“Without more stringent reforms, “another crisis – a bigger crisis that weakens both our financial sector and our larger economy – is more than predictable, it is inevitable,” Johnson says in the report, commissioned by the nonpartisan Roosevelt Institute.”
One single person doesn’t declare a recession is over, a recession is over when GDP has a positive growth. GDP is somewhat of a joke anyway since there are varying degrees of how it can be measured. Someone else said it best before that we were simply now scraping our bellies at the bottom. Many believe that until we see real change in the employment situation even if GDP increases we are still on the recessionary track.
Unlike the previous major down fall where the economy saw stagflation, we’re seeing something different now. You could call it “deflate-a-saurus” perhaps as we’ve yet to hear one economist come out and say this is what’s up. So, either they’re working dilligently on their models, or they don’t know what is going on either. Until we see overall revenues increase, and not just the bottom line increase from going lean; Until we see full employment, not underemployment (going lean), this will continue to be like a snow ball rolling down a mountain.
Now that the recovery is underway (if you can call the loss of more industrial base a recovery), that is the sign the governments use to raise our taxes to pay for all the stimulus. However, their numbers are no reflection on the wage losses that we endured so that corporations could report a bigger bottom line. Once all this money floating around is in circulation, expect inflation to hit. You should expect the government numbers will be less than 2% because all the volatiles will be removed. That is all fine and good, except you still have to pay the high prices for the products they omit. So if you took a paycut, demand your salary back.
Economists Warn Another Financial Crisis on the Way
Nonpartisan Group Led by Nobel Winner Calls for Stronger Financial Reforms
By MATTHEW JAFFE March 2, 2010
Even as many Americans still struggle to recover from the country’s worst economic downturn since the Great Depression, another crisis – one that will be even worse than the current one – is looming, according to a new report from a group of leading economists, financiers, and former federal regulators.
In the report, the panel, that includes Rob Johnson of the United Nations Commission of Experts on Finance and bailout watchdog Elizabeth Warren, warns that financial regulatory reform measures proposed by the Obama administration and Congress must be beefed up to prevent banks from continuing to engage in high risk investing that precipitated the near collapse of the U.S. economy in 2008.
The report warns that the country is now immersed in a “doomsday cycle” wherein banks use borrowed money to take massive risks in an attempt to pay big dividends to shareholders and big bonuses to management – and when the risks go wrong, the banks receive taxpayer bailouts from the government. You can read the full article from ABC News.