When it comes to economics and religion, the "experts" and activists tend to be one and the same and neither seems to be credible.
https://www.nytimes.com/interactive/projects/cp/opinion/elec...
One of our the "greatest experts" predicted eternal collapse of the markets after trump's election
"If the question is when markets will recover, a first-pass answer is never."
and an endless global recession.
"So we are very probably looking at a global recession, with no end in sight."
> This lag between economic policy and outcomes is a big reason the US has such a disingenuous public debate.
Economic policy doesn't cause recessions. The business cycle and the FED raising and lowering interests cause recessions. No matter the economic policies, there will always be a recession. I believe it was jamie dimon who said we usually get one every 8 to 10 years.
Tom Nichols’ book The Death of Expertise is relevant here.
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As for your specific points: - Paul Krugman, on his major predictions, has been incredibly prescient. He was talking about media bothsidesism, a major reason for this political moment, in 1999. He said America was being lied into war in Iraq in 2002. He predicted the effects of stimulus in America and Europe. The guy is a genius and so he becomes a target for his political enemies. (Re the stock prediction: he withdrew this in a few days. It was a minor prediction. The predictions above were long term predictions.) The issue is that conservative economics has been captured by the conservative propaganda machine which amplifies minor corrected predictions like this while ignoring the huge long term mistake that the right’s “economists” made about inflation in response to stimulus.
- The business cycle causes recessions, yes. Not sure what you mean by economic policy. But both monetary and fiscal (tax) policy has big effects on entry and exit from recession. And also public debt affects provision of public policies like the social safety net.
Some governments seem to be quite bad at this though. States differ in pension liabilities and I haven't looked at the federal level.
Only if the electorate is intelligent / educated enough to call bullshit do they temper their bullshitery.
(Just three recent examples of the nonsense of the day. Yesterday or tomorrow, different nonsense, but always nonsense over serious discussion.)
But it's not so hard to say that you can do it.
Assuming we don’t want to live in a society in which vast numbers of elderly live in penury this isn’t true. It’s well known that when retirement savings are the responsibility of the emoloyee then they don’t save enough.
What you say about bad governance is certainly true and incompetent or badly incentivized leadership will exacerbate problems. I don’t know what the solution is for the U.S. but the current system is going to make us end up with a society with large numbers of destitute elderly. Shifting the onus to the employee via 401Ks is just kicking the can down the road so to speak. It also allows politicians and voters off the hook because the liabilities aren’t on the books. On paper it looks good but the reckoning will occur.
(There are a lot of arguments to be quibbled over here, but when the average American can't calculate interest I'm not going to point to them as the best steward of their retirement)
Really, it's an issue of policy not pensions.
Additionally, pension have to be managed and administrated. This is pure wasted money. Every pensioner would be better off taking the money that is set aside for their part of the pool and putting it in a Vanguard index fund. When you start to withdraw, you know how much you have left and you haven't paid tons of kickbacks along the way. When there is a recession, you can scale back your withdraws until there is a recovery, etc.
Fixed benefit pensions can never be anything but a pyramid scheme. Otherwise, your pension would be more by doing what I state above because the administration is near zero. The pension funds have never done better than the S&P over any reasonable time window. Pensions will always have unnecessary overhead.
Also, fully funded is only fully funded when it can survive the company going bankrupt tomorrow. People like to redefine it as liability less than X, but that just means underfunded.
Granted, if you have kids you might want the leftovers from your retirement to go to them, but that's not a social problem. Further becase pensions take less money so a subset can always just buy life insurance.
PS: The biggest issue is benifits not including inflation, but again that's a policy issue.
Sure it is. It's inherently problematic because it assumes perpetual growth of population and economy. Also, there is a difference between pensions and 401ks and IRAs. 401ks/IRAs will run out. Pensions can never run out. In other words, you can outlive your 401ks/IRAs, but you can't outlive your pension.
