Experts utter nasty word, 'stagflation'

[NVMojo]

April 29, 2005


It's an economic perfect storm.

The economy is slowing, as consumers are cutting back their spending and businesses aren't investing as much. Employers have put the brakes on their hiring plans. Yet, prices are rising at their fastest rate in more than three years.

None of that news, which emerged in two reports yesterday, bodes well for consumers or business owners. Experts say it could point to an economy on somewhat shaky ground.

"The economy lost a lot of momentum in early 2005," said Mark M. Zandi, chief economist at Economy.com in West Chester, Pa. "It's disappointing."


more...
http://www.newsday.com/business/ny-bzecon4237294apr29,0,5847512.story?coll=ny-business-headlines

[a kennedy]

1. I laughed out loud when I heard the term stagflation.

Must be a new economic term, I've never heard it before, and I think it means we're in big trouble. Stagflation is right.

[TygrBright]

4. Not new at all...

This is a repeat of the phenomenon experienced in the early '70s when the first Big Oil Highjack was perpetrated.

People lose sight of just how many sectors of the economy are driven by oil prices. Our economy is totally tied to oil prices BECAUSE WE'RE TOO EFFING SHORTSIGHTED, GREEDY, AND STUPID to do anything about our level of dependence on it!!

Sow the wind, reap the whirlwind, idiots!

Even the braindead fundies should be able to understand that one.

Anyone old enough to remember the seventies probably can recall the endless vistas of decaying cities, farm foreclosures, dying rural communities, etc. It wasn't pretty, no matter how hard they tried to cover it up with Bicentennial celebrations, etc.

And it's a-comin' back, ten times worse.

mordantly,
Bright

[Doremus]

11. Remember wage controls?

I recall that, to try to thwart inflation, raises were regulated (and I think some prices?). There was some kind of formula or percentage employers had to abide by -- a proverbial beaurocratic nightmare.

That's about the time I entered the job market for the first time. Later when the controls were abolished, I remember being shocked at the size of a raise I got. From then on until the 90s when inflation cooled, raises were double digits. If you only got an 8% raise you wondered what you did wrong.

We really wondered what we did wrong when the 90s ushered in measly 2-3% raises. ;)

[tkmorris]

5. Not new at all

As another poster mentioned, it was what everyone said about the economy under Carter. Rising interest rates, rising inflation, and a stagnant economy. A triple-play of bad news.

[PhuLoi]

33. It began with Ford, who's solution was a lapel button which read

WIN, which stood for Whip Inflation Now. No Shit, that was the repugs stratedgy for economic crises.

[Terry in Austin]

35. They called it "jawboning"

The term should make a comeback -- when professional talkers run things, they assume that everything is negotiable.

Heck, we'll just spin those energy shortfalls right out of existence! Physics? What physics?

-

[Daphne08]

6. We 'oldies' have heard of it...

It means slow economic growth (stagnation) and inflation. Anyway, that's what they called it after the OPEC oil crisis in the early '70s.

[bicentennial_baby]

32. Uh, no

It's not new...take a macro class sometime.

[BlueIris]

2. My Dad once said that "stagflation" was the kiss of death for Carter.

[AndyTiedye]

7. GHWB's Arms For Hostages Deal With the Iranians...

...was the real kiss of death for Jimmy Carter. They promised the
Iranians arms in exchange for keeping the hostages locked up until
Reagan was in office. And with Ted Koppel doing "America Held Hostage,
Day nnn" every fucking night just to make sure.

Stagflation didn't help, but an operation like that probably would
have doomed Carter even if the economy were booming.

[BlueIris]

26. Respectfully, in my own defense,

yes, I was aware that this factor was also a serious blow to Carter's reelection chances. I was just post ex-utero at the time, and obviously defer to the judgment of my elders who were there, but I swear I paid attention in history class. Sometimes, my friends and family debate about what one thing, or group of things have doomed past presidents or presidential candidate. My Dad's personal belief was always that an energy crisis, the double-digit inflation and the stagflation especially in his first term eroded the public's confidence in Carter enough that even if the hostage situation had never occurred, he would have been likely been booted in favor of Reagan's charasmatic, "happy days are here again" spiel. My mom generally agrees with that assessment, but feels the arms-for-hostages development was the death knell. It's interesting that you think he would have been done because of Bush's ploy even if the economy had been healthy or prosperous. Not saying I disagree, particularly since I haven't heard that take on Carter's loss before. That's really interesting.

[Demeter]

29. It Didn't Help Carter That:

1) He was surrounded by incompetent Good-Ole-Boys (although they look wonderful next to Bush's brown nosing Brown Shirts)

2) The Democratic Congress despised him and actively worked against him (where have we seen this again? Bill Clinton, of course)

3)He really wanted to be Pope.

[xxqqqzme]

22. I thought 'stagflation' was coined

during ford's tenure. I remember the 'win' buttons WhipInfationNow. The buttons didn't do it and by election time 'stagflation' was all the buzz.

[dbt]

27. Ah, Ford's "WIN" buttons!

I remember a few wags of that era wearing them upside down and saying that the resulting "NIM" stood for No Instant Miracles. We'd do well to remember that lesson, but of course we won't.

