7 ms·

2020: policies put in place under this administration will come home to roost during the next administration, which will get the blame. This lag between econom

by mhneu 8y ago

2020: policies put in place under this administration will come home to roost during the next administration, which will get the blame. This lag between economic policy and outcomes is a big reason the US has such a disingenuous public debate. Getting what you can in the short term, while being deceptive about long term effects, has become a good strategy. [1] [1] https://mobile.nytimes.com/2017/12/18/opinion/republicans-tax-cuts-rich.html https://mobile.nytimes.com/2017/12/18/opinion/republicans-ta... “The essence of this strategy is to take tax policy out of the hands of experts and entrust it to activists. These campaigns do not usually have much credibility with card-carrying economists. ”

maxxxxx 8y ago
" 2020: policies put in place under this administration will come home to roost during the next administration, which will get the blame." That has often been the case. Bush suffered through Clinton's internet bubble. then Obama suffered through Bush's real estate bubble. Trump now benefits from Obama's policies. We'll see what happens after Trump.
- salviasloth 8y ago
  Clintons internet bubble?
  - maxxxxx 8y ago
    During Clinton's time there was a huge run-up in the stock market fueled b a lot of internet companies. Clinton got all the credit for the growth during that time and then Bush suffered through the predictable collapse.
    - salviasloth 8y ago
      He was making it sound like the bubble was caused by specific Clinton era policies. I'm pretty sure the dot com bubble was largely just a speculative bubble.
      - ohhellno 8y ago
        Al Gore invented the internet as part of that government.
    - mhneu 8y ago
      Luckily for us, Clinton moved the budget toward balance during a good economy. So when the bubble burst, Bush was able to stimulate the economy and cut taxes. The current tax cut increases the national debt during a good economy. So this irresponsibility limits America’s options when this bubble (if it exists) bursts.
      - adventured 8y ago
        The current tax cuts are a trivial part of the deficit problem (to note, I'm against the personal income tax cuts they passed). The US deficit was going to $1 trillion regardless of the tax cuts. The forecast for a deficit explosion due to entitlement costs, long predates the Trump tax cuts. Half of those cuts reset. The primary item in the other half, the corporate income tax cuts, were a necessity to compete with the rest of the planet that has a more typical ~20% rate (including Europe, which has the lowest corporate income tax rates of any region). The deficit is going to $1 trillion, the tax cuts are an average $50-$75 billion per year of that problem over the next ten years. The tax cut is meaningless in that picture. It'll add at worst a trillion to the $30 trillion pile of public debt that will exist in 8-10 more years.
        forapurpose 8y ago
        Could you provide some factual basis for this? For example, my understanding is that the corporate tax burden in the US was lower than other advance economies; one particular tax, which few paid in full due to loopholes, etc, was higher.
        mhneu 8y ago
        It's a $3 trillion tax cut over 10 years. They get to $1B by finding an "offset" of $2 billion, which assumes a very optimistic growth estimate, which there was political push to develop. In particular, that offset assumes there is no bubble to pop. Good luck to the US. The yearly budget is $3.8T. Of that, only $1B is discretionary. $3T of tax cuts is three years of the entire discretionary budget. The cut is huge. And that cut wasn't Keynesian stimulus - it came during a good economy. Good luck to the US.
      - 8y ago
    - forapurpose 8y ago
      > During Clinton's time there was a huge run-up in the stock market fueled b a lot of internet companies. I'm not sure the dot-com boom and bust affected the rest of the economy nearly as much as it affected our industry. If there was a recession, it was the smallest in decades: https://tradingeconomics.com/united-states/gdp-growth-annual https://tradingeconomics.com/united-states/gdp-growth-annual