Or put it simply, with 401k/IRAs, you can't take out more than you put in. With pensions, you can if you live long enough. So who makes up the difference? The workers or taxpayers.
If pension payouts floated as a percentage of overall asset value, then they would a great retirement strategy. But promising people a guaranteed (generous) fixed-income is not sustainable in the long-term.
That has often been the case. Bush suffered through Clinton's internet bubble. then Obama suffered through Bush's real estate bubble. Trump now benefits from Obama's policies. We'll see what happens after Trump.
For the exact same story, see the ongoing student loan debacle.
I agree with your broader point: government policy is complex, we need a regulated market system because completely free markets don’t work, so we need a high skilled government that tries hard to get things right — and a legislative system that cares about the government functioning well.
Same with surveillance: It's either Bush's fault or Obama's fault. They don't see the steady progression over the years independently of who is in power.
The same sort of attitude ensures that third parties will never be considered. When people are driven to literally fear the 'opposition' winning, it means that the powers that be have effectively sealed their grip on power tight. Also even notice the media's focus on "electability." It's all rhetoric designed to get people to note vote for the candidate they want in power, but to 'strategically vote' and in the process completely undermine their own self interest.
Pair this with some institutional issues like ballot access and we have a system where the establishment has all but guaranteed their perpetual success.
Since we're discussing nothing short of the US government acting as an enemy to the citizens it is supposed to serve, I would suppose the next few prudent questions are:
1) What is the entity deploying this divide and conquer strategy?
2) Is this entity monolithic? Cellular? Organized or random?
3) What does this entity stand to gain and is it good for all?
Your premise is incorrect. The "sort of" part of my statement is important. There are lots of forces at play that cause this. I see it as sort of an emergent phenomenon and not the design of some clever genius or powerful organization.
Your assertion is not strong enough and your self referential call out to authority is suspect or at the least misplaced.
It is absolutely divide and conquer and it absolutely is an organized effort.
My assertions were posed as questions only to guide the light.
Anyone with eyes to see will know this. The problem is most of those eyes lack the courage and faith to speak.
Giving Obama credit to me is at the very least questionable - things were at rock bottom, they could almost only go up (and I supported Obama). There are so few absolutes to hold on to in terms of economic indicators for the layperson, but its hard to see how the Obama years were an economic catastrophe, and unfortunately we'll never know what the effect of a larger stimulus might have been (or no stimulus for that matter).
https://www.scientificamerican.com/article/the-political-bra...
[1] - https://www.bls.gov/opub/btn/volume-4/people-who-are-not-in-...
In the meantime, politifact has a good breakdown of what he says about the issue and where the numbers come from (spoiler, they make some wild assumptions) [1].
[1] http://www.politifact.com/truth-o-meter/statements/2015/sep/...
Schrodinger's Obama Policies?
Even outside the market, people are hiring again, companies are making investments, it's a hell of a turn around.
- The United States added almost 3 million jobs in 2014, 2.7 million in 2015 and 2.2 million in 2016.
- The U.S. economy added 2 million jobs in 2017
http://money.cnn.com/2018/01/05/news/economy/december-2017-j...
What's your point?
> then immediately jumping, once the election results were in.
So your long-term retirement investment fund which should span over 20+ years increased somewhat drastically over a small percentage of it's perceived lifetime. Why is that superbly beneficial for long term fund performance?
> Even outside the market, people are hiring again
When did they stop hiring? Source data?
You must be a terrible investor then, the DOW under Obama went from ~7,000 to 18,000, unemployment fell from 10% to 5%, nearly 20 million gained healthcare under the ACA, and the economy gained 11.6 million jobs. Obama's numbers blow Trump's away.
The current tax cut increases the national debt during a good economy. So this irresponsibility limits America’s options when this bubble (if it exists) bursts.
This time is not different
Half of those cuts reset. The primary item in the other half, the corporate income tax cuts, were a necessity to compete with the rest of the planet that has a more typical ~20% rate (including Europe, which has the lowest corporate income tax rates of any region).
