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" 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
by 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 agoClintons internet bubble?
- maxxxxx 8y agoDuring 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 agoHe 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 agoAl Gore invented the internet as part of that government.
- mhneu 8y agoLuckily 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 agoThe 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 agoCould 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 agoIt'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.
- notadoc 8y ago> when this bubble (if it exists) bursts. This time is not different
- 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 agoThe 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 agohttps://en.wikipedia.org/wiki/Dot-com_bubble https://en.wikipedia.org/wiki/Dot-com_bubble
- salviasloth 8y agoYeah I know what the dot-com bubble is, thanks.
- adventured 8y agoDuring 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 ago100% 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 agoYou 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 agoTARP 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 agoWhats the current betting odds For/Against Trump winning in 2020?
- ams6110 8y agoTrump benefits from Obama's policies by reversing them.
- maxxxxx 8y agoWhatever 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 agoThe 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 agoIt'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 agoIt'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 agoThe housing bubble was caused by Clinton's policies that modified the CRA resulting in all those crappy loans
- acjohnson55 8y agoI can't validate the truth of that perspective, but there was the better part of a decade to correct this issue.
- ben509 8y agoAnd 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 agoThat’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 agoDo you ever get the feeling no one in government wanted the issue corrected?
- maxxxxx 8y agoExactly. 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 agoIt'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 agoI 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 agoIt’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 agoMann and Ornstein predicted this and explain its causes.
- jpzisme 8y agoDespite partisan bickering, this is a very insightful comment that illustrates a long-standing problem in government, politics, and economics.