:hippie:

[magellan]

3. "Experts say it could point to an economy on somewhat shaky ground."

What they're "experts" at is masterful understatement.

[Zynx]

16. Experts can get in big trouble for making alarmist claims

For example, saying that a bank could go under is a serious crime. And for very good reason. See 1929.

[magellan]

20. But Bush** didn't get in trouble for talking the economy down in 2000

Perhaps he's no "expert", but he certainly had the ear of a lot of people in this country.

And anyway, isn't it equally irresponsible to be non-alarmist when you know the economy's in trouble? It seems to me that a lot of innocent people stand to lose a lot of money if they can't read between the lines these "experts" are handing us.

[markus]

8. People are paying off their credit cards?

Someone posted yesterday (but I didn't see the original story myself) that MNBA had posted disappointing earnings because people were paying off their credit cards.

Sounds like the man in the street is thinking thinks don't look so good, either.

[Boomer]

14. Paid off my credit cards...

... AND my mortgage. Cleared the decks.

Final step in preparation for hard times, I just keep reminding myself that I've had a lifetime of luxury and plenty, more so than most humans have enjoyed in the past or even in the present. The memories will have to keep me warm.

[renaissanceguy]

18. though I wonder about the less fortunate

the working poor, who can only survive by using credit cards... they'll be hit the hardest.


http://www.cafepress.com/liberalissues.21272015

[Solly Mack]

9. Haven't seen that word in a while

been waiting on it though...

[dbt]

10. We need to clue the young ones in about this word,

lest they think it's something new. Funny, but I remember it from the Ford administration rather than the Carter one.

[Solly Mack]

12. It was uttered under Ford and Nixon...well before Carter

[rodeodance]

13. why not cue the BushCo cabal into the word?

.....The combination of slower economic growth and higher inflation has led some experts to mention the possible return of stagflation - the combination of a stagnating economy and growing inflation.

"It certainly does meet the definition of stagflation," said Irwin Kellner, North Fork Bank's chief economist. "It's not the extremes of the 1970s, but it's certainly a lot different from what it was last year at this time.".......

[Solly Mack]

15. They know.They fully understand what can happen when oil prices

skyrocket. They just don't care.

[AndyTiedye]

31. Boosh** is Trying to Corner the Market

They want prices to go up. That's the point.

[valis]

17. Sounfds like "flagellation"

[anitar1]

21. Well, feels like it too==we are being beaten up every day.

Happiness and a light heart seem such a distant memory. About 5 years ago , to be exact. Life seems very grim anymore. I notice it everywhere. Someome should have told these people about the stagflation! I knew it months ago.

[valis]

36. Yes. It's back to the Reagan/PoppyBush feelings of desperation.

[NVMojo]

19. ...and Rumsfeld wants more, more, more for war, war, war!!!

[Rainscents]

23. To bankrup this country!

[anarchy1999]

24. Oh dear, all I can do is chuckle, and cry. Damn. Am I surprised?

No, anyone else?

"The economy lost a lot of momentum in early 2005,"

I believe "momentum" was lost quite some time ago. Long before "early 2005". Leave it to Washington to come up a day late and a dollar short, and to most of our esteemed "economists'", in and out of Washington, (P. Krugman, Stiglitz and a few others not withstanding, Chavez and Castro, maybe? hmmm).

Is there a better way to word the above than "notwithstanding"? Help quick so I can edit.

[tedoll78]

25. I honestly have no pity for our country.

To the Chimp supporters lurking here:
You voted for this.
Your party controls all of the levers of the federal government.
If you can't afford to feed your family, may I suggest a Bible-based broth? Quite tasty.

[Demeter]

28. Which Is Better: Stagflation or Depression?

Because with Bush as our leader, we are likely to have both--simultaneously!

[spinbaby]

34. This is purely antecdotal, but...

...every business I have personal connections to has had a drastic drop in sales recently.

My son owns a snack stand in a shopping area. His business has dropped drastically in the last six weeks or so and the shopping area is doing so badly, there have been many layoffs and cuts in hours. All in the last six weeks.

The company I work for laid off 20 people last Monday because the first quarter saw sales drop drastically.

A friend I had dinner with works in human resources for a largish manufacturing company. She had to lay off 80 last week because sales have dropped drastically recently.

Locally (Pittsburgh), at least, I'm seeing signs that there's been a very steep dropoff in the economy in just the last few weeks. Depression may not be far off the mark.

[Barkley]

37. Bush/ Greenspan would prefer a depression

The main difference btw now and the 70s is the monetary and fiscal policy is strongly anti-inflationary.

In the 70s when higher fuel prices depressed output and increased the CPI and the economy was below its potential; the fed and fiscal policy worked to keep the economy at full-employment.

This policy combined with accelerating prices ultimately had the effect of stagflation.

The 70s is not likely to repeat themselve today because neither
Greenspan or Bush as any serious commitment to the economy at
full-employment.

They'll let the economy fall below its potential because they
have not priority for full employment.

Bush/ Greenspan will prefer falling output (recession or depression) to abetting stagflation

[90-percent]

30. Excellent!

Ole George is gonna get himself another trifecta!

-85%