Volker: Bring Consumption Back In Line With Income

[Munger]

His concerns go to the very core of how America lives and how Wall Street operates. A child of the Great Depression and a man of legendary personal thrift, Volcker thinks Americans have been living above their means for too long.

"It is the United States as a whole that became addicted to spending and consuming beyond its capacity to produce," Volcker lectured the Economic Club of New York in April. "It all seemed so comfortable."

Bringing consumption back in line with income would not only crimp individuals and families, but also require major readjustments in the global economy, which has relied on the U.S. as consumer of last resort.

http://www.latimes.com/news/nationwo...0,108304.story

[FRED]

Re: Volker: Bring Consumption Back In Line With Income

http://www.latimes.com/news/nationwo...0,108304.story

"Bring Consumption Back In Line With Income"

The depression that we are getting as a result of the failure of FIRE Economy policies since 1980 will do that for us without government assistance.

[rabot10]

Re: Volker: Bring Consumption Back In Line With Income

"Bring Consumption Back In Line With Income"

The depression that we are getting as a result of the failure of FIRE Economy policies since 1980 will do that for us without government assistance.

OK and your point is? If U think thats going to happen anytime soon U must be on crack. U arn't right> I love U for real

rick

[FRED]

Re: Volker: Bring Consumption Back In Line With Income

OK and your point is? If U think thats going to happen anytime soon U must be on crack. U arn't right> I love U for real

rick

Incomes and consumption are crashing together.

[grapejelly]

Re: Volker: Bring Consumption Back In Line With Income

that news source you quoted is bankrupt....why should we listen to them?

:p

[GRG55]

Re: Volker: Bring Consumption Back In Line With Income

"Bring Consumption Back In Line With Income"

The depression that we are getting as a result of the failure of FIRE Economy policies since 1980 will do that for us without government assistance.

Seems from what I've read around here that the depression that we are getting as a result of the failure of FIRE Economy policies since 1980...has been brought to you with government assistance...:rolleyes:

[jtabeb]

Re: Volker: Bring Consumption Back In Line With Income

OK and your point is? If U think thats going to happen anytime soon U must be on crack. U arn't right> I love U for real

rick

I didn't know that you could have a pronounced slur while typing.

[D-Mack]

Re: Volker: Bring Consumption Back In Line With Income

A lot of people blame him for starting the FIRE economy and deindustrialization

[*T*]

Re: Volker: Bring Consumption Back In Line With Income

"Bring Consumption Back In Line With Income"

The depression that we are getting as a result of the failure of FIRE Economy policies since 1980 will do that for us without government assistance.

But production is crashing too.

[BiscayneSunrise]

Re: Volker: Bring Consumption Back In Line With Income

Incomes and consumption are crashing together.

This is completely in line with what Obama promised us during the campaign. Remember the famous remark about Americans having to eat less meat, lower our thermostats and stop driving SUV's? Well, that is basically what Volcker is proposing.

For those who believe housing has bottomed, consider if incomes continue crashing, then even at current prices, housing is still unaffordable.

As for incomes crashing, I saw a brief blurb in the local newspaper regarding last weeks job report. It had said that an unnamed financial services company had been paying executives $350/yr for a certain position. Now the job is being done by people making $75/yr. it's not that the job was worth $350 to start with. Like everything else, the numbers are just returning back to normal.

[Wild Style]

Re: Volker: Bring Consumption Back In Line With Income

This is completely in line with what Obama promised us during the campaign. Remember the famous remark about Americans having to eat less meat, lower our thermostats and stop driving SUV's? Well, that is basically what Volcker is proposing.

For those who believe housing has bottomed, consider if incomes continue crashing, then even at current prices, housing is still unaffordable.

As for incomes crashing, I saw a brief blurb in the local newspaper regarding last weeks job report. It had said that an unnamed financial services company had been paying executives $350/yr for a certain position. Now the job is being done by people making $75/yr. it's not that the job was worth $350 to start with. Like everything else, the numbers are just returning back to normal.

If the 3 to 3.5 times annual income is to be realized again, Broward home prices and a lot of other areas in the states is still way off. i think they said the average household income in Broward for example was 60,000? I Imagine that's even less now. I don't think a lot of people are mentally prepared for where these prices are going.

[skidder]

Re: Volker: Bring Consumption Back In Line With Income

Could the US do this and still maintain a viable dollar? It seems to me that the gov't is the entity most addicted to spending above it's means. With the rapidity that the gov't is adding new debt, it doesn't appear that trend is reversing, not to mention that the existing debt couldn't be managed with vastly lower spending by it's citizens. So, is this comment by Volker really anything other than noting what is going to happen but not really the "meat" of the change that is coming?

[c1ue]

Re: Volker: Bring Consumption Back In Line With Income

Like everything else, the numbers are just returning back to normal.

Greg,

But the debt isn't returning to normal...yet.

[BiscayneSunrise]

Re: Volker: Bring Consumption Back In Line With Income

Greg,

But the debt isn't returning to normal...yet.

No, it's not. And the debt will have to be paid down in some fashion.

[grizam303]

Re: Volker: Bring Consumption Back In Line With Income

OK and your point is? If U think thats going to happen anytime soon U must be on crack. U arn't right> I love U for real

rick

So logically, if the poster is not on crack, he must be correct, right?

Interesting counter-argument you've presented.