6 ms·

Honestly I don't think the issue is that another recession is coming. It's going to be the fourth or fifth serious economic crisis I've experienced in my lifeti

by epups 4y ago

Honestly I don't think the issue is that another recession is coming. It's going to be the fourth or fifth serious economic crisis I've experienced in my lifetime. What worries me is that the quality of our political leadership and in general our ability to diagnose and address complex issues is, in my view, at an all-time low.

atlgator 4y ago
They are downplaying this whole thing heading into the midterm elections. Inflation is transitory, it's the supply chain, it's Putin, it's gas station owners and oil companies, we're doing a soft landing. These are all cover stories for doing nothing. Low interest rates + $5T in bond purchases fueled remarkable growth and all time high employment. Raising interest rates and selling those bonds will do the opposite. This reality is uncomfortable heading into midterm elections, which is why the Fed has largely done nothing to curb. And yes, 1.5% is nothing.
- seanmcdirmid 4y ago
  They really don’t have much of a choice. None of those issues can be solved in the near term, and many of them were setup 10-15 years ago. Both parties have been irresponsible when it comes to spending, interest rates, and inflation. We should have been tightening up on interest rates and taxes during boom times so we could loosen during bust times, but it’s just been loosen loosen loosen since 2001 or so. No one is interested in evening out the economic cycle. And the parties have been irresponsible because we the voters wanted that.
  - worker_person 4y ago
    Gas prices are from day 1 decisions of the current president. The real fun will be when strategic reserve runs out. https://www.washingtonpost.com/business/energy/the-us-is-depleting-its-strategic-petroleum-reserve-faster-than-it-looks/2022/06/17/3b899c40-ee04-11ec-9f90-79df1fb28296_story.html https://www.washingtonpost.com/business/energy/the-us-is-dep...
    - seanmcdirmid 4y ago
      > Gas prices are from day 1 decisions of the current president. The real fun will be when strategic reserve runs out. That simply isn't true at all. The only thing of consequence that Biden did was prevent Albertan oil from more easily being exported to Latin America and Europe by cancelling the keystone pipeline expansion. At the same time, oil producing states were complaining that oil prices were so low that it didn't make sense to invest in production. Now that demand has picked up and Russian oil is off the table, prices are going up worldwide, not just in the USA. The USA's production hasn't changed much since the Trump administration, which hardly changed much since the Obama administration (which has been going down because oil-shale extraction costs couldn't be covered by the price of oil for much of the time). Democrats are blamed when oil is too cheap (because red states depend on oil production jobs), they are also blamed when the price of oil is too high. I'm just going to buy an EV and ignore the whole issue, it isn't worth my time to worry about the price of gas when we don't really have to anymore.
      - jjav 4y ago
        > I'm just going to buy an EV and ignore the whole issue But you can't get away from it because everything that you use that gets transported by someone is getting more expensive.
        seanmcdirmid 4y ago
        Yep. But it is about time we revamped that infrastructure as well. There are huge opportunities in the next couple of decades with respect to transportation (toward electric from trucks and let's get those overhead wires in for our rails already) and labor (automation, productivity increases are our best way out of inflation). However, the expected but worst thing that could happen now is oil crashes down because of a recession (demand playing most of the role in oil's price) and labor becomes cheap again.
- voisin 4y ago
  > fueled remarkable growth Much of which was growth in name only and will prove to be investments in unproductive assets that never would have made it out of the brainstorming session if there was an actual opportunity cost of capital.
