Author Topic: Political Economics  (Read 888778 times)

Body-by-Guinness

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Birds of a Feather
« Reply #2450 on: May 06, 2024, 10:34:39 AM »
Who is funding all the pro-Hamas college protests etc? The same people funding Biden....

https://www.politico.com/news/2024/05/05/pro-palestinian-protests-columbia-university-funding-donors-00156135

DougMacG

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Re: Political Economics, Bidenflation
« Reply #2451 on: May 06, 2024, 08:16:41 PM »
Average car payment is now $744 per month according to Kelley Blue book, reported by Steve Moore, CTUP newsletter.

This is way up because of  high interest rates and escalating car prices.

But it's good news to the true left because they don't want people to have cars anyway.

How much money does it take to be rich anymore?  The term millionaire doesn't mean Thurston Howell anymore. More like it means you better postpone retirement because that isn't going to be enough.


DougMacG

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Political Economics, Lowest confidence ever
« Reply #2452 on: May 07, 2024, 08:24:40 AM »
Confidence in a president running for reelection to fix the economy is the lowest under Biden since Gallup first tracked the metric, according to the pollster.

https://www.washingtonexaminer.com/news/washington-secrets/2992228/historically-low-confidence-biden-fed-economy/

ccp

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Re: Political Economics
« Reply #2453 on: May 07, 2024, 09:58:15 AM »
with numbers like that the election should be a blowout

I remember when Reagan ran against Carter the election did not seem assured beforehand.

But of course, Trump is no Reagan.

DougMacG

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Political Economics, Inflation was 9%
« Reply #2454 on: May 11, 2024, 06:48:01 AM »
President Joe Biden this week:

“I mean, no president’s had the run we have had, in terms of creating jobs and bringing down inflation. It was 9% when I came to office, 9%.”


If this thread was about Joe Biden I would note that when he lies he like to repeat himself for emphasis.  See his first VP debate with Sarah Palin.

Democrats have been lying about the consequences of their policies since long before slow Joe lost his marbles.

We did have 9% inflation recently but it wasn't when this transitory President came to office, it was after markets saw his policies.  It was after multiple multi-trillion dollar boondoggles from Washington squeezed out the private sector and reckless regulations squeezed out whatever the spending missed.

"The month Biden took office, inflation was 1.4%. Eighteen months later it topped 9%. Now it’s 3.5% and rising again."
https://issuesinsights.com/2024/05/10/is-this-bidens-supermarket-scanner-moment/
-------------------------
Let me get this straight.  The reason a Democrat voter including Joe Biden should vote Democrat is because they brought the inflation rate down.  When you find out that is false and just the opposite was true, he more than tripled or quadrupled the cumulative rate of inflation in his time in office as a result of his policies, shouldn't you vote the opposite?

And if you don't use logic to make vote, why are you pretending to use it to make your argument?
« Last Edit: May 11, 2024, 07:28:52 AM by DougMacG »

Body-by-Guinness

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Restaurant Apocalypse
« Reply #2455 on: May 14, 2024, 08:49:48 AM »

DougMacG

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Political Economics, Trump China Tariffs Punish US Consumers
« Reply #2456 on: May 15, 2024, 06:12:24 AM »
but our sh*t doesn't stink.

https://web.archive.org/web/20240427033735/https://www.nytimes.com/2021/07/16/us/politics/yellen-us-china-trade.html

"Yellen Says China Trade Deal Has ‘Hurt American Consumers’ "
That was then.
--------------

But Biden's tariffs are "targeted".  They will do amazing good and you won't feel a thing, said the lady who brought us the worst inflation since Jimmy Carter.

https://www.pbs.org/newshour/show/treasury-secretary-yellen-on-why-biden-is-targeting-chinese-manufacturing-with-new-tariffs

Again, the lying 'tell' is the lips moving.

It might be a good policy. It might be a bad policy. But don't tell us a major tax doesn't have a cost to it.

They sold us slow Joe as a "moderate" compromise candidate. They told us Merrick Garland would be a moderate independent voice on the Supreme Court. And what a coup it was to get a chairwoman of the independent Federal Reserve to serve in the executive branch.

Why can't they just be honest and tell us they've chosen political hacks for these positions?

They say Trump only chooses "loyalists".  What do they call these appointees who check their morals, ethics and common sense at the door when they come in?
« Last Edit: May 15, 2024, 06:21:26 AM by DougMacG »

Body-by-Guinness

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CPI Manipulation
« Reply #2457 on: May 15, 2024, 09:04:01 AM »
Biden Admin removers coffee--which has shot up significantly in cost--from the consumer price index. Guess that's one way to "control inflation...."

https://x.com/shipwreckedcrew/status/1790733260005499383

DougMacG

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Re: Political Economics
« Reply #2458 on: May 20, 2024, 06:58:29 PM »


https://www.powerlineblog.com/ed-assets/2024/05/Screenshot_2024-05-19_182649.png

I wish the graph would post.

Change in household net worth under Trump, and under Biden. 

Chart 1, nominal gains, they look pretty similar, nice gains. 

Chart 2, after inflation, good gains under Trump.  Zero under Biden.

Four wasted years.
« Last Edit: May 20, 2024, 07:02:55 PM by DougMacG »

Body-by-Guinness

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Re: Political Economics
« Reply #2459 on: May 21, 2024, 06:02:23 AM »


https://www.powerlineblog.com/ed-assets/2024/05/Screenshot_2024-05-19_182649.png

I wish the graph would post.

Change in household net worth under Trump, and under Biden. 

Chart 1, nominal gains, they look pretty similar, nice gains. 

Chart 2, after inflation, good gains under Trump.  Zero under Biden.

Four wasted years.

Whoa, that's a telling graph! Tee shirt material, IMO, and I nominate Paul Krugman to recieve this tattoo across his chest, backwards, so he can view it in the mirror every morning.

DougMacG

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Re: Political Economics
« Reply #2460 on: May 22, 2024, 07:42:25 AM »
Cherrypicking economic results to show that Dem policies don't work is kind of easy these last 4 years.  Today's sampling:

Federal Reserve Report:  65% report they are worse off last year due to inflation.  (The other 35% don't know it?)
https://www.federalreserve.gov/publications/files/2023-report-economic-well-being-us-households-202405.pdf

CBS:  New College Grads face cooling job market
https://www.cbsnews.com/news/jobs-hiring-college-grads-class-of-2024/

WSJ:  Parents getting hit hard with inflation
https://www.wsj.com/economy/consumers/americans-hit-by-inflation-are-feeling-worse-financially-especially-parents-ab383606

USAToday:  Largest rent increases are in swing states
https://www.usatoday.com/story/news/politics/elections/2024/05/21/rents-prices-swing-states-voters-disenchanted/72794026007/

Trump:  'I'm embarrassed to only be leading this guy by a few points.'
« Last Edit: May 22, 2024, 07:45:42 AM by DougMacG »

ccp

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Re: Political Economics
« Reply #2461 on: May 22, 2024, 07:47:18 AM »
the free shit crowd

make the rich pay!

that will solve everything.

 :wink:

DougMacG

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Democrat analyst tries to flip the economic narrative
« Reply #2462 on: May 22, 2024, 09:24:17 PM »
Democrat analyst tries to flip the economic narrative for the election.

With no success.

https://thehill.com/opinion/4678521-mellman-diving-deeper-the-trump-economy-vs-the-biden-economy/

Mention previously, net worth went up under Trump and not so under biden.

The jobs growth they talk about under Biden was the reopening following covid, everybody knows it.

