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You are here: Home / Politics / Domestic Politics / More Housing News

More Housing News

by John Cole|  August 23, 20109:53 am| 139 Comments

This post is in: Domestic Politics

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The end of an era:

Housing will eventually recover from its great swoon. But many real estate experts now believe that home ownership will never again yield rewards like those enjoyed in the second half of the 20th century, when houses not only provided shelter but also a plump nest egg.

The wealth generated by housing in those decades, particularly on the coasts, did more than assure the owners a comfortable retirement. It powered the economy, paying for the education of children and grandchildren, keeping the cruise ships and golf courses full and the restaurants humming.

More than likely, that era is gone for good.

My widely misinterpreted remarks yesterday about the economy and there being little that can be done were trying to get at this sort of thing. I’m not implying the Obama team shouldn’t do everything they can to get the economy rolling again, I’m of the belief that there is no way to get the economy rolling again the way it used to these past few decades. Things are simply fundamentally different. I just don’t see how we put Humpty Dumpty back together again, and honestly, I’m not sure we should.

Again, I’m no economist, but I just get the feeling that things are going to be different for a while until we figure out the new normal (and yes, I know this is empty babblespeak). What has me terrified is when Paul Krugman and others point out that the new normal might be unemployment at 9-10% for as far as the eye can see.

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Reader Interactions

139Comments

  1. 1.

    cleek

    August 23, 2010 at 9:58 am

    it’s always a good time for Stereolab!

    pingpong:

    it’s alright ‘cos the historical pattern has shown
    how the economical cycle tends to revolve
    in a round of decades three stages stand out in a loop
    a slump and war then peel back to square one and back for more
    bigger slump and bigger wars and a smaller recovery
    huger slump and greater wars and a shallower recovery
    you see the recovery always comes ’round again
    there’s nothing to worry for things will look after themselves
    it’s alright recovery always comes ’round again
    there’s nothing to worry – things can only get better
    there’s only millions that lose their jobs
    and homes and sometimes accents
    there’s only millions that die in their bloody wars,
    it’s alright

  2. 2.

    Punchy

    August 23, 2010 at 10:02 am

    Things are simply fundamentally different

    This. Without jobs, peeps cant buy houses. Without house purchases, no one has any equity to spend. Without spending, companies go tits up. Tits up companies lay off/fire workers, who now have no jobs.

    Rinse, repeat.

    And if you brought those jobs back to America, then t-shirts would cost $30 and garden hoses $40 and every “$1 Dollar Store” in the U.S. goes BK.

    Fucked we are.

  3. 3.

    Montysano

    August 23, 2010 at 10:03 am

    Again, I’m no economist, but I just get the feeling that things are going to be different for a while until we figure out the new normal (and yes, I know this is empty babblespeak).

    Not at all. As I noted on the thread last night, the only thing we can be sure of is that we are not going back to where we were. Since I feed myself a steady diet of Kunstler and LATOC, I’m pretty doomy. But I hold out hope that we could transition to a simpler, more localized economy. Less wealthy, yes, and we’ll have less “stuff”, but hopefully we won’t be reduced to hunting squirrels for a meal.

    From the linked article:

    The wealth generated by housing in those decades…. did more than assure the owners a comfortable retirement. It powered the economy

    Unfortunately, it was just about the only thing powering the economy, as the destruction of our manufacturing base was well under way.

  4. 4.

    Bob

    August 23, 2010 at 10:03 am

    This is an age of pessimism, economically speaking, and I’m on board. On the other hand, a lot of good band making good music.

  5. 5.

    newsouthzach

    August 23, 2010 at 10:06 am

    It’s about damn time that happened. I’m considering fleeing back to the States once my contract is up; I recently saw a condo advertised in Alexandria (a not-particularly-desirable Sydney suburb): 1BR, 1BA, $360K. The listing said, and I quote: “Investors note: Potential rent $350/wk!”

    Now, $350/wk on a $360K condo is a cap rate of about 2%. Given that savings accounts here pay ~5%, I have no idea why anyone would buy that, but I’m sure it will be snapped up. People are counting on appreciation, but there’s nowhere for prices to go.

    –newsouthzach +8, and glad to be a renter.

  6. 6.

    cmorenc

    August 23, 2010 at 10:09 am

    To the extent that pre-2008 economic growth depended on a residential real estate market devoted to indefinitely gobbling up ever-increasing expanses of former rural land with McMansions and developments whose inherent design depended on copious amounts of car commuting for work and shopping, and which were inherently poorly suited for service by public transport – the crash of the old model may be a very good thing indeed. That old model was sooner or later just as unsustainable as a cancer cell’s growth model.

    That doesn’t mean the transition to a healthier, more sustainable housing model won’t be painful, or without some of that “creative destruction” hard-core capitalists are always talking about. It will be more painful than had we paid much better heed to wiser planning and sustainability much sooner. But the old ways led to disaster eventually, even though lots of people got seemingly rich off it in the shorter run.

  7. 7.

    beltane

    August 23, 2010 at 10:10 am

    The adjustment to a “new normal” will be much harder in this country than it would be in most other places. I am not confident that we are all that resilient as a people. We are always told that we are a resilient people, but there is no evidence that this is the case. Compared to the days of the Weimar Republic, our economic crisis is mild, and yet our first reaction is to resort to race baiting and religious scapegoating.

    In a country that truly lacks “shared values”, the only thing that united us was a belief that all things were possible in the USA, and that this country held out the promise of a never-ending all you can eat buffet. Our history is all based on unlimited land and unlimited resources; what will our future look like in a world with finite resources where the only things you get are the things you pay for?

  8. 8.

    Mr. Poppinfresh

    August 23, 2010 at 10:10 am

    @newsouthzach: You don’t even know from overpriced. The average starter home in Vancouver goes for over nine times the average family income, and the average Vancouverite is paying 70% of their income on housing. Since rents are barely higher than anywhere else of a similar size, imagine how much of that is skewed by homeowners.

  9. 9.

    John S.

    August 23, 2010 at 10:11 am

    There is one old play in the book that would work just fine…

    INFRASTRUCTURE. NOW.

  10. 10.

    mr. whipple

    August 23, 2010 at 10:12 am

    Things are simply fundamentally different. I just don’t see how we put Humpty Dumpty back together again, and honestly, I’m not sure we should.

    I agree. We could re-inflate the bubble enough to make people falsely feel ‘rich’ enough to spur spending out the wazoo to pump up demand. But that would all crash again.

    I don’t have much hope for the next big thing: green jobs. The batteries and windmills and solar panels can be made cheaper overseas, just like everything else. So outside of service jobs installing such things, I don’t see a lot of manufacturing jobs coming out of that.

    The unemployment rate for college graduates is quite low, about 3% IIRC. So, we either need jobs for people w/out degrees or get them the education to get one.

    We are gonna be hurting for a long, long time.

  11. 11.

    Montysano

    August 23, 2010 at 10:12 am

    @Punchy:

    And if you brought those jobs back to America, then t-shirts would cost $30 and garden hoses $40 and every “$1 Dollar Store” in the U.S. goes BK.
    —
    Fucked we are.

    A part of me wishes that oil goes ahead and goes sky-high. The concept of making sneakers in China and selling them for $14.95 at Costco is possible partly because cheap oil makes the shipping affordable. It’s a stupid and non-sustainable business model. The only answer is to re-grow local manufacturing and production. But the journey from here to there will be quite painful.

  12. 12.

    Belafon (formerly anonevent)

    August 23, 2010 at 10:12 am

    I’m thinking either war or plague. Something to create an scarcity of the working class, forcing each individual to be worth more. Think black plague or the end of WWII.

    Revolution might work as well, but I would also prefer colonizing moving a large number of people off planet.

    I also heard something else interesting on the radio: What will happen to the stock market when boomers start trying to live on their 401ks?

  13. 13.

    J.A.F. Rusty Shackleford

    August 23, 2010 at 10:15 am

    Again, I’m no economist, but I just get the feeling that things are going to be different for a while until we figure out the new normal (and yes, I know this is empty babblespeak). What has me terrified is when Paul Krugman and others point out that the new normal might be unemployment at 9-10% for as far as the eye can see.

    Why wouldn’t things (house value, unemployment) continue as they are now? The houses that people bought to flip were never worth the inflated amounts people expected, no matter how many granite counter-tops you installed. Any why should a plant manager hire a few more people when you can pick and choose from an inflated pool of available labor and your current workers are too afraid to ask for a raise for risk losing their job?

  14. 14.

    WereBear

    August 23, 2010 at 10:15 am

    A life based on crap will yield crap.

    The world wrought by Reagan and his followers, spawned by greedy corporatism, was one of increasing isolation surrounded by junk that broke within six months. As I write this, more McMansions are crumbling into soggy masses of haphazard material; they are houses with the half life of a Happy Meal.

    Just as few clean up their junk food habit until they are actually grappling with diabetes or a heart attack, so our society has to look at the junk surrounding itself and pick a way out.

  15. 15.

    beltane

    August 23, 2010 at 10:16 am

    @cmorenc: The land-use patterns of the USA from the 1960’s to today will likely be studied by future generations as the key to understanding what went wrong with this country both economically and culturally. Our exurban/suburban landscape offers a lethal combination of isolation without privacy. When times are rough, there simply is no community available for tens of millions of Americans to fall back on. Family ties are amazingly weak here as well.

  16. 16.

    cleek

    August 23, 2010 at 10:19 am

    sadly, when it comes to economic policy, our new GOP congress will probably send nothing but tax breaks to Obama’s desk. no stimulus or infrastructure improvement or anything useful.

    so, if things don’t pick up on their own, we’s fuxxored.

  17. 17.

    Maude

    August 23, 2010 at 10:20 am

    Gee thanks, Cole. This just brightens up my day.
    We have to back to making things instead of having the financial sector be so large. Things have been upended for so long. The change is major and change is chaotic.
    The prices for houses was insane. People don’t earn enough to buy houses now. Something has to give.

  18. 18.

    PeakVT

    August 23, 2010 at 10:21 am

    I’m of the belief that there is no way to get the economy rolling again the way it used to these past few decades.

    I think the economy could be healthy again. But it certainly won’t be based on the two things that drove the economy recently – technological development in the 90s and massive debt-driven consumption throughout the economy in the 00s. Now, the biggest driver I see is investment in public goods (which mostly consists of infrastructure). That would mean more debt in the short term, but payoffs in the long term. Our political system and civic culture are too broken to seize the initiative, unfortunately.

