Biggest drop in industrial output since VE Day

[Pale Blue Dot]

Source: Marketwatch

WASHINGTON (MarketWatch) - The output of the nation's factories, mines and utilities fell 1.5% in March despite higher production of motor vehicles and boost from utilities, the Federal Reserve reported Wednesday. Industrial production is down 13.3% since the recession began in December 2007, the largest percentage decline since the end of World War II. Output fell at a 20% annual rate in the first quarter, and is now at the same level as December 1998. Factory production fell 1.7% in March. Factory output has fallen 15.7% during the recession, also the largest decline since 1945-1946. Capacity utilization fell by a full percentage point to 69.3%, the lowest since the data series begins in 1967.

Read more: http://www.marketwatch.com/news/story/Biggest-drop-industrial-output-since/story.aspx?guid={3358C354-05A9-4A10-9009-0CAA8C345AE9}&dist=hplatest

[sakabatou]

1. Damn

So what do we do? Free-up money for lending?

[Oregone]

2. No

Despite what money banks have, they wont gamble it in this economy (they would rather use it to grab cheap acquisitions and consolidate)

The government needs to increase production itself. Since the private market will not inject money into the economy, the government must directly.

No more tax cuts. Throw the bailouts away. Now it is time for the government to stimulate from the ground up.

[sakabatou]

3. Ah, ok

Time for The New Deal II

[MilesColtrane]

4. We need jobs.

People don't spend money when they're not working or in danger of being laid off.

Increase employment and you'll increase demand for goods. Production will ramp up again.

[biopowertoday]

6. Will another Obama Serman on the Mount do?

http://www.cbsnews.com/blogs/2009/04/14/business/econwatch/entry4944206.shtml


April 14, 2009 1:54 PM
President Obama's Sermon At Georgetown
Posted by Daniel Farber | Comments 13


(AP Photo/Gerald Herbert)

President Obama can't turn water into wine, but he is determined to change sand into rock. In a major economic speech today at Georgetown University, Mr. Obama invoked the Sermon on the Mount -- likening the economic foundations of the previous administrations to sand that is easily blown away:

"There is a parable at the end of the Sermon on the Mount that tells the story of two men. The first built his house on a pile of sand, and it was destroyed as soon as the storm hit. But the second is known as the wise man, for when '…the rain descended, and the floods came, and the winds blew, and beat upon that house… it fell not: for it was founded upon a rock.'"

Click here to read Mr. Obama's full remarks.

"We cannot rebuild this economy on the same pile of sand. We must build our house upon a rock. We must lay a new foundation for growth and prosperity – a foundation that will move us from an era of borrow and spend to one where we save and invest; where we consume less at home and send more exports abroad.".................................

[Oregone]

5. Whatever you want to call it...

If we want to get out of this, the government MUST focus upon goods and service vouchers and infrastructure spending. The government must mandate that money is injected directly into the economy in such a way that it "multiplies" efficiently across tangential sectors.

Once you increase production (and subsequently jobs), you will see private investment. On the other hand, increasing the liquidity of private investors does not guarantee investment at all, until the fundamentals of the economy improve (such as, until employed people have cash).

And now isn't the worst time ever to raise capital from those saving it, such that it can actually be invested into the economy. They use to call this taxation.