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    Trump's Economy

    First Quarter 2018:
    Now, it’s Trump’s economy



    The US economy grew 2.86% year-on-year in the first quarter of 2018, three tenths of a point faster than in the previous season. It’s the seventh straight increase in the pace of growth, dating back to Q-2 2016.

    Private consumption, which accounts for more than two-thirds of all economic transactions in the economy, slowed slightly, from 2.85% in Q-4 2017 to 2.63% in the latest period. Demand for services (44.8% of GDP) was up a sluggish 2% over January-March 2017 while goods purchases by households (23.6% of the economy) rose 3.6%.

    Capital investment (a 16.7% slice of the total) rose a healthy 4.9% on the strength of non-residential construction. Government spending (18.1% of GDP) rose 1.2% after falling an average of 0.9% per quarter over the past seven years. Naturally, federal spending (+2%) and particularly defense (+3.6%) drove ahead. The GOPers are back in charge, so what do you expect?

    Exports (12.9%) were up 3.1% and imports (18.1%) by 3.4%. As a result, domestic demand – the measure that looks at exports and something to be taken away from the economy and imports as a contribution – rose 3.1%, the best pace in nine quarters.

    When the Fed thinks about adjusting interest rates, it looks at the change in prices households pay. By that measure, the private consumption deflator, inflation was 1.8% in the first three months of the year, the fastest pace in six years. That’s still below the target 2% minimum, but it is encouraging nonetheless.
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    Trade deficit rises $28 billion. No worries trade wars are easy?

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    Quote Originally Posted by snapper View Post
    Trade deficit rises $28 billion. No worries trade wars are easy?

    There’s a dead easy way to reduce the deficit, and by deficit I mean the one that counts: current account balance, including goods, services and investment flows.

    The technique is called driving the economy into the toilet.
    Very simple and very effective.
    Destroy demand, and watch imports dry up.

    Average, 2005-07
    Real GDP: +2.6% p.a.
    Current account balance: -$188.5 per quarter average


    Average, 2008-10
    Real GDP: +0.1% p.a.
    Current account balance: -$107.5 per quarter average

    That’s a 43% improvement, at the cost of just a 2.5 percentage point decline in growth.

    (let's not talk about unemployment or financial sector meltdown. trade is all that matters, right?)
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    Imports are good for America.

    Consider the following:

    • When consumer goods become cheaper, crime decreases because it is less attractive to steal them.
    • When smoke detectors become cheaper, it is less likely that your family will die in a fire.
    • When surgical-type gloves are so cheap fast food workers use them, people don’t pass on germs as easily. The food may still make you sick, but dirty hands are less likely to be the reason.
    • Insurance premiums fall when always-on cameras are cheap enough to be everywhere – in cars, homes, shops and on the streets – proving who did what and to whom.



    So, the next time some protectionist clown (Hello, Mr President!) claims that imports are bad, ask he how he’d pay for safety and security if prices suddenly shot up.

    But, don’t we import too much?

    Share of global imports, selected years:
    _ _ _ _ _ _ _ _ Korea, Taiwan, Hong Kong, Japan,
    _ _ _ _ U.S.A. _ China, Singapore, Malaysia, Thailand
    1948 _ 13.0% _ _ _ _ _ 5.2%
    1953 _ 20.5% _ _ _ _ _ 8.1%
    1963 _ 16.1% _ _ _ _ _ 8.2%
    1973 _ _7.2% _ _ _ _ _11.3%
    1983 _ 18.5% _ _ _ _ _13.9%
    1993 _ 21.3% _ _ _ _ _19.3%
    2003 _ 22.4% _ _ _ _ _19.0%
    2016 _ 19.4% _ _ _ _ _22.7%

    The dates were selected by the latest WTO report on global trade: wto.org
    Last edited by DOR; 01 May 18, at 09:20.
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    Ian Bremmer's recent book, Us Vs Them, is a pretty good demonstration regarding the breakdown between strict economic efficiency and politics.

    essentially the vast increase in labor supply caused by globalization and technology exerts a massive downward pressure on wages and allows capital to vastly concentrate wealth.

