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Most of the US economy is in a recession

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Re: Most of the US economy is in a recession

#241

Post by scoofy »

tonyedgecombe wrote: post #202
rich_sasha wrote: post #190

Earlier quoted context omitted.

I find the "K-shaped" recovery a very compelling narrative. Some companies are going stratospheric, some are decaying, the average is +1% growth or so. So depending on where you are, you will see the economy as either booming or floundering. There's plenty of little nuggets like this to point to. US 2025 GDP ex AI investment was in a recession. US equity market ex tech does not outperform e.g. Europe. And so on.

I'm not sure that means much. Absent AI investors would have put their money somewhere else.

Imagine a consumer packaged goods fund that focuses on premium consumer packaged goods, like the kind of more cutesy stuff you may have seen on the shelves at places like Whole Foods. You would think that the fund is doing poorly because people have less money to spend in general. However, in a K-shaped recovery, the premium goods should actually over-perform the standard options, because the people who are on tight budgets and moving to the value options, well, they weren't really buying the premium items in the first place.

Markets have an obscene number of variables to consider in any analysis. An industry can be doing both good and bad depending on what the product is, and who the customer is.

At the end of the day, I continue to believe the Housing Theory of Everything thesis when it comes to the sense that people are on an economic treadmill where nothing ever gets better. And it helps describe the engine behind the K-shaped recovery. If we can fix the rent-seeking, we should be able to get back to a world where a rising tide lifts all boats.

https://worksinprogress.co/issue/the-housing-theory-of-every...

Re: Most of the US economy is in a recession

#242

Post by John23832 »

joe_mamba wrote: post #223
dzonga wrote: post #80

that's pretty obvious to everyone in the US what's not obvious to most people - is how e.g other countries that are already struggling will get into deeper depths e.g UK where cost of energy was super high. UK is not bombing Iran, but their economy will cry more than the US what's not obvious is how a few oil Barrons will make so much money in the next few weeks e.g those in Texas - their great grand-children will ne…

>if you're in the US/Netherlands you will be okay in terms of food I don't get it. Why is Netherlands in the same boat as the US? Do they have some crazy oil reserves I don't know about?

They are a net food exporter.

Re: Most of the US economy is in a recession

#243

Post by JumpCrisscross »

lovich wrote: post #237
JumpCrisscross wrote: post #236

Earlier quoted context omitted.

> Why do you think I responded to you the way I did? How is the rhethorical-question style working out? I'm pointing out an ahistorical claim in the top post. You want to broaden the discussion without acknowledging that, and without actually saying anything, which isn't particularly interesting to engage on.

You didn’t point out an ahistorical claim. They didn’t claim that GDP wasn’t growing. They said that it wasn’t helping the common man and you jumped in with an equivalent of “but the DOW is over 50k”

> They didn’t claim that GDP wasn’t growing. They said that it wasn’t helping the common man and you jumped in with an equivalent of “but the DOW is over 50k”

No, this is a ridiculous misreading. They said that "realizing that GDP growth can be achieved while average joe on Main Street is struggling" is "what changed." That is ahistorical. I may realize, today, that the sky is blue, but that's a personal discovery, not a general one. GDP growth amidst widespread poverty has been the default in most of human history; it isn't what changed.

Whether or not GDP is growing was never brought up by anyone except you.

Re: Most of the US economy is in a recession

#244

Post by lovich »

JumpCrisscross wrote: post #243
lovich wrote: post #237

Earlier quoted context omitted.

You didn’t point out an ahistorical claim. They didn’t claim that GDP wasn’t growing. They said that it wasn’t helping the common man and you jumped in with an equivalent of “but the DOW is over 50k”

> They didn’t claim that GDP wasn’t growing. They said that it wasn’t helping the common man and you jumped in with an equivalent of “but the DOW is over 50k” No, this is a ridiculous misreading. They said that "realizing that GDP growth can be achieved while average joe on Main Street is struggling" is "what changed." That is ahistorical. I may realize, today, that the sky is blue, but that's a personal discovery, n…

That’s a reasonable position but none of it came across in your comment here

> This is most GDP growth across human history until the Industrial Revolution with the exception of maybe a half dozen civilisations.

