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And why do you think it would happen under Republicans whose last President was loudly and publicly pressuring the Fed to keep interest rates low? Something no

And why do you think it would happen under Republicans whose last President was loudly and publicly pressuring the Fed to keep interest rates low? Something no Democratic President (or other Republican President, for that matter) has ever done.

GaryTang 5y ago
For that reason exactly — Trump had to scream and pout publicly in order to keep rates down. Meanwhile, Democrats operate with much more tact & better PR.
- legolas2412 5y ago
  Yeah, I am no trump supporter but found this whole affair hilarious. Federal reserve kept the interest rate near zero from 2008-2015, and only started raising them rapidly in 2016. To a neutral observer, it felt political that they didn't start raising rates in 2012, and instead started QE3 which was as big as QE1 and QE2 combined!
pclmulqdq 5y ago
Fed chairs have always received a lot of political pressure from the ruling party. Most administrations do it quietly. Yellen was particularly cozy with the white house in her day as fed chair, which is why she is now treasury secretary. The past three presidents haven't understood the danger of keeping rates low, but so far it has paid off for them.
- LatteLazy 5y ago
  If something slightly helps you but completely wrecks the whole economy after you've left office, you do it. That's the joy of anglo-style democracy...
  - evgen 5y ago
    Yes unlike to all of those other political systems that are perfectly happy to crash the system now when it hurts less, like..... I am sure we can come up with examples... any day now....
    - LatteLazy 5y ago
      The Northern Europeans don't have the same love of bubble we do. They plan long term. The Chinese are facing the same temptations we are now. At least some of the time they make longer term choices. I won't pretend that's always the case, but at least some of the time it is (eg the current Evergrande situation). They have their own political issues so I'm definitely not saying we should just copy them. But their ability to plan more than 2 years ahead is a major advantage they have over us...
      - hnfong 5y ago
        It can be argued that Evergrande being allowed to take on so much debt is actually evidence of Chinese officials not taking a long view on things. Presumably the pressure to pump up the GDP was so great in previous years (not unlike executives in capitalist America with their quarterly reports) that they allowed corporations to become what they currently are.
        evgen 5y ago
        Exactly. Evergrande is simply the tip of the iceberg. There is a huge amount of bad debt in the Chinese banking system that has been hidden for various reasons and while the most obvious examples are starting to explode the big fear (for Chinese leadership as well as foreign markets) is that once the first dominos start to fall the entire rotten edifice might collapse. China was an extremely bad example to pull and to be honest was just the sort of example I was hoping someone would bring up as a contrast to 'anglo-style democracies' because it is so easy to tear apart.
        LatteLazy 5y ago
        We can back and forth about whether Evergrande was well managed or well regulated. I mostly agree if that helps. But the point I was making is that when a big company goes bankrupt, at least in this case, the CCP let it happen and didn't just keep it alive on zero interest loans. That's the right decision in the long term but it's painful in the short term. That's a decision the US and UK have been unwilling to make since 2008.
- imtringued 5y ago
  I don't know what you mean by keeping rates low. Interest rates have been going down for a long time. 0% is just another boring destination as 1% was.
  - pclmulqdq 5y ago
    0% is fundamentally different than 1%. Modern monetary theory disagrees, but there is definitely a big difference between "cheap" and "free." Also, I mean since 2008. Pre-2008, rates were pretty healthy, but central banks haven't had the courage to raise them back to that level. Economically speaking, we are not in a crisis, and we have not been for a long time.

GaryTang 5y ago

For that reason exactly — Trump had to scream and pout publicly in order to keep rates down. Meanwhile, Democrats operate with much more tact & better PR.

legolas2412 5y ago
Yeah, I am no trump supporter but found this whole affair hilarious. Federal reserve kept the interest rate near zero from 2008-2015, and only started raising them rapidly in 2016. To a neutral observer, it felt political that they didn't start raising rates in 2012, and instead started QE3 which was as big as QE1 and QE2 combined!

pclmulqdq 5y ago

Fed chairs have always received a lot of political pressure from the ruling party. Most administrations do it quietly. Yellen was particularly cozy with the white house in her day as fed chair, which is why she is now treasury secretary. The past three presidents haven't understood the danger of keeping rates low, but so far it has paid off for them.

LatteLazy 5y ago
If something slightly helps you but completely wrecks the whole economy after you've left office, you do it. That's the joy of anglo-style democracy...
- evgen 5y ago
  Yes unlike to all of those other political systems that are perfectly happy to crash the system now when it hurts less, like..... I am sure we can come up with examples... any day now....
  - LatteLazy 5y ago
    The Northern Europeans don't have the same love of bubble we do. They plan long term. The Chinese are facing the same temptations we are now. At least some of the time they make longer term choices. I won't pretend that's always the case, but at least some of the time it is (eg the current Evergrande situation). They have their own political issues so I'm definitely not saying we should just copy them. But their ability to plan more than 2 years ahead is a major advantage they have over us...
    - hnfong 5y ago
      It can be argued that Evergrande being allowed to take on so much debt is actually evidence of Chinese officials not taking a long view on things. Presumably the pressure to pump up the GDP was so great in previous years (not unlike executives in capitalist America with their quarterly reports) that they allowed corporations to become what they currently are.
      - evgen 5y ago
        Exactly. Evergrande is simply the tip of the iceberg. There is a huge amount of bad debt in the Chinese banking system that has been hidden for various reasons and while the most obvious examples are starting to explode the big fear (for Chinese leadership as well as foreign markets) is that once the first dominos start to fall the entire rotten edifice might collapse. China was an extremely bad example to pull and to be honest was just the sort of example I was hoping someone would bring up as a contrast to 'anglo-style democracies' because it is so easy to tear apart.
      - LatteLazy 5y ago
        We can back and forth about whether Evergrande was well managed or well regulated. I mostly agree if that helps. But the point I was making is that when a big company goes bankrupt, at least in this case, the CCP let it happen and didn't just keep it alive on zero interest loans. That's the right decision in the long term but it's painful in the short term. That's a decision the US and UK have been unwilling to make since 2008.
imtringued 5y ago
I don't know what you mean by keeping rates low. Interest rates have been going down for a long time. 0% is just another boring destination as 1% was.
- pclmulqdq 5y ago
  0% is fundamentally different than 1%. Modern monetary theory disagrees, but there is definitely a big difference between "cheap" and "free." Also, I mean since 2008. Pre-2008, rates were pretty healthy, but central banks haven't had the courage to raise them back to that level. Economically speaking, we are not in a crisis, and we have not been for a long time.