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Thread: The US Recovery

  1. #916
    Senior Contributor DOR's Avatar
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    Quote Originally Posted by tbm3fan View Post
    Right, so it is stagnating and has been for a very long time before your point in time. In short the standard of living has also stagnated for about as long.
    Yeah, so why not kick standards of living while they’re down?
    Trust me?
    I'm an economist!

  2. #917
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    Quote Originally Posted by DOR View Post
    Yeah, so why not kick standards of living while they’re down?
    Sigh. You are too academic and too far removed from the streets to really see anymore.

    You talk more like a CEO than a guy who once made $30/hour and is now struggling at $15/hour and no good prospects anywhere near where he and his family lives.

    You REALLY need to get down to the street level for a few months in the Rust Belt. I'd actually prescribe that for you.

  3. #918
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    All well and good but so what! Compare for me the minimum to 1950 after adjusting it for inflation. Bet it hasn't increased more than a few pennies if that. Tell me what a typical American worker makes today and compare it to 40 years ago adjusted for inflation. Bet it hasn't increased. Standard of living stagnant over those 40 years.

    How does any of this benefit the average American worker who has lost unions, who has been prevented from now filing class action suits when contracts call for mandatory arbitration.

    How does this reconcile with the repeal of corporate regulations that tried to keep the playing field from tilting all the way to corporations. Especially now since corporations are intent on forming oligopolies with total control over pricing?

    Frankly I think those numbers mean very little to almost all Americans outside a CEO or large shareholders.

    Yeah we have jobs but too bad there are no good jobs in the country for the average American. This is the kind of stuff made to order for Trump to leverage American against American.

    I think US recovery is in the end a little misleading.
    one of the books i just finished is "Us Vs Them" by Ian Bremmer:

    https://www.amazon.com/Us-vs-Them-Fa.../dp/0525533184

    pretty much addressing this. a globalist talking about how globalism has failed, and how it will continue failing until there's a true sea-change in the way we do business.

    globalism has succeeded in making the world economy far more efficient, but has placed immense downward pressure on wages in the developed world. domestic politics in the US, instead of ameliorating these concerns, have worsened them by heavily favoring capital. now there's a backlash, ie Brexit and Trump.

    Bremmer takes a pretty dark view in that he does not think this is a situation that will get better anytime soon-- that it will take the elites FEELING the pain, as opposed to seeing it, to start changing things.

    and that it will be far worse in developing nations.
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

  4. #919
    Defense ProfessionalSenior Contributor tbm3fan's Avatar
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    Another recent comment here from Robert Reich

    The official rate of unemployment in America has plunged to a remarkably low 3.8%. The Federal Reserve forecasts that the unemployment rate will reach 3.5% by the end of the year.

    But the official rate hides more troubling realities: legions of college grads overqualified for their jobs, a growing number of contract workers with no job security, and an army of part-time workers desperate for full-time jobs. Almost 80% of Americans say they live from paycheck to paycheck, many not knowing how big their next one will be.

    Blanketing all of this are stagnant wages and vanishing job benefits. The typical American worker now earns around $44,500 a year, not much more than what the typical worker earned in 40 years ago, adjusted for inflation. Although the US economy continues to grow, most of the gains have been going to a relatively few top executives of large companies, financiers, and inventors and owners of digital devices.

    America doesn’t have a jobs crisis. It has a good jobs crisis...

    http://www.talkmarkets.com/content/e...re?post=184752

  5. #920
    Senior Contributor DOR's Avatar
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    Quote Originally Posted by tbm3fan View Post
    Sigh. You are too academic and too far removed from the streets to really see anymore.

    You talk more like a CEO than a guy who once made $30/hour and is now struggling at $15/hour and no good prospects anywhere near where he and his family lives.

    You REALLY need to get down to the street level for a few months in the Rust Belt. I'd actually prescribe that for you.
    I do have more in common with CEOs than hourly wage earners. That's why I better understand the issue. What's your excuse?
    By the way, I just spent a week in McHenry, Mississippi. Go ahead and look it up, it's about 30 miles north of Biloxi.
    Trust me?
    I'm an economist!

