Your view of stimulus spending by Bush in causing the boom is almost laughable (not least because 75% of defence spending was spent OVERSEAS). Again, it was BAD monetary policy (setting interest rates to 1%, which misallocated capital into housing) and government intervention *via* the subprime market: http://blog.mises.org/archives/008907.asp and http://mises.org/story/3200 (excellent article, scrolling half way vetoes your premise) and http://blog.mises.org/archives/008898.asp

Moreover, what are these "corrections" you speak off (these seem arbitrary numbers you cited) and what are your sources? Please list and EXPLAIN the SOURCES you cited. As far as I can see, you are not dealing with recessions: http://www.nber.org/cycles.html NBER is the *official bureau* which records economic recessions. As you can see, the early 1979 oil shock is one year late in 1980 and 3 years late in 1982. The 1978 downturn in Aus was cearly *too* early to be caused by oil.

I refer you to the following papers, which I basis my claims on. I expect you to highlight academic papers as well.

1. 'Why do oil shocks no longer shock?' http://www.oxfordenergy.org/pdfs/WPM35.pdf The point of this article is that oil is no longer looked at central banks in setting monetary policy - malinvestments in land, due to tightening monetary policy, can be exposed, as they were in 1975. *Yes* oil can have a shock BUT ONLY MAGNIFIED by collapsing land values. However, the article cited below clearly shows stagflation can be explained in purely monetary terms without any reference to oil:
2. http://www.networkideas.org/ideasact/sep08/Jyotirmoy.pdf
3. http://www.frbsf.org/publications/economics/letter/2005/el2005-31.html
4. Empirical analysis: http://www.mees.com/postedarticles/finance/general/a47n35b01.htm which can be found here: www.sais-jhu.edu/faculty/sandleris/Macro/Readings/R_Oil_and_the_Macroeconomy.pdf This paper notes “conceptual difficulties in assigning a central role to oil price shocks in explaining macroeconomic fluctuations.” The timing of oil price increases and recessions is consistent with the notion that oil price shocks may contribute to recessions without necessarily being pivotal, they say. They also-note-oil-is-often*too*-late-(1990) or too-early (1980) to be the cause of the downturn. You can find this on page of the above paper - page 122 and 133 prove my point. Overall, the facts you cited are not espoused by either NBER or recent economic research.

Try using a free yahoo Dow chart and seeing what happening in real time you clown and stop annoying the natives with your petulant frenzy

That's fine. But please cite your source or link us to the source. You say to use yahoo or google to locate it. Again, I can do that, and have done that, but none of the sources or graphs I have viewed lead to your conclusion. Again, I implore you, please, provide me the source. I am most interested indeed in what you are saying and therefore urge you to assist me. I shall continue to propound a 'petulant frenzy' in the name of educating the natives like yourself and in advancing academic integrity. It is forums like these which provide genuine intellectual discourse.

Anyways, the issue here was the REAL ECONOMY - that is GDP growth (or therelack of). The articles cited above continues my claim that oil may contribute to inflation, but not necessarily to DOWNTURNS. Isn't this interesting, the tenure, the tenure of your argument has turned from the real economy to the Dow Jones etc. Again, I request, no I implore you, to cite your source and prove to me oil created the downturns cited above i.e. 1975, 1982-3, 1990 and why it has not caused subsquent downturns. Please, Thomas, help me, find the answer. Because I have searched and your conclusions simply seem alien to me.

Phew what a challenge! Not only does I gets to solve the world economic crisis I gets to advance the integrity of the forum.
Please only one miracle at a time or my head will swell.
In answer to the second statement as I am sure the first was a false platitude!
Solutions ….hmm what solution?
The speculation in real estate is the underlying problem in this disaster which we have still to reach bottom.
I would suggest that a Dow range of 4000 to 6000 might be safe level to begin from, but as you can see the No drama Obama package isn’t and will not work.
Not until the real estate sorts itself out will the problem correct itself. The home is, after all, the basis of all quality of life in the western world?
This is also the basis for the correct approach to rebuilding the economy. However the government both here and there refuses s to adopt any logical response package policy. Since when was throwing money at an economic crisis ever a solution.
The invasion of Iraq by Mr. Bush was the beginning of the boom, and was paid for by the eventual massive USA debt that now threatens the world. We’re talking trillions here not a piddley $500 billion of the Aussie economy. And Australia, England and Canada are all equally responsible for the WOMD argument so no blaming he USA solely for this one.
However as we have a n international banking system so dependent on the USA to float itself we have a lot more pain to follow.

I am glad we agree that real estate speculation is a problem. My overall point stands: deficit spending was not the *PRIMARY* cause the downturn - albeit giving the amount of debt the US public sector has weakened the US governments response to the current deflation (if they hyperinflate there currency collapses, if they do nothing there domestic economy does so too). I find the following posts very amusing (it also address some of the earlier points made by Wattle e.g. the home buyers grant inflated land values, State top-ups of this scheme that increase it to $24,000, no capital gains tax on sales of an owner-occupied house–so that the entire capital gain from selling your home on a rising market is tax-free): http://www.debtdeflation.com/blogs/2009/02/20/neoliberalism-and-economic-breakdown/

I would venture to say that the "housing subsidy" whilst it appears good on the surface just :
1 adds to the inflationary cost of a home in that it provides $24,000 for the builder and $17,000 for the existing home buyer.
2 does not free money or make it any easier for this shrinking group, especially now the crisis is reaching its worst.
Banks re simply going to do what they have done in the States , keep the cash or use I to buy more capital , which brings me to an amusing sideline.
The Obama package threatens buts yet I haven’t seen any laws come into play , to cap the banker’s packages to $500,000. This has brought a lot of complaints from the sector. Th prime argument being the system will lose its talent! I would argue what talent! The same ole same ole isn’t talent its system manipulation.
3 if anything place the capital at risk.
4 does nothing for the building industry but cause inflation.