Revisiting the economic predictions from the progressive establishment

[Magox]

I was looking through some of the predictions from the progressive economic darlings right after Trump had won his election and I thought I'd share them with you.    

Right after Trump had won, not sure if you guys remember but the stock market tanked by close to 1000 points in overnight trading and that prompted Krugman, our favorite economist to write a column.

Quote

 

"It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover?"

"If the question is when markets will recover, a first-pass answer is never."

 

“So we are very probably looking at a global recession, with no end in sight. I suppose we could get lucky somehow. But on economics, as on everything else, a terrible thing has just happened.”

 

 

 

Politico came out with an article titled: 

 

Economists: A Trump win would tank the markets, If GOP nominee pulls off a Brexit-like surprise, Wall Street would face a Brexit-like stock plunge.

 

Sounds ominous, lets see what they had to say:

Quote

Wall Street is set up for a major crash if Donald Trump shocks the world on Election Day and wins the White House.

New research out on Friday suggests that financial markets strongly prefer a Hillary Clinton presidency and could react with panicked selling should Trump defy the polls and deliver a shocking upset on Nov. 8. “Wall Street clearly prefers a Clinton win certainly from the prospective of equity prices,” said Dartmouth College’s Eric Zitzewitz, one of the authors of the new study along with the University of Michigan’s Justin Wolfers. “You saw Clinton win the first debate and her odds jumped and stocks moved right along with it. Should Trump somehow manage to win you could see major Brexit-style selling.”

 

 

 

Quote

 

This also suggests that a shock Trump victory next month could crush stock prices, perhaps by as much as 10 percent, and send the peso and other currencies sharply lower while ushering in a period of intense market volatility as investors try and discern how Trump would govern and whether he would make good on his pledge to start trade wars with Mexico and China and deport 11 million current undocumented immigrants.

“You would see incredible pressure on stock prices if Trump wins and everyone flooding into rare metals like gold and into bonds” in the U.S., Germany and the United Kingdom, said Erik Jones, professor at the Johns Hopkins University School of Advanced International Studies.

Jones said the depth of markets for so-called “safe haven” assets could be severely tested should Trump win. “The gold markets are just not deep enough to hold this much scare,” he said.

 

 

So much scare he says.

 

Well, how about from the Editorial Page of the Washington Post.  Those guys are grounded.   Surely they must have had a reasonable take on what a Trump economy could look like, right?   Right?????   

 

Their headline blared:  A President Trump could destroy the world economy  

 

Yikes!   
 

Quote

A 45 percent tariff on China (or any country) imposed as punishment for “manipulating” its currency to the United States’ detriment? That, too, could well be legal, at least temporarily, under any of several statutes whereby Congress has broadly delegated the president power to raise tariffs to meet a national emergency or protect national security. As lawyer-economist Gary Hufbauer of the Peterson Institute for International Economics has argued, Congress could not stop Mr. Trump without an unlikely veto-proof two-thirds majority; court challenges would take months even in the unlikely event they succeeded. To be sure, Mr. Trump’s team has recently cast his threats as negotiating positions — examples of how he, unlike previous presidents, would play hardball in defense of U.S. workers and businesses. This is hardly reassuring: He seems to have no response prepared for trading partners’ inevitable pushback.

 

U.S. leadership of the global trading system has helped stabilize an area of international life that had bred conflict, even war, for centuries. To abdicate in favor of Mr. Trump’s zero-sum mind-set not only would undo the work of generations and lower the United States’ standing among the nations; it also would license other nations to conduct themselves just as selfishly. The disruption to market confidence could breed economic damage in excess of any transitory benefits. His approach would be a historic error, which, as president, he would be free to commit.

 

 

 

What about Mark Zandi from Moody's Analytics.   He's one of the lead advisers of the Obama Stimulus package.  Let's see what he said:

 

Quote

 

If Donald Trump were elected president and put in his stated policies, the United States would experience a lengthy recession, enormous job losses, much higher interest rates and diminished long-term growth prospects. At least, that is the conclusion of economists from Moody’s Analytics, a recent analysis highlighted by Hillary Clinton in a speechTuesday.

