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

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

#181

Post by ravenscrow » Fri, Jun 08, 2018, 7:09 PM UTC

ebbv wrote: post #148

mhb wrote: post #71

Earlier quoted context omitted.

Become a good strategy? Pensions for government workers have been a thing for a very long time.

Pensions are not inherently a problem any more than any other form of retirement account is. HN should be above this kind of ignorant rhetoric.

> Pensions are not inherently a problem any more than any other form of retirement account is.

Sure it is. It's inherently problematic because it assumes perpetual growth of population and economy. Also, there is a difference between pensions and 401ks and IRAs. 401ks/IRAs will run out. Pensions can never run out. In other words, you can outlive your 401ks/IRAs, but you can't outlive your pension.

Or put it simply, with 401k/IRAs, you can't take out more than you put in. With pensions, you can if you live long enough. So who makes up the difference? The workers or taxpayers.

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

#182

Post by snarf21 » Fri, Jun 08, 2018, 7:10 PM UTC

Retric wrote: post #163

xyzzyz wrote: post #154

Earlier quoted context omitted.

Of course they are more of a problem, just like a mortgage is more risky than saving up to buy a house with cash upfront — pensions create a long term liability in a way that putting cash in employee 401k doesn’t. Even more importantly, with pensions you’re taking a mortgage that is deferred for a few decades, and someone else than you will be responsible for paying it off — by the time the pension benefits come to m…

Unfunded pensions do that, but the government could easily mandate all pensions are 110% fully funded. Really, it's an issue of policy not pensions.

I'd disagree. Fully funded would probably look more like 300% of what is expected. People are living longer. If healthcare is included in the pension, it is a variable cost we can't even measure in terms of future cost.

Additionally, pension have to be managed and administrated. This is pure wasted money. Every pensioner would be better off taking the money that is set aside for their part of the pool and putting it in a Vanguard index fund. When you start to withdraw, you know how much you have left and you haven't paid tons of kickbacks along the way. When there is a recession, you can scale back your withdraws until there is a recovery, etc.

Fixed benefit pensions can never be anything but a pyramid scheme. Otherwise, your pension would be more by doing what I state above because the administration is near zero. The pension funds have never done better than the S&P over any reasonable time window. Pensions will always have unnecessary overhead.

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

#183

Post by pdonis » Fri, Jun 08, 2018, 7:13 PM UTC

icu wrote: post #102

lostmsu wrote: post #26

Earlier quoted context omitted.

What's wrong with inflation?

In basic terms, inflation is the loss of purchasing power due to an increase of the monetary supply faster than economic growth. In plain English, this is where more currency is chasing the same number of goods and services. This means your unit of currency buys less over time. What is 'wrong' with this is that inflation is a transfer of wealth—some people even go so far as calling it theft or a 'stealth tax.' This i…

> the purchasing power that you had in your unit of currency isn't 'lost', it is actually transferred to the institutions creating the money.

I wish I could upvote this more. If only the majority of people understood this basic fact.

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

#184

Post by AnimalMuppet » Fri, Jun 08, 2018, 7:14 PM UTC

jcomis wrote: post #29

Ok, say you believe this is going to happen. What the hell can you really do?

Well... you can be in the stock market for the next two years. During those two years (under normal circumstances), interest rates should be rising. Two years from now, when the stock market is at its peak, sell stocks and buy long duration bonds. Hold those while the stock market tanks and interest rates go down. (Bonds increase in price as the interest rate declines; the longer term the bond, the bigger the price change.)

All that's assuming that Bernanke is right both in direction and in timing. It also assumes that interest rates will do the usual thing this cycle which, given the strange stuff that the government is doing to intervene, may not be a good assumption.

Note well: I am not a financial advisor, and this is not investment advice.

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

#185

Post by mywittyname » Fri, Jun 08, 2018, 7:14 PM UTC

mindcrime wrote: post #120

hawkesnest wrote: post #111

Earlier quoted context omitted.

But problems 1 and 2 are the same for the official unemployment metric in times past as well. 1. If the person has stopped looking for a job, their likelihood of resuming their job-seeking is pretty low. That's especially true for the unusually large aging baby-boomer population who are taking an early retirement rather than seeking re-employment. 2. While that's clearly another indicator of the strength of the job m…

But problems 1 and 2 are the same for the official unemployment metric in times past as well. Absolutely. Don't get me wrong... I'm not arguing for or against any specific policy in the post above, or making any particular claim regarding Bernanke's argument. I just wanted to point out that saying "we're at full employment" is at least a little bit questionable as an assertion, at least if we take "full employment" t…

But "full employment" is widely considered to be a sub 5.0% unemployment rate.

> at least if we take "full employment" to represent a situation where lack of available labor represents a threat to the economy, vis-a-vis other policy issues.

I believe that there are officially fewer unemployed people than there are open jobs in the US [1]. Not sure if that's the kind of "threat" you're looking for, but it qualifies, as a risk at least.

[1] http://money.cnn.com/2017/06/06/news/economy/us-job-openings...