      - mywittyname 8y ago
        The recession happened just before Bush's election (officially starting in March 2000). The .com bust had a huge impact on the tech sector, but the Enron & Worldcom scandals hit the rest of the economy hard. It was a modest recession, but it wiped out a huge amount of wealth held by "main street" investors. It was bad enough that Bush, a very, very pro-business president, signed into law the Sarbanes-Oxley Act, which is widely criticized as an onerous and needless regulation by conservatives.
  - jonwachob91 8y ago
    https://en.wikipedia.org/wiki/Dot-com_bubble https://en.wikipedia.org/wiki/Dot-com_bubble
    - salviasloth 8y ago
      Yeah I know what the dot-com bubble is, thanks.
  - adventured 8y ago
    During the second half of the Clinton Admin, there was an extreme stock market bubble, which began to crash at the end of his second term. Bush inherited a guaranteed recession, and then 9/11 occurred on top of that context. Which then led the Fed to make stupid mistakes on interest rates, which helped spur immense asset inflation in the real estate sector, which then collapsed, which led to the great recession, which got Obama elected with a Dem super majority to go with it, which delivered the ACA. Then the Fed lowered interest rates to basically zero, or below zero when QE is considered, for the better part of a decade to combat the great recession, which spurred / enabled extreme corporate debt binging, extreme government debt binging, and re-inflated both the stock market and real estate asset bubbles. The debasement of the dollar due to the Fed's abusive interest rate policies during the ~2001-2004 period also dramatically spiked both healthcare costs and college costs, while eroding US purchasing power and the US standard of living (represented by the simultaneous global skyrocketing of GDP in all other nations, as well as being represented in the epic commodity bubble (commodities are mostly priced in dollars)). Now we're waiting for the fallout from another round of idiotic Fed policies. All in the name of initially trying to avoid or skate around a rather mild recession in the GW Bush first term - because no politician can tolerate a recession these days - the assholes at the Fed delivered more than a decade of immense suffering with more to come.
    - creaghpatr 8y ago
      100% agree, I'd put the blame on the Fed before Trump, Obama, Bush, or Clinton. If I had to choose it would be Bush for being president when TARP was passed but really the blame there falls on the Congress.
      - maxxxxx 8y ago
        You are probably right but people tend to give credit to presidents when things go well so they also should get the blame. Justified or unjustified.
      - mywittyname 8y ago
        TARP would have been signed by Obama (or McCain). The fact that the US has enjoyed a economic boom post 2008, while the rest of the world struggled for several more years (especially Europe), can be considered evidence that it was the correct action to take at the time. The current expansion is the second longest in modern history.
- ForRealsies 8y ago
  Whats the current betting odds For/Against Trump winning in 2020?
- ams6110 8y ago
  Trump benefits from Obama's policies by reversing them.
  - maxxxxx 8y ago
    Whatever Trump is doing will only have an impact later. Right now he is taking credit for what Obama did while at the same claiming they were bad.
    - notadoc 8y ago
      > taking credit for what Obama did while at the same claiming they were bad. Schrodinger's Obama Policies?
    - emerged 8y ago
      The neat thing about macro scale dynamics (e.g. economics) is you can always choose to blame the current or previous powers, depending on which provides support for your political preferences.
  - megaman22 8y ago
    It's startling what the growth on my 401k has done since November 2016. Essentially flat for years before, then immediately jumping, once the election results were in. Q1 2018 was a bit sluggish, but it's back on that tragectory again. Even outside the market, people are hiring again, companies are making investments, it's a hell of a turn around.
    - mbesto 8y ago