  6. #921
    Senior Contributor DOR's Avatar
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    The regularly scheduled revisions to US second quarter GDP figures added $9.4 billion to the economy, bumping up real growth by 0.04 percentage points, to 2.87% year-on-year. The quarter-to-quarter annualized pace rose a notch, to 4.2%.

    Private consumption dipped by 0.05 percentage points while capital investment rose 0.2 points. CAP increase was mainly in non-residential structures.

    For the first half of the year, the economy grew 2.7%. Private consumption was up 2.5% on the back of strong durable goods sales. Investment rose 5.5%, exports 5% and imports 4.6%. Federal spending was up 2.1% and total government consumption expenditure by 1%.

    Year-to-date, unemployment is averaging 4%, one half point lower than January-June 2017. Inflation, at 2.5%, is three tenths higher.
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  7. #922
    Senior Contributor DOR's Avatar
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    Just in time for the elections ...

    "The federal budget deficit was $895 billion for the first 11 months of fiscal year 2018, the Congressional Budget Office estimates, $222 billion more than the shortfall recorded during the same period last year. Revenues were 1 percent higher than in the same period in fiscal year 2017, but outlays rose by about 7 percent."

    That's a budget deficit 33% larger than before.

    Fiscal conservatives, anyone?

    The good news is that individuals are paying 7.1% more than a year ago, and corporate tax payments fell by 30.4%. (Income from other sources fell 6.4%.)

    Did I say 'good news' ? Well, it is if you're a company rather than an individual. If you're just plain folk, well, you're screwed.

    https://www.cbo.gov/system/files?fil.../54442-MBR.pdf
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  8. #923
    Senior Contributor DOR's Avatar
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    10 Years On

    Ten years ago this month, the Bureau of Labor Statistics reported that 441,000 people had filed first-time unemployment; last week, it was less than half that number, 205,000. That figure is 53.7% lower than in September 2008. It is also the lowest recorded number since June 1969, nearly half a century ago. Bear in mind that the labor force back then was almost exactly half as large as it is today.

    But, this week isn't about the Summer of '69, but rather about The End of The World As We Know It, also known as the Great North Atlantic Financial Crisis of 2007-09.

    So, how are we doing and where are all those people who were predicting doom and gloom?

    • The economy is 17.5% larger, in real terms, than in 2008.
    • Unemployment has been below 4% for four of the past five months, that is, less than half of the rate of 10 years ago.
    • Inflation finally crawled above 2% again a year ago, but slipped by half a point in recent months. +15.2% over 10 years.
    • Retail sales are up 18.7% in real terms.
    • Manufacturing wages are 20.6% higher than in 2008, construction pay 25.8%.



    The budget deficit as a percent of GDP is seven percentage points lower this year (but, rising quickly). The main reason is that incomes have recovered so well that taxes from personal income rose 31.9%. If you remember all those recent reports about record corporate profits and think that the same would be true on that side of the street, think again. Taxes collected from corporations are down 26% from 2008.

    The astonishing thing is what didn't happen. Every Austrian / monetarist / supply-sider knew, with great confidence, that any attempt to drive up demand through government action would instantly result in hyper inflation, the destruction of the value of the dollar and the collapse of standards of living and the global economy. Gold would be the only safe harbor (but, the price since then has risen almost exactly in line with nominal GDP).

    The Keynesians, however, believed that the biggest threat was the loss of demand, and that leaving it to 'the market' would only result in a downward spiral, a la the 1930s. So, the government recapitalized the banks, bailed out the auto industry and jacked up money supply growth by half.

    And, it worked.

    I wonder where the 10 year reunion of the doom and gloom crowd is being held?
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  9. #924
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    I wonder where the 10 year reunion of the doom and gloom crowd is being held?
    they're in the administration now, pushing for tax cuts.

    http://nymag.com/daily/intelligencer...verything.html

    one funny end-result is that with the utter bad faith of the supposed deficit hawks/inflationists have been demonstrated over and over again, Dems will give exactly zero craps about the Paul Ryan types the next time Dems have power.
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

  10. #925
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    Quote Originally Posted by DOR View Post
    I wonder where the 10 year reunion of the doom and gloom crowd is being held?
    Chez moi, all welcome.

