4 ms·

>Of course this is going to end terribly. It is basically guaranteed to do so unless the business cycle has stopped for good (unlikely). The question in my min

>Of course this is going to end terribly. It is basically guaranteed to do so unless the business cycle has stopped for good (unlikely). The question in my mind is who the scapegoat is going to be, and how much denial there's going to be if the real effects of slowing growth start becoming apparent.

ttul 8y ago
With any luck (sorry), the crash happens just prior to Election Day.
- williesleg 8y ago
  Not likely. All the new jobs and lower taxes will keep it boosted for a long time.
  - perl4ever 8y ago
    Recent history shows that the Fed starts raising interest rates and then goes just a bit too far. They're like a driver who won't stop rhythmically pressing and releasing the gas pedal, until the passengers get motion sick. In my opinion, the tax cut that has been benefiting the economy is the move away from zero percent interest rates. Lending to banks at below inflation is like a tax that goes directly to them. But when we keep on raising short term rates above inflation, that's going to be like a tax too, and I expect we will promptly get whiplash since the Fed doesn't know when to stop. Maybe I am becoming a crank, because I feel Cassandra-ish, like major macroeconomic problems are so simple but nobody gets it. Feel free to explain why I am totally wrong.
  - pacerwpg 8y ago
    Job growth in the US hasn't really changed considerably since the recession leveled out. It's been painfully steady. https://data.bls.gov/timeseries/CES0000000001?output_view=net_1mth https://data.bls.gov/timeseries/CES0000000001?output_view=ne...
  - ttul 8y ago
    The tax cut is like sugar at a birthday party. It will cause a short term boom, but soon enough that stimulant will be adjusted for, and when the recession comes, the government will have less flexibility to use fiscal stimulus to restart growth. Furthermore, to finance that tax cut, a lot of money is being borrowed. When government is out there shilling its bonds, this crowds out investment into corporate bonds and equity, depressing growth.
- perl4ever 8y ago
  I expect the crash happens just after there is an impeachment or election defeat, and everyone draws exactly the wrong conclusion.
panarky 8y ago
> The question in my mind is who the scapegoat is going to be Step 1 - do dumb and harmful things to increase your popularity among ignorant supporters Step 2 - blame the innocent for the inevitable crisis Step 3 - use the crisis you created to justify more dumb and harmful things Step 4 - multiple crises cascade into catastrophe Step 5 - use the catastrophe to justify emergency powers, suspend due process, arrest political opponents, mobilize local militias to "restore law and order"
- AnimalMuppet 8y ago
  That assumes that it's deliberately planned, rather than incompetence. Or, I suppose, it could be incompetence that still knows how to recognize opportunity...
olefoo 8y ago
It will be the fault of the party not in power. The autocrat will demand that his opponent in the general be locked up for it... and so it goes.

ttul 8y ago

With any luck (sorry), the crash happens just prior to Election Day.

williesleg 8y ago
Not likely. All the new jobs and lower taxes will keep it boosted for a long time.
- perl4ever 8y ago
  Recent history shows that the Fed starts raising interest rates and then goes just a bit too far. They're like a driver who won't stop rhythmically pressing and releasing the gas pedal, until the passengers get motion sick. In my opinion, the tax cut that has been benefiting the economy is the move away from zero percent interest rates. Lending to banks at below inflation is like a tax that goes directly to them. But when we keep on raising short term rates above inflation, that's going to be like a tax too, and I expect we will promptly get whiplash since the Fed doesn't know when to stop. Maybe I am becoming a crank, because I feel Cassandra-ish, like major macroeconomic problems are so simple but nobody gets it. Feel free to explain why I am totally wrong.
- pacerwpg 8y ago
  Job growth in the US hasn't really changed considerably since the recession leveled out. It's been painfully steady. https://data.bls.gov/timeseries/CES0000000001?output_view=net_1mth https://data.bls.gov/timeseries/CES0000000001?output_view=ne...
- ttul 8y ago
  The tax cut is like sugar at a birthday party. It will cause a short term boom, but soon enough that stimulant will be adjusted for, and when the recession comes, the government will have less flexibility to use fiscal stimulus to restart growth. Furthermore, to finance that tax cut, a lot of money is being borrowed. When government is out there shilling its bonds, this crowds out investment into corporate bonds and equity, depressing growth.
perl4ever 8y ago
I expect the crash happens just after there is an impeachment or election defeat, and everyone draws exactly the wrong conclusion.

panarky 8y ago

> The question in my mind is who the scapegoat is going to be Step 1 - do dumb and harmful things to increase your popularity among ignorant supporters Step 2 - blame the innocent for the inevitable crisis Step 3 - use the crisis you created to justify more dumb and harmful things Step 4 - multiple crises cascade into catastrophe Step 5 - use the catastrophe to justify emergency powers, suspend due process, arrest political opponents, mobilize local militias to "restore law and order"

AnimalMuppet 8y ago
That assumes that it's deliberately planned, rather than incompetence. Or, I suppose, it could be incompetence that still knows how to recognize opportunity...

olefoo 8y ago

It will be the fault of the party not in power. The autocrat will demand that his opponent in the general be locked up for it... and so it goes.