      It's startling what my 401k/IRA did from 2012 to 2014: https://imgur.com/a/M7PZn2m https://imgur.com/a/M7PZn2m What's your point? > then immediately jumping, once the election results were in. So your long-term retirement investment fund which should span over 20+ years increased somewhat drastically over a small percentage of it's perceived lifetime. Why is that superbly beneficial for long term fund performance? > Even outside the market, people are hiring again When did they stop hiring? Source data?
- galieos_ghost 8y ago
  The housing bubble was caused by Clinton's policies that modified the CRA resulting in all those crappy loans
  - acjohnson55 8y ago
    I can't validate the truth of that perspective, but there was the better part of a decade to correct this issue.
    - ben509 8y ago
      And the democrats fought tooth and nail to prevent corrections for that decade because those policies, in the short term, appeared to help their constituents. They wanted to get lots of new homeowners homes, but those homeowners often found they couldn't afford the mortgages in the long run, which is exactly why the banks hadn't been making those loans prior to government meddling. Those mortgage problems were, naturally, exacerbated by the fact that lots of additional demand drove up home prices. For the exact same story, see the ongoing student loan debacle.
      - mhneu 8y ago
        That’s not the story I heard from the finance people who were setting up the securitization. I agree with your broader point: government policy is complex, we need a regulated market system because completely free markets don’t work, so we need a high skilled government that tries hard to get things right — and a legislative system that cares about the government functioning well.
    - bodi 8y ago
      Do you ever get the feeling no one in government wanted the issue corrected?
      - maxxxxx 8y ago
        Exactly. Unfortunately Americans have been trained to believe that one party is right and the other is wrong. The concept that maybe both are wrong or support the same thing is foreign to them. Same with surveillance: It's either Bush's fault or Obama's fault. They don't see the steady progression over the years independently of who is in power.
- forapurpose 8y ago
  It's incredible that nobody in this discussion mentions the massive fraud and incompetence on the part of Wall Street banks, and the deregulation and lack of oversight that allowed it.
  - maxxxxx 8y ago
    I really regret making my comment. It was about presidents getting credit and blame for the consequences of whatever happened before they were in office. It just shows that people are not capable of discussing things without immediately going into their partisan positions.
    - sykh 8y ago
      It’s a sign of how bad things are in the U.S. State something obvious, like you did, that jives with someone’s attachement to a political party and you get irrational responses. The polarization is palpable. People don’t seem to rationally discuss policy. It’s about defending/justifying political parties. It’s the party that matters.
      - mhneu 8y ago
        Mann and Ornstein predicted this and explain its causes.
- jpzisme 8y ago
  Despite partisan bickering, this is a very insightful comment that illustrates a long-standing problem in government, politics, and economics.
mhb 8y ago
Become a good strategy? Pensions for government workers have been a thing for a very long time.
- jjaredsimpson 8y ago
  Pensions are fine if employers accurately discount present wages for the expected payment of future wages, and accurately forecast future population growth to maintain a good ratio of workers to retirees. Some governments seem to be quite bad at this though. States differ in pension liabilities and I haven't looked at the federal level.
  - 3pt14159 8y ago
    It isn't that governments are bad at it, its that they have incentives to fuck it up. It's much easier politically to give the union what it wants and let it be some mess someone cleans up in 20 or 40 years. Only if the electorate is intelligent / educated enough to call bullshit do they temper their bullshitery.
    - leereeves 8y ago