 

Prediction 1: Trump’s policies would cause a 1.5 percent contraction in gross domestic product in 2019. 

 

Prediction 2: 

Tax cuts and larger deficits would stimulate at first, then cause a contraction. Mr. Trump has advocated major tax cuts, including reducing the highest income tax rate to 25 percent from 39.6 percent and increasing the standard deduction for all filers. On spending, he has said he would maintain the military, Social Security and Medicare, and raise spending on veterans health care.

These actions would stimulate the economy at first — the Moody’s projection has stronger growth in 2017 in a Trump administration than in a baseline case. But over time they would translate to higher deficits that would push interest rates much higher and crowd out other activity in the economy, given that they forecast the economy will be near its full potential when the next president takes office in January 2017.

 

Prediction 3: 

Moody’s predicts that Trump policies would push 10-year Treasury bond yields to 8.6 percent in 2018, compared with 1.6 percent today and 3 percent in their base case — leading to a contraction in business investment, housing and consumer spending. The money the government would need to borrow to fund a much larger deficit would squeeze out business investment, housing and consumer spending.

 

Prediction 4:

 

Mass deportations would be a negative supply shock. The simple version of this is that if there are fewer workers in the United States because the Trump administration deports millions of undocumented immigrants or makes life unpleasant enough for them that they leave voluntarily, the nations’s economic output would fall.

As immigrants leave, the Moody’s researchers write, employers will struggle to fill the vacated jobs. “Many of these positions will go unfilled, because, by the time the Trump administration is underway, the U.S. is expected to be at full employment, meaning there will be no slack labor out of which to hire workers.” Some businesses that are heavily reliant on immigrant labor would close. To the degree the labor shortage drives up wages, it would be counteracted by Federal Reserve interest rate increases to try to slow the economy and combat inflation.

 

 

Oh hell, you can just read his drivel/study right here.

 

By the way, Mark Zandi has been and is continuing to be quoted by many mainstream outlets such as CNN, NY times, Politico, WAPO etc etc as if he is some neutral arbiter and he continues to downplay the economy.  

 

In any case, I got a chuckle out of these predictions, I knew they would be waaaay off from day one.    Thought I'd share them with you.

 

 

 

 

[RochesterRob]

3 minutes ago, Magox said:

I was looking through some of the predictions from the progressive economic darlings right after Trump had won his election and I thought I'd share them with you.    

Right after Trump had won, not sure if you guys remember but the stock market tanked by close to 1000 points in overnight trading and that prompted Krugman, our favorite economist to write a column.

 

 

Politico came out with an article titled: 

 

Economists: A Trump win would tank the markets, If GOP nominee pulls off a Brexit-like surprise, Wall Street would face a Brexit-like stock plunge.

 

Sounds ominous, lets see what they had to say:

 

 

 

So much scare he says.

 

Well, how about from the Editorial Page of the Washington Post.  Those guys are grounded.   Surely they must have had a reasonable take on what a Trump economy could look like, right?   Right?????   

 

Their headline blared:  A President Trump could destroy the world economy  

 

Yikes!   
 

 

 

What about Mark Zandi from Moody's Analytics.   He's one of the lead advisers of the Obama Stimulus package.  Let's see what he said:

 

 

Oh hell, you can just read his drivel/study right here.

 

By the way, Mark Zandi has been and is continuing to be quoted by many mainstream outlets such as CNN, NY times, Politico, WAPO etc etc as if he is some neutral arbiter and he continues to downplay the economy.  

 

In any case, I got a chuckle out of these predictions, I knew they would be waaaay off from day one.    Thought I'd share them with you.

 

 

 

 

Krugman has been a Democratic pawn for over 25 years now.

[DC Tom]

1 minute ago, RochesterRob said:

Krugman has been a Democratic pawn for over 25 years now.

 

I wish I could mint a cryptocurrency backed by Krugman's utter wrongness. 

