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The Trump Economy

GG

By GG
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Posted
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3 hours ago, GG said:

My names is GG and I approve this message.

 

 

The guy seems a bit confused.  He thinks the loss of reserve status is related to money printing; it's not.  It's related to the decline in economic power. Economic power is what gives rise to military/political power which is used to push its currency on the world. 

 

The decline of the US started in the late 1970s as US corps began to outsource production, and was hastened by the rise of LBOs in the 1980s and private equity over the past 20 years, both of which focus on short term profits, buying and breaking up firms for a quick buck.  The decline in the economic base goes along with the decline of the middle class and stagnant wages, with Walmart now the largest private sector employer.  The loss of those good jobs reduces the tax base in the middle, and with the significant rise in inequality, those at the top pay most of the taxes.  However, they have pushed your favored supply side economics in order to cut their taxes, so deficits have gotten bigger every time supply side tax cuts are passed.  Deficits are compounded on the spending side as the MIC gets their share by pushing endless conflict, and the day of reckoning is coming because government can't both provide the resources to maintain the war machine and provide the promises to my generation. 

 

However, the constraint is NOT about money, rather it's a real resource constraint.  Will we have enough productive capacity (labor and machinery) to meet the demand for both the military goods AND the consumption goods driven by the SS payments to retirees (not to mention all of the claims on goods and services by the rest of the private sector!)? No. The government could simply "appropriate additional funds" and fill the future SS gap, but that would lead to too many claims on the available resources--inflation, which is the ultimate constraint on fiscal policy.

 

So woe is us, it's all MMT's fault (not), even though most of you never heard of it until this year (thanks AOC!).  The reality is the decline of the US began a long time ago, and just as the rising economic power of the US took over from the declining economic power of the UK, so too will the rising economic power China usurp the declining economic power of US.  The US will lose its reserve currency status, but it won't be MMT's fault.....

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3rdnlng Hall of Famer

3rdnlng

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13 minutes ago, mead107 said:

Almost time for the wtf have the democrats done in 3 years. Or what are there states and cities like.  

 

Not doing a very good job. 

 

I know 2 people that are totally behind you and can guess that other than a few asswipes everyone supports you. WTF, you're already retired with a fixed pension. Give em Hell.

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Doc Brown Hall of Famer

Doc Brown

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14 hours ago, TH3 said:

"I can walk down Fifth Avenue and shoot someone....and my supporters will still love me" 

This cult of personality sentiment was and is still true of "Obamaites" as well.  Both groups will defend them unconditionally and are motivated by allegiance to them above their policies or party.  Luckily, the 22nd amendment was passed when it was.

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/dev/null Hall of Famer

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5 hours ago, Doc Brown said:

 

This cult of personality sentiment was and is still true of "Obamaites" as well.  Both groups will defend them unconditionally and are motivated by allegiance to them above their policies or party.  Luckily, the 22nd amendment was passed when it was.

 

 

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3rdnlng Hall of Famer

3rdnlng

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Gleeful Shady, it seems like you're doing a little jig here reveling in what you can claim is a sinking economy. Here is what you failed to mention in each of those articles:

 

Cisco is restructuring and may hire those that are laid off in another division

 

Lowe's is outsourcing their assembly operations. No net loss of jobs.

 

IBM may be laying off 1700 of its 340,000 worldwide employees but they may also be picking up 13,000.

 

AT&T article was from 7 months ago.

 

You are a dishonest poster with an agenda. Gleeful Shady seems like a pretty good moniker for you.

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row_33 Hall of Famer

row_33

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Looks like the world won’t be plunging into instant recession and ruin after all.

 

The gleeful doomsayers were wrong again. 

 

Oh well, I’m sure the Dow will drop again soon so they can work their BS again without accountability 

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GG Hall of Famer

GG

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13 hours ago, TPS said:

The guy seems a bit confused.  He thinks the loss of reserve status is related to money printing; it's not.  It's related to the decline in economic power. Economic power is what gives rise to military/political power which is used to push its currency on the world. 

 

The decline of the US started in the late 1970s as US corps began to outsource production, and was hastened by the rise of LBOs in the 1980s and private equity over the past 20 years, both of which focus on short term profits, buying and breaking up firms for a quick buck.  The decline in the economic base goes along with the decline of the middle class and stagnant wages, with Walmart now the largest private sector employer.  The loss of those good jobs reduces the tax base in the middle, and with the significant rise in inequality, those at the top pay most of the taxes.  However, they have pushed your favored supply side economics in order to cut their taxes, so deficits have gotten bigger every time supply side tax cuts are passed.  Deficits are compounded on the spending side as the MIC gets their share by pushing endless conflict, and the day of reckoning is coming because government can't both provide the resources to maintain the war machine and provide the promises to my generation. 