      The electorate prefers to be distracted by Buzz Aldrin's facial ticks, Pence's water bottle, and a fake Meliana blow up doll instead of having a serious discussion about the consequences of policy today, let alone 20 years from now. (Just three recent examples of the nonsense of the day. Yesterday or tomorrow, different nonsense, but always nonsense over serious discussion.)
  - mhb 8y ago
    Probably some governments are bad at it because knowing what will happen in the future, which you need to in order to keep a defined benefit plan solvent, is impossible. Other governments/employers were luckier. But it's not so hard to say that you can do it.
- ebbv 8y ago
  Pensions are not inherently a problem any more than any other form of retirement account is. HN should be above this kind of ignorant rhetoric.
frockington 8y ago
For who will get the blame: Trump will get all the blame for when the stock market goes down and Obama will get all of the credit when it goes up. Look at this Februarys headlines for evidence of that
jghn 8y ago
In fact, even if happens sooner, if there’s any form of a blue wave in 2018 they’ll be blamed as well
ravenscrow 8y ago
> “The essence of this strategy is to take tax policy out of the hands of experts and entrust it to activists. These campaigns do not usually have much credibility with card-carrying economists. ” When it comes to economics and religion, the "experts" and activists tend to be one and the same and neither seems to be credible. https://www.nytimes.com/interactive/projects/cp/opinion/election-night-2016/paul-krugman-the-economic-fallout https://www.nytimes.com/interactive/projects/cp/opinion/elec... One of our the "greatest experts" predicted eternal collapse of the markets after trump's election "If the question is when markets will recover, a first-pass answer is never." and an endless global recession. "So we are very probably looking at a global recession, with no end in sight." > This lag between economic policy and outcomes is a big reason the US has such a disingenuous public debate. Economic policy doesn't cause recessions. The business cycle and the FED raising and lowering interests cause recessions. No matter the economic policies, there will always be a recession. I believe it was jamie dimon who said we usually get one every 8 to 10 years.
- mhneu 8y ago
  No, there are actually experts that we should rely on. Of course no economist is a perfect predicter- predicting the future is hard. Tom Nichols’ book The Death of Expertise is relevant here. —— As for your specific points: - Paul Krugman, on his major predictions, has been incredibly prescient. He was talking about media bothsidesism, a major reason for this political moment, in 1999. He said America was being lied into war in Iraq in 2002. He predicted the effects of stimulus in America and Europe. The guy is a genius and so he becomes a target for his political enemies. (Re the stock prediction: he withdrew this in a few days. It was a minor prediction. The predictions above were long term predictions.) The issue is that conservative economics has been captured by the conservative propaganda machine which amplifies minor corrected predictions like this while ignoring the huge long term mistake that the right’s “economists” made about inflation in response to stimulus. - The business cycle causes recessions, yes. Not sure what you mean by economic policy. But both monetary and fiscal (tax) policy has big effects on entry and exit from recession. And also public debt affects provision of public policies like the social safety net.
s2g 8y ago
Starts to tank under trump. Democrat doesn't miraculously fix it in 2 years. Strong republican congress in 2022. Where have I heard this story before.
davidf18 8y ago
The jobless rates are actually very inaccurate. This article was written May 24 by Larry Summers and another Harvard Economist: A Rescue Plan for a Jobs Crisis in the Heartland https://www.nytimes.com/2018/05/24/opinion/heartland-wage-subsidy-rust-belt.html https://www.nytimes.com/2018/05/24/opinion/heartland-wage-su... "More alarming, America faces a historic crisis of male joblessness in what we call the Eastern Heartland, a band of states that runs from Louisiana north through to Ohio and Michigan." A reason for jobs shortages (e.g., truckers) is because firms are not offering high enough wages.

