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

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

#131

Post by forapurpose »

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.

It's incredible that nobody in this discussion mentions the massive fraud and incompetence on the part of Wall Street banks, and the deregulation and lack of oversight that allowed it.

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

#132

Post by darksaints »

ams6110 wrote: post #93
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.

Trump benefits from Obama's policies by reversing them.

While I think Obama's economic policies were total crap, at least he had a partially-supported justification for his deficits. Trump has no excuse for his deficits, and his neo-Smoot-Hawley "reforms" are going to put us back in the same place that Smoot-Hawley did. He's reckless and out of control.

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

#133

Post by okreallywtf »

ams6110 wrote: post #93
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.

Trump benefits from Obama's policies by reversing them.

I'm hesitant to give Obama credit, but I think Trump claiming that the unemployment rate was 30, 40, 50% during the election and immediately taking credit for the unemployment numbers in january 2017 was so disingenuous that it truly boggles the mind. Anyone that gives Trump credit for the current trajectory of unemployment numbers is beyond the pale.

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).

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

#134

Post by maxxxxx »

forapurpose wrote: post #131
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.

It's incredible that nobody in this discussion mentions the massive fraud and incompetence on the part of Wall Street banks, and the deregulation and lack of oversight that allowed it.

I really regret making my comment. It was about presidents getting credit and blame for the consequences of whatever happened before they were in office. It just shows that people are not capable of discussing things without immediately going into their partisan positions.

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

#135

Post by forapurpose »

adventured wrote: post #101
mhneu wrote: post #88

Earlier quoted context omitted.

Luckily for us, Clinton moved the budget toward balance during a good economy. So when the bubble burst, Bush was able to stimulate the economy and cut taxes. 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.

The current tax cuts are a trivial part of the deficit problem (to note, I'm against the personal income tax cuts they passed). The US deficit was going to $1 trillion regardless of the tax cuts. The forecast for a deficit explosion due to entitlement costs, long predates the Trump tax cuts. Half of those cuts reset. The primary item in the other half, the corporate income tax cuts, were a necessity to compete with t…

Could you provide some factual basis for this? For example, my understanding is that the corporate tax burden in the US was lower than other advance economies; one particular tax, which few paid in full due to loopholes, etc, was higher.

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

#136

Post by nickik »

adventured wrote: post #82
salviasloth wrote: post #72

Earlier quoted context omitted.

Clintons internet bubble?

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…

The part about 2001-2004 is pretty hard to believe. Inflation was maybe high and I do think some housing debt came from that but there is absolutely no way all the effect you claim can be explained by the monetary policy of that time.

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.

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

#137

Post by nickik »

AnimalMuppet wrote: post #107
nickik wrote: post #58

Earlier quoted context omitted.

You can bet on the market going down. Just go to your banker and tell him to do it. The question is just, do you believe it?

"The market can stay irrational longer than you can stay solvent." Be very careful betting on the market going down. You not only have to be right, you have to be right soon enough.

I hate that statement. Because people who say it claim they were right based on it, when they were clearly wrong and just trying to excuse their failure.

Saying 'at some point in the future prices might be lower' without a time attached to it is an intellectually empty statement.

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

#138

Post by komali2 »

pjc50 wrote: post #65
komali2 wrote: post #27

Earlier quoted context omitted.

I always think of it in disaster tiers. Market slowdown, you'll want your bonds. Recession, you'll want your cash. Depression, you'll want gold and barterable goods. Economic collapse or apocalypse, you'll want food, medicine, and alcohol (possibly the most barterable good, also delicious). In any case anybody reading this in a major city faces non zero likelihood of disaster (take your pick for your city, hurricane,…

Yeah, there's a very deep end it's possible to go off. However after this winter's experience where two feet of snow ran the supermarkets out of fresh food, I'm going to keep slightly more food and folding money on hand. But remember these are long-term processes. Ultimately your connections and community will become important in economic collapses, because they're usually very slow-motion.

Regarding that, I highly recommend "a Paradise in hell."

It analyzes the citizen responses to several catastrophic disasters. Turns out, people don't turn into ravaging wolves in a disaster, they immediately begin to help their neighbor, with no regard to race color Creed etc. It's when the national guard comes in that issues start arising...

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

#139

Post by nickik »

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…

You are disagreeing with all economists. 1929 was clearly a monetary policy issues and even left wing economist mostly agree with that.

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

#140

Post by forapurpose »

maxxxxx wrote: post #75
salviasloth wrote: post #72

Earlier quoted context omitted.

Clintons internet bubble?

During Clinton's time there was a huge run-up in the stock market fueled b a lot of internet companies. Clinton got all the credit for the growth during that time and then Bush suffered through the predictable collapse.

> During Clinton's time there was a huge run-up in the stock market fueled b a lot of internet companies.

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

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