How has Trump done with jobs?

Just so you’re speaking for yourself.

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Totally agree. However, to be clear, the crowding out that occurs isn’t fiscal, it’s real.

I Googled “Micro-Recession” and I didn’t see much. There is an NYT story about “localized recession” which I suspect is what you’re alluding to. I refer to this more broadly as “market disruption”. Some disruption can be constructive or destructive. That said, I think we’re referring to the same thing or at least something similar.

Let’s address Japan.

From an MMT perspective, which you know I embrace, at least in part, Japan’s experience seems to lend some evidence to claims made by MMT"academics".

Do big deficits cause inflation? No. Japan’s inflation runs just above zero.

Do big debts cause high interest rates? No. Japan’s policy rate is about -0.10 (negative rates).

Do big debts cause bond vigilante strikes? No. Japan’s government debt is hoovered up as fast as it can be issued. (All the more true with the BOJ running QE and creating a “scarcity” in spite of the quadrillions of yen debt available.)

Moving on…

Critics of MMT counter that Japan is “proof” that big deficits kill investment and growth.

Well, it is true that Japan has been growing at just 1% per year—certainly nothing to write home about. However, investment grows at about a 2% pace but is pulled down by lack of consumption growth—which has averaged just about zero over the past few years.

From the MMT perspective, what Japan needs is a good fiscal stimulus, albeit one that is targeted. Japan has three “injections” into the economy: the fiscal deficit (which has fallen from 7% of GDP to about 5% over the past few years—still a substantial injection), the current account surplus, and private investment. But what it needs is stronger growth of domestic consumer demand—which would also stimulate investment directed to home consumption. So fiscal policy ought to be targeted to spending that would increase the economic security of Japanese households to the point that they’d increase consumer spending.

So what is Prime Minister Abe’s announced plan? To raise the sales tax to squelch consumption and reduce economic growth.

You cannot make this up.

This has been Japan’s policy for a whole generation. Any time it looks like the economy might break out of its long-term stagnation, policy makers impose austerity in an attempt to reduce the fiscal deficit and thereby throw the economy back into its permanent recession.

Clearly, this is the precise opposite to the MMT recommendation. And yet pundits proclaim Japan has been following MMT policy all these years.

The result?

Permanent stagflation.

I agree, but to suggest that capitalists know this is equally false. Furthermore, should the money go to improving the lives of citizens or generating higher profits? The two aren’t mutually inclusive.

Should decisions be made only by investors or as a process within our democracy?

I don’t claim to have the answers to these questions and I realize there are problems on both sides as I’ve defined (though I recognize there may be more choices).

I know we don’t always agree, but I appreciate your input. That said, not sure what you mean by “omni-slashing”…

Thx.

[Emphisis mine]

And yet to hear Republicans and right-wing media, you’d have thought the stock market was going the other direction, that things in the US were getting worse.

Of course, we can point to anecdotes that prove that things got worse under Obama and better under Trump and vice-versa.

The problem is two-fold.

  1. There are lots of ways to evaluate something as complex as the economy and the temptation is for each side to look only at favorable data and ignore the unfavorable.

  2. There is little if any agreement on a wide array of metrics under which each side would agree to evaluate, as a standard, to judge the success or failure of an administration’s economic policy.

Is the stock market a good indicator? 84 percent of all stocks owned by Americans belong to the wealthiest 10 percent of household, thus the success of stocks would seem to affect those at the top the most and therefore is not a good overall economic indicator.

Conversely…When looking at the bottom, 14% (corrected) of Americans make less than $18k a year. If that number decreased significantly, do you think that would be a good indicator of the health of the overall economy?

In a vacuum? Probably not. But it makes no sense, outside of any context to argue that an improvement in ether measure is bad, that said, it matters how these improvements occurred in the context of lots of other variables.

kids…ya can’t shoot em.

Boomers, ya can’t shoot them either… :crazy_face:

But your side has plans.

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Christina Romer herself, the head of Obama’s Economic council who proposed this plan, estimated that the Stimulus only created 0.7 to 1.2 dollars for every dollar spent, instead of the 2 dollars it needed to be effective.

Her excuse was that it wasn’t big enough; but looking closely at how the money was spent tells a very different story.

It’s one of the Government creating make work, and allocating money according to political incentives. Not need, not merit, not wealth creation.

It contributed to their declining savings rate, and real wages being lower than they were 30 years ago.

The Japanese today work longer hours than their parents. For the same or less money.

Only so long as they don’t need foreign investors to buy their debt.