    GOP mantras of deregulation and supply-side economics hugely amplifies these natural effects. same with The New Democratic mantra of free trade and deregulation, although to a lesser extent.

    the demise of the New Democrats and New Labour on the UK side was largely a realization that calling a "truce" in the "class wars" would not necessarily mean that the GOP/wealthy would try to find middle ground. the old Mandelson quote about New Labour being "intensely relaxed about people getting filthy rich as long as they pay their taxes" has been repudiated...even by Mandelson himself.

    in short the discussions about the economic -effectiveness- of free trade vs protectionism is moot. intellectually i understand that the threatened Trump tariffs are stupid, and that the new iteration (voluntary quotas!) is even stupider.

    but we're essentially living in a world where "blame the filthy foreigner" is an easier and less politically fraught (domestically anyways) way of demonstrating populism vs raising taxes. after all, raising taxes at all is anathema for the GOP, while raising taxes on the poor/middle-class/upper-middle class is anathema for the Dems.
    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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    When China, and later India joined the global economy, it added hundreds of millions of workers to the potential labor pool. Potential, because a Sichuanese farmer in 1983 wasn’t actually employed in the global economy.

    In the 1980s, these two countries contributed 0.6% of the global increase in merchandise exports. In the 1990s, in grew five-fold, to a 2.9% share of the rise. The take-off was in the early 2000s, when it averaged over 22%. But, post GNAFCrisis, it fell back to less than 16%.

    In 2000-09, China’s share of the growth in global merchandise imports – what China buys, not what it sells – was 17.8%. The next closest contributor was the US, at 10.2%. Germany, 6.2%. India, 4.1%.

    The key narritive that's missing from the "massive increase in the labor force" perspective is the "massive increase in the consumer market," and "massive drop in prices" bit.
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    Quote Originally Posted by astralis View Post
    Ian Bremmer's recent book, Us Vs Them, is a pretty good demonstration regarding the breakdown between strict economic efficiency and politics.

    essentially the vast increase in labor supply caused by globalization and technology exerts a massive downward pressure on wages and allows capital to vastly concentrate wealth.

    GOP mantras of deregulation and supply-side economics hugely amplifies these natural effects. same with The New Democratic mantra of free trade and deregulation, although to a lesser extent.

    the demise of the New Democrats and New Labour on the UK side was largely a realization that calling a "truce" in the "class wars" would not necessarily mean that the GOP/wealthy would try to find middle ground. the old Mandelson quote about New Labour being "intensely relaxed about people getting filthy rich as long as they pay their taxes" has been repudiated...even by Mandelson himself.

    in short the discussions about the economic -effectiveness- of free trade vs protectionism is moot. intellectually i understand that the threatened Trump tariffs are stupid, and that the new iteration (voluntary quotas!) is even stupider.

    but we're essentially living in a world where "blame the filthy foreigner" is an easier and less politically fraught (domestically anyways) way of demonstrating populism vs raising taxes. after all, raising taxes at all is anathema for the GOP, while raising taxes on the poor/middle-class/upper-middle class is anathema for the Dems.
    Quote Originally Posted by astralis View Post
    Ian Bremmer's recent book, Us Vs Them, is a pretty good demonstration regarding the breakdown between strict economic efficiency and politics.

    essentially the vast increase in labor supply caused by globalization and technology exerts a massive downward pressure on wages and allows capital to vastly concentrate wealth.

    GOP mantras of deregulation and supply-side economics hugely amplifies these natural effects. same with The New Democratic mantra of free trade and deregulation, although to a lesser extent.

    the demise of the New Democrats and New Labour on the UK side was largely a realization that calling a "truce" in the "class wars" would not necessarily mean that the GOP/wealthy would try to find middle ground. the old Mandelson quote about New Labour being "intensely relaxed about people getting filthy rich as long as they pay their taxes" has been repudiated...even by Mandelson himself.

    in short the discussions about the economic -effectiveness- of free trade vs protectionism is moot. intellectually i understand that the threatened Trump tariffs are stupid, and that the new iteration (voluntary quotas!) is even stupider.