    ETA: Some serious downward redistribution tax increases on the rich would put a lot of money that is currently parked in various Wall Street investment schemes to a more socially productive use.

  19. 19.

    GeorgeSalt

    August 23, 2010 at 10:21 am

    In the Sunday NY Times there was a good op-ed that discussed current thinking in Japan:

    “Japan and the Ancient Art of Shrugging”

    Here’s a snippet:

    “Three years ago, I saw a television program about a new breed of youngster: the nonconsumer. Japanese in their late teens and early 20s, it said, did not have cars. They didn’t drink alcohol. They didn’t spend Christmas Eve with their boyfriends or girlfriends at fancy hotels downtown the way earlier generations did. I have taught many students who fit this mold. They work hard at part-time jobs, spend hours at McDonald’s sipping cheap coffee, eat fast food lunches at Yoshinoya. They save their money for the future.

    “These are the Japanese who came of age after the bubble, never having known Japan as a flourishing economy. They are accustomed to being frugal. Today’s youths, living in a society older than any in the world, are the first since the late 19th century to feel so uneasy about the future.

    “I saw young Japanese in Paris, of course, vacationing or studying, but statistics show that they don’t travel the way we used to. Perhaps it’s a reaction against their globalizing elders who are still zealously pushing English-language education and overseas employment. Young people have grown less interested in studying foreign languages. They seem not to feel the urge to grow outward. Look, they say, Japan is a small country. And we’re O.K. with small.

    “It is, perhaps, a sort of maturity.”

    It seems to me that modern economic theory assumes constant growth over time. But what if economies eventually reach a “steady state” and there is little or no growth for decades or even centuries? I believe that Japan is 10-15 years ahead of us in post industrial economic development, so it is worth looking at what is going on there.

  20. 20.

    roshan

    August 23, 2010 at 10:23 am

    Can this be the new normal?

    YouTube Stars Making $100,000 Plus Per Year

    Fuck manufacturing, this is the way to go!

  21. 21.

    General Stuck

    August 23, 2010 at 10:24 am

    When it comes to forcasting econ trends, this is my go to guy.

    He has been right longer than Krugman, and is not aligned with any political movement as best I can tell.

    Mr. Celente does not paint a pretty picture.

  22. 22.

    Punchy

    August 23, 2010 at 10:25 am

    I also heard something else interesting on the radio: What will happen to the stock market when boomers start trying to live on their 401ks?

    Please explain.

    /nervously raps fingers on table

  23. 23.

    gnomedad

    August 23, 2010 at 10:27 am

    OT: 23 percent of those surveyed “strongly agreed” with the statement, “I believe that Barack Obama’s birth was faked, just like the moon landing.”

  24. 24.

    PeakVT

    August 23, 2010 at 10:30 am

    @Punchy: Nothing will happen if stock prices are somehow related to the fundamentals of cash flow and profits. OTOH…

  25. 25.

    chopper

    August 23, 2010 at 10:30 am

    @beltane:

    Compared to the days of the Weimar Republic, our economic crisis is mild, and yet our first reaction is to resort to race baiting and religious scapegoating.

    to be fair, that was the first reaction of the weimar republic as well. they had a far nastier crisis, but then again their race baiting and religious scapegoating ended up being far nastier as well.

  26. 26.

    Bobbo

    August 23, 2010 at 10:32 am

    I don’t think Krugman believes 10% is going to be the “new normal.” I think he believes we could bring unemployment down to pre-crash levels, the problem is that the deficit peacocks, the Federal Reserve, and other assholes who hold the power in Washington don’t care enough about the unemployed to make it happen.

  27. 27.

    KXB

    August 23, 2010 at 10:34 am

    It will not be a bad thing if things do not go back to where things were. Specifically, having the financial sector become so intertwined with the housing sector was a suicide pact. Given that a home is the largest expense a family will make, allowing financiers to devise ever more confusing ways to allow more people to buy who were not ready to buy was a game of financial musical chairs.

    Actually, a house used to be the most expensive purchase a family would make. But I would now add a college education and health care, even post-reform. Given these three huge expenses, and wages failing to keep up, it should not surprise us that loan sharks (banks) were there ready to filling in the purchasing power gap. What is funny (or tragic) is that banks can now charge interest rates that in the past would bring criminal charges against Mafia families.

  28. 28.

    Alwhite

    August 23, 2010 at 10:36 am

    But it was not always thus. There was a time people spent based on rising incomes. Most of that increase came from continued increases in productivity. During the 70’s the masters of the universe discovered that it was faster and easier to ship jobs to workers making .20 an hour, so wages in the US stopped growing. This had a lot of other benefits for them, gutting pension plans, destruction of unions, disruption of tax base etc. But for workers it meant they need to find other sources to fund their American dream. For years that was done via borrowing and home ownership. Those are busted now. 401ks are next to die.

    What is going to happen as the MoU respond to the next event, people will no longer buy $150 sneakers or $5000 TVs and that will affect their income after they squeeze the last drop out of the slave labor of the 3rd world?

  29. 29.

    chopper

    August 23, 2010 at 10:37 am

    the economy will be healthy again, inasmuch as someone recovering from a stroke will eventually be ‘healthy’ again. it’ll take years of PT, and a serious change in lifestyle, and life will never be as easy as it once was, but eventually it won’t be too bad.

  30. 30.

    Alwhite

    August 23, 2010 at 10:38 am

    @chopper:

    but then again their race baiting and religious scapegoating ended up being far nastier as well.

    Are you sure about that? I don’t think we have seen the end of it yet so that is TBD.

  31. 31.

    Scott de B.

    August 23, 2010 at 10:41 am

    A part of me wishes that oil goes ahead and goes sky-high. The concept of making sneakers in China and selling them for $14.95 at Costco is possible partly because cheap oil makes the shipping affordable. It’s a stupid and non-sustainable business model.

    Unsustainable it is, but I don’t think it’s stupid. If oil does skyrocket, the immediate upshot will be 1.2 billion angry Chinese with nuclear weapons. I doubt that will be an improvement.

  32. 32.

    Alwhite

    August 23, 2010 at 10:41 am

    BTW – I have gotten crap here before for my gloomy, negative, forecasts about America’s future. Its even more depressing to see so many of you coming over to my side – STOP IT! :)

  33. 33.

    joe from Lowell

    August 23, 2010 at 10:41 am

    During periods of expansion, we get overly-exuberant people who declare “This time is different,” and are certain there will never be a crash or reversal.

    During periods of recession, we get overly-pessimistic people who declare, “This time is different,” and are certain we’re never going to return to economic growth.

    They’re both wrong. Always. This time is not different. It never is.

  34. 34.

    Belafon (formerly anonevent)

    August 23, 2010 at 10:42 am

    @Punchy: The radio was making the point that the one thing most people do not want is instability when trying to live on their retirement, so they were talking about a lot of money being pulled out of the market to be put into something more stable.

    One of my general comments to people has been that the surest way to have the government running the economy is to put most of peoples savings in Wall Street.

  35. 35.

    Violet

    August 23, 2010 at 10:43 am

    @Belafon (formerly anonevent):

    I also heard something else interesting on the radio: What will happen to the stock market when boomers start trying to live on their 401ks?

    It’s going to be even worse for the tail end of the boomers and the folks just after the boomers. The early boomers will get whatever good is there and the others will be fighting over crumbs.

    Maybe it really is time for Goldline. Bwahahaha.

  36. 36.

    John S.

    August 23, 2010 at 10:43 am

    What will happen to the stock market when boomers start trying to live on their 401ks?

    This is already happening. This year saw a record number of people making hardship withdrawals from their 401k and cashing out mutual funds at an unprecedented level (I think $30 billion so far).

    What will happen is the stock market will tank. Institutional investors cannot keep the party going at the craps table when individual investors aren’t willing to roll the dice anymore.

  37. 37.

    chopper

    August 23, 2010 at 10:45 am

    @Alwhite:

    shrug. i expect our long-term economic issues will cause the US to become a meaner, nastier place, i don’t forsee us going full nazi or anything.

    then again, when it comes to the double-whammy of oil depletion and climate change, who knows what kind of wackness we’ll be pushing for.

  38. 38.

    cheflovesbeer

    August 23, 2010 at 10:45 am

    John, I wish I shared your optimism. Republicans see rising unemployment as a good way to get back in power. They will continue to trash the economy. Those Reagan/Bush economic policies are going to be wonderful in 2012. Just what the economy needs. I predict unemployment in the 20%=-30% range then.

  39. 39.

    chopper

    August 23, 2010 at 10:47 am

    @John S.:

    also, you’re seeing individual investors pulling out of stocks. which is what i’d expect boomers to do when they’re lining up their retirement.

  40. 40.

    vtr

    August 23, 2010 at 10:47 am

    Is it possible to calculate how much of the housing bubble was based on fraudulent banking practices? Probably not, but if anyone has seen a study that show what houses generally would be worth without the exaggeration of the bubble, I would like to know about it.
    For many years, my friends and I have felt that the U. S. economy had been based on ways to make money after all the constructive ways – manufacturing, and so on – had had the life sucked out of them and donated to China. I think it’s called FIRE – finance, insurance, real estate.

  41. 41.

    J.W. Hamner

    August 23, 2010 at 10:49 am

    Instead, Mr. Humphries and other economists say, housing values will only keep up with inflation. A home will return the money an owner puts in each month, but will not multiply the investment.

    While I’m a renter and thus would like to show how smart this makes me, it is important to point out that houses keeping up with inflation still makes them a better deal than renting as long as you are not planning on moving for 5+ years. Which is the way it is supposed to be: this is not a dystopian vision of the future.

    What was crazy was how people were able to ratchet up their houses (and debt!) every couple of years at the housing bubble peak.

  42. 42.

    vtr

    August 23, 2010 at 10:49 am

    @chopper: Some of that is people like me who are pulling money out of our 401Ks and 403Bs so that we can put food on our families.

  43. 43.

    Stillwater

    August 23, 2010 at 10:49 am

    @Bobbo: the Federal Reserve, and other assholes

    Educate me about this. I personally think the Fed is taking a very rational approach to this whole mess: they’re keeping interest rates low, in part to spur investment. The Fed, however, can’t make banks lend money. On the ‘other assholes’ side of things, even though the money is cheap to borrow, Congress is pretty hamstrung wrt increased borrowing right now – the austerity hawks are winning the policy debate, and (for once) it’s not like they don’t have a compelling argument to make.

