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

Bernanke Says U.S. Economy Faces a ‘Wile E. Coyote’ Moment in 2020

bloomberg.com

Post reply on HN
Print view View original

121–130 of 228 posts

Re: Bernanke Says U.S. Economy Faces a ‘Wile E. Coyote’ Moment in 2020

#121

Post by galieos_ghost »

maxxxxx wrote: post #66
mhneu wrote: post #46

2020: policies put in place under this administration will come home to roost during the next administration, which will get the blame. 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/republi…

" 2020: policies put in place under this administration will come home to roost during the next administration, which will get the blame." 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.

The housing bubble was caused by Clinton's policies that modified the CRA resulting in all those crappy loans

Re: Bernanke Says U.S. Economy Faces a ‘Wile E. Coyote’ Moment in 2020

#122

Post by knuththetruth »

mindcrime wrote: post #87

“The economy is already at full employment.” I'm not sure that's actually true. Yes, the govt. reported "official" unemployment number is 3.8% or whatever. BUT... that comes with a couple of big, big caveats: 1. Those numbers by definition don't include job-seekers who have left the market and quit being job-seekers. IOW, people who became so despondent that they gave up. But, there's nothing specific that stops thes…

Also don’t forget that a huge percentage of the job growth has been in the tenuousness of the “gig economy,” famous for its workers committing suicide in public as a desperate appeal for acknowledgement of their hardship.

Re: Bernanke Says U.S. Economy Faces a ‘Wile E. Coyote’ Moment in 2020

#123

Post by maxxxxx »

creaghpatr wrote: post #119
adventured wrote: post #82

Earlier quoted context omitted.

During the second half of the Clinton Admin, there was an extreme stock market bubble, which began to crash at the end of his second term. 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, whic…

100% agree, I'd put the blame on the Fed before Trump, Obama, Bush, or Clinton. If I had to choose it would be Bush for being president when TARP was passed but really the blame there falls on the Congress.

You are probably right but people tend to give credit to presidents when things go well so they also should get the blame. Justified or unjustified.

Re: Bernanke Says U.S. Economy Faces a ‘Wile E. Coyote’ Moment in 2020

#124

Post by spir »

mindcrime wrote: post #87

“The economy is already at full employment.” I'm not sure that's actually true. Yes, the govt. reported "official" unemployment number is 3.8% or whatever. BUT... that comes with a couple of big, big caveats: 1. Those numbers by definition don't include job-seekers who have left the market and quit being job-seekers. IOW, people who became so despondent that they gave up. But, there's nothing specific that stops thes…

> “The economy is already at full employment.”

On a recent EconTalk[1], Edward Glaeser, the Fred and Eleanor Glimp Professor of Economics at Harvard, said, in their recent sample, 11.9% of U.S. men aged 25-55 have been jobless for over 12 months.

EDIT: quick googling, 11.9% of U.S. men aged 25-55 is about 7.5 million people.

http://www.econtalk.org/archives/2018/03/edward_glaeser.html

Re: Bernanke Says U.S. Economy Faces a ‘Wile E. Coyote’ Moment in 2020

#125

Post by nickik »

__derek__ wrote: post #4
chollida1 wrote: post #2

This is one area where I think the US system shows the power of separation of concerns. Trump would love lower interest rates but the Fed, tends to run itself without much political influence. These people are all "adults" and very accomplished and knowledgeable. They set the FED rate and everyone else falls along. They have been actively raising rates, with more rate hikes expected in this year to cool inflation, an…

> At the very least the US will have some wiggle room to lower rates when the economy slows down again. While true, one of the lessons from 2008-9, and part of Bernanke's point, is that monetary policy alone can't always accomplish the task. If we use up all the extra fuel in the run-up to a rough patch, we risk not having enough to get us out of the rut ahead.

Yeah and he is wrong and telling a false history.

Go back to 2008 and look at their policy and meeting. The fact is that they were talking about HIGH INFLATION in the meeting in late 2008.

They did not lower interest rates to zero and had a policy of sterilization (selling bonds to buy troubled housing assets, instead of buying the troubled with new money).

The did not even deliberately end this policy, the market forced them because they were running out of T-Bonds. Later the called this 'QE1' but it was not really QE, it was them preserving a minim of T-Bonds (and that's their own account).

While they did go on to do QE1/QE2 they also payed interest on reserves to prevent that money from creating more inflation. And this was very deliberate policy, they explicitly said 'We are doing this to prevent the money from going out'.

The fact is that while nominal income collapsed in 2008 the Fed did nothing while the economy collapsed, like Nero in Rome.

How can you claim that a bank that can print infinite amounts of money could not do anything against this:

https://oregoneconomicanalysis.files.wordpress.com/2011/10/n...

