Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Economy Got Off to a Historically Bad Start in 2014

fivethirtyeight.com

Post reply on HN
Print view View original

61–70 of 91 posts

Re: The Economy Got Off to a Historically Bad Start in 2014

#61

Post by mikeyouse »

Paul_Dessert wrote: post #30

The chart in the articles below paints the picture. I've never really been overly involved in economics up until last year. When I started reading and exploring I was shocked at what I found. I kept struggling, because I knew something wasn't right, I just couldn't put my finger on it. I still can't. All indicators that I can find show the economy slipping into another recession (or simply continuing the previously i…

I sincerely hope Zerohedge isn't your source for economics information, they are desperately alarmist and wrong nearly constantly. The source of your unease might just be your source of news. The world isn't falling apart, there is no 'great lie', poor homebuyers in Topeka aren't to blame for the GFC, and you shouldn't be stockpiling bullets and gold.

The world entered a debt-driven recession and we're still climbing out of the aftermath. Everyone tried to deleverage at once, which left nobody to drive the economy toward previous growth levels. Monetary policy is ineffective since the Western World is bouncing off the Zero Lower Bound, and fiscal policy is ineffective since politicians don't have the will to take on new debt to stimulate their respective economies. The historically low interest rates combined with new capital requirements are preventing financial institutions from lending money. Inflation will eventually return but not before many Western countries see several quarters of strong (4%+) growth.

Hopefully the following will help brighten your outlook;

* There are more Americans working today than at any point in US history: http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=E...

* There are 9 million more Americans working today than at the bottom of the recession -- even with nearly 800k fewer government employees: http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=E...

* Americans are now spending the lowest percentage of their disposable income on debt payments in the 40-year history of the data series: http://research.stlouisfed.org/fred2/graph/fredgraph.png?g=D...

* US government debt interest payments as a percentage of federal outlays are as low as they've ever been: http://www.pewresearch.org/files/2013/10/debt_interest2.png

Re: The Economy Got Off to a Historically Bad Start in 2014

#62

Post by mikeyouse »

shirkey wrote: post #57
mikeyouse wrote: post #24

Earlier quoted context omitted.

Shadow stats isn't credible in any way. They can't even be bothered to take the raw data and apply the 'old' weights to them, so they just arbitrarily add a few percentage points to the CPI. The BLS has dedicated far too much effort into showing why they are an asinine source for 'data': http://www.bls.gov/opub/mlr/2008/08/art1full.pdf Consider this: If "real" inflation was 7%/year, in 10 years, the price of everythi…

The data provided in my link shows 4-6% average, I was referring to the most recent spike in real inflation that is not showing up in the BLS data. At the lower end, you'd have 48% price growth compounded annually over that 10 year period, at the higher end is 79%, so not sure why you extrapolated that at 7% over ten years.

I'll admit, I didn't even click on your link, but rather went by your claimed range:

> Government stated inflation based on chained CPI and other new measures to reduce inflation may be at around 2%, but previous formulas used in the past to calculate inflation would show a much higher rate (6-10%)

I'm not here to quibble about inflation ranges, but to point out how idiotic their 'methodology' is. Don't take my word for it;

James Hamilton (CV: http://econweb.ucsd.edu/~jhamilton/) - http://econbrowser.com/archives/2008/09/shadowstats_deb

Greenlees and McClelland (Who actually designed the CPI methodology) - http://www.bls.gov/opub/mlr/2008/08/art1full.pdf

Or my favorite, via the libertarian blogger James Parsons. If you actually use Shadowstat's inflation ranges, you can 'back-calculate' the price of assets to show how insane they actually are:

* If shadow stats inflation assertions are correct, the 'real' value of housing has dropped 60% since 1980!

[1] - http://blog.jparsons.net/2011/03/shadow-stats-debunked-part-...

Re: The Economy Got Off to a Historically Bad Start in 2014

#63

Post by karlkatzke »

Two of my consulting clients have seen this show up in their Q2 sales to date; one is missing their Q2 revenue goal by a whopping 50%. Admittedly, they are a small business, but they have a great B2B recurring revenue model. The goal miss is driven completely by customers who had missed their own goals in Q1, and tightened their belts as a reaction.

Re: The Economy Got Off to a Historically Bad Start in 2014

#64

Post by jqm »

mikeyouse wrote: post #51
jqm wrote: post #44

Earlier quoted context omitted.

"The idea of taxing the socially beneficial act of working and hiring workers is pretty repugnant anyway." HEAR! HEAR! Payroll taxes are essentially a form of slavery. Every week you work X number of hours for the government. Almost like you were hauling pyramind blocks under a whip. And, on this point, conservatives (who are often wrong) are exactly right. Taxing innovation and labor are hardly incentives to provide…

Payroll taxes are nothing like slavery. You do yourself no favors with such ridiculous comparisons.

I didn't say "payroll taxes are LIKE slavery" (which would be a comparison).

I said "payroll taxes are a FORM" of slavery. (along with being a form of theft). Just because we have been doing it and you are used to it doesn't negate this.

If one WERE to compare payroll taxes and slavery, I would say the common element is involuntary appropriation of the fruits of labor. So they are not "nothing" alike. They do share at least one very strong common trait.