    I personally think that more stimulus, borrowed at these really low interest rates, is a good idea. But there is a worry (even a redistribution-hawk like me can see it): is it likely that the economy will recover enough to repay the additional deficit spending? Or are we only digging a deeper whole by kicking the austerity can down the road?

  44. 44.

    BR

    August 23, 2010 at 10:50 am

    A general description tends to fall short of the mark, but let me try. An economic arrangement can continue for quite some time after it becomes untenable, through sheer inertia. But at some point a tide of broken promises and invalidated assumptions sweeps it all out to sea. One such untenable arrangement rests on the notion that it is possible to perpetually borrow more and more money from abroad, to pay for more and more energy imports, while the price of these imports continues to double every few years. Free money with which to buy energy equals free energy, and free energy does not occur in nature. This must therefore be a transient condition. When the flow of energy snaps back toward equilibrium, much of the US economy will be forced to shut down.

    From Dmitry Orlov’s great article from 2006:

    http://energybulletin.net/node/23259

  45. 45.

    Suffern Ace

    August 23, 2010 at 10:50 am

    @chopper: Our first response wasn’t race baiting. It was pretending that it was just a little “blip.” And our first response was to make certain that the elite financial companies remained so.

  46. 46.

    gene108

    August 23, 2010 at 10:54 am

    The biggest lurking issue in the economy, which no one can address is stagnant wages.

    The stagnant wage thingy started with stagflation in the 1970’s, continued through the 1980’s and the first half of the 1990’s, had a brief respite in the late 1990’s and came back in full force for the last decade.

    I have no earthly idea how to correct a problem, which has been floating around for 40 years.

    Stagnant real estate prices wouldn’t matter, if wages increased faster than core inflation, the cost of energy, food and health care.

    Before people blurt out about the evils of off-shoring, I just want to put this out there as a some food for thought: in 1950 General Motors, the world’s largest company, had more money than India and China, the world’s two most populous countries. India, in 1950, was by no means the poorest country on the planet, but it’s GDP was still dwarfed by GM until the 1970’s.

    There was a lot of wealth the West pillaged during the colonial era, from what are now developing nations. I think some of the capital flowing from MNC’s to developing nations is partly a reversal of how money flowed during the 19th and 20th centuries, so things are just evening out.

    The real problem with off-shoring is the instability it created in the job market, during the past decade. Even if you had a good job, your company was making profits, you never knew if your department would be shipped overseas because someone, somewhere in the company decided they needed to squeeze out a couple of more cents of profit per share to please the shareholders. There’s no reason a call-center in India or a database support team in Poland should mean U.S. workers are always looking over their shoulders about when their pink slips are coming.

  47. 47.

    Emma

    August 23, 2010 at 10:54 am

    Don’t worry, guys. At the rate it’s going, we will all be working for the Chinese in a decade or so. They are building up their infrastructure at a crazy rate while ours crumble, and they can accomodate all Western manufacturers looking for cheaper and cheaper methods of production. Let’s face it, slave labor pays for itself, really.

  48. 48.

    Chad N Freude

    August 23, 2010 at 10:55 am

    @roshan: This is manufacturing of the circus part of bread and circuses. Aside from urban parking spaces, this country’s greatest wealth creation mechanism has always been the market for inane entertainment. Durable goods, real estate, infrastructure? Nothing is more productive than making fun stuff to show to the masses.

  49. 49.

    BR

    August 23, 2010 at 10:55 am

    @joe from Lowell:

    During periods of recession, we get overly-pessimistic people who declare, “This time is different,” and are certain we’re never going to return to economic growth.
    __
    They’re both wrong. Always. This time is not different. It never is.

    At some point on the downside it has to be different. Infinite growth on a finite planet with finite resources cannot continue forever. Some recession will have to be our last.

    It’s funny, I think this idea is better understood by five year old children than economists. If you take two cookies out of the cookie jar every day and only one is put in, eventually you run out of cookies.

  50. 50.

    Chad N Freude

    August 23, 2010 at 10:58 am

    @joe from Lowell: Sure it’s different. It always is.

  51. 51.

    MattF

    August 23, 2010 at 10:59 am

    Well, no one actually knows anything, and that’s entirely normal. Look back over old predictions– Is Japan still #1? And… when did the Dow-Jones average come down, after hitting 36,000? And… this time, it’s not different.

    My only point is that you can make short-term– and sometimes medium-term– predictions that have some chance of being right. Otherwise, economic predictions should be regarded as a literary genre; somewhat less stereotyped than Romance, but less realistic than Kid Lit.

  52. 52.

    Punchy

    August 23, 2010 at 11:00 am

    so that we can put food on our families

    Dumping Pork N Beans on teh wife while she sleeps? Covering the youngest in whip cream while he saws some logs? :)

  53. 53.

    John O

    August 23, 2010 at 11:00 am

    @John S.:

    That’s how I see it. A Depression-Era public works program.

    In today’s political environment it will never happen, ergo, we are well and truly boned.

  54. 54.

    roshan

    August 23, 2010 at 11:03 am

    @Stillwater:
    Current Federal Reserve policy is right? Krugman says….
    Austerity works? What does Krugman say?

  55. 55.

    mclaren

    August 23, 2010 at 11:04 am

    Again, I’m no economist, but I just get the feeling that things are going to be different for a while until we figure out the new normal (and yes, I know this is empty babblespeak).

    No, this is not empty babblespeak. It’s sound common sense.

    Look…oil is never going to be cheap again. Gasoline will never ever cost $1.00 a gallon again. That era is over. It’s done.

    Scientists say if we keep going at this rate, we’ll have fished all the fish out of the sea within 50 years. That’s fundamentally different. That’s a sea change (pardon the pun). That’s a new era.

    Computers are now getting so sophisticated that they’re starting to replace white collar college educated experts, and this is accelerating. That’s another huge change. Factory workers, we saw them get replaced by machines…but seeing surgeons get replaced by robots…that’s a whole new ball game.

    The cheap land in places like California is all gone. The cheap oil is gone. The plentiful water is going fast thanks to global warming. Phoenix AZ is not sustainable in an era of global warming with the Sierra Nevada snow pack disappearing and the Colorado river draining dry. The aquifers of the great plains of the United States have been drained down by 50% by overcultivation.

    This is a new era.

    The era of the automobile is over. The era of cheap oil is over. The era of cheap tuna or affordable fish from 5-mile-long purse nets trailed behind industrial fishing boats is over.

    Sometime around the year 2000 we hit a wall. We hit the limits of growth. Computers haven’t gotten faster than 4 Ghz. Operating systems haven’t improved materially since OS X or Windows XP appeared (Windows Vista: transparent windows, Windows 7 — new task bar. Big whoop). Cars haven’t improved materially since about 1965 (advent of fuel injection). Houses haven’t improved significantly since about 1948 (air conditioning). Nothing sounds better than a CD (not SACD, not DVD-Audio, the tests prove it), there’s no improvement in a giant-screen hi def TV that’s worth all the extra expense compared to a regular TV playing a plain ordinary DVD. Speech recognition hit a wall at 80% and hasn’t gotten better. There’s been no improvement in world processing programs or spreadsheet programs or AI software in the last 10 years. Around the year 2000, we hit a wall in a lot of areas.

    Now things have changed and we have to live with it. The freeway car culture of cheap $1-a-barrel oil in the 1950s is over. The era of giant outdoor swimming pools in Phoenix AZ and Henderson NV and Taos NM is over. The era of going to a state college and paying $400 a semester and getting a 4-year-degree and getting a decent middle-class job is over.

    A lot of institutions in America have become unsustainable and they’re breaking apart and now we’re going to have to do something different. Nobody knows what it is. But we can’t keep doing what we’ve been doing since 1950. More foreign wars, more freeways, more gas-guzzling cars, more oil-intensive giant agribusiness farms, more giant monopoly corporations, more overpriced health care, more double digit annual college tuition increases, more American jobs offshored to the third world, more 50%-per-year heath care insurance premium hikes… Fuhgeddaboudit. That can’t continue. We’re looking at the end of that era.

  56. 56.

    Linda Featheringill

    August 23, 2010 at 11:05 am

    @Punchy:

    When baby boomers start to live on their 401k accounts:

    The retirees will be taking money out of the stock market instead of putting it into the market. Quickly or slowly, the market will shrink. And of course, the selling price of shares will be much less than what they were purchased for.

    By the way, the retirees might find that they had much less than they planned for.

    Worst case: Completely crashed stock market with little hope of revival and a whole bunch of money-strapped old folks.

    Doesn’t look good.

  57. 57.

    slag

    August 23, 2010 at 11:05 am

    Things are simply fundamentally different. I just don’t see how we put Humpty Dumpty back together again, and honestly, I’m not sure we should.

    I don’t think we should put Humpty Dumpty back together again, but I do think we should replace him with something less fragile and less egg-shaped.

    What–specifically–that should look like, I still have no idea. More equality would be nice. Less environmental destruction I could definitely go for. A stronger focus on social value would be a huge plus. In other words, more substance, less flash. What nursery rhyme character would that be?

  58. 58.

    Comrade Darkness

    August 23, 2010 at 11:07 am

    @Emma: Uh, no. The Chinese are in a massive bubble and the crash from it will likely end in regime change. They now have an empty housing unit for every 1 in 4 households. Units are selling in excess of 17x annual income sometimes more than 25x. This is all financed by personal loan circles, so like the Dutch flower bulb bubble EVERY household has their wealth tied up in it. Their entire real economy is buying overpriced metals from Australia to make into sell stuff to US, who are, as you may have noticed, cutting back a bit.

    You thought California was bad? Ha ha ha ha ha.

  59. 59.

    Zifnab

    August 23, 2010 at 11:09 am

    @Punchy:

    And if you brought those jobs back to America, then t-shirts would cost $30 and garden hoses $40 and every “$1 Dollar Store” in the U.S. goes BK.

    I honestly don’t know if that is true. A lot of the work in China and India is done by hand. Why? We don’t make cars by hand. And the US automotive history has been up and done, but it’s always managed to stay within the US without make cars cost $100k. Cheap labor by big businesses stifles innovation. Why invest in a better mouse trap when you can just cut worker’s salaries in half?