This author thinks Trump benefited from growth coming out of the Obama Biden administration. Growth under Obama Biden was anemic, pathetic. The growth under Trump came from deregulation and tax reform, policies have consequences.

DougMacG

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https://www.washingtonexaminer.com/opinion/3012350/inflations-silent-impact-on-american-family-businesses/
---------------
Biden policies are shutting down family businesses in more ways than Selena Zito has room to describe in one column. For example, if you can't pass along all your hard-earned work to your family members, why would you work so hard to build it?

Completely unmeasurable of course are all the small businesses that never started due to all the complexity of over-regulation and punitive taxation.
« Last Edit: May 23, 2024, 06:09:45 AM by DougMacG »

DougMacG

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« Last Edit: May 25, 2024, 04:29:51 AM by DougMacG »

DougMacG

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US Economic Growth Last Quarter Is Revised Down From 1.6% Rate to 1.3%
« Reply #2465 on: June 04, 2024, 08:17:11 AM »
This V-shaped recovery we should have had coming out of the Dem states shutdown is looking LACKLUSTER.

This news item slipped by very quietly:

1st quarter 2024 GDP results dropped from 4th quarter 2023 growth of 3.4%, to 2.5% 'estimate', to 1.6% reported growth, now to 1.3% downwardly revised growth.

Long term average growth under normal circumstances in order to keep the country going is considered to be about 3.1% growth.

https://www.businessinsider.com/gdp-gross-domestic-product-first-quarter-economy-growth-2024-4

https://finance.yahoo.com/news/gdp-us-economy-grew-at-a-slower-pace-than-initially-thought-in-q1-131220924.html

https://www.usnews.com/news/economy/articles/2024-05-30/first-quarter-economic-growth-revised-downward-on-weaker-consumer-spending

And now what?  First, the release of oil from the strategic Democratic reelection reserve.  Next will be rate cuts from the compliant Federal Reserve wing of the Democratic Party.

In both cases it may be too little too late.  The first debate is this month?  June is the last month of second quarter, already looking dismal.  Atlanta Fed GDPnow already has 2nd quarter estimate lowered below 2%.  This is looking anemic, pathetic, insane to keep thinking more of the same will produce different results.

Check out the latest movements in the Atlanta FED estimates.  No one is optimistic at this point:



https://www.atlantafed.org/cqer/research/gdpnow

DougMacG

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How did Minorities fare under Trump, under Biden?
« Reply #2466 on: June 04, 2024, 09:13:53 AM »
https://committeetounleashprosperity.com/hotlines/minorities-have-fared-much-better-under-trump-than-biden/

Blacks’ real incomes rose by an average of $4,500 under Trump – or five times higher than under Biden (through the most recent Census Bureau year 2022).  Hispanics saw a $5,280 gain under Trump versus $320 under Biden.  And Asians saw an amazing near $10,000 average family income rise under Trump – and six times the gains under Biden.

Scroll right on the chart.  Wish I knew how to re-size these.


[Doug]  If you (blacks, minorities) don't want to stay poor forever under Democrat's repressive policies and have your children and grandchildren and their children grow up poor and dependent on the government forever - THEN YOU AIN'T BLACK!!
« Last Edit: June 04, 2024, 09:22:01 AM by DougMacG »

DougMacG

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Re: Political Economics
« Reply #2467 on: June 04, 2024, 09:24:56 AM »
Our federal government borrowed $500 Bilion in the first quarter in order to attain this 1.3% growth.

Congressional record May 7, 2024



Somebody say STOP THE MADNESS.

DougMacG

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Political Economics, Stagflation, Who Knew?
« Reply #2468 on: June 06, 2024, 05:30:46 AM »
"taking the Fed rates to artificially low levels for economic stimulus would be to repeat a pattern that causes them to go up later to punitive levels and risk future stagflation."

  - From the first paragraph of my first post in this thread 16.5 years ago.  Time flies.  But economic principles stubbornly remain.
« Last Edit: June 06, 2024, 05:41:28 AM by DougMacG »

Crafty_Dog

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Re: Political Economics
« Reply #2469 on: June 06, 2024, 08:55:55 AM »
Yup.

DougMacG

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US: Middle Class face Economic Hardship for the Rest of their Lives
« Reply #2470 on: June 06, 2024, 11:01:08 AM »
[Doug]  the premise behind liberals' economic policy in the United States today is that we have enough prosperity and now it's time to divide up what we have. It's simply not true. We don't have enough prosperity. That's why I get so bent out of shape pushing growth economics. The median income in this country is amazing but things cost so much today that the vast majority of people feel squeezed and the outlook for the future is no better.. We should legalize the pursuit of prosperity, "umleash prosperity", and maybe we would get more of it. Future healthcare is going to cost a lot. Energy and transportation cost a lot. Insurance costs are going way up. Housing costs are crazy, and it's all getting worse.
-----------------------------------
Bloomberg published a study:
Almost two-thirds of Americans considered middle class said they are facing economic hardship and don't anticipate a change for the rest of their lives, according to a poll commissioned by the National True Cost of Living Coalition. By many traditional measures, the US economy is strong, with robust labor, housing and stock markets, as well as solid gross domestic product growth. But the data don't capture the financial insecurity of millions of households who worry about their future and are unable to save, according to the group formed this year by two anti-poverty organizations that seek to come up with cost-of-living tools that help gauge economic well-being. In the large poll of 2,500 adults, 65% of people who earn more than 200% of the federal poverty level thats at least $60,000 for a family of four, often considered middle class said they are struggling financially. A sizable share of higher-income Americans also feel financially insecure. The survey found that a quarter of people making over five times the federal poverty level an annual income of more than $150,000 for a family of four worry about paying their bills. (Source: bloomberg.com)...
« Last Edit: June 06, 2024, 11:25:08 AM by DougMacG »

DougMacG

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Political Economics, amazing jobs numbers?
« Reply #2471 on: June 11, 2024, 07:23:15 AM »
Oops it's not 15.6 million new jobs, it's 2.4 million.

But that's with 8.6 million more working age adults in this country. Not just not impressive, that's moving backwards.

Of those new jobs, most were part-time, most of those went to immigrants, most of those went to illegals.

Fewer people are employed now than one year ago.

Real wages declined.

5 million working age adults dropped out of the labor force under President Biden, so don't look to the "unemployment rate" to evaluate the jobs market.

"Americans" are better off? How so?

https://issuesinsights.com/2024/06/11/the-unvarnished-truth-about-that-blockbuster-jobs-report/

Crafty_Dog

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Body-by-Guinness

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“The Myth of American Income Inequality”
« Reply #2473 on: June 11, 2024, 07:13:06 PM »
Whoa! I was not aware of all the contortions the left embraces when bemoaning supposed income inequality:

https://www.realclearpolitics.com/video/2024/06/11/the_2024_hayek_lecture_phil_gramm__john_early_on_the_myth_of_american_inequality.html

Body-by-Guinness

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What Really Threatens the Dollar Lives in DC
« Reply #2474 on: June 11, 2024, 09:05:32 PM »
2nd post. Coals to Newcastle around here, though many in DC should tattoo it backwards on their chests so they can read it in the bathroom mirror every morning as they brush their teeth:

The Dollar and its Domestic Enemies

The Beacon / by Peter C. Earle / Jun 11, 2024 at 6:31 PM

Upping the ante following the initial weaponization of the dollar in 2022, the United States and a number of allied nations have agreed in principle to begin distributing profits on seized Russian assets to Ukraine. Interest payments on securities in which hundreds of billions of dollars worth of Russian foreign exchange reserves were invested, including US, European, and other sovereign bonds, would thus be transferred into a trust account accessible to the Ukrainian government. The US assertion of this undertaking was codified as the Rebuilding Economic Prosperity and Opportunity (REPO) for Ukrainians Act, signed into law by President Biden on April 24, 2024.