If you find the phrase "slavery" inflammatory or "ridiculous" as you put it... fine. I think you are wrong, but it's irrelevant to the larger point I was making anyway.

And that point is... it is better to tax resource usage than to tax labor for a number of reasons. Justice being a primary one, and conservation and improved productivity being others. I'd love to hear your opinion on the actual point being raised if you have one.

Re: The Economy Got Off to a Historically Bad Start in 2014

#65

Post by [deleted] »

jimmaswell wrote: post #53
Retric wrote: post #13

Earlier quoted context omitted.

The US has huge structural problems and the Fed is just a useful band-aid. It's value is stabilizing the banking system not the economy. Systemic Corruption, Terrible primary education system, Ridiculous Military Spending, Unsustainable Debt Levels, Minimal Infrastructure Spending, Huge undocumented Immigrant population, Ridicules Sentencing Laws, Anti Middle Class / Start-up Tax Code, Legislation Requiring Middle Me…

>We even get basic things wrong like promoting home ownership and heavily subsidizing farming. Could you expand on what exactly is wrong with those things?

[deleted]

Re: The Economy Got Off to a Historically Bad Start in 2014

#66

Post by Retric »

kaonashi wrote: post #31
Retric wrote: post #13

Earlier quoted context omitted.

The US has huge structural problems and the Fed is just a useful band-aid. It's value is stabilizing the banking system not the economy. Systemic Corruption, Terrible primary education system, Ridiculous Military Spending, Unsustainable Debt Levels, Minimal Infrastructure Spending, Huge undocumented Immigrant population, Ridicules Sentencing Laws, Anti Middle Class / Start-up Tax Code, Legislation Requiring Middle Me…

> Unsustainable Debt Levels There's no such thing as unsustainable debt levels in the thing you are the monopoly issuer of.

Look up hyper inflation and say that again.

Re: The Economy Got Off to a Historically Bad Start in 2014

#67

Post by jqm »

crazy1van wrote: post #59
jqm wrote: post #40

Earlier quoted context omitted.

Redistributing some wealth would be a positive for the economy at this point and time. It's like playing monopoly and someone wins all the money. The game is over at that point. Now sure... some people try to keep it going by lending money. But when the winner gets all that as well and the other party eventually has mortgaged and sold everything there is no more money for the winner to get. Getting money out of the h…

> Getting money out of the hands of accumulators and hoarders (oh, I mean, "investors") and back into the hands of consumers The banking system may be seriously flawed, but I'm not following your critique of accumulators / hoarders / investors. When people acquire excess money, they rarely put in under a mattress. They don't need it right now so they enter into a transaction with someone who does need it in return fo…

Big companies have ridiculous sums of cash on hand right now that they are not investing.

People keep wealth in other forms besides banks.

There is a lot of hoarding going on and it is one of the primary reasons the economy is not growing.

But the point is... as wealth concentrates, consumers lose the ability to purchase. So things grind to a halt. There has to be some mechanism to counter this trend.

Re: The Economy Got Off to a Historically Bad Start in 2014

#68

Post by taivare »

mikeyouse wrote: post #61
Paul_Dessert wrote: post #30

The chart in the articles below paints the picture. I've never really been overly involved in economics up until last year. When I started reading and exploring I was shocked at what I found. I kept struggling, because I knew something wasn't right, I just couldn't put my finger on it. I still can't. All indicators that I can find show the economy slipping into another recession (or simply continuing the previously i…

I sincerely hope Zerohedge isn't your source for economics information, they are desperately alarmist and wrong nearly constantly. The source of your unease might just be your source of news. The world isn't falling apart, there is no 'great lie', poor homebuyers in Topeka aren't to blame for the GFC, and you shouldn't be stockpiling bullets and gold. The world entered a debt-driven recession and we're still climbing…

Can we go back to the ' Chicken Little sky is Falling ' meme of Zero Hedge ,it helps me when I feel like externalizing my pain and insecurities .

Re: The Economy Got Off to a Historically Bad Start in 2014

#69

Post by kaonashi »

tinco wrote: post #46
kaonashi wrote: post #43

Earlier quoted context omitted.

_Deficit_ levels can reduce the exchange rate; but that's not something the U.S. is having problems with at the moment.

It's not? You mean to say debt is not growing any longer? (deficit is growth of debt is it not?) (genuinely curious, I'm only on page 30 of piketty :P)

In nominal terms, yes. The point is that it never becomes unsustainable because the interest rates paid are determined by the issuer, and inflation is a product of net spending (deficit). (not really Piketty, more Fullweiler)

Re: The Economy Got Off to a Historically Bad Start in 2014

#70

Post by kaonashi »

Retric wrote: post #66
kaonashi wrote: post #31

Earlier quoted context omitted.

> Unsustainable Debt Levels There's no such thing as unsustainable debt levels in the thing you are the monopoly issuer of.

Look up hyper inflation and say that again.

I have; it usually is characterized by a collapse in real output (or loss of a war), accompanied by madly buying foreign currency at increasingly poor rates to pay off foreign debt.
Post reply on HN