 

However, the constraint is NOT about money, rather it's a real resource constraint.  Will we have enough productive capacity (labor and machinery) to meet the demand for both the military goods AND the consumption goods driven by the SS payments to retirees (not to mention all of the claims on goods and services by the rest of the private sector!)? No. The government could simply "appropriate additional funds" and fill the future SS gap, but that would lead to too many claims on the available resources--inflation, which is the ultimate constraint on fiscal policy.

 

So woe is us, it's all MMT's fault (not), even though most of you never heard of it until this year (thanks AOC!).  The reality is the decline of the US began a long time ago, and just as the rising economic power of the US took over from the declining economic power of the UK, so too will the rising economic power China usurp the declining economic power of US.  The US will lose its reserve currency status, but it won't be MMT's fault.....

 

I think you have to revisit your cause and effect arguments in this thread.

 

Trennert (and I) are not claiming that MMT will be the cause of the US losing its economic supremacy.   We're saying that people shouldn't treat MMT as a free lunch, because it will come back to bite IF the US starts to lose its supremacy.

 

Let's go back to the original question that prompted the voluminous responses.

 

The question was basic, why didn't QE cause inflation when the move is fundamentally inflationary?   The answer was simple - because the timing of the move was in the aftermath of a major recession and the markets knew that the strength of the US economy could easily withstand the infusion of liquidity.   It had nothing to do with Fed's accounting treatment of how QE was deployed into the markets.   

 

Then the discussion turned to whether QE is sustainable over a long term, and that's where the warnings should sit.  MMT is not pain free and works only when a country's currency and debt are used as a reference benchmark.  That's why as a theory is doesn't work, because the cause and effect are reversed.

 

It's economic baloney talk that frames private economic activity as driven by government actions, as opposed to government's finances driven by private markets' behavior.  Until you recognize the correct order of economic activity that funds government coffers with real currency (whether in fiat cash or tangible assets) then this discussion will go nowhere.

 

It's the perverse logic of economists' misunderstanding of the private economy's contribution that leads a politician to stand in front of an entrepreneur who built his business with his bare hands and tell him that he's not the one who built that business.

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Tiberius Hall of Famer

Tiberius

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11 hours ago, Doc Brown said:

 

This cult of personality sentiment was and is still true of "Obamaites" as well.  Both groups will defend them unconditionally and are motivated by allegiance to them above their policies or party.  Luckily, the 22nd amendment was passed when it was.

Obama's popularity was based upon competence, integrity and decency. None of those things apply to Trump. Trump's  ignorance, cruelty and incompetence seem to be his endearing factors.

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Gary M Veteran

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13 hours ago, mead107 said:

Almost time for the wtf have the democrats done in 3 years. Or what are there states and cities like.  

 

Not doing a very good job. 

 

 

better title "what will the dems do for the next 5 years"?

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2 hours ago, Tiberius said:

Obama's popularity was based upon competence, integrity and decency. None of those things apply to Trump. Trump's  ignorance, cruelty and incompetence seem to be his endearing factors.

source.gif

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Albwan Veteran

Albwan

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6 hours ago, ShadyBillsFan said:

more layoffs 

 

 

/clap clap ... dems must be starting to get that thrill up their leg, this time, again,

ITS HAPPENING!!!!!

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3rdnlng Hall of Famer

3rdnlng

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7 hours ago, 3rdnlng said:

Gleeful Shady, it seems like you're doing a little jig here reveling in what you can claim is a sinking economy. Here is what you failed to mention in each of those articles:

 

Cisco is restructuring and may hire those that are laid off in another division

 

Lowe's is outsourcing their assembly operations. No net loss of jobs.

 

IBM may be laying off 1700 of its 340,000 worldwide employees but they may also be picking up 13,000.

 

AT&T article was from 7 months ago.

 

You are a dishonest poster with an agenda. Gleeful Shady seems like a pretty good moniker for you.

I SEE GLEEFUL SHADY IS TOO MUCH OF A CHICKENSHIT TO FACE THE MUSIC FOR HIS DISHONEST POSTING EARLIER. DOES IT SURPRISE ANYONE?

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4 minutes ago, 3rdnlng said:

I SEE GLEEFUL SHADY IS TOO MUCH OF A CHICKENSHIT TO FACE THE MUSIC FOR HIS DISHONEST POSTING EARLIER. DOES IT SURPRISE ANYONE?

 

He pretty well proved yesterday that he's a dishonest douchebag who runs from anyone who questions his patently-false assertions.

 

He has yet to back up his claim of illegal immigrants being 'falsely arrested', simply because they were released on their own recognizance with a date to return to immigration court.

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DC Tom Hall of Famer

DC Tom

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3 hours ago, 3rdnlng said:

I wonder if she has ever heard of the Logan Act?