It is another in a series of unprecedented actions not only intensifying economic pressure on Russia but also signaling a shift in the economic dimension of current geopolitical conflicts. And it raises questions as to whether the entirety of those seized assets might be turned over to Kyiv should their reportedly declining war effort continue to weaken. (The legality of such a measure is beyond the scope of this writing, but discussed in full here.)

Expanding legal justifications for foreign asset confiscation, in addition to currency militarization, is accelerating an intense search for dollar alternatives among US rivals and certain allies as well. Recent data indicates that the process of de-dollarization is occurring, albeit at a very gradual rate. The lethargy is to be expected given the global economy’s long standing reliance on the US dollar for international commerce. Barriers to transitioning away from the dollar are considerable owing to deeply entrenched financial infrastructures, including technology, accounting systems, long-established settlement practices, and ingrained customs. Those factors collectively reinforce dollar dominance in global trade networks. Unsurprisingly, innovation is underway. Also, global reserve currencies have historically been subject to change. The US dollar supplanted the British pound sterling, which displaced the Dutch guilder, which replaced the Spanish real (‘piece-of-eight’), and so on.

The Chinese renminbi is not a feasible substitute for the dollar for several reasons. Yet a significant movement away from dollar and dollar-denominated exposure is underway. In the first quarter of 2024, China sold a record $53.3 billion in US Treasurys and agency bonds. Explanations for the declining appetite for US debt include attempting to bring balance between the weakening renminbi and the strengthening dollar, which has surged owing to aggressive US monetary policy. Another is risk mitigation, as China (like all other nations) needs to balance its own foreign policy interests against the growing vulnerabilities associated with US dollar use.

But today the dollar’s centrality is threatened as much, if not more, by domestic than foreign actors. One cause can be found in the Biden administration’s March 11, 2024, General Explanations of the Administration’s Fiscal Year 2025 Revenue Proposals. A notable footnote on page 80 contains the following statement:

A separate proposal would first raise the top ordinary rate to 39.6 percent (43.4 percent including the net investment income tax). An additional proposal would increase the net investment income tax rate by 1.2 percentage points above $400,000, bringing the marginal net investment income tax rate to 5 percent for investment income above the $400,000 threshold. Together, the proposals would increase the top marginal rate on long-term capital gains and qualified dividends to 44.6 percent.

Currently, the top marginal US long-term capital gains tax rate ranges from 20 to 33 percent when combining state and federal taxes. The FY 2025 budget proposal would increase this combined tax burden to over 50 percent in many states. This would significantly raise, and in some cases double, the tax rates in key corporate hubs such as California (to nearly 60 percent), New Jersey (to over 55 percent), and New York (to over 53 percent). It would establish the highest US capital gains tax in US history.

An intrinsic part of the dollar’s appeal as a reserve currency owes to liquid, deep, and broad capital markets, including government securities, equities, corporate bonds, and a vast array of other investment vehicles. Governments and large corporations with substantial dollar holdings abroad frequently invest them in US Treasury bills and notes to earn a return on those reserves. The current weighted average maturity of US Treasury debt is approximately 71 months (5.9 years). Significantly altering the tax code for long-term investments is likely to impact investor behaviors; the imposition of the highest capital gains taxes in over a century conveys an unequivocally hostile stance toward investors.

On the other side, the dollar faces threats from economic advisers to former President Trump, who have reportedly discussed punitive measures against nations moving away from using the US dollar. Saleha Mohsin of Bloomberg reported last week that discussions have included imposing trade restrictions, tariffs, and penalties typically associated with currency manipulation against dollar defectors. Like proposals for soaring capital gains taxes, an open discussion of punitive measures against nations increasingly wary of dollar-based commerce suggests a troubling and profound lack of awareness.

Recent revelations pertaining to Biden advisor Jared Bernstein reinforce the view that the dollar has internal as well as external enemies. In op-eds as far as a decade back and recent presentations, Bernstein has hinted at purposeful de-dollarization policies as a means of fostering reindustrialization within the United States. The purpose would be to reverse the nearly five decades in which China transformed into a manufacturing behemoth, a period during which the US deindustrialized, offshoring most of its industrial economy to become an uber-financialized, service-based economy. It is an objective facilitated in part by taking weak dollar policies to an extreme.

Even setting aside the vast ideological (and practical) gulf between spending lavishly on green energy projects while pursuing a return to a smokestacks-and-ironworks America, it is a shift more easily envisioned than accomplished. Rebuilding America’s manufacturing base, whether accomplished via programs associated with the left (collectivism), the incipient right populism (National Industrial Policy), or a not-at-all inconceivable marriage of the two, would quickly result in significant misallocations and crowding-out alongside cascading opportunity costs. But all of that would come only after an all-out assault on the dollar’s value was joined. Or rather, continued; the most facile means of eroding the dollar’s exchange value are stalwarts of the current and recent policy agendas: an inflation bias, debt accumulation, widening deficits, trade interventionism, and so on.

As both sides of the proverbial aisle have made abundantly clear for several decades, incentives for curtailing spending have fled Washington DC altogether. But as with a vision of America’s industrial future that seems to feature higher inflation in the service of wind farms atop coal-fired power plants, here, too, is a hitch. Ratcheting up Federal spending requires issuing more US government debt, which pushes Treasury yields higher. But if dedollarization becomes a policy goal, falling use of dollars saps a portion of the demand for US Treasuries, reducing the US government’s borrowing capacity. And this, as debt service costs steadily ascend.

The oft-heard argument that there are no substitutes for the dollar echoes hollowly in an era of stablecoins, cryptoassets, expanding commodity markets, and central bank digital currencies. The recent bull market in gold has largely been driven by central banks diversifying away from the dollar and bracing for geopolitical uncertainty.

Russian commodity dealers are increasingly turning to stablecoins, such as Tether (USDT), to execute financial transactions with Chinese counterparties in circumvention of traditional payment systems. At least two major unsanctioned metals producers have started using stablecoins and other cryptocurrencies for cross-border transactions, with settlements often processed through Hong Kong. The transition highlights the lasting impact of international restrictions following the 2022 invasion of Ukraine on the Russian economy, especially for companies trading commodities like metals and timber, which have faced challenges in receiving payments and purchasing equipment despite not being sanctioned.

The increased use of cryptocurrencies underscores the complications even in countries like China, which did not join international sanctions but have tightened compliance measures due to threats of secondary sanctions from the US Treasury. Stablecoins offer a quick and cost-effective alternative to currency-based cross-border transactions, reducing the risk of frozen or seized bank accounts. This trend reflects a broader adaptation within Russia, with the central bank showing a more open stance towards crypto in international transactions and lawmakers considering fully legalized stablecoin use. Additionally, some Russian commodities firms–in a throwback to methods employed by the Council for Mutual Economic Assistance (CMEA) during the Soviet era–have resorted to barter deals, circumventing international financial transfers altogether.

China is increasing its gold reserves, which now comprise roughly 5 percent of its total reserves. This is gold’s highest share of the Chinese reserve base since 2015. That accumulation reflects not only a response to dollar strength and trade tensions, including new tariffs on Chinese goods but also a broader effort to diversify away from dependence on the dollar. Central banks worldwide have been purchasing gold and opening foreign currency accounts in local/regional banks which heretofore they have not, insulating themselves from the prospect of monetary predation.

