I wonder if most policies put in place during a president's term actually affect the next term.
U.S. Presidents and Comparative Stock Market Performance
21–30 of 41 posts
Re: U.S. Presidents and Comparative Stock Market Performance
#22Earlier quoted context omitted.
Ya, and neither were completely his fault. However, I do fault him for juicing a good economy when stimulus would be more effective during a downturn when not wasted during upturns. Save in good times, spend in bad would do a lot for stability. 2008 could have been handled much better if he was disciplined enough during the recovery in between (besides, taking more money out of the system would have acted against bub…
The problem with "save in good times, spend in bad" is that people don't actually save in good times. Even if you raise interest rates, people will still borrow money when times are good because that's when there's profit to be made by investing the borrowed money. They do it less when rates are higher, but they still do it. The "problem" with the natural cycle is that in bad times people start to default on their de…
You missed an option C: forgive the debt (like default but less consequences) but keep companies and people accountable for externalities with really tight control.
Re: U.S. Presidents and Comparative Stock Market Performance
#23Earlier quoted context omitted.
The problem with "save in good times, spend in bad" is that people don't actually save in good times. Even if you raise interest rates, people will still borrow money when times are good because that's when there's profit to be made by investing the borrowed money. They do it less when rates are higher, but they still do it. The "problem" with the natural cycle is that in bad times people start to default on their de…
You missed an option C: forgive the debt (like default but less consequences) but keep companies and people accountable for externalities with really tight control.
Option C is a moral hazard and is fundamentally unfair. If everybody gets a UBI and people in debt use that to pay it off, people not in debt still get the same amount of money. Loan forgiveness is wrong because it doesn't work that way.
If you paid your student loans and I didn't because I decided to buy a Tesla instead, should I have my loans forgiven when you had to pay yours? If I bought a house on credit while you rent an apartment, I get my mortgage forgiven but you have to keep paying rent? If I bought a million dollar house I couldn't afford and you bought a $250K house you could, I get rewarded for living beyond my means?
Give everybody the same amount in cash.
Re: U.S. Presidents and Comparative Stock Market Performance
#24Earlier quoted context omitted.
Ya, and neither were completely his fault. However, I do fault him for juicing a good economy when stimulus would be more effective during a downturn when not wasted during upturns. Save in good times, spend in bad would do a lot for stability. 2008 could have been handled much better if he was disciplined enough during the recovery in between (besides, taking more money out of the system would have acted against bub…
people forget Bush was fighting an energy recession, and those were a godsend to many. my brother used the money to apply for college and buy books to give college a go and see how it is, he's an MD now. I disagreed with almost everything Bush did, but that was not one of them. The same is true for Trump, in the sense had it not been for the Trump tax cuts, we would be in a recession right now.
A year later, it’s very clear that the tax cuts boosted gross domestic product and jobs a bit — and just for one year. Its effects are fading as U.S. GDP growth appears likely to weaken in 2019. The only thing that “rocked” were corporate profits and the stock market. And we’re facing trillion-dollar deficits as far as the eye can see.
https://www.marketwatch.com/story/its-official-the-trump-tax...
Re: U.S. Presidents and Comparative Stock Market Performance
#25It's too bad this analysis was done against the Dow Jones Industrial Average which is a price weighted index of only 30 large cap stocks and widely considered to be a poor indicator. Something like the S&P 500 index would would have been a better choice though it doesn't go as far back as the DJIA.
Although, the Dow doesn't really go back that far either in the sense that it swaps out stocks occasionally, which could cause spurious conclusions to be drawn if not accounted for.
The S&P 500 does also swap stocks, and more often :-)
Re: U.S. Presidents and Comparative Stock Market Performance
#26Earlier quoted context omitted.
Ya, and neither were completely his fault. However, I do fault him for juicing a good economy when stimulus would be more effective during a downturn when not wasted during upturns. Save in good times, spend in bad would do a lot for stability. 2008 could have been handled much better if he was disciplined enough during the recovery in between (besides, taking more money out of the system would have acted against bub…
The problem with "save in good times, spend in bad" is that people don't actually save in good times. Even if you raise interest rates, people will still borrow money when times are good because that's when there's profit to be made by investing the borrowed money. They do it less when rates are higher, but they still do it. The "problem" with the natural cycle is that in bad times people start to default on their de…
That's not what Keynesianism does. Keynesianism is countercyclical stimulus spending which boosts the economy in general by increasing activity, balanced by higher taxes which prevent overheating.