    but we're essentially living in a world where "blame the filthy foreigner" is an easier and less politically fraught (domestically anyways) way of demonstrating populism vs raising taxes. after all, raising taxes at all is anathema for the GOP, while raising taxes on the poor/middle-class/upper-middle class is anathema for the Dems.
    Global companies gave up on America during Bush's term during 2000-2008 and relocated to third world operations where theybcould evade taxes while claiming U.S. origin and protection. They exploited their labor force and drove up debt in America while not being required to pay ot off. Now that Trump is in office he has vowed to bring back those companies and has succeeded thusfar with some of them. Also, the West coast in the U.S.A. is continuing through the depression that started in 2008. Here on the east coast you can see the economy has returned and people are recovering but back there in the west its as miserable as ever. At the same time, over the past several years, many huge business have left California to relocate in an eastern state, something like 5000 business per year. Here's one of many such articles on that https://www.thegatewaypundit.com/201...ers-activists/

    You could say that yes immigration has a lot to do with the economic woes. Trump said himself this country is over capacity cannot support more immigrants. Theres a lot of "politics" as you say in there if you look beyond the game of numbers.

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    Quote Originally Posted by DOR View Post
    First Quarter 2018:
    Now, it’s Trump’s economy



    The US economy grew 2.86% year-on-year in the first quarter of 2018, three tenths of a point faster than in the previous season. It’s the seventh straight increase in the pace of growth, dating back to Q-2 2016.

    Private consumption, which accounts for more than two-thirds of all economic transactions in the economy, slowed slightly, from 2.85% in Q-4 2017 to 2.63% in the latest period. Demand for services (44.8% of GDP) was up a sluggish 2% over January-March 2017 while goods purchases by households (23.6% of the economy) rose 3.6%.

    Capital investment (a 16.7% slice of the total) rose a healthy 4.9% on the strength of non-residential construction. Government spending (18.1% of GDP) rose 1.2% after falling an average of 0.9% per quarter over the past seven years. Naturally, federal spending (+2%) and particularly defense (+3.6%) drove ahead. The GOPers are back in charge, so what do you expect?

    Exports (12.9%) were up 3.1% and imports (18.1%) by 3.4%. As a result, domestic demand – the measure that looks at exports and something to be taken away from the economy and imports as a contribution – rose 3.1%, the best pace in nine quarters.

    When the Fed thinks about adjusting interest rates, it looks at the change in prices households pay. By that measure, the private consumption deflator, inflation was 1.8% in the first three months of the year, the fastest pace in six years. That’s still below the target 2% minimum, but it is encouraging nonetheless.
    Speaking more broadly on the topic of the US economy, it's dependent on the US's success to establish control over the world's oil resources. China and Russia, or the BRICS has risen up to compete and it's too early to declare any winner. Even though the world's oil rich countries are one by one turning away from US power.

    We now have a crucial situation developing in Venezuela with Trump ordering Russia out of Venezuela. Will Russia do as Trump demands or will this become another crisis similar or worse than the Cuban missile crisis.

    I find this a very scary situation, considering that Trump's a psychopath and capable of being the cause of a nuclear war!

    But the US economy depends on success with the world's oil reserves and this is likely the US's last chance to dictate it's terms to any small country.

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    Quote Originally Posted by montgomery View Post
    I find this a very scary situation, considering that Trump's a psychopath and capable of being the cause of a nuclear war!
    He's an unhinged sociopath, yes. But Trump unilaterally and spontenously causing a nuclear war is not very likely and doesn't really even belong in a serious discussion.
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    Quote Originally Posted by TopHatter View Post
    He's an unhinged sociopath, yes. But Trump unilaterally and spontenously causing a nuclear war is not very likely and doesn't really even belong in a serious discussion.
    I think you may be right and the US powers that be have taken necessary precautions against Trump being allowed to cause so much damage militarily. But then that could be mostly wishful thinking and disregarding that Trump has Bolton by his side!

    In any case, the story is at RT.com on Trump ordering Russia out of Venezuela, and the issue ties in closely with the future of the US economy. Much more important than the US having a vision of being able to dictate on the economic front any longer.