The greatest threat to the soundness and utility of the US dollar, and in turn to the financial health and prosperity of American civil and commercial life, comes not from shadowy figures in faraway lands, but from unremarkable apparatchiks carrying out the edicts of US officialdom. Political capacities for destroying monetary fundamentals in the pursuit of short sighted, ill-conceived and self-serving policies dwarf what elites in outlying capitals dare dream of, let alone accomplish. The flight from the dollar—still in its nascent stages and likely reversible with economically coherent, consistently applied policies—was spurred on by poor judgment, opportunism, and arrogance. Slower and at times quickly, de-dollarization will proceed until the fundamental values and policies that positioned the dollar as the anchor and lodestone of global commerce are restored.

This article was originally featured on AIER.org. You can read the original here.

The post The Dollar and its Domestic Enemies appeared first on The Beacon.

https://blog.independent.org/2024/06/11/the-dollar-and-its-domestic-enemies/?utm_source=rss&utm_medium=rss&utm_campaign=the-dollar-and-its-domestic-enemies

DougMacG

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Re: “The Myth of American Income Inequality”
« Reply #2475 on: June 12, 2024, 05:04:29 AM »
Whoa! I was not aware of all the contortions the left embraces when bemoaning supposed income inequality:

https://www.realclearpolitics.com/video/2024/06/11/the_2024_hayek_lecture_phil_gramm__john_early_on_the_myth_of_american_inequality.html

From the article:
"The Census Bureau says the top 20% of earners in America have an income that is 16.7 times the average of the bottom quintile. We show that if you count all transfer payments... as income, and you count all taxes as income lost, that the ratio is not 16.7 to 1, but 4 to 1.""

(Doug). Yes, great post.  How come being WRONG BY 4- FOLD doesn't bother these dishonest, agenda-driven control freaks?

They use the raw statistic to drive more and more taxes and programs but don't count the effects of the high taxes and generous programs we already have to keep calling for more and more of both, and it builds and cycles until there is nothing left to split up.

Back to the article:
"when you adjusted for transfer payments and taxes, the bottom 60% of Americans had basically the same income,"

(Doug)  They have completely destroyed, removed the economic ladder for the people who need it the most, and still want to keep going further and further with it.

Put it another way: If you are not a person with a set of skills, aptitude, experience and knowledge capable of making something close to $100,000 per year in this country, you can't better yourself by working or trying to improve your skills.  Might as well just ride on the wagon pulled by the others, until there is nobwagon and no pulling force.

This is the sytem designed by people who call themselves 'smart planners.  It's hard to overstate how dysfunctional this apparatus has become.

Every attempt of reform is met with cries of "giving to the rich" or "taking from the poor".
« Last Edit: June 12, 2024, 06:04:47 AM by DougMacG »

DougMacG

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Re: Political Economics
« Reply #2476 on: June 12, 2024, 06:27:16 AM »
One other small point on income inequality besides it being the ladder that leads people out of poverty...

Zero inequality coincides with 100% coercion and control because unequal is the natural order of things. 

People aren't all the same, not even the same person at different points in their life.  Skills aren't all the same.  Effort isn't all the same.  Risk taking choices aren't all the same.  Kind of dumb if you ask me to ban the rewards placed on positive differences, ban incentives to improve yourself.  And that would be a better society?  Common sense says otherwise.

Crafty_Dog

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« Last Edit: June 12, 2024, 01:41:41 PM by Crafty_Dog »

DougMacG

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Record number Jobs - per person
« Reply #2478 on: June 13, 2024, 07:12:28 AM »

DougMacG

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Political Economics, Consumer sentiment still falling
« Reply #2479 on: June 14, 2024, 04:45:14 PM »
https://confoundedinterest.net/2024/06/14/going-down-consumer-sentiment-slumps-to-7-month-low-in-5-sigma-miss-as-ppi-final-demand-sinks-and-fed-loses-more-money/

I'm not pulling for a bad economy but I will keep pointing out when bad policies have bad consequences.

For political economic purposes Biden and team hoped for interest rate cuts from the Fed by now for artificial stimulus since they have no pro growth policies of their own.  But the Fed couldn't cut rates because inflation is still WAY above target (and target is way too high as well). 

The war on energy has cost consumers a half trillion alone.  (CTUP)  Now credit card interest and fees are killing them, and taxes are going up.  Surprise, surprise, surprise, you people (80 million?) voted for all this. 

If you vote trillions spent on "green new deal", wouldn't you think that at least green food would not go up?  Or with energy subsidies your electric bill would go down?  Far from it!

"This is not stagflation", we are told.  We just happen to have 'stag' and 'flation at the same time.

Without pro-growth' policies, there is no way out of stagflation, and pro-growth policies have not had a home in the Democrat party since JFK ("rising tide lifts all boats")- although Clinton dabbled with it during 'triangulation', (although those policies were Newt's).  Even then, it's been a quarter century since any Democrat tried to grow the economy or shrink the government ("end welfare as we know it").

Like his head fake on the border, whatever he does now will likely be too little, too late.
« Last Edit: June 15, 2024, 04:58:15 AM by DougMacG »

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Oversized Government Stole our Prosperity, Scott Grannis
« Reply #2480 on: June 17, 2024, 12:33:52 PM »


Wish I could re-size this for viewing.  Scroll across; you need see the whole thing.

[Scoot Grannis]  I have been updating and publishing this chart for at least the past decade. To this day it amazes me that it has not received more attention. The 3.1% trend line (green) represents the growth path that the economy followed from 1965 through 2007. The 2.2% trend line (red) represents the growth path that largely has prevailed since mid-2009. If the economy had regained the 3.1% growth path after the 2008-2009 Great Recession, it would be fully 25% bigger in real terms today! (What a difference 1% less growth per year can make!) What explains today's slower growth should be the issue that is front and center of the national debate. My short explanation is that the economy has lost its dynamism due to 1) excessive government spending, 2) increased tax and regulatory burdens, and 3) rising transfer payments.

[Doug]  The lost economy, the area under the curve, is growing and growing every year, already worth Trillions and Trillions lost forever.  What could we use that that money could have paid for?  Paying our own healthcare comes to mind.  Education.  Investing in new businesses innovations.  Clean energy.  Curing cancer and so on.  But no.  It's lost and we're still losing more.

https://scottgrannis.blogspot.com/2024/06/tight-money-hasnt-hurt-corporate-profits.html
« Last Edit: June 17, 2024, 12:45:21 PM by DougMacG »

ccp

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Re: Political Economics
« Reply #2481 on: June 17, 2024, 01:16:37 PM »
"My short explanation is that the economy has lost its dynamism due to 1) excessive government spending, 2) increased tax and regulatory burdens, and 3) rising transfer payments."

2008 was of course the mortgage crises and when Congress began flooding the economy with money .  A trillion here a half billion there I think another 700 bill.

and of course, we see the curve start to move up just before the covid economic catastrophe

what does rising transfer of payments mean?


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Re: Political Economics
« Reply #2482 on: June 18, 2024, 06:07:51 AM »
'What does "rising transfer payments" mean?

One way of looking at the budget is to separate the cost of governing, money to run the court system for example, from the checks we write to individuals, welfare, Social Security, unemployment, and thousands of other social spending programs that now way exceed the cost of governing.

Take from Peter to pay Paul, economists call those transfer payments. If more people are in the category of Paul than Peter, there is a political benefit to it. But there is also an enormous economic cost to it. It's not a breakeven to the economy to pay people to not work and overburden with taxes those who do.

