The Economy

[Moiraine]

120 months is the record for an expansion. We’re probably going to hit that again.

 

 

[RedDenver]

10 hours ago, Moiraine said:

120 months is the record for an expansion. We’re probably going to hit that again.

 

 

YOU JUST JINXED THE ENTIRE WORLD ECONOMY!!! 

[Moiraine]

21 minutes ago, RedDenver said:

YOU JUST JINXED THE ENTIRE WORLD ECONOMY!!! 

 

 

Sorry

[RedDenver]

Interesting paper on how British policymakers forecast the eventual 2008 collapse back in 1987.

 

 

[TGHusker]

44 minutes ago, RedDenver said:

Interesting paper on how British policymakers forecast the eventual 2008 collapse back in 1987.

 

 

I'm lazy today. Too much to read.  What is the readers digest version??

[RedDenver]

3 hours ago, TGHusker said:

I'm lazy today. Too much to read.  What is the readers digest version??

Quote

ABSTRACT
Using newly declassified documents from the British Public Records Office, we argue that the finance-dependent growth regime that typified the UK economy in the period up to the Great Crash of 2008 has much deeper roots than is commonly realised. We use these documents to demonstrate that the growth of finance was integral to the Thatcher revolution, tying together mortgage markets, household debt, and boom-bust cycles as early as the mid-1980s. We also show how policy-makers in this period were aware of all the weaknesses of this growth model, to the point that they effectively diagnosed what would happened in 2008, back in 1987. We argue that selecting for a finance-led growth model as the preferred growth model so early effectively rendered other possible growth models for the UK unattainable. The result was the shift from an economy characterised by ‘stop-go’ cycles in the post-war period to an economy characterised by recurrent ‘boom-slump-austerity-reset’ cycles in the Thatcher and post Thatcher periods. The 2008 crisis did not change this highly unstable mode of accumulation.

 

[TGHusker]

1 hour ago, RedDenver said:

 

True here as well.  I'm thinking the Trump fiscal policy of tax cuts and tariffs is setting us up for a slump or bust may be the more accurate term. 

[RedDenver]

The linked article is excellent.

The conclusion of that article:

Quote

 

Where This Leaves Us
These background assumptions have been losing their power since around the middle of the Obama administration. Whether it was ever reasonable to believe them is a good question but besides the point, as these ideas are no longer able to convince liberals to the point that they shut down alternative ideas. Why always presume business and markets are the leaders in innovation and dynamism if the corporate sector looks like an increasingly bloated, shareholder-dominated rent machine? Why assume billionaires are a boon to our society if a majority of people won’t be better off than their parents? Why bother supporting this economic regime if you can’t point to these tradeoffs as having been worthwhile?

There aren’t a lot of convincing responses on the Right either. One reaction is to say nothing has changed, or that the last 40 years since Reagan have been even more about government and socialism rather than a turn to neoliberalism. I don’t think people find that convincing. Another is to try and locate the dysfunction in affirmative government policy, and if we only get government even more out of the way then we’ll make progress. These arguments are not very convincing and certainly not up to the challenge of describing or mitigating against what has happened. United conservative governance failed to do anything meaningful to correct for failed ideas. The current shift Left would have happened even without Trump—though he does accelerate the need for a new set of ideas, because it is ideas about a whole economic regime that are what we need now.

 

 

[Danny Bateman]

Thought this was interesting since we've discussed MMT on here before.

 

Economists don't much care for it.

 

 

[RedDenver]

12 hours ago, Danny Bateman said:

Thought this was interesting since we've discussed MMT on here before.

 

Economists don't much care for it.

 

 

The framing of that poll is wrong from the start, as even MMT proponents don't think governments can spend without limit and that deficits don't matter. That poll shows that economists understand that misunderstandings about MMT aren't true.

 

Here's a good article on MMT that addresses some of the misunderstandings:

Does Modern Monetary Theory Have Any Scholarly Validity?

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6. Deficits don’t matter.

WHAT? That’s such a hollow statement that no MMT economist would ever utter it because it doesn’t even mean anything. Matter how? Matter in that it will cause us to go bankrupt? In that sense, no, it doesn’t matter (see #2). In the sense that it can’t cause inflation? Then it does matter (#5). In the sense that any kind of deficit spending is helpful? Nope. Some of it is a waste of time in that it never really gets to the policy issue mentioned above: unemployment. Deficits DO matter about some things and they DON'T matter about others.

 

 

[TGHusker]

Trump's manufacturing promises are falling short.

https://www.reuters.com/article/us-usa-economy/u-s-manufacturing-sector-slowing-as-economy-loses-momentum-idUSKCN1QW1UL

WASHINGTON (Reuters) - U.S. manufacturing output fell for a second straight month in February and factory activity in New York state was weaker than expected this month, offering further evidence of a sharp slowdown in economic growth early in the first quarter.

[RedDenver]

 

 

[RedDenver]

 

[TGHusker]

Thanks Trump.  USA no longer most competitive economy. Now 3rd. 

 

https://www.foxbusiness.com/economy/worlds-most-competitive-economy

T

Quote

 

he United States no longer has the most competitive economy Opens a New Window. in the world, according to annual rankings compiled by the Switzerland-based business school IMD.

For the first time in nine years, Singapore replaced the U.S. as the world’s most competitive economy. The U.S. dropped down to third on the list, thanks to higher fuel prices, weaker high-tech exports, fluctuations in the value of the dollar and the fading impact of President Trump’s Opens a New Window. massive tax overhaul. Hong Kong, meanwhile, remained in second place. China was ranked fourteenth.

“In a year of high uncertainty in global markets due to rapid changes in the international political landscape as well as trade relations, the quality of institutions seem to be the unifying element for increasing prosperity,” Arturo Bris, an IMD professor and director of the World Competitiveness Center, said in a statement.

 

Quote

To determine the results, the study incorporated 235 indicators from each of the ranked 63 economies, taking into account statistics like unemployment, GDP and government spending on health and education, as well as issues like social cohesion, corruption and globalization.

 

 

[TGHusker]

GOP Sen Grassley slams Trump over connecting tariffs to immigration issues. 

 

 

https://www.grassley.senate.gov/news/news-releases/grassley-statement-tariff-announcement

 

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WASHINGTON — U.S. Senate Finance Committee Chairman Chuck Grassley of Iowa today released the following statement regarding President Trump’s announcement on tariffs on Mexico.

“Trade policy and border security are separate issues. This is a misuse of presidential tariff authority and counter to congressional intent. Following through on this threat would seriously jeopardize passage of USMCA, a central campaign pledge of President Trump’s and what could be a big victory for the country. President Trump should consider alternatives, such as imposing a fee on the billions of dollars of remittances that annually leave the United States to Mexico, which only encourage illegal immigration and don’t help the U.S. economy. It could fund border security measures and would put economic pressure on Mexico without imposing a financial burden on U.S. consumers or harming American jobs. I’ve long supported reforms to remittance law, which haven’t become law because of opposition from big banks and other financial interests. Mexico must help get the border crisis under control and the president should use appropriate authorities to apply pressure. I've also called for a Safe Third Country Agreement so that Mexico cannot simply pass the buck to the United States. Mexico has a leading role to play here when asylum seekers are traversing their country without regard to the law and without consequence. Congress must also immediately fully fund border security and interior enforcement. Democrats should come to the table in a reasonable way and work to put an end to the security and humanitarian crisis on the border. I support nearly every one of President Trump’s immigration policies, but this is not one of them. I urge the president to consider other options.”