Once core revenue can no longer pay their interest expense… yes it will. There’s no avoiding that.
They’ll need to attract investors, who will want more than just 1 or 2 %

As it stands, Japan has lost savings, innovation, and had a declining real estate market for more than 20 years.

And they’re now in a debt trap:

Austerity is cutting spending. Japan never did this; they’ve been above 100% debt to gdp since 1996, and it never truly fell, only stabilizing at around 240%, as anymore would threaten a crisis.

A crisis where they can’t pay the interest expense.

They know better than politicians who allocate things according to political incentives.

Neither helping them, and nor hurting them, produces the best result.

In competitive markets, higher profits increases the citizens well being. So long as what we’re talking about is profits generated by market actions. Not government assistance.

High profits means more suppliers will get into the market, and seek to undercut whomever is making them.

Profits are signals in the economy. You should examine them from that standpoint.

This is an example of what @Pappadave complained about to me when I cite statistics. The Examiner points out:

4.2 percent [nominal] growth in the second quarter of 2018.

Which is 100% true. But it lacks some crucial context that makes the information more useful and puts the information in a proper context. The Examiner is being intentionally misleading or they aren’t knowledgeable enough to understand the data they are reporting.

So what is it that makes this reporting misleading??

Real growth for that quarter was 3.2% Real growth is how we measure growth in any meaningful way. 4.2% looks great, but when put in context (real vs nominal), the highest rate of growth was right before Trump took office (Q1 2015 - 3.9% - real growth) and prior to that it was in 2010 (3.1% Q3 real growth)

Using nominal statistics is like citing the population by only measuring births and ignoring deaths and immigration/ emigration. The gross increase in population would be measured in births, the net would be births immigration minus anything that causes the population to decrease which would give you a much closer actual number.

Another example:

For the first time in more than a decade, growth is projected to exceed 3 percent over the calendar year.

Real growth is what matters and how best to make comparisons. Real growth has been declining for almost a year.

Jobs

Here are the jobs number sliced and diced every possible way you can think, most if not all significant statistics are trending downward.

http://econintersect.com/pages/releases/release.php?post=202001100809

Now in fairness to Trump, there are a few things happening, unemployment is falling and labor slack is being reduced. What we need now is not just jobs but better jobs. Automation will be key in freeing people from the lowest paying lowest skilled jobs, jobs that can easily be automated (cashier at McDonald’s). Of course, in order to get people out of low skilled work, we’ll need higher levels of education and opportunity.

That said, pointing the finger at Trump I’d point out that, undoubtedly, the trade war, which coincides perfectly with the most recent down turn (Q2 2018), correlates perfectly, has contributed to the real slowdown and is part of the self-inflicted issue Trump faces.

Do you know of any specific initiatives Trump or his administration have supported or enacted to get lower wage, lower-income people greater opportunity for education, be it college or any sort of training in trades or vocational skills?

As far as the stats, I know that media in general, not just the right-leaning media uses statistics the way that the Examiner has done in the example I gave.

Most people don’t know what the terms “real” and “nominal” mean in an economic context (one reason a good education is so important and why economics should be taught as a class just like math and English).

That said, not everything Trump has done has been bad. He lowered taxes and increased spending. This nets more money into the private sector and in my opinion is the single biggest factor in the growth we’ve seen.

That said, most of the benefits have gone to people that do very little in terms of driving demand. Much of it has been captured by the investor class and corporations that are sitting on trillions of dollars because the economy lacks the requisite demand to drive greater levels of investment.

This is what some might call the failure of supply-side econ. The idea that if you give the investor class more money that money will work it’s way down into the broader economy. Insted what we’re seeing is the wealthy are using money to capture more money.

See, Capitalism was a story about creating a product, selling it and using that money to buy other things that people needed/ wanted…

So, Product—>Capital---->Product.

In the financial economy that’s grown over the last 30 years what we’re seeing today is capital used to create a product to capture even more capital.

So, Capital---->Product---->Capital.

This isn’t an optimal way for Capitalism to work. Adam Smith and Marx both understood this, it’s amazing to me that so few people understand it today.

Efficient capitalism, a system that operates entirely in the best interest of individuals, will fail to see that individuals that adhere to a Randian Esque variety of capitalism will end up destroying the very markets they need for their own survival.

I find it hilarious that you of all people would think a good education is important; if someone says the United States won WW2 you ask for a “link”.

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BS on a shingle. You’re ACTUALLY claiming that nearly HALF of the people in the U.S. are living below the poverty line??? Just how stupid must one BE these days to be a “progressive?”