Food stamps and SSI disability for example spiked under Obama but no one called the surgeon general to see what's going on.  Everyone knew disability is really a welfare program, an alternative to working, and the incentives are economic.

The effect of this came out in BBG's income inequality post. After you figure in taxes and programs, the first quintile and the second quintile of income make approximately the same amount, which means zero incentive to work for nearly half of Americans. We are losing the benefit of their work.  Make up for it with illegals, but illegals find they don't have to work either as the programs marketed to them as well.

Open borders and free sh*t are a bad combination. There is literally no limit to the number of people we have to fund.

George Gilder's breakout book, Wealth and Poverty, detailed the welfare phenomenon. Before Reagan, we looked at taxes as a burden on the taxpayer.  But the real damage is done to the recipients. The taxpayers only lose money, maybe 30 or 40% of what they earn. The recipients of these programs lose the will to work, the will to improve themselves, the pride of becoming self sufficient and supporting a family. In some cases like SSI people sign away their right to ever make more money and work their way out of their trouble. Forever dependent. And then government took the place of fathers in the homes, and crime (and drugs) associated with men losing purpose rose. We are losing entire families to this, entire neighborhoods, and major parts of once great cities to this.

Even Social Security is part of this trap. It was supposed to insure you, not fund you.

As we sweeten the deal to not work, we get more of it. Just under Biden, 5 million more working age people left the workforce.

It's kind of strange to listen to the Democratic party today and think these are unintended consequences of well meaning programs. What we see is the racism of low expectations. Biden says it very directly to the black people, you need us, Democrats, to keep your programs, to keep you in poverty. If you can't see that, you ain't black.

It's disgusting politics but it's also an economic tragedy. A fourth of our GDP lost to this and that's the part that could push a lot of people from programs to paychecks, or from living paycheck to paycheck to building a nest egg and becoming invested.
« Last Edit: June 18, 2024, 06:41:43 AM by DougMacG »

ccp

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Re: Political Economics
« Reply #2483 on: June 18, 2024, 06:38:14 AM »
Excellent explanation.
Thank you professor!

:))

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Slow Joe is pulling a fast one on wages
« Reply #2484 on: June 21, 2024, 05:28:02 AM »
Wages, after taxes, after inflation, are down under Biden.

Is there some more meaningful way of measuring wages then after taxes and after inflation? No.
-----------

Fact Check: Joe’s Wrong on Wages. CTUP
    June 20, 2024

Joe Biden is misremembering again. Last week, he declared in an interview that “Wage increases have exceeded the cost of inflation.”

Not even close.  Over the three and a half years of the Biden presidency prices are up 19.4% and average weekly earnings up closer to 17%.

Hourly wages are rising, but hours worked are falling, so the take-home pay after inflation is still down, down, down.

This chart from Yahoo Finance confirms what we’ve been saying for many months.

https://finance.yahoo.com/news/bidens-big-inflation-problem-prices-are-now-up-nearly-20-since-he-took-office-080049551.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAABg4TovFNXcdRl0O1XpXpdGfQ30OnaT4H_pVW8yZPrSsj0uih_r2-qqLLiqrjh9WDqZoyID4oOG33F64pt3IvclwUIFOORcCud7eDzXJ59y1pCVh8z8f-5kuQLXRUVaIAorS9VIC-oIpaTWEsq-dy1v1WH8SUZ7LAe__h8KfNrt6
-------------

[Doug]  All this talk about jobs created, thousands, millions, and yet total hours worked is down. 

Isn't political economic deception a form of lying?
« Last Edit: June 21, 2024, 05:35:52 AM by DougMacG »

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McDonalds' Prices Up 40% since 2019
« Reply #2485 on: June 21, 2024, 03:31:02 PM »
https://www.cnbc.com/2024/06/20/inflation-fast-food-diners-switch-to-casual-chains-darden-ceo-says.html

I would guess it is more than that - with most of the specials gone.

Note:  People making over 400,000/yr are not burdened by this particular inflation tax increase.

I've been saying, go to Subway and ask for the $5 footlong they advertised for long.  And pay $13 or so.

The rise in fast food prices has helped me to eat healthier.  Like the article suggests, I will pay more somewhere else and eat better.

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Inflation (general price level increases) explained...
« Reply #2486 on: June 21, 2024, 05:56:53 PM »
https://x.com/thepursuinglife/status/1537201753413693441

"My gas tank bill is starting to look like a grocery bill and my grocery bill is starting to look like a Costco bill and my Costco bill is starting to look like a mortgage payment and I don’t know how people are affording to live right now."
5:33 PM · Jun 15, 2022

ccp

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Listen to the Leftist economists
« Reply #2487 on: June 27, 2024, 07:46:59 AM »
https://www.msn.com/en-us/news/politics/axios-omits-crucial-details-about-economists-who-say-trump-will-destroy-the-economy/ar-BB1oX2Pa?ocid=msedgntp&pc=DCTS&cvid=9e0e266164ff466e8fc398bb285a9615&ei=13

many of whom are Jewish wedded to the Democrat Party
the "economolisters"

like Larry the lib who twists the Constitution in every conceivable Democrat Partisan way they twist economics in every conceivable way to suit the crats.

And of course are snobby and know it alls and never ever wrong.

I am supposed to believe that increasing the debt to 50 trillion is a good plan.

I am not an economist but would not the dollar overall be in a better strategic position if we had no debt?

Would other countries be as fast to leave the dollar if we had our house in order?

Just thinking.

ccp

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second post
« Reply #2488 on: June 27, 2024, 10:26:12 AM »
Nate Jackson saw same BS from the econolisters I did:

https://patriotpost.us/articles/107993-experts-run-economic-interference-for-biden-2024-06-27

They will be on CNN and MSDNC over the weekend.

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Re: Political Economics, Record Household Debt, Record government debt
« Reply #2489 on: June 27, 2024, 05:54:47 PM »
Trump could have done his debate prep right here.

Americans Are Carrying Record Household Debt into 2024
https://www.marketwatch.com/guides/banking/american-debt-2024/
--------------------------------------------------------------
Biden adds $10 Trillion to federal debt.  New spending goes way into the out-years.
https://budget.house.gov/press-release/fact-check-biden-brags-about-deficit-reduction-while-adding-nearly-10-trillion-in-new-spending/
--------------------------------------------------------------
Biden and his own debt:
https://nypost.com/2024/06/25/real-estate/joe-and-jill-biden-refinanced-their-delaware-home-20-times/

Not exactly a pay as you go kind of guy.
--------------------------------------------------------------
National debt now, 34.7 Trillion.  Deficit estimate for just this year went up by $400 billion this spring, in large part due to "loan forgiveness".  $400 Billion given away without an act of Congress.
https://abcnews.go.com/Politics/2024-federal-budget-deficit-projection-rises-2-trillion/story?id=111254226

Which candidate did they say is a threat to democracy?
« Last Edit: June 27, 2024, 06:03:28 PM by DougMacG »

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I don't endorse her views but I recommend putting this on your workout listen list.  I would not say she is on my side but I would (grudgingly) say she is smarter than me and knows more than me.  Having just got back from the "trilateral commission" is a huge red flag, but doesn't phase the questioners, John Ellis and Joe Kline.  Mostly she stays neutral and describes a complicated world as it is with wide ranging questions and topics.