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    Quote Originally Posted by TopHatter View Post
    He's an unhinged sociopath, yes. But Trump unilaterally and spontenously causing a nuclear war is not very likely and doesn't really even belong in a serious discussion.
    I think you may be right and the US powers that be have taken necessary precautions against Trump being allowed to cause so much damage militarily. But then that could be mostly wishful thinking and disregarding that Trump has Bolton by his side!

    In any case, the story is at RT.com on Trump ordering Russia out of Venezuela, and the issue ties in closely with the future of the US economy. Much more important than the US having a vision of being able to dictate on the economic front any longer.

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    Sorry again about the double post. I'm experiencing some real serious glitches with this board.

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    joe,

    But Trump unilaterally and spontenously causing a nuclear war is not very likely and doesn't really even belong in a serious discussion.
    you'd be surprised.

    true, Trump is not so crazy that he would order a nuclear strike out of the blue. but he's wanted to do stuff that would -unknowingly- (to him) seriously raise the risk of miscalculation for some of our adversaries.

    for instance, Trump played around with the idea of announcing (on Twitter of course) the evacuation of US military family members from South Korea in early 2018, when tensions were extremely high between the US-DPRK.

    had Mattis not talked him out of it, that could have freaked out KJU enough to get the fireworks going.

    without going into too much detail here, the US population as a whole has no idea how very, very close we were to going to war then.
    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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    Quote Originally Posted by astralis View Post
    joe,



    you'd be surprised.

    true, Trump is not so crazy that he would order a nuclear strike out of the blue. but he's wanted to do stuff that would -unknowingly- (to him) seriously raise the risk of miscalculation for some of our adversaries.

    for instance, Trump played around with the idea of announcing (on Twitter of course) the evacuation of US military family members from South Korea in early 2018, when tensions were extremely high between the US-DPRK.

    had Mattis not talked him out of it, that could have freaked out KJU enough to get the fireworks going.

    without going into too much detail here, the US population as a whole has no idea how very, very close we were to going to war then.
    I remember very well and interpreted it the way you are suggesting. But it turned out to be one of the first Trump bluffs and so we may be able to interpret this current one as the same.

    I see it as a very important and very dangerous situation for both the US and Russia. (also China's future interests) This is much bigger than the US loss of control in Syria and consequently Iran because this is Russia's power being asserted in the America's.

    It raised thoughts of some sort of a negotiated trade-off as was the case with the Cuban missile crisis. Even though it doesn't seem that Trump's arrogance would allow for something like that happening.

    Now we are indeed faced with the prospect of a psychopath having his hands on the red button!

    I prefer to think in terms of not thinking about the unthinkable?

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    Quote Originally Posted by montgomery View Post
    Speaking more broadly on the topic of the US economy, it's dependent on the US's success to establish control over the world's oil resources. China and Russia, or the BRICS has risen up to compete and it's too early to declare any winner. Even though the world's oil rich countries are one by one turning away from US power.

    We now have a crucial situation developing in Venezuela with Trump ordering Russia out of Venezuela. Will Russia do as Trump demands or will this become another crisis similar or worse than the Cuban missile crisis.

    I find this a very scary situation, considering that Trump's a psychopath and capable of being the cause of a nuclear war!

    But the US economy depends on success with the world's oil reserves and this is likely the US's last chance to dictate it's terms to any small country.

    montgomery,

    Is there some reason why you choose this point in history, when the US is least dependent on imported oil, to make the absurd statement that “it's dependent on the US's success to establish control over the world's oil resources” ?


    After falling for 25 years, US crude oil production doubled in the last seven years: https://fred.stlouisfed.org/series/IPG211111CN

    In the last four years, oil has comprised 7.8% of US imports, compared to an average of 16.3% in the previous four years and a sustained high of over 20% as recently as 2008. https://www.census.gov/foreign-trade...cal/index.html

    In the last 9 years, US proven oil reserves increased by 76%, and since 2008 production has increased by 92.5%. Yes, increased. Nevertheless, consumption has fallen since 2005 by 4.4%. https://www.bp.com/en/global/corpora...downloads.html

    Reserves up.
    Production up.
    Imports down.
    Consumption down.

    You might want to rethink that statement about US success.
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