Friedman, Bernanke and many others have written about how the central bank could do much at the zero bound and other countries like Switzerland showed that this is true.

The Fed failed as a institutional because they didn't plan for 0% interest, not because its impossible to do anything.

Re: Bernanke Says U.S. Economy Faces a ‘Wile E. Coyote’ Moment in 2020

#126

Post by mbesto »

megaman22 wrote: post #113
ams6110 wrote: post #93

Earlier quoted context omitted.

Trump benefits from Obama's policies by reversing them.

It's startling what the growth on my 401k has done since November 2016. Essentially flat for years before, then immediately jumping, once the election results were in. Q1 2018 was a bit sluggish, but it's back on that tragectory again. Even outside the market, people are hiring again, companies are making investments, it's a hell of a turn around.

It's startling what my 401k/IRA did from 2012 to 2014: https://imgur.com/a/M7PZn2m

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?

Re: Bernanke Says U.S. Economy Faces a ‘Wile E. Coyote’ Moment in 2020

#127

Post by galieos_ghost »

coliveira wrote: post #38
smallnamespace wrote: post #5

The combination of tax repatriation, tax cuts, and large-scale deficit spending (fiscal expansion) late in the economic cycle (recessions typically happen every 8 years or so, and the current expansion has been going on for ~10 yrs now) while the Federal reserve is raising interest rates (monetary 'contraction') is more or less unprecedented (we've never seen it happen in modern times in the US or any other large dev…

The so called business cycle is created by the FED itself. Left uncontrolled, the market will disconnect from reality and create bubbles that can destroy the economy, as it did in 1929. The unrecognized work of the FED is to increase the interest rates periodically to force these bubbles to pop and create a minor recession before they can collapse the economy. The real risk of this cycle is that the FED has already l…

fed intervention has been shown to make things worse, rather than a quick and violent correction we get the anemic recovery from the 2008 recession, combined with another 10 trillion in debt from the fed printing money to buy stocks and prop up Obama. Zero interest rake hikes during his entire presidency is a joke.

Re: Bernanke Says U.S. Economy Faces a ‘Wile E. Coyote’ Moment in 2020

#128

Post by mindcrime »

bdamm wrote: post #117
mindcrime wrote: post #87

“The economy is already at full employment.” I'm not sure that's actually true. Yes, the govt. reported "official" unemployment number is 3.8% or whatever. BUT... that comes with a couple of big, big caveats: 1. Those numbers by definition don't include job-seekers who have left the market and quit being job-seekers. IOW, people who became so despondent that they gave up. But, there's nothing specific that stops thes…

Do you know how the government might acquire the data you're looking for? #3 is easy, #1 and #2 seem more in the domain of private surveyors that are more like pollsters and taking voluntary data sets to proxy the big picture. That has its own problems, of course. #3 is clearly happening in tech.

There is already data collected on at least (2) and(3) of those points, although I can't tell you all of the details from memory, as far as who collects it, how it's collected, the frequency, etc. But I can clearly recall reading recent (and less recent) articles on economic issues that cited data reflecting underemployment, and wage growth.

There's a lot of interesting information here[1] regarding what employment related data is collected and reported by the BLS.

[1]: http://www.pewresearch.org/fact-tank/2017/03/07/employment-v...

#3 is clearly happening in tech.

True, and a handful of other areas as well. But that's still only a portion of the overall economy.

Re: Bernanke Says U.S. Economy Faces a ‘Wile E. Coyote’ Moment in 2020

#129

Post by maxxxxx »

megaman22 wrote: post #113
ams6110 wrote: post #93

Earlier quoted context omitted.

Trump benefits from Obama's policies by reversing them.

It's startling what the growth on my 401k has done since November 2016. Essentially flat for years before, then immediately jumping, once the election results were in. Q1 2018 was a bit sluggish, but it's back on that tragectory again. Even outside the market, people are hiring again, companies are making investments, it's a hell of a turn around.

The stock market has being going sup since 2009 or so. Sometimes a little faster, sometimes a little slower. Look at a logarithmic chart and you will see that trend from 2009 to now. Same for unemployment. The rate has steadily gone down from 2010 on. There was no turn around in 2016.

Re: Bernanke Says U.S. Economy Faces a ‘Wile E. Coyote’ Moment in 2020

#130

Post by acjohnson55 »

galieos_ghost wrote: post #121
maxxxxx wrote: post #66

Earlier quoted context omitted.

" 2020: policies put in place under this administration will come home to roost during the next administration, which will get the blame." 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.

The housing bubble was caused by Clinton's policies that modified the CRA resulting in all those crappy loans

I can't validate the truth of that perspective, but there was the better part of a decade to correct this issue.
Post reply on HN