 

Anyone have any ideas how to implement IdiotCoin(tm)?

[row_33]

to the media every single time...

 

[Tiberius]

Ha!!! How about the coming hyper inflation!! When is that arriving??? 

[TakeYouToTasker]

1 hour ago, DC Tom said:

 

I wish I could mint a cryptocurrency backed by Krugman's utter wrongness. 

 

Anyone have any ideas how to implement IdiotCoin(tm)?

 

Talk to Mead.

[leh-nerd skin-erd]

2 hours ago, Magox said:

I was looking through some of the predictions from the progressive economic darlings right after Trump had won his election and I thought I'd share them with you.    

Right after Trump had won, not sure if you guys remember but the stock market tanked by close to 1000 points in overnight trading and that prompted Krugman, our favorite economist to write a column.

 

 

Politico came out with an article titled: 

 

Economists: A Trump win would tank the markets, If GOP nominee pulls off a Brexit-like surprise, Wall Street would face a Brexit-like stock plunge.

 

Sounds ominous, lets see what they had to say:

 

 

 

So much scare he says.

 

Well, how about from the Editorial Page of the Washington Post.  Those guys are grounded.   Surely they must have had a reasonable take on what a Trump economy could look like, right?   Right?????   

 

Their headline blared:  A President Trump could destroy the world economy  

 

Yikes!   
 

 

 

What about Mark Zandi from Moody's Analytics.   He's one of the lead advisers of the Obama Stimulus package.  Let's see what he said:

 

 

Oh hell, you can just read his drivel/study right here.

 

By the way, Mark Zandi has been and is continuing to be quoted by many mainstream outlets such as CNN, NY times, Politico, WAPO etc etc as if he is some neutral arbiter and he continues to downplay the economy.  

 

In any case, I got a chuckle out of these predictions, I knew they would be waaaay off from day one.    Thought I'd share them with you.

 

 

 

 

Outstanding post. Thank you. 

[/dev/null]

3 hours ago, DC Tom said:

 

I wish I could mint a cryptocurrency backed by Krugman's utter wrongness. 

 

Anyone have any ideas how to implement IdiotCoin(tm)?

 

1 hour ago, TakeYouToTasker said:

 

Talk to Mead.

 

hahagatorcoin

[B-Man]

[KD in CA]

Just now, B-Man said:

 

Presumably you can mine for those by posting laughable stupid comments in PPP?

[Bray Wyatt]

1 minute ago, B-Man said:

 

This is too perfect, thats exactly how I picture the look on Tibs face when hes posting

[/dev/null]

5 minutes ago, Bray Wyatt said:

 

This is too perfect, thats exactly how I picture the look on Tibs face when hes posting

 

this is how i picture gator

 

 

and before i put him on ignore, thats the voice in my head when i read his posts

 

Yaaaaay!!

[Bray Wyatt]

1 minute ago, /dev/null said:

 

this is how i picture gator

 

 

That's a picture personifying his intellectual capabilities, the outside looks like the gator who is like "I dont care what they say I know Im right!" 

[Azalin]

2 hours ago, /dev/null said:

 

 

hahagatorcoin

 

Gatorcoin?! What, it has absolutely no worth and insults you as you try to spend it?

[3rdnlng]

29 minutes ago, Azalin said:

 

Gatorcoin?! What, it has absolutely no worth and insults you as you try to spend it?

Dirty money.

[B-Man]

.............Gator's actual picture

 

 

 

 

 

 

.

[US Egg]

The Lefts "China Syndrome" tarriff scare tactic will likely be their next hoax to blow up in their face.

 

But, given their unceasing lying chicken little rants, clearly they want the U.S. to falter at any cost.

Edited May 11, 2019 by I am the egg man

[Chef Jim]

FAIL!!!

[Q-baby!]

1 hour ago, Chef Jim said:

FAIL!!!

Can I borrow 50 bucks? 

[Chef Jim]

51 minutes ago, BigMcD said:

Can I borrow 50 bucks? 

 

No. 