https://substack.news-items.com/p/stuck

Bio:  Rebecca Patterson is a globally recognized investor and macro-economic researcher with more than 25 years of experience studying how politics and policy intersect with economic trends to drive financial markets. Most recently, Rebecca was Chief Investment Strategist at Bridgewater Associates, where she helped shape the firm’s agenda for researching and building systematic trading strategies. She was a frequent author of Bridgewater’s Daily Observations, met regularly with investors and policymakers and served on the firm’s Executive Committee and Investment Committees. Rebecca joined Bridgewater after serving for eight years as Chief Investment Officer at Bessemer Trust, where she managed $85 billion in client assets. Previously, she spent more than 15 years at JP Morgan, initially as a researcher in the firm’s investment bank in Europe, Singapore, and the US. She also served as a Chief Investment Strategist in the firm’s asset management arm and ran the private bank’s global currency and commodity trading desk. Rebecca has worked closely with the Federal Reserve throughout her career, including serving on both the New York Fed’s Investor Advisory and Foreign Exchange Committees. Rebecca currently Chairs the Board of the Council for Economic Education and serves on the boards of the Bretton Woods Committee and the University of Florida’s endowment. She is a member of the Council on Foreign Relations, the Trilateral Commission and the Economic Club of New York. She holds an MBA from New York University, an MA in International Relations from The Johns Hopkins University School of Advanced International Studies and a BS in Journalism from the University of Florida.

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Political Economics, Misery Index up, Unemployment up
« Reply #2491 on: July 08, 2024, 01:25:14 PM »
[Doug] Shouldn't the economy still be bouncing back from covid closings - if we didn't keep shooting our selves in the foot with wrong-headed policies.  "Build back better from the middle outward," he says. WTF is he talking about?  He's building nothing back better except a giant government deep state operation to put down private interests.  "Record revenues" and still running 1.6 - 1.8T deficits.  How can that be?  It's the spending stupid.
------------------------------------------------------------------------------------------------

Economist bio and link below. From the article:  This shows why the United States Misery Index is rising to 7.4% in June from 6.8% in January. The Misery Index, which measures unemployment and inflation, bottomed out at 68% in 2023 and has been worsening since then. Furthermore, the index is far away from the pre-pandemic level of 5.4%.

All these measures allow us to understand why Americans are negative about the economy. Despite messages of redistribution, social policies, and equality, the average citizen is poorer, and only the wealthy have been able to improve their position and navigate high rates and inflation thanks to investments in the stock market. While this shouldn’t come as a surprise, it’s important to remember. There is nothing social about increasing debt, deficit spending, and taxes.

The problem for most Americans is that it is increasingly difficult to make ends meet despite record government spending, or because of its negative impact on inflation and taxes.

There is a reason why we should be worried about rising discontent and impoverishment. The placebo effect of government spending on GDP is declining. Real gross domestic income (GDI) increased 1.3 percent in the first quarter, a downward revision of 0.2 percentage points from the previous estimate and a market slowdown. The average of real GDP and real GDI, a supplemental measure of U.S. economic activity that equally weights GDP and GDI, increased 1.4 percent in the first quarter, according to the Bureau of Economic Analysis.

If we look forward, Americans are going to have to choose between two options: further impoverishment with Keynesian policies or making a dramatic pro-growth turn where policy is targeted at improving disposable income, increasing investment, and strengthening productivity and real economic growth.

We know that it will be impossible to cut the current deficit with tax hikes. There is no revenue measure that will generate two trillion US dollars per year, and it is impossible to increase taxes further without punishing investment. The problem in the United States is mandatory spending, as the CBO expects outlays to reach 24.9% of GDP in 2036, while revenues will reach a record but insufficient 18%. If the Federal Reserve continues to monetize debt, Americans will suffer from the inflation impact as well as the rising cost of housing. The US dollar’s purchasing power will continue to decline. However, it is easier to create two trillion US dollars of productive GDI than to tax two additional trillion dollars per year out of the existing fiscal base.

Yes, the only solution for the United States is pro-growth, pro-business policies that defend the purchasing power of the US dollar. So-called social policies have only made everyone poorer and hurt the middle class.

About Daniel Lacalle
Daniel Lacalle, PhD Economist and Fund Manager.
https://www.dlacalle.com/en/americans-are-poorer-the-united-states-misery-index-rises-again/
« Last Edit: July 08, 2024, 01:34:40 PM by DougMacG »

Body-by-Guinness

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Elevating Housing Costs
« Reply #2492 on: July 09, 2024, 04:34:45 PM »
The Old Gray Hag lets an non-NYT writer explain why elevators are so few and far between in multi-family buildings, and in doing so, charts how rules, regs, bureaucrats, and special interests add costs to housing construction. And everything else:

The American Elevator Explains Why Housing Costs Have Skyrocketed

By Stephen Smith

Mr. Smith is the founder and executive director of the Center for Building in North America.

My mission to understand the American elevator began in 2021 when I came down with a crippling postviral illness. The stairs to my third-floor Brooklyn walk-up apartment would leave me dizzy and winded, my ears ringing, heart beating out of my chest. At 32, I’d joined the 12 percent of Americans who report serious difficulty with stairs. On bad days, I became a prisoner in my own home.

A few months later, visiting Bucharest, I rode the elevator in my mother’s five-story building. A developer in a much poorer Eastern European country could afford to include an elevator, but the developer of my luxury five-story building in Brooklyn, built 25 years after the passage of the Americans With Disabilities Act, could not? I quit my job in real estate and started a nonprofit focused on building codes and construction policy.

Through my research on elevators, I got a glimpse into why so little new housing is built in America and why what is built is often of such low quality and at high cost. The problem with elevators is a microcosm of the challenges of the broader construction industry — from labor to building codes to a sheer lack of political will. These challenges are at the root of a mounting housing crisis that has spread to nearly every part of the country and is damaging our economic productivity and our environment.

Elevators in North America have become over-engineered, bespoke, handcrafted and expensive pieces of equipment that are unaffordable in all the places where they are most needed. Special interests here have run wild with an outdated, inefficient, overregulated system. Accessibility rules miss the forest for the trees. Our broken immigration system cannot supply the labor that the construction industry desperately needs. Regulators distrust global best practices and our construction rules are so heavily oriented toward single-family housing that we’ve forgotten the basics of how a city should work.

Similar themes explain everything from our stalled high-speed rail development to why it’s so hard to find someone to fix a toilet or shower. It’s become hard to shake the feeling that America has simply lost the capacity to build things in the real world, outside of an app.

The passenger elevator was invented and popularized in the United States and helped our country grow into an economic powerhouse. The elevator-powered Manhattan skyline became the command center for the global economy, where a wave of postwar redevelopment turned emptied-out old tenements into rows of luxury elevator buildings, fortifying the city with a middle- and upper-income tax base to counterbalance the coming decades of urban decay.

Nobody is marveling at American elevators anymore. With around one million of them, the United States is tied for total installed devices with Italy and Spain. (Spain has one-seventh our population, 6 percent of our gross domestic product and fewer than half as many apartments.) Switzerland and New York City have roughly the same population, but the lower-rise alpine country has three times as many single-family houses as Gotham — and twice as many passenger elevators.

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In Western Europe, small new apartment buildings of just three stories typically include a small elevator (and sometimes buildings of just two stories as well). These types of buildings have almost never had elevators in America, and developers are planning and building new five- and six-story walk-ups in some cities. When a developer in Philadelphia or Denver comes across a piece of land zoned for a few stories, elevator expenses are often one reason they build townhouses rather than condos — fewer in number and with higher price tags.