    Likewise, shirts you buy in Walmart for $5 only cost a few pennies to make. If we made the shirts in the US, and it cost you $1-$2, you’d make the same profits selling them for $6-7. That’s not going to destroy society as we know it.

    Meanwhile, higher quality clothing – your business suites and your high end athletic wear – costs you well north of $30 anyway. They still cost the barest fraction of that overseas.

    Raw materials, transportation, storage, the cut from retail – these prices don’t change when manufacturing costs go up. If you really want cheap t-shirts, build high speed commercial rail and stop paying a fortune in gas bills and trucking fees. Bam! Now we’ve got more construction jobs AND cheaper domestic production.

  60. 60.

    roshan

    August 23, 2010 at 11:10 am

    Hey blog mom, can we get Mclaren some cool commenting features like “rest is below the fold” or “continue reading”? If you string together all of his posts on this site, it could easily rival couple titles from the Harry Potter series.
    Also, I will respectfully devote few weeks to read all those comments.

  61. 61.

    Chad N Freude

    August 23, 2010 at 11:11 am

    @Stillwater: Consider this argument in favor of having the Fed raise interest rates.

    I would love to think that someone, somewhere — preferably in Washington, and most preferably at the all-knowing and all-seeing Federal Reserve — is thinking about this stuff and plotting out a course of action that will get us from the consumption society back to a nation where we build stuff and develop technologies that are the envy of the world. But then I have to remind myself that these are the same people who brought us the low rates (for the last 20-something years, at least) that got us here in the first place. Seldom in the tenures of former Chairman Greenspan and present Chairman Bernanke has the need for Americans to save more been enunciated, or emphasized, or even mentioned except when discussing some esoteric point of economic analysis. In short, the people who should have been cheerleading a return to historic savings rates and a culture of thrift in America — and should have been urging Congress and the White House to enact policies that would have valued saving at the expense of consumption — have been the very ones who have set us on a course that makes greater risk in the financial system inevitable by making it ever easier and cheaper to borrow.
    __
    I got a very personal lesson in this recently, when I looked at the paltry (and I do mean paltry) amount that I had received in interest on the cash cushion that I always keep in my brokerage account during July. When I mentioned this to a friend (also in the investment business), his answer stopped me in my tracks: “But that’s how the Fed is working this. They don’t want you to have cash. They want you to go back into risk assets.” And indeed, to get some yield, I bought a couple of utility stocks — hardly the riskiest assets, but much riskier than cash nonetheless. While I had intuitively known that this “re-risking” was the intention of Fed policy, I had never heard it put into exactly those blunt terms, and as the implications of it began to filter through to me, I must admit that I got — well, just plain mad.

  62. 62.

    Nick

    August 23, 2010 at 11:11 am

    @Punchy:

    This. Without jobs, peeps cant buy houses

    I have a job, I can’t buy a house. Very often with jobs, people can’t buy houses. They simply don’t make enough and are taught to blame taxes for that.

  63. 63.

    BR

    August 23, 2010 at 11:11 am

    @mclaren:

    This.

  64. 64.

    Felonious Wench

    August 23, 2010 at 11:11 am

    Why would we want things to go back the way they were? I don’t get that mentality. Yes, I want unemployment to go down, but Americans have been spending, spending, spending for far too long. We’re tearing apart land to build more and more houses while our inner cities and our infrastructure rots. We were more than due for an adjustment. We were riding the wave on borrowed time.

    It was obvious housing prices were ridiculously inflated, but people still fell for it, buying homes as an “investment” instead of just a place to live. It wasn’t logical.

    We will emerge much healthier as an economy once we get past this. It could not continue the way it was.

  65. 65.

    gene108

    August 23, 2010 at 11:15 am

    @Emma: China’s big advantage in manufacturing, even over other developing countries like India, is so much of the economy is state controlled the private businesses get materials at below market prices.

    Year in Review – Anti-dumping and Subsidy Cases Involving Chinese Products

    Printer Friendly … Print Version
    12/1/2006

    Greg Kanargelidis & Lindsay Bunt

    The People’s Republic of China (PRC) is often the target of complaints by Canadian manufacturing companies that exporters in the PRC are selling “dumped” or “subsidized” goods into Canada which is causing “material injury” to Canadian manufacturers. 2006 was no exception, and several dumping and subsidy cases involving the PRC were initiated or concluded.

    Canadian Rules on Dumping Investigations
    Pursuant to international trade rules, where exporters are found to be “dumping” goods into Canada which results in “material injury” to Canadian manufacturers, Canada is authorized to impose an “anti-dumping” duty equal to the margin of dumping. Furthermore, if a country is found to be unfairly subsidizing its exporters, Canada is authorized to impose a “countervailing duty” equal to the amount of the subsidy expressed as a percentage of the export price of the goods. These duties remain in place for five years and can be renewed for additional terms of five years.

    Allegations of Dumping and Unfair subsidization in 2006
    In 2006, Chinese exporters of Certain Copper Pipe Fittings were the subject of a dumping and unfair subsidization investigation by the Canada Border Service Agency (CBSA). Based on the investigation, the CBSA made a preliminary determination that the goods were dumped into the Canadian market and estimated that the average margin of dumping amongst exporters was equal to 48.3% of the export price of the goods. The CBSA also made a preliminary determination that the exporters in question were receiving the benefits of certain subsidy programs offered by the PRC. Therefore, in addition to the estimated margin of dumping, CBSA also estimated that the weighted amount of domestic subsidies was 17.4% of the export price of the goods. Based on these preliminary determinations, the Canadian International Trade Tribunal (CITT) initiated a formal injury inquiry on October 23, 2006. If the CITT determines that the dumping and subsidization of the goods has caused or threatens to cause material injury to the Canadian industry, the CITT will make an order imposing antidumping and countervailing duties on imports of the goods into Canada. The CITT is expected to render its final order on February 19, 2007.

    http://www.blakes.com/english/view.asp?ID=39

    On a side note, even during this recession the U.S.’s economy is still larger than China’s, Germany’s, and Japan’s COMBINED!

    Americans truly underestimate how much money is sloshing around in this country.

  66. 66.

    Chad N Freude

    August 23, 2010 at 11:15 am

    @mclaren: Go look at something funny on YouTube. You’ll feel a lot better, Mr. Grouchypants.

  67. 67.

    gene108

    August 23, 2010 at 11:16 am

    @Emma: China’s big advantage in manufacturing, even over other developing countries like India, is so much of the economy is state controlled the private businesses get materials at below market prices.

    Year in Review – Anti-dumping and Subsidy Cases Involving Chinese Products

    Printer Friendly … Print Version
    12/1/2006

    Greg Kanargelidis & Lindsay Bunt

    The People’s Republic of China (PRC) is often the target of complaints by Canadian manufacturing companies that exporters in the PRC are selling “dumped” or “subsidized” goods into Canada which is causing “material injury” to Canadian manufacturers. 2006 was no exception, and several dumping and subsidy cases involving the PRC were initiated or concluded.

    Canadian Rules on Dumping Investigations
    Pursuant to international trade rules, where exporters are found to be “dumping” goods into Canada which results in “material injury” to Canadian manufacturers, Canada is authorized to impose an “anti-dumping” duty equal to the margin of dumping. Furthermore, if a country is found to be unfairly subsidizing its exporters, Canada is authorized to impose a “countervailing duty” equal to the amount of the subsidy expressed as a percentage of the export price of the goods. These duties remain in place for five years and can be renewed for additional terms of five years.

    Allegations of Dumping and Unfair subsidization in 2006
    In 2006, Chinese exporters of Certain Copper Pipe Fittings were the subject of a dumping and unfair subsidization investigation by the Canada Border Service Agency (CBSA). Based on the investigation, the CBSA made a preliminary determination that the goods were dumped into the Canadian market and estimated that the average margin of dumping amongst exporters was equal to 48.3% of the export price of the goods. The CBSA also made a preliminary determination that the exporters in question were receiving the benefits of certain subsidy programs offered by the PRC. Therefore, in addition to the estimated margin of dumping, CBSA also estimated that the weighted amount of domestic subsidies was 17.4% of the export price of the goods. Based on these preliminary determinations, the Canadian International Trade Tribunal (CITT) initiated a formal injury inquiry on October 23, 2006. If the CITT determines that the dumping and subsidization of the goods has caused or threatens to cause material injury to the Canadian industry, the CITT will make an order imposing antidumping and countervailing duties on imports of the goods into Canada. The CITT is expected to render its final order on February 19, 2007.

    http://www.blakes.com/english/view.asp?ID=39

    On a side note, even during this recession the U.S.’s economy is still larger than China’s, Germany’s, and Japan’s COMBINED!

    Americans truly underestimate how much money is sloshing around in this country. Whether it’s being put to the best use possible is a different matter, but the money’s still here.

  68. 68.

    Elie

    August 23, 2010 at 11:16 am

    @beltane:

    I think it depends on how fast the “contraction” occurs… The faster things shrink, the less “resilient” we will be and the more contentious and panicked.

    I think that the Obama administration and other leaders know this is happening and are just trying to manage the rate of decline – trying to prevent immediate collapse of the housing sector and catastrophic increases in unemployment. There is no way to bring back the past or completely mitigate this — just soften the fall..

  69. 69.

    MikeJ

    August 23, 2010 at 11:16 am

    @Chad N Freude: I don’t see an argument in favor of raising rates, I see somebody saying he wishes rates would go up.

  70. 70.

    Comrade Darkness

    August 23, 2010 at 11:16 am

    @Zifnab: You just are about right, but the scale is even smaller than that. Socks made in the u.s. cost exactly the same to manufacture, except closing the toe, which costs a few cents more because it requires manual labor. But distributors in their ever running battle for every last shiny penny of profit, can’t bear to pay a few cents more. They just can’t. Therefore, Chinese made socks.

    If you look around, you will find the u.s.a. made ones. It’s your choice as a consumer.

  71. 71.

    duck-billed placelot

    August 23, 2010 at 11:18 am

    See slactivist for a (so far) 4-part series on infrastructure projects that are scary overdue.

  72. 72.

    john b

    August 23, 2010 at 11:20 am

    @mclaren:

    this is hogwash.

    there have been vast improvements in everything you’ve listed.

    the car hasn’t improved since 1965? are you kidding me?

    and clock speed isn’t the only measure of quality of computer.

    and do you use windows xp? i sure don’t.

    have you used a laptop from 10 years ago recently?

    nah nothing has improved since then.

    have you used a cell phone from 10 years ago recently?

    and back to the car thing. aside from quantum leaps in car safety and efficiency since the 1960s, there are lots of technologies that have been developed for alternatives to the internal combustion engine. these aren’t huge right now, but i’ve got to believe they will be in the coming years as gas becomes more and more scarce (and expensive).

    so again, your post is sensationalist hogwash.