[3rdnlng]

12 minutes ago, Chef Jim said:

 

No. 

I guess his investments aren't going all that well.

[Tommy Callahan]

lol, and that was just the first.

 

Seems every fear card they pushed since Hillary lost, has been a fat nothing burger.

 

 

[\GoBillsInDallas/]

 

[/dev/null]

 

[DC Tom]

52 minutes ago, /dev/null said:

 

 

It's just a rebranded March of the Penguins.

[Q-baby!]

5 hours ago, Chef Jim said:

 

No. 

Wow, that hurts. 

[Magox]

 

 

When I read this article yesterday it reminded me of this topic.  

 

Mark Zandi back at it again:

 

 

Quote

 

Most significantly, the economy is growing slowly, barely enough to generate the jobs needed to keep unemployment low. The president promised that his large tax cuts to mostly big corporations and high-income households would fuel sustainably stronger growth. They haven't. Instead the nation is struggling with trillion-dollar budget deficits and an increasingly heavy debt load.

 

If the economy were to slow any further, for whatever reason, then unemployment would begin to rise. Once unemployment increases, even from low levels, recession becomes more likely than not. Consumers immediately sense the weakening economy since it means fewer job openings, smaller pay increases and no bonuses. They become more cautious. Businesses see this and pull back further on their hiring. They may even begin laying off workers. Unemployment rises more, and a self-reinforcing negative dynamic — a recession — takes hold.

 

This hasn't happened. But it is prudent to be nervous that this vicious cycle could take hold. Despite trade progress with China, there's still debilitating uncertainty created by President Trump's trade war. While businesses may now believe the president won't escalate the war before the 2020 election, they remain unsure what he will do if reelected. Since his trade war has not solved the big problems we have with the Chinese, such as intellectual property protection, cybersecurity and more access to their markets, it is almost certain he will double down on his war should he win a second term.

 

 

 

Here is another gem of an opinion from Krugman just 6 months ago:

 

Quote

 

Last year, after an earlier stock market swoon brought on by headlines about the U.S.-China trade conflict, I laid out three rules for thinking about such events. First, the stock market is not the economy. Second, the stock market is not the economy. Third, the stock market is not the economy.

But maybe I should add a fourth rule: The bond market sorta kinda is the economy.

An old economists’ joke says that the stock market predicted nine of the last five recessions. Well, an “inverted yield curve” — when interest rates on short-term bonds are higher than on long-term bonds — predicted six of the last six recessions. And a plunge in long-term yields, which are now less than half what they were last fall, has inverted the yield curve once again, with the short-versus-long spread down to roughly where it was in early 2007, on the eve of a disastrous financial crisis and the worst recession since the 1930s.

Neither I nor anyone else is predicting a replay of the 2008 crisis. It’s not even clear whether we’re heading for recession. But the bond market is telling us that the smart money has become very gloomy about the economy’s prospects. Why? The Federal Reserve basically controls short-term rates, but not long-term rates; low long-term yields mean that investors expect a weak economy, which will force the Fed into repeated rate cuts.

So what accounts for this wave of gloom? Much though not all of it is a vote of no confidence in Donald Trump’s economic policies.----------------------------------------------------------------------------------------snip---------

Now, a word of caution: Bond markets are telling us that the smart money is gloomy about economic prospects, but the smart money can be wrong. In fact, it has been wrong in the recent past. Investors were clearly far too optimistic last fall, but they may be too pessimistic now.

But pessimistic they are. The bond market, which is the best indicator we have, is declaring that Trumponomics was a flop.

 

I always like looking back at these sort of articles, specially when it comes from partisan economists.  They are so invested in their positions that the slightest hint that they could be right they feel compelled to put themselves on the record and prematurely proclaim victory.   I like it when they do that.

 

 

Quote

 

Wages for nonsupervisory employees — who make up 82% of the workforce — are rising at the fastest rate in more than a decade, the Wall Street Journal reports.

Why it matters: It indicates that the benefits of a tightening labor market and a time of historically low unemployment rates are finally being passed along to most workers.

