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Trumponomics: It's (Still) the Economy, Stupid
#1
This thread title is an updated variation of the phrase "The economy, stupid," which James Carville coined as a campaign strategist of Bill Clinton's successful 1992 presidential campaign against sitting president George H. W. Bush.

According to Investopedia, Trumponomics describes the economic policies of President Donald Trump, who won the November 8, 2016 presidential election on the back of bold economic promises to cut personal and corporate taxes, restructure trade deals, and introduce large fiscal stimulus measures focused on infrastructure and defense.  Trump's chief political strategist, Steve Bannon, has summed up these policies as "economic nationalism."  Most pundits will defer to the shorthand of Trumponomics

As with any U.S. president, Trump's fortunes will rise and fall on the strength of the domestic economy, over which he has only partial control.  Indeed, a president's economic success is often as much a matter of luck as it is a matter of his fiscal policy.  Where America happens to be in the economic and market cycles at the time of his inauguration has as much--if not, more--bearing on his success or failure as any domestic policies he might get enacted into law.  Consider Herbert Hoover, who, for all his vast experience and business acumen, had the poor, dumb luck to come into office right as a speculative stock market was headed for a crash.  Like Trump, he had similarly ambitious programs, but the twin tsunamis of a bear market and banking crisis overwhelmed Hoover's attempts to revive the economy.  Bill Clinton, by contrast, assumed office after a mild recession, and benefited immensely from the dot.com boom over which he had little influence.  In the case of "Boomerang Bill," as I like to call him, it's more apt to say that he presided over a long-running recovery rather than engineering it through economic policy.   

Trump recently proclaimed, "To be honest, I inherited a mess.”  In some respects, that may be true.  But if we consider GDP, the U.S. unemployment rate, not to mention market trends (equities, real estate), Trump has very little to complain about and so much to fear.  The economy is grinding along (albeit below its long-term average), and the stock market is booming, the latest rally of which can be properly attributed to "great expectations" about the salutary effects of Trumponomics, though it should be said that the stock market seems to be "getting well out over its skis" in the short run.

So let's start the discussion first by countering Trump's claim that he inherited a mess.  He hasn't, though there's room for improvement, as pointed out in this article:

"The Economy Trump Inherited, in Two Charts"
https://www.bloomberg.com/view/articles/...two-charts

And FactCheck.org provided a more detailed glimpse of the economy that Trump inherited.

"What President Trump Inherits"
http://www.factcheck.org/2017/01/what-pr...-inherits/

All in all, the economy is in pretty good shape, though there are worrying signs.  In addition, there is the omen of history, which is why Trump has much to fear.  He's raised expectations sky-high, not least among his supporters.  History has not been kind to Republican presidents: recessions are much more common during their terms in office, with the notable exception of Ronald Reagan, whose timing could not have been more fortuitous.  (And as I have previously noted, there's certainly something to be said for timing.)

I would liken the economy that Trump has inherited to a baton that is passed during a relay race, a race that I would characterize as a race against time.  I say that because so many of the voters that switched their allegiance from Democrats to Republicans in this past presidential election gave essentially the same answer when asked how much time they were willing to give Trump: "Two years." 

That speaks volumes about the "patience" of many desperate Americans.  The worst of the financial crisis was blunted, and the policies of Obama made up some of the ground, but not enough.  Trump may well sprint to the finish line, or he could stumble badly.  Time will tell.  For now, Trumponomics is taking shape, and experts are already weighing in on the potential benefits--and pitfalls--of his economic proposals.  I have my own instincts that I will comment on later...
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#2
We're in, if not an unprecedented period, a period of unusual dynamics. Inflation is extremely low, growth is good though not spectacular, and the job market is finally tightening. The economy has had the longest period without a recession or even a mild downturn in decades. Under conditions like these, the smart money tends to see the future as one of two things, a bubble waiting to burst or a recession in the offing. Yet the smart money is betting big. Of course, the smart money bet big under GWB too.