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

#186

Post by davidf18 » Fri, Jun 08, 2018, 7:16 PM UTC

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…

The jobless rates are actually very inaccurate. This article was written May 24 by Larry Summers and another Harvard Economist:

A Rescue Plan for a Jobs Crisis in the Heartland

https://www.nytimes.com/2018/05/24/opinion/heartland-wage-su...

"More alarming, America faces a historic crisis of male joblessness in what we call the Eastern Heartland, a band of states that runs from Louisiana north through to Ohio and Michigan."

A reason for jobs shortages (e.g., truckers) is because firms are not offering high enough wages.

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

#187

Post by maxxxxx » Fri, Jun 08, 2018, 7:20 PM UTC

sykh wrote: post #174

maxxxxx wrote: post #149

Earlier quoted context omitted.

Exactly. Unfortunately Americans have been trained to believe that one party is right and the other is wrong. The concept that maybe both are wrong or support the same thing is foreign to them. Same with surveillance: It's either Bush's fault or Obama's fault. They don't see the steady progression over the years independently of who is in power.

It’s sort of the divide and conquer strategy. Pit groups against each other whilst the looting occurs. While people fight over who is the true snowflake and that kind of stuff all sorts of shitty policies get enacted. Things didn’t just suddenly get unbearable because just got elected. If one thinks this then the problem was already there and one's lack of awareness of it is the real problem.

This Chomsky vote comes to mind: “The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum....” .

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

#188

Post by _dps » Fri, Jun 08, 2018, 7:23 PM UTC

tabtab wrote: post #177

tim333 wrote: post #171

Earlier quoted context omitted.

Business cycles have been around longer than the FED and in countries where it doesn't operate. Hence it probably didn't create them all. The FED tries to moderate the cycles I guess.

The "Tulip Bubble" of 1630's is arguably the first speculative bubble. No FED back then. Maybe the FED affects the timing and depth of the business cycle, but probably cannot prevent all "bubbles"...Unless, maybe you give the FED a clue-stick to use on stupid investors.

The historical view of tulip speculation has changed a lot in the last 20 years, but popular conception has not caught up.

In a nutshell, it is now believed by several researchers to have been a very narrow phenomenon with minimal impact to the national economy. Per Wikipedia

"While Mackay's account held that a wide array of society was involved in the tulip trade, Goldgar's study of archived contracts found that even at its peak the trade in tulips was conducted almost exclusively by merchants and skilled craftsmen who were wealthy, but not members of the nobility.[44] Any economic fallout from the bubble was very limited."

https://en.wikipedia.org/wiki/Tulip_mania#Modern_views

Taken at face value, this suggests that the tulip "bubble" was dramatically different from either the dotcom or the mortgage bubble, which had wide ranging participation and damage. One could argue that the latter two would have been impossible without the Fed.

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

#189

Post by pdonis » Fri, Jun 08, 2018, 7:23 PM UTC

icu wrote: post #102

lostmsu wrote: post #26

Earlier quoted context omitted.

What's wrong with inflation?

In basic terms, inflation is the loss of purchasing power due to an increase of the monetary supply faster than economic growth. In plain English, this is where more currency is chasing the same number of goods and services. This means your unit of currency buys less over time. What is 'wrong' with this is that inflation is a transfer of wealth—some people even go so far as calling it theft or a 'stealth tax.' This i…

> if the creation and circulation of money was perfectly in line with the growth of the economy than there would be no inflation.

While this is technically true (at least for some interpretations of "inflation"), it's important to realize that the wealth transfer effect you describe still occurs in this case. The only way it would not occur is if the newly created money was distributed exactly in accordance with the current allocation of money: in other words, if the economy grows by 1 percent, every current holder of a dollar gets a penny. But of course that's not how money creation is actually done.

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

#190

Post by TangoTrotFox » Fri, Jun 08, 2018, 7:24 PM UTC

sykh wrote: post #174

maxxxxx wrote: post #149

Earlier quoted context omitted.

Exactly. Unfortunately Americans have been trained to believe that one party is right and the other is wrong. The concept that maybe both are wrong or support the same thing is foreign to them. Same with surveillance: It's either Bush's fault or Obama's fault. They don't see the steady progression over the years independently of who is in power.

It’s sort of the divide and conquer strategy. Pit groups against each other whilst the looting occurs. While people fight over who is the true snowflake and that kind of stuff all sorts of shitty policies get enacted. Things didn’t just suddenly get unbearable because just got elected. If one thinks this then the problem was already there and one's lack of awareness of it is the real problem.

It's also convenient for maintaining a grip on power and something I'm certain both parties have internally considered. Think about the most recent election. How many people voted for Hillary thinking, "I think this person truly and accurately represents my views and beliefs." And similarly for Trump? By contrast how many voted for one or the other thinking, "This person is trash... but, my god, the alternative is just completely unacceptable!"

The same sort of attitude ensures that third parties will never be considered. When people are driven to literally fear the 'opposition' winning, it means that the powers that be have effectively sealed their grip on power tight. Also even notice the media's focus on "electability." It's all rhetoric designed to get people to note vote for the candidate they want in power, but to 'strategically vote' and in the process completely undermine their own self interest.

Pair this with some institutional issues like ballot access and we have a system where the establishment has all but guaranteed their perpetual success.