  73. 73.

    Chad N Freude

    August 23, 2010 at 11:20 am

    @MikeJ: The argument is that increased interest rates for savings would put more spendable cash in circulation and would stimulate the economy. I saw this same point somewhere else this weekend, but this is the first thing that came up when I googled for it. (The author is a she.)

  74. 74.

    Face

    August 23, 2010 at 11:21 am

    More foreign wars, more freeways, more gas-guzzling cars, more oil-intensive giant agribusiness farms, more giant monopoly corporations, more overpriced health care, more double digit annual college tuition increases, more American jobs offshored to the third world, more 50%-per-year heath care insurance premium hikes… Fuhgeddaboudit. That can’t continue

    McLaren, please shake hands with Sarah Palin. Or really, any other Republican president in 2012. All of this will certainly continue under them.

  75. 75.

    jrg

    August 23, 2010 at 11:23 am

    @mclaren:

    Computers are now getting so sophisticated that they’re starting to replace white collar college educated experts, and this is accelerating.

    Vonnegut speculated this in the ’50s with “Player Piano”. Some of it was prescient, but a lot of it missed the new industries that were created with increased automation. More automation means more free time which means increased demand for things that occupy that free time.

    Sometime around the year 2000 we hit a wall. We hit the limits of growth. Computers haven’t gotten faster than 4 Ghz.

    It sounds like you don’t know what you’re talking about. Ever hear of virtualization? Ever hear of SSDs? More cores on a chip? Tech has improved since 2000 – dramatically.

    There’s been no improvement in world processing programs or spreadsheet programs or AI software in the last 10 years.

    And yet, at the top of your post, you claim that AI is starting to replace the white-collar workforce.

    Your post is a bunch of meaningless doom and gloom.

  76. 76.

    BR

    August 23, 2010 at 11:25 am

    @john b:

    While it’s true that computers have more cores, I can tell you that it’s an unsolved problem in computer science to figure out how to actually tap into those extra cores beyond just running parallel apps/threads.

    And operating systems did hit a point where changes have been incremental.

    Sadly, my cell phone from 10 years ago was better than the one I have now. (But then again, I don’t have an iPhone or whatever.)

    Also, one hundred years ago there were electric cars (never mass produced) that could go, say 40 miles without a charge. You know, like the Volt.

  77. 77.

    Chad N Freude

    August 23, 2010 at 11:25 am

    @jrg: Related to this, it was the development of supersmart superfast quantitative financial analysis software that got us here.

  78. 78.

    CalD

    August 23, 2010 at 11:26 am

    The wealth generated by housing in those decades, particularly on the coasts, did more than assure the owners a comfortable retirement. It powered the economy, paying for the education of children and grandchildren, keeping the cruise ships and golf courses full and the restaurants humming.
    __
    More than likely, that era is gone for good.

    Wait. Didn’t a similar run-up in the housing market happen in the 80s (i.e., right before the tech bubble really started inflating)? Maybe not as big in total dollars but dollars were worth a damned sight more then. Or was that just in the northeast?

    And anyway, wasn’t this one made possible in the first place by gaming the mortgage market and lending bajillions of dollars to people who had little realistic chance of paying it back?

    And didn’t the fact that people were feeling artificially rich from their houses distract us for about a decade while the proud products of America’s business schools were busily using China as a pawn shop to sell off the country’s entire industrial sector, our most fundamental producer of actual wealth and most sustainable elevator of middle class living standards?

    And didn’t housing bubble euphoria encourage a lot of otherwise intelligent people to keep electing Republicans, who busily set about dismantling the governments regulatory capability, enabling ever worse abuses in the financial markets and enacting fiscal policy that looked a lot like how the most starry-eyed house-rich among us were managing their personal finances?

    And people are seriously lamenting that fact that some guy says this can never happen again (completely ignoring the fact that very similar things have been happening on a fairly regular basis at least since the Dutch Tulip bulb bubble in the 17th century)?

    Just asking.

  79. 79.

    arguingwithsignposts

    August 23, 2010 at 11:27 am

    @mclaren:

    Cars haven’t improved materially since about 1965 (advent of fuel injection).

    Um, no. That’s just bone-stupid rhetoric.

  80. 80.

    Chad N Freude

    August 23, 2010 at 11:28 am

    @jrg:

    increased demand for things that occupy that free time

    And now we’re back to making wealth from YouTube.

  81. 81.

    ThatLeftTurnInABQ

    August 23, 2010 at 11:30 am

    @Stillwater:

    I personally think that more stimulus, borrowed at these really low interest rates, is a good idea. But there is a worry (even a redistribution-hawk like me can see it): is it likely that the economy will recover enough to repay the additional deficit spending?

    If we can’t borrow the money, increase taxes, in a very progressive fashion. Get the stagnant and uproductive wealth concentrated at the top back down to where it will be spent. From a macro-econ standpoint it really isn’t that complicated. From a political standpoint, aye-yiii-yiii we are so fncked.

    In the long run we are suffering from the characteristic disease of the transition to a post-industrial economy. Which is that once you have a large fraction of the economy devoted to creating bits (i.e. information) rather than manufacturing stuff or growing food, you enter into what Nick Taleb calls extremistan, where a mostly Gaussian distribution of productivity, rewards and benefits goes out the window and is replaced with power-law scaling in wages and wealth distribution. This leads to extreme concentrations of wealth which over time become stagnant and unproductive for the economy as a whole.

    There are really only two possible cures for this disease – the first is to sharply curtail the production of bits, essentially rolling back to a purely industrial and agricultural economy. Nat ganna happen. The other is to use tax policy to smooth out the extermistan patterns of income and wealth distribution.

    Now we just have to figure out how to make the politics of that work. I predict it won’t happen until the party of the old Confederacy aka the GOP gives up on catering to Wall St and big bizness, and goes full metal economic populist. That what the Dems did under FDR to break out of the regional and cultural ghetto they had been trapped in since 1860, it can happen again. But it will probably take another 30 years at least.

    Ultimately it is the job of the govt to deal with the problems created by a new economic model. This happened once before with the Industrial Revolution, so it can happen again. Last time it took about 100 years and two global wars, before we figured it out. Hopefully we’ll be faster learners this time around.

  82. 82.

    john b

    August 23, 2010 at 11:31 am

    @BR:

    and i’m guessing those turn of the (20th) century cars could pass safety standards and go 65+ mph, etc etc.

    and as someone who is running a computation right now on 500+ cores, i’m plenty aware of the advances in parallel computing in the past decade.

  83. 83.

    catclub

    August 23, 2010 at 11:32 am

    @chopper:
    ” Compared to the days of the Weimar Republic, our economic crisis is mild, and yet our first reaction is to resort to race baiting and religious scapegoating.

    to be fair, that was the first reaction of the weimar republic as well. they had a far nastier crisis, but then again their race baiting and religious scapegoating ended up being far nastier as well. ”

    Wrong, wrong, wrong. The Weimar inflation crisis was 1923
    -and by comparison with 1933, nothing happened.

    In 1933 The National s oci alist percentage of the vote soared as UMEMPLOYMENT WENT OVER 50%.

    We have neither hyperinflation nor that scale of unemployment.

    We do seem to have an abundance of Chicken Littles, though.

  84. 84.

    Face

    August 23, 2010 at 11:34 am

    Socks made in the u.s. cost exactly the same to manufacture, except closing the toe, which costs a few cents more because it requires manual labor.

    How can this be? Factories in the US have greater (read: expensive) OSHA standards to uphold, have to pay greater health care bennys to whomever is loading the cotton onto the machines, driving the cotton to the factory, and supervising the engineering of the place. I imagine that the property/corporate taxes paid by the factory are greater (although I dont know this for sure), which the company has to recapture.

    IOW, there would seem to be, in almost every aspect of factory manufacting, a higher cost of being in the US, under US laws, using US unionized labor, than being in poor-ass Thailand or China. Is this wrong?

  85. 85.

    Brachiator

    August 23, 2010 at 11:34 am

    @GeorgeSalt:

    I believe that Japan is 10-15 years ahead of us in post industrial economic development, so it is worth looking at what is going on there.

    Japan has recently been eclipsed by China, which is now the second biggest economy in the world in terms of GDP, so I’m not sure that Japan is worth watching. They also have an even bigger problem with respect to an aging population, since they don’t attract young immigrants to energize their economy.

    But apart from this, I don’t know which way the US economy is headed. And since many professional economists were so bad at predicting the recent collapse and recession, I’m not sure that I give them a whole lot of credit in predicting a long period of malaise.

    @Montysano:

    But I hold out hope that we could transition to a simpler, more localized economy. Less wealthy, yes, and we’ll have less “stuff”, but hopefully we won’t be reduced to hunting squirrels for a meal.

    A simpler, less wealthy economy with high unemployment is still problematic. And a decline in wealth and standard of living makes it much harder to sustain government programs such as health care reform.

    The unemployment rate for college graduates is quite low, about 3% IIRC. So, we either need jobs for people w/out degrees or get them the education to get one.

    According to a recent NY Times story, even college graduates are feeling the pain of a slow economy, and for those without a degree it’s devastating:

    Thomas J. Nardone, an assistant commissioner of the Bureau of Labor Statistics, said that the jobless rate for college graduates under age 25 was 8 percent in April, up from 6.8 percent in April 2009 and 3.7 percent in April 2007, before the recession began.
    __
    The 8 percent unemployment rate is lower than the nation’s overall 9.9 percent jobless rate, but it is high for college graduates, who typically have a lower unemployment rate than those without bachelor’s degrees. Mr. Nardone noted that for high school graduates under age 25 who did not enroll in college, the jobless rate was 24.5 percent last month, up from 11.4 percent in April 2007.

    At this point, I am just watchful, neither pessimistic nor overly optimistic. I don’t see infrastructure investment as a magical solution, since it takes fewer workers to do construction work than in the past and I don’t know that infrastructure investment pulls sufficient numbers of women workers from the dole and back into the work force. Technological innovation, as well as the decline in manufacturing jobs, has cut a huge swath in the middle class.