by mhneu 8y ago

maxxxxx 8y ago

" 2020: policies put in place under this administration will come home to roost during the next administration, which will get the blame." That has often been the case. Bush suffered through Clinton's internet bubble. then Obama suffered through Bush's real estate bubble. Trump now benefits from Obama's policies. We'll see what happens after Trump.

salviasloth 8y ago
Clintons internet bubble?
- maxxxxx 8y ago
  During Clinton's time there was a huge run-up in the stock market fueled b a lot of internet companies. Clinton got all the credit for the growth during that time and then Bush suffered through the predictable collapse.
  - salviasloth 8y ago
    He was making it sound like the bubble was caused by specific Clinton era policies. I'm pretty sure the dot com bubble was largely just a speculative bubble.
    - ohhellno 8y ago
      Al Gore invented the internet as part of that government.
  - mhneu 8y ago
    Luckily for us, Clinton moved the budget toward balance during a good economy. So when the bubble burst, Bush was able to stimulate the economy and cut taxes. The current tax cut increases the national debt during a good economy. So this irresponsibility limits America’s options when this bubble (if it exists) bursts.
    - adventured 8y ago
      The current tax cuts are a trivial part of the deficit problem (to note, I'm against the personal income tax cuts they passed). The US deficit was going to $1 trillion regardless of the tax cuts. The forecast for a deficit explosion due to entitlement costs, long predates the Trump tax cuts. Half of those cuts reset. The primary item in the other half, the corporate income tax cuts, were a necessity to compete with the rest of the planet that has a more typical ~20% rate (including Europe, which has the lowest corporate income tax rates of any region). The deficit is going to $1 trillion, the tax cuts are an average $50-$75 billion per year of that problem over the next ten years. The tax cut is meaningless in that picture. It'll add at worst a trillion to the $30 trillion pile of public debt that will exist in 8-10 more years.
      - forapurpose 8y ago
        Could you provide some factual basis for this? For example, my understanding is that the corporate tax burden in the US was lower than other advance economies; one particular tax, which few paid in full due to loopholes, etc, was higher.
      - mhneu 8y ago
        It's a $3 trillion tax cut over 10 years. They get to $1B by finding an "offset" of $2 billion, which assumes a very optimistic growth estimate, which there was political push to develop. In particular, that offset assumes there is no bubble to pop. Good luck to the US. The yearly budget is $3.8T. Of that, only $1B is discretionary. $3T of tax cuts is three years of the entire discretionary budget. The cut is huge. And that cut wasn't Keynesian stimulus - it came during a good economy. Good luck to the US.
    - 8y ago
  - forapurpose 8y ago
    > During Clinton's time there was a huge run-up in the stock market fueled b a lot of internet companies. I'm not sure the dot-com boom and bust affected the rest of the economy nearly as much as it affected our industry. If there was a recession, it was the smallest in decades: https://tradingeconomics.com/united-states/gdp-growth-annual https://tradingeconomics.com/united-states/gdp-growth-annual
    - mywittyname 8y ago
      The recession happened just before Bush's election (officially starting in March 2000). The .com bust had a huge impact on the tech sector, but the Enron & Worldcom scandals hit the rest of the economy hard. It was a modest recession, but it wiped out a huge amount of wealth held by "main street" investors. It was bad enough that Bush, a very, very pro-business president, signed into law the Sarbanes-Oxley Act, which is widely criticized as an onerous and needless regulation by conservatives.
- jonwachob91 8y ago
  https://en.wikipedia.org/wiki/Dot-com_bubble https://en.wikipedia.org/wiki/Dot-com_bubble
  - salviasloth 8y ago
    Yeah I know what the dot-com bubble is, thanks.
- adventured 8y ago
  During the second half of the Clinton Admin, there was an extreme stock market bubble, which began to crash at the end of his second term. Bush inherited a guaranteed recession, and then 9/11 occurred on top of that context. Which then led the Fed to make stupid mistakes on interest rates, which helped spur immense asset inflation in the real estate sector, which then collapsed, which led to the great recession, which got Obama elected with a Dem super majority to go with it, which delivered the ACA. Then the Fed lowered interest rates to basically zero, or below zero when QE is considered, for the better part of a decade to combat the great recession, which spurred / enabled extreme corporate debt binging, extreme government debt binging, and re-inflated both the stock market and real estate asset bubbles. The debasement of the dollar due to the Fed's abusive interest rate policies during the ~2001-2004 period also dramatically spiked both healthcare costs and college costs, while eroding US purchasing power and the US standard of living (represented by the simultaneous global skyrocketing of GDP in all other nations, as well as being represented in the epic commodity bubble (commodities are mostly priced in dollars)). Now we're waiting for the fallout from another round of idiotic Fed policies. All in the name of initially trying to avoid or skate around a rather mild recession in the GW Bush first term - because no politician can tolerate a recession these days - the assholes at the Fed delivered more than a decade of immense suffering with more to come.