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You are correct, that was a typo, the number is 14%, not 44%.

And 60% of Americans will be in the top 10% for at least 1 year.

The people in these categories is not static. There’s economic mobility; going both ways.

Yes, I read the Heritage and AEI reports that say that, though, let’s be clear, what we’re talking about is income, not wealth. There is a HUGE difference in income and wealth.

The range by state to be in the top 10% in terms of income ranges from around ~$150k in states like AL, MS and WV and $320k at the top in DC.

The reports don’t specifically say or I missed it scanning through the paper, but I believe they are talking about family income, which in most places means that salaries are usually around $75k per person/ houshold +/- …

That said, someone, making these kinds of incomes can and often do have zero or less than zero net wealth. One of the reasons why you only need to have around $100k in net wealth to be in the top 10% of wealthiest families.

Thus, stating that 60% of people earn enough to be in the top 10% of income earners for at least 1.2% of their lives means little as (I would be willing to bet) the vast majority of those people will have very little or any net wealth. If you don’t include the homes they’ve purchased and live in (a very illiquid asset) I bet most people that make the top 10% fo ar least a year have negative net wealth.

And indeed, regardless of the fluidity of the people that move into and out of these categories over time the wealth accrued by those at the bottom is shrinking…,. (the latest stats I could find). Though I doubt things have improved significantly since 2013.

image

Total wealth is similar. Drastic reductions in the bottom 80%

image

There is one prime way to improve your net worth. You SAVE. That’s what my wife and I did. We put away about 20% a year. If you blow through your income every year and worse yet, go into debt, you will end up with nothing. My in-laws have done that all of their lives, despite high incomes. Even the Hunt Brothers, who were billionaires, went broke speculating in silver futures.

If you spend yourself to the poor house, it’s your fault. I know that you will probably propose yet another government program to fix that. Government is your god, Mr. Brown. It can solve every problem, real and imagined, according to you.

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You’re not going to find what net wealth is by offering stats measuring relative wealth.

You only know what people get overtime by measuring absolute wealth, and when you do that, you find the bottom quintile has been getting richer, in every decade. Moving on up.

This video is 3.5 minutes long. If you “don’t have the time”, I call shenanigans.

And this is a hard no CS.

The bottom quintile got richer, and more moved into higher income categories. It’s relative wealth that declined. Do not confuse the two.

Equally, speaking of households is problematic when the average composition of households has changed. Households in previous decades were more likely to have several working adults; today, you have two or even just one person incomes in those households, even among the poor.

So even if there are places where income per household declined, per person, it did not. It grew. Thomas Sowell has been pointing this out for decades.

Ironically, ever dollar saved is a dollar not spend driving demand. The paradox of thrift. That said, you are correct. That said, I’ve lived in both worlds, paycheck-to-paycheck and being able to save 20%+ of my income. Looking back, could I have saved more? Of course, there are always things that we didn’t need, that fishing rod, soda pop, subscription to Car and Driver. But, that’s part of what makes a standard of living a standard of living.

Assuming you have the money to blow, sure. A family of 4 in an average city. What kind of salary, as a family, do you think they need in order to have a respectable lifestyle and be able to save, let’s say, 20% for retirement?

As long it’s of the people, by the people and for the people, then I think government can be used to create a society that’s better by almost any metric. But I admit it’s difficult to achieve, but then again, nothing worth having comes easy. But worship, like a god? Ironic, as I don’t worship anything, gods or government. BTW, government’s don’t solve problems, people solve problems.

Nonsense, CSB. People don’t “save” money by putting it under their mattresses. They put it into “safe” investments…even interest-bearing savings accounts…where it’s USED to earn money for the savers.

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Is Trump a good president? I read a lot of negative also there are positive but still don’t know the truth.

Welcome, DanielShaw!

Yes, President Trump IS a great President! For the first time in my 78 years on this planet, we have a President who says exactly what he means and means exactly what he says…and then DELIVERS on each of his campaign promises. I was skeptical before the election. I knew he’d given big bucks to Democrats in the past and even given a VERY large wedding gift to Chelsea Clinton and attended her wedding. He’s proven my skepticism unfounded almost daily since the election.

Can he SEEM crude and “unlettered” from time to time? Yes. Still, he thwarts the Democrats at every turn and he talks in terms that the vast majority of Americans understand and with which they agree. Was it “impolitic” for him to characterize MS13 “immigrants” as animals? Probably, but he called them exactly what they ARE and Americans understood and agreed…at least those living outside of the “blue” enclaves in New England, D.C. and the Left Coast do.