Behind the dearth of elevators in the country that birthed the skyscraper are eye-watering costs. A basic four-stop elevator costs about $158,000 in New York City, compared with about $36,000 in Switzerland. A six-stop model will set you back more than three times as much in Pennsylvania as in Belgium. Maintenance, repairs and inspections all cost more in America, too.

The first thing to notice about our elevators is that, like many things in America, they are huge. New elevators outside the U.S. are typically sized to accommodate a person in a large wheelchair plus somebody standing behind it. American elevators have ballooned to about twice that size, driven by a drip-drip-drip of regulations, each motivated by a slightly different concern — first accessibility, then accommodation for ambulance stretchers, then even bigger stretchers.

The United States and Canada have also marooned themselves on a regulatory island for elevator parts and designs. Much of the rest of the world has settled on following European elevator standards, which have been harmonized and refined over generations. Some of these differences between American and global standards result in only minor physical differences, while others add the hassle of a separate certification process without changing the final product.

If physics is the same everywhere and there are no measurable differences in safety outcomes, why reinvent the wheel (or elevator)? America’s reputation for unbridled capitalism and a stereotype of Europe as a backwater of overregulation are often turned on their head in the construction sector.

Not only do we have our own elevator code, but individual U.S. jurisdictions modify it further. More accurate and efficient electronic testing practices, for example, are still mostly viewed with suspicion by the nearly 100 boards and jurisdictions that regulate elevator safety in North America. (The exact number in the regulatory patchwork is hard to nail down.)

And then there’s labor. Americans, and citizens of almost every other high-income country, rely on immigrants in construction. But there are few legal ways in for construction workers; H-1B visas, which allow foreigners in tech and other industries to work in the United States, are usually only for professions that require college degrees. Immigrant workers without papers therefore typically stick to nonlicensed construction trades like painting and framing.

That works for single-family houses, with their simpler construction. But it’s led to skyrocketing construction labor costs in cities, where stricter licensing and physical complexity of multifamily construction can make it untenable to hire a large slice of the construction labor pool. Workers’ lack of legal status and stability makes it tough for them to get licensed or enroll in apprenticeships or other formal job training programs. The fewer workers available to do a job, the more the job costs.

This tight market for skilled and licensed labor has strengthened the hand of the elevator union — power it uses to create even more of a labor squeeze.

Architects have dreamed of modular construction for decades, in which entire rooms are built in factories and then shipped on flatbed trucks to sites, for lower costs and greater precision. But we can’t even put elevators together in factories in America, because the elevator union’s contract forbids even basic forms of preassembly and prefabrication that have become standard in elevators in the rest of the world. The union and manufacturers bicker over which holes can be drilled in a factory and which must be drilled (or redrilled) on site. Manufacturers even let elevator and escalator mechanics take some components apart and put them back together on site to preserve work for union members, since it’s easier than making separate, less-assembled versions just for the United States.

American building codes and federal law may dictate how large an elevator must be, but they often have little to say about whether one is required at all for apartments. Given the expense, our apartments often just go without.

Beyond the elevator itself, you’ll find a byzantine mess of absurdities and contradictions behind the U.S. construction industry’s slowness, inefficiency and expense. For example, Americans cannot use the latest heat pumps — a critical tool for fighting climate change by electrifying heating systems — because of the same sorts of barriers imposed by U.S. regulators. Instead, Americans rely on obsolete heat pumps that don’t have a market abroad. And plumbing codes in America require an entire network of ventilation piping that has been deemed largely unnecessary in much of the world.

America’s single-family suburbs largely avoid this dysfunction. Over decades, single-family homebuilders and politicians responsive to their concerns have kept a close eye on building codes and the costs they may generate. The National Association of Home Builders has negotiated guaranteed seats on the national model code committees that regulate single-family houses, and it doesn’t shy away from making its case directly to legislators when it feels that those national model codes threaten affordability and should be overridden.

But multifamily developers, traditionally a weaker and less organized constituency, are mostly checked out, so materials manufacturers and organized labor — for whom higher prices mean more money — have run amok.

And it shows. Construction costs for detached single-family houses average about $153 per square foot. In America’s most in-demand coastal cities, multifamily construction costs have exploded. Even subsidized multifamily housing in California can cost $500 per square foot (or more).

A generation of young would-be homeowners locked out by skyrocketing housing costs has taken notice. Their first target was a century of tightening land-use regulation, in which existing homeowners enriched themselves by blocking development through restrictive zoning measures. In recent years, the rise of the so-called YIMBY — or “yes in my backyard” — movement has succeeded in all but abolishing single-family zoning on the West Coast.

But as zoning codes were liberalized, architects and developers soon began ringing alarm bells about the hurdles buried in the finer points of building codes and standards and other more technical rules.

And so, a new front is opening in the housing war.

The advocacy group California YIMBY and its partners have sponsored a bill to rein in an overly litigious legal climate that has made condos almost impossible to build in the state. With the help of the Center for Building in North America, the organization I founded, another bill passed directing the California fire marshal to study national model building code provisions that limit the height of small, single-stair apartment buildings to three stories (one of the most stringent limits in the developed world). And in Vermont, the state legislature and fire marshal are reviewing building and fire code provisions with an eye toward increasing production of housing (including cheaper elevators).

If elevators are ever to be as inexpensive and abundant in North America as they are in Europe and Asia, deeper reforms will be necessary.

Adopting the European elevator standard would open up the market to more competition and parts. We should grant some leniency when it comes to elevator size for small apartment buildings that are at risk of having no elevator at all (or not being built in the first place). Some thought should be given to accommodating less credentialed immigrants like those who work in construction, as in the European Union. In the meantime, vocational and technical training in public high schools should be improved to supply the elevator industry with more native-born workers.

And then there are bigger-picture questions about what to do about our complex system of rules and the groups that oversee them. The federal government could raze the existing system by setting uniform rules for construction with more of an eye toward global best practices and cost, perhaps starting with elevators. The federal government could condition the billions of dollars it hands out for housing assistance on the adoption of new codes, as it has done with highway funding and the now-uniform 21-year-old minimum drinking age.

America has grown extraordinarily rich from white-collar industries like software engineering and finance. But with email-job couples earning well into the six digits now struggling to afford to live in many American cities, we are bumping up against the limits of what quality of life an economy built on apps can provide. Software and financial engineers can’t make my apartment building accessible, so at some point we must relearn how to build things in the real world. Maybe the elevator can teach us how.

https://www.nytimes.com/2024/07/08/opinion/elevator-construction-regulation-labor-immigration.html

DougMacG

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Re: Elevating Housing Costs
« Reply #2493 on: July 10, 2024, 06:10:14 AM »
". A basic four-stop elevator costs about $158,000 in New York City, compared with about $36,000 in Switzerland. "

With "No measurable difference in safety outcomes".

Laws against positive innovation need to be repealed or struck down.

Like he says, just a window into what is wrong.

Amazing that NYT allows truth to slip past its editors.

DougMacG

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Highest office vacancy rate since Carter administration
« Reply #2494 on: July 10, 2024, 07:02:47 AM »
https://www.axios.com/2024/07/09/office-vacancy-rate-record-high
----------------

One of the points of the recent posts in this thread is that these economic problems have nothing to do with one guy forgetting his lines in a debate.  These bad outcomes result from the policies of the Left braintrust behind him destroying our country with their economic ignorance and bad intent.

Yes remote work changes office demand but another invisible fact is that new businesses not starting due to over-taxation and over-regulation are not filling that void.

The failure of commercial real estate is a threat to large banks and affects the entire economy.