Color me dubious. If the bull market continues another year, I'll be shocked. If it continues another 60 days without a large correction, I might be a bit scared.
Intelligence is not knowledge and knowledge is not wisdom, but they all play well together.
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#3
(03-02-2017, 04:47 PM)David Horn Wrote: We're in, if not an unprecedented period, a period of unusual dynamics.  Inflation is extremely low, growth is good though not spectacular, and the job market is finally tightening.  The economy has had the longest period without a recession or even a mild downturn in decades.  Under conditions like these, the smart money tends to see the future as one of two things, a bubble waiting to burst or a recession in the offing.  Yet the smart money is betting big.  Of course, the smart money bet big under GWB too.

Color me dubious.  If the bull market continues another year, I'll be shocked.  If it continues another 60 days without a large correction, I might be a bit scared.

I, too, am dubious.  Both the economic expansion and the bull market are getting "long in the tooth."  Trump's herculean task is to "keep the ball rolling," which he may well succeed in doing--at least in the short run.  Here's what he's up against in terms of timing:

"Current U.S. Economic Recovery May End Up as Longest Ever" [And note that this was written last July.] 
http://www.marketwatch.com/story/current...2016-07-18

"Trump Rally Could Mark Biggest Postelection Stock Market Rise Since Hoover" [And, as of yesterday, the Dow is up a stunning 15% since the election..."animal spirits" have apparently been released in the equity markets after a two-year trading range.]
http://www.marketwatch.com/story/trump-r...2016-12-12

The comparison to Hoover is a bit discomforting, to be sure.
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#4
(03-02-2017, 05:02 PM)TeacherinExile Wrote:
(03-02-2017, 04:47 PM)David Horn Wrote: We're in, if not an unprecedented period, a period of unusual dynamics.  Inflation is extremely low, growth is good though not spectacular, and the job market is finally tightening.  The economy has had the longest period without a recession or even a mild downturn in decades.  Under conditions like these, the smart money tends to see the future as one of two things, a bubble waiting to burst or a recession in the offing.  Yet the smart money is betting big.  Of course, the smart money bet big under GWB too.

Color me dubious.  If the bull market continues another year, I'll be shocked.  If it continues another 60 days without a large correction, I might be a bit scared.

I, too, am dubious.  Both the economic expansion and the bull market are getting "long in the tooth."  Trump's herculean task is to "keep the ball rolling," which he may well succeed in doing--at least in the short run.  Here's what he's up against in terms of timing:

"Current U.S. Economic Recovery May End Up as Longest Ever" [And note that this was written last July.] 
http://www.marketwatch.com/story/current...2016-07-18

"Trump Rally Could Mark Biggest Postelection Stock Market Rise Since Hoover" [And, as of yesterday, the Dow is up a stunning 15% since the election..."animal spirits" have apparently been released in the equity markets after a two-year trading range.]
http://www.marketwatch.com/story/trump-r...2016-12-12

The comparison to Hoover is a bit discomforting, to be sure.
The Wall Street Journal pointed out the aging nature of this economic expansion, too:

"This Is Now the Third-Longest Economic Expansion in U.S. History"  (Only the expansions of the 1990s and 1960s were longer. Here's what that might mean.)

http://blogs.wsj.com/economics/2017/03/0...s-history/

A few excerpts from the article:

The road back from the recession that struck in 2007 has been messy: sluggish growth, slumping productivity, stubbornly high measures of unemployment. But there’s an aspect of this recovery that may be redemptive: It’s been unusually long.

The arrival of March means the current economic expansion has now entered its 93rd month, surpassing the 92-month expansion of the 1980s, to become the third-longest in U.S. history.

The financial crisis was such a severe earthquake [my favorite metaphor] that crippling aftershocks seemed inevitable. No such rumble has occurred. Is it because low growth lasts longer? Or is it a sign that something more fundamental changed about the U.S. economy in recent decades?

...The stock market usually turns before the economy and has been in a similarly enduring bull market since March 2009...

...If this economy makes it to next summer, it will be the second-longest in U.S. history. By mid-2019 it would become the longest on record. The bull market in stocks is already the second longest in history.