The deficit is going to $1 trillion, the tax cuts are an average $50-$75 billion per year of that problem over the next ten years.
The tax cut is meaningless in that picture. It'll add at worst a trillion to the $30 trillion pile of public debt that will exist in 8-10 more years.
Good luck to the US. The yearly budget is $3.8T. Of that, only $1B is discretionary. $3T of tax cuts is three years of the entire discretionary budget. The cut is huge. And that cut wasn't Keynesian stimulus - it came during a good economy. Good luck to the US.
I'm not sure the dot-com boom and bust affected the rest of the economy nearly as much as it affected our industry. If there was a recession, it was the smallest in decades:
https://tradingeconomics.com/united-states/gdp-growth-annual
It was a modest recession, but it wiped out a huge amount of wealth held by "main street" investors. It was bad enough that Bush, a very, very pro-business president, signed into law the Sarbanes-Oxley Act, which is widely criticized as an onerous and needless regulation by conservatives.
Bush inherited a guaranteed recession, and then 9/11 occurred on top of that context.
Which then led the Fed to make stupid mistakes on interest rates, which helped spur immense asset inflation in the real estate sector, which then collapsed, which led to the great recession, which got Obama elected with a Dem super majority to go with it, which delivered the ACA.
Then the Fed lowered interest rates to basically zero, or below zero when QE is considered, for the better part of a decade to combat the great recession, which spurred / enabled extreme corporate debt binging, extreme government debt binging, and re-inflated both the stock market and real estate asset bubbles. The debasement of the dollar due to the Fed's abusive interest rate policies during the ~2001-2004 period also dramatically spiked both healthcare costs and college costs, while eroding US purchasing power and the US standard of living (represented by the simultaneous global skyrocketing of GDP in all other nations, as well as being represented in the epic commodity bubble (commodities are mostly priced in dollars)).
Now we're waiting for the fallout from another round of idiotic Fed policies.
All in the name of initially trying to avoid or skate around a rather mild recession in the GW Bush first term - because no politician can tolerate a recession these days - the assholes at the Fed delivered more than a decade of immense suffering with more to come.
However in 2008-2009 the Fed policy was actually extremely tight. The recession of 2008 can not be explained by the monetary policy of 2001-2006. It simply does not add up. And even people who argue for the Austrian Theory (i.e. unsustainable investment boom in long term investments).
If monetary policy was to easy, then there is simply no way to explain nominal income. How can you explain this with 'Fed was to easy':
https://oregoneconomicanalysis.files.wordpress.com/2011/10/n...
The people who developed the Austrian cycle theory actually called this 'secondary deflation'. A static central bank policy can be inflationary or deflationary depending on the outside of the economy. Or more technically the stance on monetary policy depends on the Fed target rate relative to the natural rate.
What happened in 2008 is that the natural rate fell bellow the Fed rate and Fed policy became deflationary. They did not notice this because they observed false signals from high oil prices, you can read that in the documents from their late 2008 meeting. In the middle of a NGDP collapse they were talking about high inflation expectation, pretty insane.
The story of successive Fed created bubbles simply does not hold up.
The fact that the US has enjoyed a economic boom post 2008, while the rest of the world struggled for several more years (especially Europe), can be considered evidence that it was the correct action to take at the time. The current expansion is the second longest in modern history.
(And it’s useful to go back in 2008-2011 and see what different economists were saying about stimulus and inflation. There was a big partisan divide.)
This lag between economic policy and outcomes is a big reason the US has such a disingenuous public debate. Getting what you can in the short term, while being deceptive about long term effects, has become a good strategy. [1]
[1] https://mobile.nytimes.com/2017/12/18/opinion/republicans-ta... “The essence of this strategy is to take tax policy out of the hands of experts and entrust it to activists. These campaigns do not usually have much credibility with card-carrying economists. ”