Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: JohnM who wrote (125476)	11/25/2009 12:43:59 AM
From: Steve Lokness	Read Replies (1) \| Respond to of 543141

John; The gap between what the economy could produce and what it’s actually producing Well that is the whole question huh? What to do with all that extra production when there is no demand for it. Force it on people? Thats the question Krugman needs to get his mind around I think. steve

To: JohnM who wrote (125476)	11/25/2009 8:53:27 AM
From: Steve Lokness	Read Replies (2) \| Respond to of 543141

John; This is really quite grim. At this growth rate it’s far from clear that we’re doing anything to reduce the output gap — the gap between what the economy could produce and what it’s actually producing. Correspondingly, there’s no reason now for even a bit of optimism on unemployment. Because this is so darn important I would like to expand on my earlier comment which was made in haste. ........This output gap that Krugman mentions is right on and I agree with this statement of Krugmans. BUT Krugmans solution is to create or allow for more demand. Taking housing as an example; we created enough production capacity to build homes for anyone that wanted one whether they could afford one or not - the housing bubble. This led to production capacity in every aspect of housing way beyond any normal demand. So now that demand has gotten smaller, the production capacity is still there. So every aspect of housing has that excess capacity which wasn't even hardship at all demonstrated by no inflation. And what do we do with that production capacity now Paul? What do you do with production capacity to manufacture 2by4's for the housing bubble? Or the capacity to produce all those windows or floor covering? You can't switch that to produce biotech for instance - it's just dead and those jobs are NOT coming back no matter how many gimmicks Krugman wants to try. Unless Krugman can come up with some magical way to get housing going again - but what fruitcake really wants that? - the only solution for these economic maladies is to not allow them in the first place. Now the only solution is time. steve