Is the expansion’s length redemptive? It’s certainly better than having a renewed collapse. But this was an unusually severe recession (the longest since the Great Depression, and by many measures the most severe since then too) and slow recovery left many people in dire straits for far too long, leading to significant economic scarring. Some economists believe that one reason for this expansion’s length may well be this weakness. Booming economies build up excesses; it’s hard for a tepid economy to reach the point where there’s as much to lose...

...Over time, however, recessions have become less frequent and thus expansions longer. This could be explained, in part, by the shift away from an industrial economy...

...Prior to the recession of 2007-09, economists referred to the phenomenon of lengthening expansions and mild recessions as “the Great Moderation.” The idea of “moderation,” however, was widely mocked after the severity of the financial crisis. There’s nothing moderate about a national banking system collapsing, a housing bubble bursting, millions of homes in foreclosure and millions of workers being thrown into unemployment.

It’s clear now that recessions still happen and can be incredibly severe. Yet even if a new severe crisis hits soon, it will still bookend a very long expansion. The longer it grinds on into the record books, the clearer it becomes that some qualities of the “Great Moderation” have survived.

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#5
Trumponomics, is still, Reaganomics. And, it still won't work. Trump is essentially just another neo-liberal in xenophobic nationalist garb.

The next recession is due to start kicking in late next year. 10 years is not atypical or economic cycles in the past. In fact it's probably shorter, especially since the "recovery" was tepid and mild. There was no great moderation, either recently, or ever.
"I close my eyes, and I can see a better day" -- Justin Bieber

Keep the spirit alive;
Eric M
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#6
(03-03-2017, 07:15 PM)X_4AD_84 Wrote: And right on queue the new administration (with Congress likely to follow) are doing their level best to undo the various mitigations and controls both Bush 43 and Obama kicked off.

Even if the current boom does not crash soon, at some point the overhang will be immense, simply due to bad fiscal behavior.

We'll see banks that can't pass a stress test, phony baloney corporate debt stashes, and all sorts of chicanery.

Except, this is not just a casino going bust.

If the US goes the way of the typical Trump mega leveraged crappy scheme, there is no one to bail us out.

1. That is very true. While stuff like SARBOX, etc. happened. The proper fix is to undo *Clinton's repeal of Glass-Steagall. Glass-Steagall is of course a time tested law that needs to happen pronto.

*I'd say, upon reviewing that era, globalisism [defined as such: Neoliberal enabling of corporate rape on raw materials and people , worldwide; build factories where environmental regulations don't exist + desperate population, say folks who live in say Bangladesh, a fairly intact hellhole, but a hellhole, nontheless. ] + [cojoined with NeoCON nonsense about crap like "New American Century" / "American Exceptionalism" <-get out of jail free card wrt UN Res 51.

2.  Yeup. The denouement of said credit boom, and yes, it's a credit boom , it's yugge credit boom..... It's a pyramid basically.  Like a great many things, there, X_4AD_84. The pyramid will collapse , [*]  .

3. Heh, heh. You know, some casinos come up with an enticement that fails the maths test.  I've read where a casino was selling big wheel tickets for something like $8/00 10 tickest, which of course exceeded the big wheel's against play odds. Mathie errors say @ Wall $treet algos may well do the trick , you see. If the algo logic has no valid output for some random input,  whoops, ya get a diskie dumpie Dow doldrums. Cool Big Grin Exclamation

*Rags is profound, tonight.

4. "Trump mega leveraged" crappola...   Yes, I dare say that would be called the "reset". It's like Ubuntu updates. apt-get update; apt-get upgrade;  ... making new kernel, making new grub file...  When ya mess with vital system operations, the odds of a FUBAR really go up.  The ole boot record on PC's hasn't evolved much. Single point's of failure suck, XY_4AD, right?  I'm guessing you're aware of boot record updates. It's Murphy's law writ large. Anything that can muck the boot record, will. Then ... it's a manner if you have a descent backup to fall back on.  OK, Corporate America, and I'm looking straight at you Yahoo. Why did allow yourselves to be such easy hack targets. You know this having to get not 1, but 2 hack reports, I had to change my password again. That's not nice, I have to go into Thunderbird and redo stuff like that. Y'all need to do something, perhaps, you know, use some variant of Linux. Yes, Linux, that operating system that has segregation of privilege.
So... only the organizations' sysadmins are the only ones, yes, it's yuggge concept, only sysadmins have god privilege, OK? That means if some random user clicks some stupid ransom-ware 'll just has his/her stuff messed up.  Now, and get this now, again, make sure to do regular backups, OK. Then you can just tell said, dumb user that he'll have yesterday's file/directories restored.  He /she just loses a day of work , [may have to come in on weekend to make up lost time] and said user can hand redo any work as needed on files].   OK, so here's what we've learned today.