The last decade or two haven't been Keynesian at all - they've been selective corporate welfare for the financial sector, combined with a bizarre implication that this will somehow trickle down into the economy as a whole, combined with very anti-Keynesian low taxation for the beneficiaries.
The effects are as you describe, but more for common sense reason than Keynesian ones. Financial actors who were some combination of bankrupt, inefficient, and corrupt were bailed out and Frankensteined into continued growth when they should have been left to die on the slab.
The result has been a fragile debt, leverage, and froth extraction economy, tentpoled - for now - by a few giant tech monopolies.
Re: U.S. Presidents and Comparative Stock Market Performance
#27Earlier quoted context omitted.
The problem with "save in good times, spend in bad" is that people don't actually save in good times. Even if you raise interest rates, people will still borrow money when times are good because that's when there's profit to be made by investing the borrowed money. They do it less when rates are higher, but they still do it. The "problem" with the natural cycle is that in bad times people start to default on their de…
That's not what Keynesianism does. Keynesianism is countercyclical stimulus spending which boosts the economy in general by increasing activity, balanced by higher taxes which prevent overheating. The last decade or two haven't been Keynesian at all - they've been selective corporate welfare for the financial sector, combined with a bizarre implication that this will somehow trickle down into the economy as a whole,…
[deleted]
Re: U.S. Presidents and Comparative Stock Market Performance
#28"Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans."
- Robert F. Kennedy
Re: U.S. Presidents and Comparative Stock Market Performance
#29Earlier quoted context omitted.
Although, the Dow doesn't really go back that far either in the sense that it swaps out stocks occasionally, which could cause spurious conclusions to be drawn if not accounted for.
The S&P 500 does also swap stocks, and more often :-)
If the data exists for the underlying stocks in the market, a far better indicator would be to do an IRR calculation on every stock in the market, or every stock above a certain market cap threshold (inflation-adjusted). Easy enough.
Re: U.S. Presidents and Comparative Stock Market Performance
#30Earlier quoted context omitted.
The problem with "save in good times, spend in bad" is that people don't actually save in good times. Even if you raise interest rates, people will still borrow money when times are good because that's when there's profit to be made by investing the borrowed money. They do it less when rates are higher, but they still do it. The "problem" with the natural cycle is that in bad times people start to default on their de…
That's not what Keynesianism does. Keynesianism is countercyclical stimulus spending which boosts the economy in general by increasing activity, balanced by higher taxes which prevent overheating. The last decade or two haven't been Keynesian at all - they've been selective corporate welfare for the financial sector, combined with a bizarre implication that this will somehow trickle down into the economy as a whole,…
> Keynesianism is countercyclical stimulus spending which boosts the economy in general by increasing activity, balanced by higher taxes which prevent overheating.
As implemented by the Fed it means lowering interest rates during downturns to stimulate spending on credit and raising interest rates during times of exuberance to cool things off.
But the result of that is that everyone is always getting further into debt, because it's the bad times when people would otherwise normally have either defaulted or paid the debts back (to avoid what would otherwise be higher risk-driven interest rates at those times, compared to the then-lower investment returns from the borrowed money). So by stimulating borrowing during recessions, debt increases significantly then instead of being reduced.
Meanwhile it still doesn't get paid back during the good times because the higher rates reduce borrowing during those times but nobody really wants them so high during times of productive business opportunities that people divert money from growing businesses to paying back old debts.
So consumer debt goes up but never down.
The corollary on the government side only works because "high taxes" rather than "high interest rates" actually increases government revenue, which gives them something to pay the public debt back with. (Assuming that's what they did with the money, which it isn't -- and can't be with the Fed doing the opposite, because paying back government debt in good times would lower interest rates then.)
But on the consumer side, higher interest rates reduce the amount of money people have to pay back debts with rather than increase it. And so do higher taxes.
Which leaves the way out as the government creating new money and giving it to people so that they have something to pay their debts with. Then it doesn't come from taxes, so you aren't just taking money from people to give it back to them (or crashing the stock market by taking it from businesses), and it doesn't come from issuing more government debt, so you aren't increasing interest rates and causing people to have to pay the money they receive as interest rather than principal (or crashing the stock market again).