  11. #926
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    the irony is that while the doom-and-gloom crowd were and are still wrong about the threat of debt, they would be less wrong if they reared up on their hind legs regarding the issue today. (they were spectacularly wrong during the depths of the Great Recession; now, the threat of debt is that it will be less easy to come up with the political will to inject government spending during the next recession. you're supposed to be paying down the deficit during the good times.)

    but of course the people screeching about how the US was going to turn into Greece back then are now talking about how it's just great to have a tax cut that's twice the size of the much-feared stimulus.
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

  12. #927
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    regarding the political will for the next bailout/stimulus, robert samuelson has a new piece below.

    https://www.washingtonpost.com/opini...57f_story.html

    All during the 2008-2009 financial crisis, Americans were told the government was saving Wall Street not to protect overpaid bankers but to help Main Street avoid a second Great Depression. It was a hard case to make. However valid the logic, it was overwhelmed by infuriating realities — the government was pouring tens of billions of dollars into the financial system while, in early 2009, 500,000 or more Americans were losing their jobs every month. Naturally, people felt bitter and betrayed.

    Ten years after the financial crisis, the first responders — Henry Paulson, treasury secretary under President George W. Bush; Timothy Geithner, treasury secretary under President Barack Obama; and Ben Bernanke, former chairman of the Federal Reserve Board — are confessing that this political and public relations failure was their greatest setback...

    The housing boom was fated to implode. Home buyers had paid too much on the (false) assumption that prices would rise indefinitely. As real estate valuations crested in 2006, homeowners had to divert more of their income to repaying their mortgages and home-equity loans. Other consumer spending suffered. By itself, this might have triggered a recession, possibly a severe one. But Bernanke and others believe that the popping of the housing bubble by itself would not have caused a recession as destructive as what actually occurred.

    The difference, they argue, reflects the side effects of financial speculation: reliance of banks and others on short-term funding and the proliferation of arcane securities. What might have been a serious recession turned into an almost-depression. Panic seized many financial markets. Securities were dumped; their prices fell. “The severity of the recession cannot be explained by a deterioration in housing and consumer finances alone,” Bernanke recently wrote on his blog...

    How do you protect the system without seeming to reward the guilty?
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

  13. #928
    Senior Contributor GVChamp's Avatar
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    Why are you lumping Monetarists in with supply-siders and Austrians? Monetarists are practically the exact opposite of Austrians. Supply-siders are their own thing, it's like trying to say you can't be a Christian and a Bears Fan.

    Re: post above mine.
    Here's the paradox. People think the recession was caused by excessive risk-taking. That's entirely the opposite. The recession was caused by fear in response to possible losses caused by excessive risk-taking.
    It's like driving too fast and getting into a car accident, then deciding you will never leave the house again. You will definitely run out of money, but it wasn't the car accident that caused that: it's because you quit your job.
    Last edited by GVChamp; 17 Sep 18, at 13:59.
    "The great questions of the day will not be settled by means of speeches and majority decisions but by iron and blood"-Otto Von Bismarck

  14. #929
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    What we should have learned from 2008

    https://www.foreignaffairs.com/artic...isis-next-time

  15. #930
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    GVChamp,

    Why are you lumping Monetarists in with supply-siders and Austrians? Monetarists are practically the exact opposite of Austrians. Supply-siders are their own thing, it's like trying to say you can't be a Christian and a Bears Fan.
    the problem is that i don't think there's really any strict Monetarists anymore: the Fed response to the Great Recession showed the limits of monetary policy for one, and for another, many conservatives started lumping Fed action as "government overreach" and went all the way to Austrian/neo-classical school.

    so the same Republicans who hated the idea of stimulus were also the ones raging against the bailout or Fed liquidity action.

    the idea of political will is the same, though. putting the US into a deeper deficit hole for nominal economic gain (in a time of economic growth, to boot) is foolish but not an utter disaster; similar to what you mention, the real issue is when there IS a severe recession and this paralyzes people from acting then. the debt itself is not the problem, it's how people act towards it.
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

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