  - nathanaldensr 4y ago
    Right; it's "growth" instead of growth.
- danaris 4y ago
  From what I can understand (which I will freely admit is somewhat limited, and biased), it seems to me that the root of the problem is that we let the very wealthy soak up all the economic gains due to productivity over the course of a few decades, while also letting those with more money have more influence over our politics (thus meaning that they had the means to ensure their gains would be locked in, rather than redistributed for the benefit of those who actually created them—ie, the workers). Until we can collectively recognize this and address the staggering socioeconomic inequality in our society, we're going to keep seeing the economy limp and sputter frequently. A healthy economy needs its working class—the vast majority of people in it—to overall have healthy economic situations, enough for at least some disposable income on a regular basis on top of being able to comfortably pay for basic necessities and save a bit for the future. Ideally, it needs that to be the minimum condition, so that everyone in the economy has some genuine discretionary spending capability.
  - claytongulick 4y ago
    The logical extrapolation from what you are saying is command economy / forced mass redistribution to wealth. It's a great exercise to research the effects of this type thing historically.
    - jszymborski 4y ago
      Has this happened often in free democracies? Would be interested in seeing what the outcomes there would be.
    - gpsx 4y ago
      Wage inflation could accomplish this without forced redistribution. I’m hoping we get out if this with more wage inflation than price inflation, but monetary authorities don’t have the control to get a good outcome here (regarding inflation), and business is against it.
    - toomuchtodo 4y ago
      Labor unions and taxes on the wealthy? Works out well. Cutting taxes to wealth inequality reduction is a fool's errand. https://www.cnbc.com/2017/08/09/the-happiest-countries-in-the-world-also-pay-a-lot-in-taxes.html https://www.cnbc.com/2017/08/09/the-happiest-countries-in-th...
- hyperpape 4y ago
  I acknowledge that this data isn't perfect, but here is one measure of market based expectations of inflation: https://twitter.com/conorsen/status/1546855290913660928 https://twitter.com/conorsen/status/1546855290913660928. The market generally factors in a lot of things, it's not looking at 1.5% rates, it's looking at what the fed has effectively committed itself to doing. It's looking at 3% rates by the end of the year.
- roflyear 4y ago
  I mean, gas is a huge part of it. Take away fuel costs and you're left with housing costs and that's really it.
bratbag 4y ago
That or the complexity of our problems is at an all time high. Same result either way though.
UkrainianJew 4y ago
The quality of the political leadership is a direct consequence of what average people want from their leadership. For the past decade or so the modus operandi has been: 1. Print more money, give it to bureaucrats and corporations 2. Toss in some non-monetary issue that will piss of ~50% of the population, while making the other ~50% feel entitled. 3. Promise one half to serve their interests by punishing the other half. 4. Print more money, give more to bureaucrats and corporations. 5. Rinse and repeat. It seemed to work for over a decade: people gave up dreams of retirement, property ownership, having children, we were headed straight for normalizing living with parents while eating factory-produced bug proteins. Thankfully, the black-swan COVID-19 happened, the money printer got too cocky and people finally started to notice a problem. The quality of life will decrease in the short term. But once enough people admit it's a bigger problem than being offended by what somebody on the Internet said, there will be finally demand for competent politicians offering viable solutions.
- RickJWagner 4y ago
  Yes! Notice the Andrew Yang fans are oddly silent lately. Nobody cares to dig too deeply into the 'student loan forgiveness' issue, either. Free money isn't really free.