Crafty_Dog

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Re: Political Economics
« Reply #2495 on: July 10, 2024, 07:13:33 AM »
Good point and well said.

DougMacG

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Political Economics, GDPnow = 1.5%, Atlanta Fed
« Reply #2496 on: July 10, 2024, 07:23:42 AM »
https://www.atlantafed.org/cqer/research/gdpnow  1.5% 'growth'.

Normal growth is 3.1%.  Good growth is above that.  Scott Grannis would tell you the gap between those two lines is GDP lost.
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Thanks Crafty, I was still adding rant to the above stats.    )
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Inflation is close to twice what is allowable, maybe ten times what is ideal. And that is on top of and compounding the previous price level increases we will never get back.

Growth is half of our historic average, and this is with all these tens of millions of "new workers" flooding across our border.  More people, less economic growth, what is wrong with this picture?

The name coined for this is stagflation measured by the misery index which is getting markedly worse.  But the misery index understates the problem because the unemployment rate no longer measures worker age people not working.

Labor force participation rate is calculated as the labor force divided by the total working-age population.  As of July 2023, the labor force participation rate remains persistently low at 62.6%.
https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm

Checking in with Scott Grannis this morning, he notes all the uncertainty the nation faces combine with equities at record highs and calls what we face "troubling to say the least".
http://scottgrannis.blogspot.com/
I'll put that in a separate post to get his concerns in context.


« Last Edit: July 10, 2024, 07:49:40 AM by DougMacG »

Crafty_Dog

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Re: Political Economics
« Reply #2497 on: July 10, 2024, 07:25:22 AM »
You're on a roll!

DougMacG

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Political Economics, Scott Grannis, elections matter
« Reply #2498 on: July 10, 2024, 07:55:55 AM »
Scott sometimes drives me crazy for for giving straight analysis and not being more political, even though he is on 'our side'.  Maybe our election season combined with his recent return from Argentina has got him thinking about these policies being in the control of voter choices.

Chart 3 shows the point I made earlier.  Loss of GDP growth has cost us 25% of what should be our income.  Think for a second about what the nation could do, could have done, with that money.

http://scottgrannis.blogspot.com/
http://scottgrannis.blogspot.com/2024/07/with-little-luck-well-survive-bidens.html

With a little luck we'll survive Biden's departure

This is one of those times when it's easy to find things to worry about, and right now they add up to a big deal. Figuring out what that means for the world of investments is the tough part.

To begin with, for years the federal government has been spending way too much money on non-productive things, thus sapping the economy's inherent strength. The federal deficit (debt) is now almost 100% of GDP, and debt service costs are rising rapidly. The Fed is most likely too tight, holding short-term interest rates uncomfortably high relative to current and expected inflation. Meanwhile, the economy is growing at a modest pace that is unlikely to pick up anytime soon. Interest-sensitive sectors (particularly housing) are really being squeezed.

But the elephant in the living room is HUGE. The press and the DNC can no longer hide the fact that the president of the United States is mentally and physically unable to perform the duties of his office, and he's getting worse by the day. There is no question that he will not be the Democratic candidate for president on the November ballot (for proof of this, see this editorial in the NY Times). By all rights, and since he is unqualified to run, he is also unqualified to serve. It is thus quite likely that he will depart the Oval Office well before November, since he is now the DNC's worst nightmare. Worst of all, he poses a threat to global peace; nature abhors a vacuum, and the vacuum that pervades the White House is intolerable.

When you consider all this in the context of an equity market that has reached new highs in both nominal and real terms, it is troubling to say the least.

One way to make sense of all this is to conclude that the market is looking across the valley of despair to better times ahead. Biden's vow to allow the Trump tax cuts to expire at the end of next year and to instead raise taxes on the economy's engines of growth is now off the table. Happily, Biden will no longer be able to make foreign policy mistakes (he's been on the wrong side of every foreign policy issue for the past four decades, as Robert Gates once said). The Supreme Court recently issued decisions which will drastically curtail the power of the administrative estate, long Biden's ally, and Trump is likely to do even more in that regard. Green Energy subsidies are now an endangered species, as demand for electrical vehicles crumbles and the nation's power grid struggles to compensate for unreliable wind and solar power generation.

The charts that follow highlight some of the problems the economy is facing, as well as some of the indicators that suggest all is not yet lost.

Charts 1 & 2


Chart 1 shows government transfer payments (e.g., social security, medicare, medicaid, welfare) as a percent of disposable personal income). Since 1970, transfer payments have swelled from 10% of disposable income to now over 20%. Chart 2 shows the percentage of people of working age who are currently working, which began to collapse right around 2008-2009, when transfer payments surged in response to the Great Recession. Transfer payments essentially give money to people who aren't working. To paraphrase Art Laffer, when you pay people who aren't working, don't be surprised to find that fewer people are willing to work.

Chart #3


It's not surprising, then, that the economy can only muster sub-par growth, as Chart #3 demonstrates. The 3.1% trend growth line (green) began in 1965, only to finally break down in the wake of the Great Recession and its avalanche of transfer payments. 2.2% per year seems now to be the new norm, as the red line illustrates. Had 3.1% prevailed, the economy today would be about 25% bigger. What a difference a 1% annual shortfall in growth can make after 17 years!

Chart #4


Chart #4 is one of my long-time favorites, since it shows two variables that have, until recently, foreshadowed the onset of every recession in my lifetime (with the solitary exception being the Covid black hole). When the Fed raises short-term rates to levels significantly higher than inflation—otherwise known as monetary tightening—and the Treasury yield curve inverts (red line), recessions typically follow. We are now very close to seeing both of these variables manifesting: real rates (blue line) are 3% and rising (still a bit shy of past peaks however), and the yield curve has been inverted for several years. If the economy avoids a recession it will likely be due to the Fed's policy of abundant reserves, an argument I've been making for the past 15 years. Abundant reserves all but guarantee that liquidity remains abundant, and that has the effect of inoculating the economy against credit busts and related recession. I've been making this argument frequently in the past 18 months.

Chart #5


Chart #5 reminds us that interest rates tend to follow inflation, albeit with a lag. (I've chosen ex-energy inflation to illustrate this since energy prices are by far the most volatile of all prices.) Note the asterisk on the lower right-hand side of the chart: inflation ex-shelter prices has been a mere 2.1% for the past year. Given the past behavior of housing prices, headline inflation is very likely to continue trending down. See this post for more information on why this is a valid point to make.

Chart #6


My no-recession-for-now call is not without risk, as Chart #6 suggests. The recently-released Small Business Optimism survey of employment intentions has deteriorated markedly in recent months, approaching levels associated with past recessions.

Chart #7


Chart #8


Fortunately, financial markets to date show no sign whatsoever of any deterioration in the outlook for corporate profits. That's the message of Charts #7 and #8. Credit spreads on corporate bonds remain quite low.

Although the Fed's tight monetary stance is applying unnecessary pressure to the economy, it has not yet reached critical levels. And given that all signs point to a continuing disinflationary process (see my last post for more details), the Fed essentially has only one choice to make: when and by how much to lower interest rates. They are dragging their feet, but eventually they will figure this out.

In the meantime, I think we'll need to worry more about external threats to global peace than about the US economy. Unfortunately my crystal ball holds no special insights into the minds of Vladimir Putin and Xi Jinping.
« Last Edit: July 10, 2024, 08:39:39 AM by DougMacG »

Crafty_Dog

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Re: Political Economics
« Reply #2499 on: July 10, 2024, 09:47:28 AM »
Doug:

Thank you for keeping us in touch with Scott's thinking.  IMHO he is a real gem.