The big picture: Workers at the bottom of the pay scale have been feeling positive effects on their wages at the end of 2019 — especially when compared to those at the top.

• Pay rates the bottom 25% of wage earners rose 4.5% in November from a year earlier, while wages for the top 25% of earners rose only 2.9%, per data from the Federal Reserve Bank of Atlanta.
• The bank also found that the rate of pay rises for low-skilled workers matched those for high-skilled workers last month for the first time since 2010.

 

 

 

 

These opinions from partisan economists that say that the Tax cuts have only benefited the rich and corporations are truly incredulous.

 

It flies in the face of most of the economic data that has been coming out aside from Manufacturing, which I suspect will turn around over the next couple years.

 

Economists are shocked that the hiring has been this strong.   Hardly anyone predicted this, then they moved their focus to these ignorant sort of AOC/Bernie sort of claims that "well that's because most people are working two jobs" 

 

They claimed that wages weren't rising except for the rich.  This is simply not true, wages in fact have been rising for everyone and more so for the lower wage earners.    

 

Economic partisans won't ever admit that they were wrong. 

 

 

 

 

[DC Tom]

6 minutes ago, Magox said:

 

 

When I read this article yesterday it reminded me of this topic.  

 

Mark Zandi back at it again:

 

 

Most significantly, the economy is growing slowly, barely enough 

 

"Barely enough?"  So what I get from that is...this is, finally, no longer Obama's economic rally?

[Magox]

9 minutes ago, DC Tom said:

 

"Barely enough?"  So what I get from that is...this is, finally, no longer Obama's economic rally?

 

 

It's a preposterous position because all you would have to do is read through his praises of Obama's economy when he was president to his opinions over the past few years and there are so many logical fallacies and inconsistencies with his views that he twists himself into a 3D pretzel.. 

 

The only problem I have with the tax cut is that it does contribute a nice chunk of change into the National Debt.   But I have to say that I went from being a deficit hawk to something pretty close to a 180 degree view of it over the past few years.  I criticized Cheney and found it laughable when he said "Deficits don't matter" to now thinking -  He was on to something.

 

It matters, but not in all cases.  If you are a country that isn't able to generate a lot of revenue, then deficits matter.  But in the case of the U.S who has the dollar as the world's reserve currency and despite all the talk, the U.S is still by far the most attractive flight to safety for investors in the world and it's ability to generate revenues like no other, deficits truly almost don't matter.

 

I'll save that discussion for another day.

Edited December 27, 2019 by Magox

[Foxx]

4 minutes ago, Magox said:

 

 

It's a preposterous position because all you would have to do is read through his praises of Obama's economy when he was president to his opinions over the past few years and there are so many logical fallacies and inconsistencies with his views that he twists himself into a 3D pretzel.. 

 

The only problem I have with the tax cut is that it does contribute a nice chunk of change into the National Debt.   But I have to say that I went from being a deficit hawk to something pretty close to a 180 degree view of it over the past few years.  I criticized Cheney and found it laughable when he said "Deficits don't matter" to now thinking -  He was on to something.

 

It matters, but not in all cases.  If you are a country that isn't able to generate a lot of revenue, then deficits matter.  But in the case of the U.S who has the dollar as the world's reserve currency and despite all the talk, the U.S is still by far the most attractive flight to safety for investors in the world and it's ability to generate revenues like no other, deficits truly almost don't matter.

 

I'll save that discussion for another day.

i think QE(almost)Infinity pretty much made the argument for the, 'deficits don't matter' perspective. we are almost doing it again, today with the liquidity that is being injected into the banks.

Edited December 27, 2019 by Foxx

[/dev/null]

26 minutes ago, Foxx said:

i think QE(almost)Infinity pretty much made the argument for the, 'deficits don't matter' perspective. we are almost doing it again, today with the liquidity that is being injected into the banks.