And you literally used the phrase “GDP growth” and referenced how high it was so I don’t get why you’d say I was the one who brought it up.

Re: Most of the US economy is in a recession

#245

Post by conductr »

mr_00ff00 wrote: post #177
conductr wrote: post #156

Earlier quoted context omitted.

I think that’s what’s changed though, as GP asked, people want to define recession as closer to the social wellbeing than a metric like gdp that is divorced

Doesn’t this kinda create a problem though? Like a recession implies economic slowdown, but social wellbeing can decrease while the economy is fine. For example, a plague or severe weather might make the average person have a worse standard of living, but if the economy isn’t net affected, it seems wrong to say we are in a recession.

Our vocabulary is too limited then. I know average people only use the word recession when things are compounding negative towards their personal finances / economics AND they feel like most people they know are dealing with the same. They don't claim it's a Katrina/Harvey/[any storm name] recession, they know the differences and that storm driven struggles are usually localized / temporary with a known amount of work to rebuild - average joe feels helpless in a macro-recession as it's only going to be solved in time and/or with help of politicians they don't trust.

Plagues are a weird example, because I can't think of any situation where a plague would not affect the economy - and it should effect it negatively. I think COVID effected it negatively, we just chose to have a financial long COVID and drag out what should have been a financial disaster without all the government programs. Instead of economic collapse and starvation, we chose to massively spend money knowing it would be paid in time through inflation and also knowing it wouldn't get reallocated in an even way as pre-COVID. (That's my take, I don't know if there's any validity to it but it's just my gut feeling.)

Re: Most of the US economy is in a recession

#247

Post by joquarky »

JumpCrisscross wrote: post #72
vjvjvjvjghv wrote: post #11

Earlier quoted context omitted.

A good economy is an economy that benefits most of the population and not just a few percent at the top. I would argue it should be a political goal to keep income distribution relatively stable. A good economy is also relatively stable. Big booms with a crash following are very devastating to not-rich people. In a crash rich people lose a lot of paper money but not-rich people may have trouble affording shelter or f…

> it should be a political goal to keep income distribution relatively stable This penalizes economic dynamism and moves economic decision making from risk taking to whoever defies the baseline distribution. > A good economy is also relatively stable. Big booms with a crash following are very devastating to not-rich people Not necessarily–plenty of social systems let the market boom and bust without causing social di…

> risk taking

All I see is bailouts where risk should have wiped out at least some of these so-called risk takers.

Re: Most of the US economy is in a recession

#248

Post by JumpCrisscross »

joquarky wrote: post #247
JumpCrisscross wrote: post #72

Earlier quoted context omitted.

> it should be a political goal to keep income distribution relatively stable This penalizes economic dynamism and moves economic decision making from risk taking to whoever defies the baseline distribution. > A good economy is also relatively stable. Big booms with a crash following are very devastating to not-rich people Not necessarily–plenty of social systems let the market boom and bust without causing social di…

> risk taking All I see is bailouts where risk should have wiped out at least some of these so-called risk takers.

> bailouts where risk should have wiped out at least some of these so-called risk takers

Sure. I’m not saying we have a great system right now. Just that swinging to the other end is also a bad idea. You want risk takers to enjoy their fruits when they win and suffer their losses when they lose.

Re: Most of the US economy is in a recession

#249

Post by IAmBroom »

_heimdall wrote: post #226
ekjhgkejhgk wrote: post #51

Earlier quoted context omitted.

What specifically has changed?

Historically, both politicians and yhe media considered two consecutive quarters of declining GDP. The Biden administration changed that, basically arguing that the definition is too narrow and they preferred to use a more broad set of indicators that just so happened to avoid calling a recession when they wanted to claim a strong economy.

The Biden administration argued for a change. They did not convince others. It's like saying "Trump renamed the Gulf of Mexico" - no one but loyalists bought in.

Economists continue to use the same definition as before, despite your attempt to blame Biden.

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