by epups 4y ago

atlgator 4y ago

They are downplaying this whole thing heading into the midterm elections. Inflation is transitory, it's the supply chain, it's Putin, it's gas station owners and oil companies, we're doing a soft landing. These are all cover stories for doing nothing. Low interest rates + $5T in bond purchases fueled remarkable growth and all time high employment. Raising interest rates and selling those bonds will do the opposite. This reality is uncomfortable heading into midterm elections, which is why the Fed has largely done nothing to curb. And yes, 1.5% is nothing.

seanmcdirmid 4y ago
They really don’t have much of a choice. None of those issues can be solved in the near term, and many of them were setup 10-15 years ago. Both parties have been irresponsible when it comes to spending, interest rates, and inflation. We should have been tightening up on interest rates and taxes during boom times so we could loosen during bust times, but it’s just been loosen loosen loosen since 2001 or so. No one is interested in evening out the economic cycle. And the parties have been irresponsible because we the voters wanted that.
- worker_person 4y ago
  Gas prices are from day 1 decisions of the current president. The real fun will be when strategic reserve runs out. https://www.washingtonpost.com/business/energy/the-us-is-depleting-its-strategic-petroleum-reserve-faster-than-it-looks/2022/06/17/3b899c40-ee04-11ec-9f90-79df1fb28296_story.html https://www.washingtonpost.com/business/energy/the-us-is-dep...
  - seanmcdirmid 4y ago
    > Gas prices are from day 1 decisions of the current president. The real fun will be when strategic reserve runs out. That simply isn't true at all. The only thing of consequence that Biden did was prevent Albertan oil from more easily being exported to Latin America and Europe by cancelling the keystone pipeline expansion. At the same time, oil producing states were complaining that oil prices were so low that it didn't make sense to invest in production. Now that demand has picked up and Russian oil is off the table, prices are going up worldwide, not just in the USA. The USA's production hasn't changed much since the Trump administration, which hardly changed much since the Obama administration (which has been going down because oil-shale extraction costs couldn't be covered by the price of oil for much of the time). Democrats are blamed when oil is too cheap (because red states depend on oil production jobs), they are also blamed when the price of oil is too high. I'm just going to buy an EV and ignore the whole issue, it isn't worth my time to worry about the price of gas when we don't really have to anymore.
    - jjav 4y ago
      > I'm just going to buy an EV and ignore the whole issue But you can't get away from it because everything that you use that gets transported by someone is getting more expensive.
      - seanmcdirmid 4y ago
        Yep. But it is about time we revamped that infrastructure as well. There are huge opportunities in the next couple of decades with respect to transportation (toward electric from trucks and let's get those overhead wires in for our rails already) and labor (automation, productivity increases are our best way out of inflation). However, the expected but worst thing that could happen now is oil crashes down because of a recession (demand playing most of the role in oil's price) and labor becomes cheap again.
voisin 4y ago
> fueled remarkable growth Much of which was growth in name only and will prove to be investments in unproductive assets that never would have made it out of the brainstorming session if there was an actual opportunity cost of capital.
- nathanaldensr 4y ago
  Right; it's "growth" instead of growth.
danaris 4y ago
From what I can understand (which I will freely admit is somewhat limited, and biased), it seems to me that the root of the problem is that we let the very wealthy soak up all the economic gains due to productivity over the course of a few decades, while also letting those with more money have more influence over our politics (thus meaning that they had the means to ensure their gains would be locked in, rather than redistributed for the benefit of those who actually created them—ie, the workers). Until we can collectively recognize this and address the staggering socioeconomic inequality in our society, we're going to keep seeing the economy limp and sputter frequently. A healthy economy needs its working class—the vast majority of people in it—to overall have healthy economic situations, enough for at least some disposable income on a regular basis on top of being able to comfortably pay for basic necessities and save a bit for the future. Ideally, it needs that to be the minimum condition, so that everyone in the economy has some genuine discretionary spending capability.
- claytongulick 4y ago
  The logical extrapolation from what you are saying is command economy / forced mass redistribution to wealth. It's a great exercise to research the effects of this type thing historically.
  - jszymborski 4y ago
    Has this happened often in free democracies? Would be interested in seeing what the outcomes there would be.
  - gpsx 4y ago
    Wage inflation could accomplish this without forced redistribution. I’m hoping we get out if this with more wage inflation than price inflation, but monetary authorities don’t have the control to get a good outcome here (regarding inflation), and business is against it.
  - toomuchtodo 4y ago
    Labor unions and taxes on the wealthy? Works out well. Cutting taxes to wealth inequality reduction is a fool's errand. https://www.cnbc.com/2017/08/09/the-happiest-countries-in-the-world-also-pay-a-lot-in-taxes.html https://www.cnbc.com/2017/08/09/the-happiest-countries-in-th...
hyperpape 4y ago
I acknowledge that this data isn't perfect, but here is one measure of market based expectations of inflation: https://twitter.com/conorsen/status/1546855290913660928 https://twitter.com/conorsen/status/1546855290913660928. The market generally factors in a lot of things, it's not looking at 1.5% rates, it's looking at what the fed has effectively committed itself to doing. It's looking at 3% rates by the end of the year.
roflyear 4y ago
I mean, gas is a huge part of it. Take away fuel costs and you're left with housing costs and that's really it.

bratbag 4y ago

That or the complexity of our problems is at an all time high. Same result either way though.

UkrainianJew 4y ago

The quality of the political leadership is a direct consequence of what average people want from their leadership. For the past decade or so the modus operandi has been: 1. Print more money, give it to bureaucrats and corporations 2. Toss in some non-monetary issue that will piss of ~50% of the population, while making the other ~50% feel entitled. 3. Promise one half to serve their interests by punishing the other half. 4. Print more money, give more to bureaucrats and corporations. 5. Rinse and repeat. It seemed to work for over a decade: people gave up dreams of retirement, property ownership, having children, we were headed straight for normalizing living with parents while eating factory-produced bug proteins. Thankfully, the black-swan COVID-19 happened, the money printer got too cocky and people finally started to notice a problem. The quality of life will decrease in the short term. But once enough people admit it's a bigger problem than being offended by what somebody on the Internet said, there will be finally demand for competent politicians offering viable solutions.

RickJWagner 4y ago
Yes! Notice the Andrew Yang fans are oddly silent lately. Nobody cares to dig too deeply into the 'student loan forgiveness' issue, either. Free money isn't really free.