Obama: 'Millions of jobs' in danger next year, page 1

Obama: 'Millions of jobs' in danger next year

www.msnbc.msn.com

WASHINGTON - U.S. President-elect Barack Obama said on Saturday that he was crafting an aggressive, two-year stimulus plan to revive the troubled economy, warning that swift action was needed to prevent a deep slump and a spiral of falling prices.

(visit the link for the full news article)

Obama seems to be concerned about "falling prices." How did the President-elect figure that prices are spiralling down?

Just look at the photo to the right of the article. Here he is: Mr Obama went shopping and became horrified by the food prices that, after taking off with the price of gas last year, are too low for our leader designated.

Surely, Mr Obama means well. It's all just a case of junk Internet juornalism to link him with falling prices and add a photo of him buying a sausage.

But>>>>> What if Mr Obama had on his mind the falling prices of oil?

Aaah, not a good start, Barack.


Can anyone figure out what he meant by that "spiral of falling prices" and how bad this is for the American consumer?


www.msnbc.msn.com
(visit the link for the full news article)

Um... guys... Obama is showing what he has learned about economics. He has been studying the economy (as have many who have concerns about it) and he is concerned about deflation.

Deflation is spiraling prices as an indication that there isn't much money or credit to be had and people aren't buying things. That's why gas is low. Because people aren't buying it. It's a Bad Thing. It precedes depressions.

Deflation is considered a problem in a modern economy because of the potential of a deflationary spiral and its association with the Great Depression, although not all episodes of deflation correspond to periods of poor economic growth historically
...
In economic theory, deflation is a general reduction in the level of prices, or of the prices of an entire kind of asset or commodity. Deflation should not be confused with temporarily falling prices; instead, it is a sustained fall in general prices.

Deflation

What Caused the Great Depression

reply to post by stander

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If you are to post an OP to to talk about one topic please be nice enough to post the entire links that explain the reason why the new president made the comment he did.

From your source

While deflation might sound welcome, in fact it can be devastating to borrowers, banks and businesses. The Great Depression in the 1930s was accompanied by deflation of 10 percent per year, reflecting the widespread lack of demand. Falling prices in the 1890s made it impossible for farmers to keep up with mortgage payments, as Fed Chairman Ben Bernanke noted in a 2002 speech on the topic.

As prices fall, consumers and businesses become less willing to spend and invest, worsening the economic downturn, as happened in Japan's "lost decade" of the 1990s.

Falling prices raise worries about deflation
Sustained trend could create headwind for growth, problem for markets

While deflation is a good thing for the economy too much of it will render the economy at the mercy of depression.

Originally posted by stander




But>>>>> What if Mr Obama had on his mind the falling prices of oil?

Aaah, not a good start, Barack.


Can anyone figure out what he meant by that "spiral of falling prices" and how bad this is for the American consumer?


www.msnbc.msn.com
(visit the link for the full news article)

The only thing that makes sense to me is that he may be referring to the falling prices of stocks and houses. If he is talking about the falling prices of goods and gas, then your absolutely right. Not a good start, Barack.

I can't imagine how anyone can think (except the people selling) of the prices of goods and gas going down is bad.

reply to post by Mystery_Lady

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That's because people don't understand economics. We're in a period of very loew demand and this is set to get worse. In times like these lower prices means lower demand and can be a very good indicator as to the financial trouble we're in when people can't afford to buy products that are cheap.

Deflation is not always a good thing. The minute I saw gas prices beginning to fall I knew we were in some serious trouble. Same with gold and other commodities.

The credit freeze combined with low confidence as left alot of people VERY cash strapped, and the prices going down is an indicator of a contraction in the America economy not an expansion.

Those of you that keep saying stupid things like "Maybe this is the change he promised" might wanna get informed on the rules. Bush is president until Jan. 20th, and people losing their jobs has nothing to do with the Obama administration as it is Bush who is handling this mess and it is Bush who is mismanaging it.

I've stopped being an Obama supporter, but this whole tugging at whatever blame you can pull from this and dump onto Obama is ridiculous. Most of the time we give newly elected presidents the time to screw up..You can't blame people for things they are not present for.

Millions of jobs will be lost. But those indicators have already come out, Low demand(Which in these times just means people are broke) on oil, food, retail(which include automotive sales) and financial markets. This combined is OF COURSE going to cause the loss of jobs.

reply to post by stander

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Actually there is such a thing called a deflationary spiral which is in many ways far worse for the economy than inflation or stagnation.

A deflationary spiral is a situation where decreases in price lead to lower production, which in turn leads to lower wages and demand, which leads to further decreases in price. Since reductions in general price level are called deflation, a deflationary spiral is when reductions in price lead to a vicious circle, where a problem exacerbates its own cause. The Great Depression was regarded as a deflationary spiral.

en.wikipedia.org...

[edit on 22-11-2008 by grover]

reply to post by stander

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This is from your source

Obama acknowledged Saturday that evidence is growing the country is "facing an economic crisis of historic proportions." He noted turmoil on Wall Street, a decrease in new home purchases, growing jobless claims and the menacing problem of deflation.

Is this not what he was saying prior to getting elected?

I got a feeling his administration elect is already trying to lower expectations. If jobs losses continue to increase after he takes office they will blame it on Bush. Obama was elected because he said he had plans that would create jobs and improve the economy..

I say no excuses..get busy. None of this isn't anything he didn't know prior to getting elected.

reply to post by munkey66

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I guess he's going to put people to work building bridges and roads.
Maybe he will pay them a few dollars.
Who knows...........

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