    But despite these challenges, banks are sitting on huge piles of cash that have to be invested somewhere. College graduates and people returning to school, may be quietly cultivating new ideas to spark economic growth.

  86. 86.

    Michael

    August 23, 2010 at 11:35 am

    @Violet:

    It’s going to be even worse for the tail end of the boomers and the folks just after the boomers. The early boomers will get whatever good is there and the others will be fighting over crumbs.

    Yay, me!

  87. 87.

    gene108

    August 23, 2010 at 11:37 am

    @Montysano: You do realize local American manufacturing has automated factory functions, so a factory that once employed 100 people can run just fine with a fraction of that amount working. Bringing manufacturing back here won’t hire as many people per unit produced, like it did decades ago, due to automation. The capital investment versus the employment opportunities created may not be as efficient a way to produce jobs as before.

  88. 88.

    Emma

    August 23, 2010 at 11:37 am

    Comrade Darkness: The d.mn thing ate my snark marks!!!

  89. 89.

    mattH

    August 23, 2010 at 11:39 am

    What has me terrified is when Paul Krugman and others point out that the new normal might be unemployment at 9-10% for as far as the eye can see.

    Maybe you need to read Krugman more. This is more a cautionary tale about how if we keep on the present course we won’t recover and this does become the new normal. He’s being pessimistic, not fatalistic. There is a way out of this, and at least a few of the people in power know better.

    @gene108:

    The biggest lurking issue in the economy, which no one can address is stagnant wages.

    The stagnant wage thingy started with stagflation in the 1970’s, continued through the 1980’s and the first half of the 1990’s, had a brief respite in the late 1990’s and came back in full force for the last decade.

    I have no earthly idea how to correct a problem, which has been floating around for 40 years.

    The fact that stagnant wages for the middle class, and a number of financial disasters has occurred, at the exact same time that income gaps have increased might give you an idea of why they started, and how to fix it.

    The housing bubble was a direct result of there being too much money floating around that the investors of were not happy only making 2-3%, and the only way to get 10% returns on mortgage-based securities was to disguise risky, 10%-producing high risk mortgages as safe 3% mortgages (by cutting them up, putting them together, and getting a rating for the whole as if the whole thing was a 2% mortgage). Don’t forget that there were perverse incentives at the end of the bubble (if not before) for lenders to get even low risk customers to take on high-risk mortgages.

    It’s pretty clear how to fix this, at least long term: make sure there isn’t so much money lying around, “needing” to be invested with a 10% return. Easiest way to do that is to create higher marginal tax rates, preferably more brackets than we have now, and get that money back into the economy producing real value, instead of waiting around to be “invested”.

  90. 90.

    jrg

    August 23, 2010 at 11:39 am

    @john b:

    and as someone who is running a computation right now on 500+ cores, i’m plenty aware of the advances in parallel computing in the past decade.

    But, But… Unless each core is running at eleventy billion gigahertz, it doesn’t count.

    Multi-core processing won’t matter until each core can work on the same thread at the same time by predicting values that will be derived by another core at some point in the future. That’s an “unsolved problem in Computer Science”.

    …And better pipelining doesn’t count because, um, BR and mclaren said so.

  91. 91.

    BR

    August 23, 2010 at 11:40 am

    @john b:

    Just saying that there was a way of achieving it and that there wasn’t a will to do it. (Regarding cars.)

    Regarding cores, sure CS folks can use it for parallel computation and the like, but given that almost every non-techie I know has a laptop with two cores and all they ever have open is a web browser with one or two tabs, only one of which they’re actively using, it sort of tells me that not only are two cores unnecessary, but even that one is underused.

  92. 92.

    BR

    August 23, 2010 at 11:41 am

    @jrg:

    …And better pipelining doesn’t count because, um, BR and mclaren said so.

    I did?

  93. 93.

    mclaren

    August 23, 2010 at 11:42 am

    @Chad N Freude:

    Americans think having more material goods and more money makes you happier and having less makes you miserable. But that’s just not true, above a certain minimum level of income.

    In the 1970s, New York economist Richard Easterlin observed that in wealthy nations, after exceeding a certain level of income, happiness did not increase with higher income – a concept now know as the “Easterlin Paradox.”

    The truth is that we don’t need anywhere near the amount of material stuff we have in America to make us perfectly happy. All this obsession with giant 2400-sqft houses and giant-screen TVs and huge SUVs is delusional. That stuff doesn’t make you happy.

    Look at John Cole. He’s got three pets and a blog. That’s all he needs.

    Getting out of the giant-screen-TV and get-rich-in-real-estate mania will be good for us. That stuff doesn’t make you happy. It’s experiences and human relationships that make you happy.

    Research has demonstrated that Western societies, such as the United States and Japan, have not experienced an increase in happiness since the 1950s, despite an overall improved lifestyle. The reason for this lies in how that improved lifestyle is achieved – at the expense of human relationships.

    Source: “Happiness economics,” Forbes India, Ignacio de la Torre, 15 January 2010.

  94. 94.

    duck-billed placelot

    August 23, 2010 at 11:45 am

    @mclaren: John Cole is your model for happiness?

  95. 95.

    arguingwithsignposts

    August 23, 2010 at 11:48 am

    @mclaren:

    Americans think having more material goods and more money makes you happier and having less makes you miserable. But that’s just not true, above a certain minimum level of income.

    I’m sure the irony inherent in you making that statement is not wasted on all here.

  96. 96.

    john b

    August 23, 2010 at 11:49 am

    @BR:

    improvements happen where there is a motivation to improve. if oil becomes as scarce as people project, there will be plenty of motivation to improve the electric (or whatever) car. we’ve been seeing this already in the past decade and i’m guessing it will become more pronounced in the coming decade.

  97. 97.

    Omnes Omnibus

    August 23, 2010 at 11:49 am

    @duck-billed placelot: He’s starting small.

  98. 98.

    mattH

    August 23, 2010 at 11:49 am

    @mclaren: John Cole is your model for happiness?

    We are all dooomed, I tell ya.

    ^_-

  99. 99.

    BR

    August 23, 2010 at 11:51 am

    @john b:

    That’s true. The thing I worry about is that a shift of that importance needs to be pre-planned. It’s too massive of a shift, and it’s involuntary, so we can’t just wait until the market realizes it’s time to change because it’ll be too late. The DOE’s Hirsch report identified this problem:

    http://en.wikipedia.org/wiki/Hirsch_report

    Waiting until world oil production peaks before taking crash program action leaves the world with a significant liquid fuel deficit for more than two decades.

  100. 100.

    Martin

    August 23, 2010 at 11:52 am

    Oh, bullshit. The only thing special about the bubble was that people in Topeka participated in the housing run-up. If you still want to become a millionaire on your house, there are plenty of places to do it. We aren’t building more beaches and Central Park views, and these markets will always allow you to get rich on a good investment.

  101. 101.

    El Cid

    August 23, 2010 at 11:59 am

    @mclaren: I heard about a recent poll in Britain which surveyed measures of happiness related to income.

    Those at either the lowest ends of the scale and at the highest end were not the happiest.

    The happiest were those who had a household income of something like (don’t have perfect recall) $80 – 150K.

    The very rich weren’t as happy as that group, but as people got poorer they were more and more and more miserable. In general, of course there are always exceptions.

  102. 102.

    Montysano

    August 23, 2010 at 12:07 pm

    @Brachiator:

    A simpler, less wealthy economy with high unemployment is still problematic. And a decline in wealth and standard of living makes it much harder to sustain government programs such as health care reform.

    I’m well aware. I’m just casting about for some crumbs of hope.

  103. 103.

    jrg

    August 23, 2010 at 12:13 pm

    @BR:
    You said:

    While it’s true that computers have more cores, I can tell you that it’s an unsolved problem in computer science to figure out how to actually tap into those extra cores beyond just running parallel apps/threads.

    That’s not true. Pipelining enables a processor to execute a single thread in multiple stages, by making predictions about when and how the logic will branch… So it’s not an unsolved problem in CS.

    Sometimes the CPU will mis-predict a branch, though, and waste CPU cycles while the correct values are determined. In processors with hyperthreading, another thread can be run on the same CPU while the pipeline “bubble” makes it’s way through.

    This means that the aggregate throughput for each individual thread/process in the system is improved. Same number of threads/procs as before… Better performance for all of them individually.

    There’s never a case where you will be running only one thread/proc, by the way… The OS needs to run them, too.

    Regarding cores, sure CS folks can use it for parallel computation and the like, but given that almost every non-techie I know has a laptop with two cores and all they ever have open is a web browser with one or two tabs, only one of which they’re actively using, it sort of tells me that not only are two cores unnecessary, but even that one is underused.

    You’re probably not CPU bound, anyway, so who cares? If you did have an eleventy billion gigahertz processor, it would probably not improve your web browsing experience… But fire up a few more windows and you’ll see a difference. If your complaint is that you’ve got too much CPU horsepower, you can opt for a CPU with less horsepower, but longer battery life. In other words, if you find two cores unnecessary, you have other options.

  104. 104.

    Omnes Omnibus

    August 23, 2010 at 12:15 pm

    @El Cid: I think that makes a great deal of sense, assuming that the income level is reasonably secure. It is enough money (in most places) to provide for a comfortable life with some luxuries, but not so much that one can have anything one wants and thus loses appreciation for it.

  105. 105.

    mclaren

    August 23, 2010 at 12:18 pm

    @BR:

    You really don’t want to get into an argument with me about multicore CPUS because I can cite chapter and verse.

    “The Problem With Threads,” by Dr. Edward A. Lee, chairman of electrical engineering at the University of California at Berkeley…examines new problems that can appear when multithreaded programs run on systems with multiple processors or multicore processors. Programs thought to be rock-solid after rigorous testing and everyday use can suddenly fail. They behave just fine on single-processor or single-core systems, but suffer mysterious thread-contention deadlocks (sometimes called “threadlocks”) when running on systems with multiple processors or cores. These failures can happen even if the programmers tested and debugged the software with thread-analysis tools.

    Lee cites the example of the Ptolemy Project at UC-Berkeley. In early 2000, a team of programmers began writing the kernel of an interactive concurrency modeling environment. The team thoroughly tested and debugged this multithreaded Java program, using multiple levels of design reviews, code reviews, daily rebuilds, and 100%-coverage regression tests. The finished program ran great for four years. Until one day, when running on a dual-processor system, it deadlocked.