QE2Infinity&Beyond, Deficits dont matter, and Modern MonetaryTheory are awesome as the bubble inflates.  Once it pops, things are gonna get messy

[Foxx]

2 minutes ago, /dev/null said:

QE2Infinity&Beyond, Deficits dont matter, and Modern MonetaryTheory are awesome as the bubble inflates.  Once it pops, things are gonna get messy

of course, it's all champagne and caviar until then. this is also why cryptos are presently being set up, to make the transition as smooth as possible. 

[Nanker]

Time is running out to take your RMDs if you turned 70 1/2 in 2019.

 

[3rdnlng]

2 minutes ago, Nanker said:

Time is running out to take your RMDs if you turned 70 1/2 in 2019.

 

Hyman Roth waited too long and do you see what happened to him?

[TPS]

1 hour ago, Magox said:

 

 

It's a preposterous position because all you would have to do is read through his praises of Obama's economy when he was president to his opinions over the past few years and there are so many logical fallacies and inconsistencies with his views that he twists himself into a 3D pretzel.. 

 

The only problem I have with the tax cut is that it does contribute a nice chunk of change into the National Debt.   But I have to say that I went from being a deficit hawk to something pretty close to a 180 degree view of it over the past few years.  I criticized Cheney and found it laughable when he said "Deficits don't matter" to now thinking -  He was on to something.

 

It matters, but not in all cases.  If you are a country that isn't able to generate a lot of revenue, then deficits matter.  But in the case of the U.S who has the dollar as the world's reserve currency and despite all the talk, the U.S is still by far the most attractive flight to safety for investors in the world and it's ability to generate revenues like no other, deficits truly almost don't matter.

 

I'll save that discussion for another day.

Or, if you were reading any of my posts on deficits....?

 

Btw, despite his hatred of Trump, Krugman wasn't really off on the bond market discussion.  Manufacturing experienced a downtown for most of this year due to the trade war; and RGDP also fell back to 2%.  The service economy, consumer and government spending drove most of the positive growth.  Given these issues, the FED reversed its policy which eliminated the inverted yield curve.  

38 minutes ago, /dev/null said:

QE2Infinity&Beyond, Deficits dont matter, and Modern MonetaryTheory are awesome as the bubble inflates.  Once it pops, things are gonna get messy

People have been posting these kinds of things for as long as I've been here, which is from the start of TBD and PPP...

Edited December 27, 2019 by TPS

[Magox]

11 minutes ago, TPS said:

Or, if you were reading any of my posts on deficits....?

People have been posting these kinds of things for as long as I've been here, which is from the start of TBD and PPP...

 

My position has changed on this topic.  I do believe there is a day or reckoning but I can’t possibly see that happening anytime soon or for that matter while the US maintaining its reserve currency status.   
 

Some country would have to dethrone the US for that to happen and right now there is no country that in the foreseeable future can even challenge the US for that role.

 

I was more dogmatic on my views of QE and deficits years back but the data has led me to change my views to an extent.  So there still is a qualifier there but it’s a remote possibility at this juncture.

 

Also, an area that you were more right than wrong and I was more wrong than right was the view that I believed we would see astonishing levels of inflation.   Even though prices of many important consumer goods did go up such as food and energy which are large components for lower wage workers did feel those inflationary pressures but the Wall Street gauges ie. wage inflation never materialized due to the slack in the economy caused by the Great Recession.

 

I will give you credit on that one.  On the other hand your views on how prescient of an economist that Krugman is, not so much.   ?

[row_33]

At least 15 Black Monday/Tuesdays were guaranteed 

[/dev/null]

34 minutes ago, TPS said:

 

People have been posting these kinds of things for as long as I've been here, which is from the start of TBD and PPP...

Okay Boomer

[row_33]

44 minutes ago, 3rdnlng said:

Hyman Roth waited too long and do you see what happened to him?

hyman Roth has been dying from the same heart attack for 20 years now

 

but he can’t get his birthday wish of taking a pee that doesn’t hurt 

[Koko78]

1 hour ago, 3rdnlng said:

Hyman Roth waited too long and do you see what happened to him?

 

Didn't he join the IRA?