 

Congresscritters aren't bound by the Logan Act.  They can meet with foreign leaders, even overseas, as part of their 'authority" to "investigate" for "legislative" reasons.

 

Of course, that's not why the Democrats do it...because Democratics think Congress is an advocacy group, not a legislative body.

 

(And another reminder: Pelosi met with Assad in 2007 as Speaker of the House, specifically to undermine Bush's foreign policy.  Just because she has broad latitude for this, doesn't mean she's not abusing it.  And she's not the only one to abuse it - Obama's 2008 Presidential campaign include a swing through Western Europe meeting with world leaders.)

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TPS All Pro

TPS

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On 8/16/2019 at 11:38 AM, GG said:

 

I think you have to revisit your cause and effect arguments in this thread.

 

Trennert (and I) are not claiming that MMT will be the cause of the US losing its economic supremacy.   We're saying that people shouldn't treat MMT as a free lunch, because it will come back to bite IF the US starts to lose its supremacy.

The US has already given up its economic supremacy, and, as I stated, it has nothing to do with MMT.  The economic demise is inevitable, and it is usually associated with finance becoming the dominant "industry," an industry that produces no tangible good.

Quote

 

Let's go back to the original question that prompted the voluminous responses.

 

The question was basic, why didn't QE cause inflation when the move is fundamentally inflationary?   The answer was simple - because the timing of the move was in the aftermath of a major recession and the markets knew that the strength of the US economy could easily withstand the infusion of liquidity.   It had nothing to do with Fed's accounting treatment of how QE was deployed into the markets.   

Please explain why QE is "fundamentally inflationary."  As I've suggested, your errors seem to stem from not understanding the causes of inflation, so please do explain.

Quote

 

Then the discussion turned to whether QE is sustainable over a long term, and that's where the warnings should sit.  MMT is not pain free and works only when a country's currency and debt are used as a reference benchmark.  That's why as a theory is doesn't work, because the cause and effect are reversed.

If this was true, then please explain why there is no inflation in Japan.  And "some day" is not an answer....do YOU have a theory?

Quote

 

It's economic baloney talk that frames private economic activity as driven by government actions, as opposed to government's finances driven by private markets' behavior.  Until you recognize the correct order of economic activity that funds government coffers with real currency (whether in fiat cash or tangible assets) then this discussion will go nowhere.

The statement that "deficit spending stimulates an increase in private sector wealth creation" is not the same thing as saying "all private sector wealth creation depends on government actions." I'll say it again for you, government does not create wealth, but it does spur greater wealth creation by the private sector when it deficit spends because it puts more REAL resources to work (like the Raytheon example).  As TRump has shown, government does not have to tax to spend more on Raytheon's "products; in fact, he cut taxes AND increased defense spending--he increased the level of deficit spending!  (I wonder how Raytheon's share prices reacted to Trump's increase in defense spending...?)

 

Yes, the discussion will go nowhere because you don't understand the nature of the argument, as that second sentence indicates.  Where does money come from? How do people and firms pay their taxes?

Quote

 

It's the perverse logic of economists' misunderstanding of the private economy's contribution that leads a politician to stand in front of an entrepreneur who built his business with his bare hands and tell him that he's not the one who built that business.

A complete straw man statement.    

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Tiberius Hall of Famer

Tiberius

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The failure of Trump's trade war, manufacturing already in recession. Fail

Quote

 

The risks of an economic recession are on the rise, but the country's manufacturing sector is already there.

And for President Trump, who promised to end the “American carnage” of “rusted-out factories scattered like tombstones across the landscape of our nation,” that could be political trouble.

The manufacturing sector shrunk by 1.9 percent in the first quarter of the year and another 1.2 percent in the second quarter. In July, it is estimated that it contracted 0.4 percent. A recession occurs when an economy contracts in two consecutive quarters.

 

https://thehill.com/policy/finance/457771-manufacturing-shrinks-raising-questions-for-trump

46 minutes ago, TPS said:

 

A complete straw man statement.    

From GG? No way! He's the guy saying the Athens and Rome were hurt by their debts. Can you get him to answer to that in any detail at all. I'd be grateful :)

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TPS All Pro

TPS

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I think this is a mostly fair assessment of Trump's predicament with the economy. 

https://news.yahoo.com/recession-signs-worry-trump-ahead-213427540.html

 

 

 

Quote

 

Trump has taken to blaming others for the recession fears, mostly the Federal Reserve, which he is pushing for further interest rate cuts. Yet much of the uncertainty in the markets stems from his own escalation of a trade war with China, as well as weakened economies in key countries around the world.

Some of Trump's closest advisers have urged him to lower the temperature of the trade dispute, fearing that further tariffs would only hurt American consumers and rattle the markets further. The president blinked once this week, delaying a set of tariffs in an effort to save Christmas sales

 

.

 

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