    Lee concludes: “It is certainly true that our relatively rigorous software-engineering practice identified and fixed many concurrency bugs. But the fact that a problem as serious as a deadlock that locked up the system could go undetected for four years despite this practice is alarming. How many more such problems remain? How long do we need test before we can be sure to have discovered all such problems? Regrettably, I have to conclude that testing may never reveal all the problems in nontrivial multithreaded code.”

    That’s a frightening conclusion, especially coming from a respected professor at a leading engineering school. Lee’s paper goes on to discuss the shortcomings of today’s programming languages and software-development tools and suggests some solutions. Nevertheless, his experience with the Ptolemy II kernel and his other research is disquieting. What does it foretell for millions of ordinary PCs and servers? Dual-core processors are now widespread, even in low-end systems, and quad-core chips are rapidly penetrating the market. Some of these multicore processors compound the potential problem by using hardware multithreading, too.

    Source: “The Dread of Threads,” Tom R. Halfhill, Microprocessor, Vol 21, No. 4, April 30, 2007

    Or google the IEEE Spectrum article “The trouble with multicore.” Turns out efforts to automate parallelized programming (single core code in, multicore code out) have failed. And humans can’t write parallelized code that runs reliably, as the Dr. Lee points out above.

    But wait — it get worse.

    US nuke boffins say they have seen the future of multicore computing, and it is troubled.

    Researchers at the Sandia national lab say that their projections indicate that performance gains flatten out badly after quad cores and cease altogether after eight – and beyond that point, performance actually worsens as more cores are packed onto a processor chip.

    According to the Sandia boffins, the issue is that as numbers of cores increase, access to the information to be processed becomes more difficult. Performance gains extrapolated from Moore’s famous Law can’t be sustained.

    Source: “CPU gains stop at eight,” The Register, 15 January 2009.

    For the original Los Alamos National Laboratory research paper, google “System resilience at extreme scale white paper,” by T. El-Ghazawi.

    Computers have hit a wall. No one wants to admit it, but that’s the reality.

  106. 106.

    Cat

    August 23, 2010 at 12:24 pm

    @Chad N Freude: @Chad N Freude:

    I must admit that I got — well, just plain mad.

    Who the F*ck does he think he is that he should get inflation beating returns for just holding cash?

    I believe everyone should have a safe place to put their capital while they run off to The Hamptons for July, regardless of how much it is. They can go DIAF if they chose to complain about how little their 100% safe capital makes and want to strangle the economy so that they can make a few BMW worth of interest rather then a Hyundai.

    These tone deaf elites are poster children to how low the bar is to earn entry into the Master of the Universe club. Its almost as if gender and race play a much larger role.

  107. 107.

    Omnes Omnibus

    August 23, 2010 at 12:26 pm

    @mclaren: Technology hits walls. What makes you think that this wall is unbreachable? If you can, please keep any answer on the simple side; I am not a techie.

  108. 108.

    chopper

    August 23, 2010 at 12:31 pm

    @catclub:

    so there was no race-baiting or jew-blaming in germany until 1933? seriously? germans started laying the blame for everything on the jews etc long before hitler took the chancellorship.

  109. 109.

    Cat

    August 23, 2010 at 12:32 pm

    @BR:

    Also, one hundred years ago there were electric cars (never mass produced) that could go, say 40 miles without a charge. You know, like the Volt.

    Not at the same speed, not as reliably, and not as safely.

    There are very few man made things that were ‘better’ 10 years ago, let alone 100 years ago.

    ‘Things’ be unliving things, man’s done a great job of ruining food with GMO and crossbreading.

  110. 110.

    Nick

    August 23, 2010 at 12:35 pm

    @catclub:

    The Weimar inflation crisis was 1923

    which was the same year as the Beer Hall Putsch.

  111. 111.

    Cat

    August 23, 2010 at 12:40 pm

    @gene108: To add another point, many of the local factories can’t be restarted efficiently because the factory buildings and the machines that made them competitive are gone.

    The factories were demolished or re-purposed. The machines sold for scrap or crated up and moved overseas at huge expense.

  112. 112.

    gene108

    August 23, 2010 at 12:41 pm

    @mattH:

    The fact that stagnant wages for the middle class, and a number of financial disasters has occurred, at the exact same time that income gaps have increased might give you an idea of why they started, and how to fix it.

    My only issue with this analysis is it misses the economic problems of the 1970’s, where stagflation started the problem with stagnant wages. In the 1970’s, the top marginal tax rates were high and the spread between the top earners and bottom earners was less than today, but high inflation wiped out any gains in the income people had.

    The high tax rates worked during the 1950’s and 1960’s, but those two decades saw an artificial advantage for the U.S., due to the devastation World War II had on other industrial countries.

    Even back in the era of high marginal tax rates, from what I understand, there were enough deductions that the effective tax rate for top earners was far less than what the marginal rates were.

    Income stagnation is as much a function of business processes as anything else. Businesses are not budgeting projects to pay people $20/hr to do work, where they can pay $10/hr anymore. This started back in the 1960’s, when manufacturing moved from Northern cities to the South, in search of cheaper labor.

    Tax policy will not address this underlying problem. Some sort of change in the attitude towards labor, i.e. those not getting most of their money from stock options, needs to take place, in order for the wage structure to change. Somewhere over the course of the last 30 years, the idea CEO’s would get hundreds of times what labor made, because their compensation would be bundled with stock options has totally skewed businesses attitudes towards labor. The attachment of stock options being the primary way to earn big money (or other profit sharing bonuses) has also skewed the risk management mindset of businesses, as we saw in the last decade.

    I don’t see how a change in the marginal tax rates will change this attitude businesses have towards labor being a disposable item, where you are constantly searching for the cheapest option that can do the job.

  113. 113.

    Chad N Freude

    August 23, 2010 at 12:42 pm

    @Cat: I think you missed the point. See @Chad N Freude: You may disagree, but it’s not just an elitist class-maintaining argument.

  114. 114.

    Elie

    August 23, 2010 at 12:44 pm

    @Montysano:

    The relative speed of this really has a huge impact on the sociology and politics of this. Pray for just slow enough to help us to stay relatively sane…Have my doubts looking at current events

  115. 115.

    Cat

    August 23, 2010 at 12:54 pm

    @BR:

    web browser with one or two tabs, only one of which they’re actively using, it sort of tells me that not only are two cores unnecessary, but even that one is underused.

    Please stop. You know nothing about modern OS design or software development.

    IE just viewing a page with flash and who knows what else has over a dozens threads. Your concept of ‘doing nothing’ and a computers concept of ‘doing nothing’ are miles apart.

    If you were able to switch the CPU in a computer from one of the new intel i* with one of the single core Atoms running at the same clock speed you’d see the difference. And if you can see the difference in reality that means its the atom is mind blowing slower and a huge waste in productivity even if its just producing leisure time at home.

  116. 116.

    Brachiator

    August 23, 2010 at 1:00 pm

    @Montysano:

    I’m just casting about for some crumbs of hope.

    Yeah. I know what you mean.

    I was talking to some California tax preparers the other day, and one thing we noted, which may have been reported, but is still under-acknowledged, is the number of people who were laid off in their 40s in the late 80s and 90s who may have found jobs again, but rarely at the same wage and career-path levels as their earlier employment. To keep up and take care of their families, some of them sold their homes, dipped into their pensions, depleted their savings. In some ways they have never quite caught up again.

    This kind of thing could also become of feature of our current no-growth economy, affecting even more workers.

    This is more gloom, perhaps, but also part of the economic landscape that has to be dealt with if anything is going to improve.

  117. 117.

    jrg

    August 23, 2010 at 1:03 pm

    Computers have hit a wall. No one wants to admit it, but that’s the reality.

    Your assertion that single-threaded performance == “computers” is complete bullshit. Multi-threaded performance is improving, CPUs are getting smaller and more energy efficient, disk storage is getting cheaper, SSDs are getting bigger, etc, etc, etc.

    It all depends on the workload and the application.

  118. 118.

    gene108

    August 23, 2010 at 1:06 pm

    @Cat: I’m just pointing out that due to the high use of automation in factories, maybe there’s a better use of capital to spur job creation.

    The money may mostly go for machines, rather than labor, compared to how factories operated prior to robotics and other automation becoming necessary to maintain quality control. Even if the older factories were still here, I don’t think they’d start up with the old machines. The owners would get new machines, so they could employ fewer people.

    I don’t think the economy of the future, in America, will be centered on manufacturing like it was in the 20th century.

    Also, the amount of the work force in agriculture has dropped dramatically over the past 100 years, much more so than in manufacturing – I think it was probably close to 50% of the labor force prior to the Great Depression – but for whatever reason this doesn’t seem to create as much of an issue, when looking at systemic problems in the economy. We’re producing more food, with less labor and no one feels this is undermining the economy.

    I don’t know why the lack of labor in agriculture doesn’t cause the same angst that the loss of labor in manufacturing does, but I’d thought I’d throw it out there as some food for thought.

  119. 119.

    mclaren

    August 23, 2010 at 1:16 pm

    @Omnes Omnibus:

    The history of all technologies shows sigmoid curves. At first, what looks like exponential growth, then it flattens out and eventually flatlines and plateaus.

    Take a look at the growth of telegraphy, horse-drawn trolleys, telephones, top speed of locomotives, power of steam engines, power of internal combustion engines, top speed of airplanes, top speed of cars. All sigmoid curves. “Tree don’t grow to the sky.”

  120. 120.

    mclaren

    August 23, 2010 at 1:19 pm

    @jrg:

    No, your assertion that research papers written at Los Alamos National Laboratories and research done by PhDs at U. of Berkely is “bullshit” is what’s bullshit.

    Provide peer-reviewed scientific journal articles that specifically rebut the scientific journal articles I cited, or stand revealed as an ignorant liar and incompetent fool.

  121. 121.

    Cat

    August 23, 2010 at 1:22 pm

    @mclaren:

    You really don’t want to get into an argument with me about multicore CPUS because I can cite chapter and verse.

    Any idiot can cite crap they don’t understand.

    A metaphor you might understand.

    Engines are designed for gas that only lets you go 25mph, but a few engine makers for whatever reason claim theirs could do 50 mph if they had the right gas.

    One day Shell starts selling gas that lets certain cars go 50mph. The badly designed or made engines that claimed to go 50mph and never tested it or never designed an engine that would go 50mph blew up.