  - creaghpatr 8y ago
    100% agree, I'd put the blame on the Fed before Trump, Obama, Bush, or Clinton. If I had to choose it would be Bush for being president when TARP was passed but really the blame there falls on the Congress.
    - maxxxxx 8y ago
      You are probably right but people tend to give credit to presidents when things go well so they also should get the blame. Justified or unjustified.
    - mywittyname 8y ago
      TARP would have been signed by Obama (or McCain). The fact that the US has enjoyed a economic boom post 2008, while the rest of the world struggled for several more years (especially Europe), can be considered evidence that it was the correct action to take at the time. The current expansion is the second longest in modern history.
ForRealsies 8y ago
Whats the current betting odds For/Against Trump winning in 2020?
ams6110 8y ago
Trump benefits from Obama's policies by reversing them.
- maxxxxx 8y ago
  Whatever Trump is doing will only have an impact later. Right now he is taking credit for what Obama did while at the same claiming they were bad.
  - notadoc 8y ago
    > taking credit for what Obama did while at the same claiming they were bad. Schrodinger's Obama Policies?
  - emerged 8y ago
    The neat thing about macro scale dynamics (e.g. economics) is you can always choose to blame the current or previous powers, depending on which provides support for your political preferences.
- megaman22 8y ago
  It's startling what the growth on my 401k has done since November 2016. Essentially flat for years before, then immediately jumping, once the election results were in. Q1 2018 was a bit sluggish, but it's back on that tragectory again. Even outside the market, people are hiring again, companies are making investments, it's a hell of a turn around.
  - mbesto 8y ago
    It's startling what my 401k/IRA did from 2012 to 2014: https://imgur.com/a/M7PZn2m https://imgur.com/a/M7PZn2m What's your point? > then immediately jumping, once the election results were in. So your long-term retirement investment fund which should span over 20+ years increased somewhat drastically over a small percentage of it's perceived lifetime. Why is that superbly beneficial for long term fund performance? > Even outside the market, people are hiring again When did they stop hiring? Source data?
galieos_ghost 8y ago
The housing bubble was caused by Clinton's policies that modified the CRA resulting in all those crappy loans
- acjohnson55 8y ago
  I can't validate the truth of that perspective, but there was the better part of a decade to correct this issue.
  - ben509 8y ago
    And the democrats fought tooth and nail to prevent corrections for that decade because those policies, in the short term, appeared to help their constituents. They wanted to get lots of new homeowners homes, but those homeowners often found they couldn't afford the mortgages in the long run, which is exactly why the banks hadn't been making those loans prior to government meddling. Those mortgage problems were, naturally, exacerbated by the fact that lots of additional demand drove up home prices. For the exact same story, see the ongoing student loan debacle.
    - mhneu 8y ago
      That’s not the story I heard from the finance people who were setting up the securitization. I agree with your broader point: government policy is complex, we need a regulated market system because completely free markets don’t work, so we need a high skilled government that tries hard to get things right — and a legislative system that cares about the government functioning well.
  - bodi 8y ago
    Do you ever get the feeling no one in government wanted the issue corrected?
    - maxxxxx 8y ago
      Exactly. Unfortunately Americans have been trained to believe that one party is right and the other is wrong. The concept that maybe both are wrong or support the same thing is foreign to them. Same with surveillance: It's either Bush's fault or Obama's fault. They don't see the steady progression over the years independently of who is in power.
forapurpose 8y ago
It's incredible that nobody in this discussion mentions the massive fraud and incompetence on the part of Wall Street banks, and the deregulation and lack of oversight that allowed it.
- maxxxxx 8y ago
  I really regret making my comment. It was about presidents getting credit and blame for the consequences of whatever happened before they were in office. It just shows that people are not capable of discussing things without immediately going into their partisan positions.
  - sykh 8y ago
    It’s a sign of how bad things are in the U.S. State something obvious, like you did, that jives with someone’s attachement to a political party and you get irrational responses. The polarization is palpable. People don’t seem to rationally discuss policy. It’s about defending/justifying political parties. It’s the party that matters.
    - mhneu 8y ago
      Mann and Ornstein predicted this and explain its causes.
jpzisme 8y ago
Despite partisan bickering, this is a very insightful comment that illustrates a long-standing problem in government, politics, and economics.

