(. Here it is so PNH can see.

You being from Michigan should know things are bad. Worst Economy in 50 yrs or Great Depression? Well it depends on how you quantify things. By Unemployment numbers, we're at the worst since 1992 When Bush Sr. Left us with a Mess. Any higher (which it most likely will climb past the 7.6 we saw then) and it'll be the worst since the 1981/1982 recession where unemployment capped at 10.8 percent. A number higher than 7.6 HAS NOT been since in 27/28 years. Yet, what is adding to this recession is the fact the Housing Crash, Massive Foreclosures, and Credit Crisis. Previous recessions happened based upon a slow down of activity. This one was brought on by EXTREMELY UNREGULATED lending practices that trickled down to every facet in our lives. Too many people were getting rich, to give a crap that things were going to crumble. Last, and not to forgo my previous point, numbers in this current recession don't speak the whole volume of problems.

I Don't know the work force in 1981/1982 but the population in 1980 was 226 million. Today, it's 300 million. That's a 75 million / 25 percent increase. So if one assumes the labor force is 50 percent of the population, then 113 million worked in 1981/1982 and 150 million work today. What's my point? It takes far fewer people to boost unemployment higher when population is low. Yet, more are affected when population increase. 7.2 percent of 113 million would be 15.7 million where as 7.2 of 150 would be 20.8 million. All things are relative and you must put them into context. You and PNH failed to do so.

Love the personal pot-shot. Yes, I know who Paul Volcker is. But since I'm an economic moron, please educate me - please explain HOW the oil shortages caused rampant inflation across the entire economy. Yeah, it'll cause some price spikes in a couple sectors, but those price spikes translate (generally) to reduced demand for said products and services, which should lead to deflation - not hyper-inflation.

Also, when you factor in inflation, our recent oil price spikes put our current run-up (prior to this latest pull-back) on par with oil prices during Carter's time in office. And yet, unemployment is nowhere near what it was at that point. And rather than have inflationary pressure, we're likely going through a period of deflation. So, please, educate me - please explain how the high price of oil at the time caused all the economic malaise under Carter.

Oh, and you do know that Volcker served until 1987, right. That put him as the Fed chair most of the way through the Reagan administration, who you also panned. So, please explain this logic to me - Carter was an economic genius for naming Volcker who himself righted the ship - but we had economic mistakes (per your first post) under 'Ronnie'. Wait! How is that possible! If the sainted Paul Volcker was still the head of the fed at that point, then how in the world could we have gone astray, in terms of monitary policy, under Reagan. Please explain that disconnect to me. I'd love to hear that one too.

More money chasing fewer goods produces inflation. Oil is used by a wide range of industries, so when the price of that goes up, so does the price of everything else that depends on it, which is a lot. The Federal Reserve chairmen prior to Volcker responded to problems in the economy by increasing the money supply, which produces more inflation.The recession (and maybe a depression) that we are in due to W.'s policies have weakened demand so much that prices are falling. They fell during the Great Depression of the 1930's too, if you prefer that to the 1970 period.I didn't say we went astray due to monetary policies under Reagan during that period, but due to huge budget deficits. That is fiscal policy, which a president controls by his budget.

I'm trying to figure out where to start with this. First off, an increase in the price of a commodity (like oil) will make, as you correctly state, other products more expensive. If your cost goes up due to an increase in the price of a commodity you need to make that product, the price for that product will go up. Increased prices do one thing - and this is where I think you have it wrong - they REDUCE DEMAND. That's why stores have sales... reduce the price, and you increase demand. Reduced demand leads to... reduced prices! That's the way a normal business cycle works. Look at what's going on right now. People are spending less on everything. Why? One reason that we started down this road is because of oil prices. High oil prices caused a slow down in consumption, which caused a decrease in demand which caused deflationary pressure. That's a normal business cycle. I have to ask (yet again) - what the hell happened in the late 70's?

Second, you claimed that the economic ship got righted, thanks to Carter, because he nominated Volcker. I well understand that fiscal policy is controlled by the president. But you gave all the credit (as far as I can tell) to the economic recovery of the mid-80's to the fact that Carter nominated Volcker. Well, if just nominating Volcker (and thereby implementing Volcker's monetary policy) was enough to get the economy out of the toilet that it was in in the late 70's, then how the hell could things have been OTHER than rosy throughout Reagan's term? I was being a bit sarcastic on my question about this. On the one hand you appear to give ALL the credit for the turn-around to Carter's naming of Volcker (I didn't see you make any claims of Carter's fiscal brilliance, so I had to assume that it was simply his naming Volcker that made him an economic genius), but yet you claim that we had a recession in 82 thanks to Ronnie. But if fiscal policy played NO role in what happened under Carter, then how the hell can it have played such a big role under Reagan?

Or is it just possible (I know this is a stretch and all) that it's Carter's FISCAL policies that largely led to the doldrums that we were in during his tenur? Look at it this way, things got markedly worse between the time he took office until he lost in 1980. Who was to blame for that? Just the oil prices? Come on (again, I have to go back to the fact that oil prices were recently just as high and we didn't have anywhere near the malaise we had back in the late 70's). Finally I find it interesting that you blame (I believe it was your post) Nixon's policies on the economic slide that Carter had to endure, but then you turned right around and say that 1982 was a recessionary year - did it escape you that if Carter was inheriting Nixon's legacy, that just maybe Reagan inherited Carter's? A little consistency on this point would be nice - you can't claim that Carter was the victim of bad policy from a prior administration (giving the blame to Nixon), while exhonerating Carter from the downturn during Reagan's watch.

You can't have it both ways. BTW, I do agree that Nixon's price and wage controls were a large reason for the state of the economy under Ford. But that in no way exhonerates Carter for not turning that around. He had 4 years to do it, and the economy was considerably worse when he was done.

Price is where supply and demand intersect. Increasing the price causes inflation (and in fact is the definition of it). That causes people to buy less. That is not "demand" however, which is the amount that people are willing to buy at a given price. You need to go back to Economics 101.What happened in the 70's was inflation due to the oil price increase. Perhaps you mean the 80's? That was a recession.Because economic health is due to both monetary and fiscal policy. I never said it played no role in Carter's policy. Where did you get that idea? I merely pointed out that the huge deficits under Ronnie negatively impacted the economy. It transferred capital from normal civilian use to his huge military buildup mainly. As you will recall, that was the era when the U.S. semiconductor manufacturers lost out to Japan as a result. The car manufacturers did not do so well either. That is because the Japanese invested in the civilian side of the economy.Carter's budget deficits were far smaller than Reagans, and total government spending was a lot less. The difference was the oil shock, as was well understood at the time.We could be in a far worse situation now, and not just because of oil, but because of the collapse of the financial industry. That could make anything in the 70's look like small potatoes.I did not mention Nixon at all. And it is not I who say that 1982 was a recessionary year, but the government.Well at least we agree on something. But whatever the state of the economy under Nixon, the Iranian oil embargo made it far worse. You have your choice to let inflation get out of control, or else control the money supply. Paul Volcker did the latter. Now you should be pointing out that that contributed to the recession in the 1980's, which is of course correct. But once inflation was under control, he then allowed the money supply to increase, which brought us out of it. However, the huge deficits due to excessive government spending (in spite of the rhetoric) caused long-term damage that is still being felt.

Well that's 6 billion dollars more than Canada is spending on broadband this year.