    You don’t claim 50mph gas is bad or a step backwards, you say Manufacture X made a crappy product not Shell.

  122. 122.

    catclub

    August 23, 2010 at 1:24 pm

    @chopper:
    As we know from the writings of Martin Luther,
    Germany has a loooong history of anti-semitism and pogroms
    against the Jews. So I am not claiming it was fine until 1933.

    My point was that although people say that the hyperinflation
    of 1923 during the Weimar republic was what drove the Germans to the madness of theNazis, I am saying that the 50% unemployment of the depression was what actually did it.

    Hyperinflation wipes out the debts of the poor to the rich, also.

    Similar to pogroms where one of the first tasks is to burn the records of the jewish bankers.

    ” The Weimar inflation crisis was 1923

    which was the same year as the Beer Hall Putsch.”
    Which was put down, and Hitler was jailed.
    Kind of unlike what happened in 1933.

  123. 123.

    toujoursdan

    August 23, 2010 at 1:26 pm

    @mclaren:

    This. (And it’s a shame that people are quibbling over details rather than addressing your main point.)

    We are going to enter a few decades of resource depletion, shortages and demographic changes. That has to fundamentally change how we live. Americans are completely unprepared for it. There are too many people who believe that we’re headed back to business as usual.

  124. 124.

    bjacques

    August 23, 2010 at 1:26 pm

    @mclaren 105: Goddammit!

    @jrg 117: Yay! Singularity, here I come!

    @mclaren 119 & 120: Goddammit!

    etc.

    (finally got around to reading Charles Stross’s “Accelerando.”)

  125. 125.

    ChrisS

    August 23, 2010 at 1:30 pm

    @Brachiator:

    In some ways they have never quite caught up again.

    We’re getting to a point in time where the kids from parents affected by those huge manufacturing layoffs are barely able to catch-up. My dad was laid off in the mid-80s. I was 10 or 12. He never managed to catch on anywhere with the same level of benefits or salary (union, too). So our family of six, was soon five (deevorce). Single mom, barely adequate child support from Dad because he couldn’t afford much more. College? Yeah, right. And guess what? Right around that time tuition started increasing, aid decreased and predatory lending came on strong.

    So, it’s taken me 25 years since my Dad was laid-off, a stint in the military protecting various oil-rich autocracies, a self-financed education (though recently the GI Bill has changed where it funds living expenses at $1100/mo and repays tuition costs in full), and I’ve just managed to reach the income level that my non-college educated father was at when he was laid off.

    It sucks starting a race late. And I’m dead fucking certain that I ain’t the only one.

  126. 126.

    jrg

    August 23, 2010 at 1:31 pm

    @mclaren:

    your assertion that research papers written at Los Alamos National Laboratories and research done by PhDs at U. of Berkely is “bullshit” is what’s bullshit.

    Dude, I work for a company that designs operating systems. Under the right conditions, you can utilize all the cores on a chip effectively. Even in cases where you cannot write multi-threaded programs to handle a specific task, you can still stack VMs on top of one box and do more work using less power. On top of that, disk-bound workloads are running faster due to solid-state memory.

    I’m not taking issue with the research paper, you tool. I’m taking issue with your assertion that single-threaded performance == “computers”.

    stand revealed as an ignorant liar and incompetent fool.

    OK, sport.

  127. 127.

    chopper

    August 23, 2010 at 1:32 pm

    @catclub:

    My point was that although people say that the hyperinflation of 1923 during the Weimar republic was what drove the Germans to the madness of theNazis, I am saying that the 50% unemployment of the depression was what actually did it.

    which is a fine response to an argument i didn’t make.

    what i did say was that weimar germany did in fact resort to racial and religious scapegoating in response to a nastier crisis and to a greater degree than what we’re doing here now.

  128. 128.

    Cat

    August 23, 2010 at 1:32 pm

    @Chad N Freude:

    You may disagree, but it’s not just an elitist class-maintaining argument.

    Chalk me down as disagreeing. People who are ‘saving’ aren’t spending the interest off their 20k in the passbook, they are compounding it.

    A minimum wage job pays more then the interest off 1M at a passbook rate of 1%.

    I’m hard pressed to shed a tear for someone who wants to live work free off 1M at the expense of the rest of us.

    The people who are trying to live off 20k in savings won’t be saved by an increase in the interest rates paid on savings accounts. They are better served by social safety nets.

  129. 129.

    chopper

    August 23, 2010 at 1:37 pm

    @catclub:

    the funniest thing is, your response was full of smug asshole (like “wrong wrong wrong!”), and yet you completely missed the point entirely.

    i love the internet.

  130. 130.

    Walker

    August 23, 2010 at 1:41 pm

    @mclaren:

    According to the Sandia boffins, the issue is that as numbers of cores increase, access to the information to be processed becomes more difficult. Performance gains extrapolated from Moore’s famous Law can’t be sustained.

    This is an issue of modern memory architecture, not the CPUs themselves (other than design decisions such as whether or not two cores share the same cache). There is a reason why GPUs (which are a tad more than 8), have a radically different memory design than traditional CPUs.

  131. 131.

    jrg

    August 23, 2010 at 1:42 pm

    @Cat: It’s pretty clear that mclaren has no idea what he’s talking about. He just wants to pretend he knows more about OS development than those of us who actually, you know, do it for a living.

    I’m done feeding that troll.

  132. 132.

    tworivers

    August 23, 2010 at 1:43 pm

    JC:

    I just don’t see how we put Humpty Dumpty back together again, and honestly, I’m not sure we should.

    Well said. Geithner et al. act as if they want to return to the good old days of the 90’s and 2000-2008. But is the euphoric boom followed by bust model of the American economy something we want to go back to? Don’t we want to avoid the sort of debilitating economic crash we just experienced (and to an extent, are still experiencing)? Didn’t we learn anything?

    The “new normal” will probably suck hard for quite some time, but I don’t see any way around it. Until we adjust to what this new normal is, and until American business figures out how to prosper without A) inflating any artificial bubbles and B) tooling around with incredibly complex financial instruments that they themselves don’t even fully understand, it’s going to be a lean time, I fear.

  133. 133.

    Judas Escargot

    August 23, 2010 at 2:26 pm

    Computers have hit a wall. No one wants to admit it, but that’s the reality.

    The difficulties in allocating multiple tasks to multi-core processors is a software/algorithm design problem, really: in other words, it’s Software engineering (or perhaps the mental models we use for software design) that has hit a wall, not ‘Computers’ as a whole.

    We have at least a decade left to climb Moore’s Curve before quantum effects totally take over. Whether or not we’ll be smart enough to fully utilize those future machines is still an open question.

    Just a nit.

  134. 134.

    DaveInOz

    August 23, 2010 at 7:04 pm

    Can’t Goldman Sachs come in and create an artificial market in housing like they did in food commodities and drive the price up artificially?

    Oh wait, they already did that didn’t they?

  135. 135.

    BrianM

    August 23, 2010 at 8:20 pm

    @Walker: I heard an interesting talk about programming a 1024-core GPU to do things less obviously parallelizable than rendering pretty pictures. It required some substantial mindshifts to do it well. For example, you have to get used to the idea that memory is really, really, really far away. “Don’t store, recalculate.”

    Note that in the application space, the great white hope for using multicores is purely-functional languages like Clojure. I have more background in such languages than most, and it’s still mind-bending at times.

    I also once worked with some people who programmed Illiac IV, one of the early massively-parallel computers. They used to have reunions that they characterized to me as being like Pearl Harbor survivors’ reunions – full of stories of great heroism and great suffering.

    We have learned a lot since then, but it’s way overdoing it to claim that N cores is anywhere near as easy to take advantage of as doubling the speed of a single core.

  136. 136.

    mclaren

    August 23, 2010 at 10:47 pm

    @jrg:

    You’re an ignorant kook. The hard cold fact is that your claim only proves true for a handful of highly exotic specialized cases: diagonalizing huge sparse matrices, doing radiul blurs in PhotoShop, running FFTs on immense datasets.

    The proof that you’re an ignorant liar is simple and obvious: if what you say is true, why hasn’t your company taken over the personal computer market by building and selling massively multicore chips that run Windows 50x faster than the conventional architecture of CPUs?

    I can tell you exactly why your company hasn’t done that. Because most computer applications are serially limited. Massive performance gains from parallelization only arises in a microscopic subset of special cases.

    Stop spewing nonsensical lies, kook, the adults are having a serious conservation about the fact that all technologies enter sigmoid curves and plateau. You’re quibbling and haggling and squabbling over minutia because you can’t disprove my main point — like a colony of bacteria in a petri dish, the human race has hit the limits of growth.

    That’s what John Cole was talking about that’s the substantive truth of the matter. Your lies and misleading non sequiturs only serve to distract from that larger and more important point.

  137. 137.

    mclaren

    August 23, 2010 at 10:51 pm

    @Judas Escargot:

    By the way, ignorant incompetent liars like jrg have failed to cite the recent invention of the memristor, most likely because he doesn’t know what a memristor is and he can’t even spell the word. We’ll get a little more exponential growth out of that new silicon architecture (probably). But once again, trees don’t grow to the sky.

    You can’t keep growing exponentially forever. Exponential growth means the growth is proportional to the size (or in the case of Moore’s law, the transistor density), and that means growth just shoots up like a rocket.

    You simply cannot keep going at that rate for very long before you hit hard limits. Those limits are set by physics and information theory. You can’t hand-wave them away.

  138. 138.

    mclaren

    August 23, 2010 at 11:28 pm

    @jrg:

    Translation:

    I have no facts and no logic to counter mclaren’s citation of peer-reviewed scientific literature from Los Alamos National Laboratory, so I’m going to run away and hide.

    Don’t let the door hit you in the ass on the way out.

    If you actually write operating systems, you should know the single most important law governing software: Wirth’s Law.

    Wirth’s Law: software gets slower faster than hardware gets faster.

    Unfortunately, it rules software with an iron fast, and it explains why all our whizbang hardware runs real-world applications slower today than comparable apps did on slower computer hardware back in the day.

  139. 139.

    Neldob

    August 24, 2010 at 12:04 am

    There is a good article in the LA Times, Disincentivizing greed
    By Neal Gabler, that makes the point that many of our economic bummers happened after Reagan lowered the top marginal tax rate, thereby incentivizing (that’s probably not a word) greed. This is relevant somehow.

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