mhb 8y ago

Become a good strategy? Pensions for government workers have been a thing for a very long time.

jjaredsimpson 8y ago
Pensions are fine if employers accurately discount present wages for the expected payment of future wages, and accurately forecast future population growth to maintain a good ratio of workers to retirees. Some governments seem to be quite bad at this though. States differ in pension liabilities and I haven't looked at the federal level.
- 3pt14159 8y ago
  It isn't that governments are bad at it, its that they have incentives to fuck it up. It's much easier politically to give the union what it wants and let it be some mess someone cleans up in 20 or 40 years. Only if the electorate is intelligent / educated enough to call bullshit do they temper their bullshitery.
  - leereeves 8y ago
    The electorate prefers to be distracted by Buzz Aldrin's facial ticks, Pence's water bottle, and a fake Meliana blow up doll instead of having a serious discussion about the consequences of policy today, let alone 20 years from now. (Just three recent examples of the nonsense of the day. Yesterday or tomorrow, different nonsense, but always nonsense over serious discussion.)
- mhb 8y ago
  Probably some governments are bad at it because knowing what will happen in the future, which you need to in order to keep a defined benefit plan solvent, is impossible. Other governments/employers were luckier. But it's not so hard to say that you can do it.
ebbv 8y ago
Pensions are not inherently a problem any more than any other form of retirement account is. HN should be above this kind of ignorant rhetoric.

frockington 8y ago

For who will get the blame: Trump will get all the blame for when the stock market goes down and Obama will get all of the credit when it goes up. Look at this Februarys headlines for evidence of that

jghn 8y ago

In fact, even if happens sooner, if there’s any form of a blue wave in 2018 they’ll be blamed as well

ravenscrow 8y ago

> “The essence of this strategy is to take tax policy out of the hands of experts and entrust it to activists. These campaigns do not usually have much credibility with card-carrying economists. ” When it comes to economics and religion, the "experts" and activists tend to be one and the same and neither seems to be credible. https://www.nytimes.com/interactive/projects/cp/opinion/election-night-2016/paul-krugman-the-economic-fallout https://www.nytimes.com/interactive/projects/cp/opinion/elec... One of our the "greatest experts" predicted eternal collapse of the markets after trump's election "If the question is when markets will recover, a first-pass answer is never." and an endless global recession. "So we are very probably looking at a global recession, with no end in sight." > This lag between economic policy and outcomes is a big reason the US has such a disingenuous public debate. Economic policy doesn't cause recessions. The business cycle and the FED raising and lowering interests cause recessions. No matter the economic policies, there will always be a recession. I believe it was jamie dimon who said we usually get one every 8 to 10 years.

mhneu 8y ago
No, there are actually experts that we should rely on. Of course no economist is a perfect predicter- predicting the future is hard. Tom Nichols’ book The Death of Expertise is relevant here. —— As for your specific points: - Paul Krugman, on his major predictions, has been incredibly prescient. He was talking about media bothsidesism, a major reason for this political moment, in 1999. He said America was being lied into war in Iraq in 2002. He predicted the effects of stimulus in America and Europe. The guy is a genius and so he becomes a target for his political enemies. (Re the stock prediction: he withdrew this in a few days. It was a minor prediction. The predictions above were long term predictions.) The issue is that conservative economics has been captured by the conservative propaganda machine which amplifies minor corrected predictions like this while ignoring the huge long term mistake that the right’s “economists” made about inflation in response to stimulus. - The business cycle causes recessions, yes. Not sure what you mean by economic policy. But both monetary and fiscal (tax) policy has big effects on entry and exit from recession. And also public debt affects provision of public policies like the social safety net.

s2g 8y ago

Starts to tank under trump. Democrat doesn't miraculously fix it in 2 years. Strong republican congress in 2022. Where have I heard this story before.

davidf18 8y ago

The jobless rates are actually very inaccurate. This article was written May 24 by Larry Summers and another Harvard Economist: A Rescue Plan for a Jobs Crisis in the Heartland https://www.nytimes.com/2018/05/24/opinion/heartland-wage-subsidy-rust-belt.html https://www.nytimes.com/2018/05/24/opinion/heartland-wage-su... "More alarming, America faces a historic crisis of male joblessness in what we call the Eastern Heartland, a band of states that runs from Louisiana north through to Ohio and Michigan." A reason for jobs shortages (e.g., truckers) is because firms are not offering high enough wages.