a. Use Linux!  Linux has privilege separation where one user may do something utterly stupid, it does not interfere with co-workers. Linux is also a low priority target which also helps. Only a few odd ball folks use Linux. Only odd balls use Linux 'cause
a. You have to find a Linux breed that will play nice with your hardware set up.  Be it known that some Linux's guess wrong on the GPU, really, really bad stuff happens.
Yes, happens. Rags had this problem wrt Fedora. Fedora, well it's a nice Linux Variant, being supported by Redhat. Well, it sucked whn Fedora would just crash and not boot after a power hit.  The usual stuff was wrong, you see. It *should* have been the X server was correct for the real hardware configuration. This is where Fedora messed up. Yes, I have an NVIDIA GT 610X with an Intell graphics card turned off.  The vendor said it was turned off, but I guess, ... not.
So... After too many crashes, I tries me Ubuntu.  Ubuntu did a very different thing. It "found" the offending Intell chip and added software to address said situation.

b. If crashes mess up and make backups not work, hey!  The Linux variant you are picking isn't working right.  It took a while/ very fustrated to  be sure,
Herein lie the solutions....    http://distrowatch.com/       At
---Value Added Cool
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#7
(03-03-2017, 07:15 PM)X_4AD_84 Wrote: And right on queue the new administration (with Congress likely to follow) are doing their level best to undo the various mitigations and controls both Bush 43 and Obama kicked off.

Even if the current boom does not crash soon, at some point the overhang will be immense, simply due to bad fiscal behavior.

We'll see banks that can't pass a stress test, phony baloney corporate debt stashes, and all sorts of chicanery.

Except, this is not just a casino going bust.

If the US goes the way of the typical Trump mega leveraged crappy scheme, there is no one to bail us out.

We're due for an economic downturn now (modern business cycles tend to be 7-11 years long) and Trump's dangerous economic policies are sure to help drive the economy into a ditch. It's going to be the Smoot-Hartley Tariff debacle all over again.
#MakeTheDemocratsGreatAgain
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#8
(03-06-2017, 08:18 AM)Odin Wrote:
(03-03-2017, 07:15 PM)X_4AD_84 Wrote: And right on cue the new administration (with Congress likely to follow) are doing their level best to undo the various mitigations and controls both Bush 43 and Obama kicked off.

Even if the current boom does not crash soon, at some point the overhang will be immense, simply due to bad fiscal behavior.

We'll see banks that can't pass a stress test, phony baloney corporate debt stashes, and all sorts of chicanery.

Except, this is not just a casino going bust.

If the US goes the way of the typical Trump mega leveraged crappy scheme, there is no one to bail us out.

We're due for an economic downturn now (modern business cycles tend to be 7-11 years long) and Trump's dangerous economic policies are sure to help drive the economy into a ditch. It's going to be the Smoot-Hartley Tariff debacle all over again.

It will be ugly.

Many Americans voted to give up the freedoms of others in return for questionable promises of economic gain. People like that deserve the Chavez or Mugabe who succeeds on such promises. (But what about people who prefer rationality in politics? We get stuck too). Even without a general downturn, Americans can expect worsening conditions of life as the insiders get rich off their connections and as workers' rights get sliced away.

Gerrymandering has ensured that the House of Representatives will be effectively the House of Corporate Lobbyists indefinitely, and Democrats have few chance for gain and many for loss in the Senate in 2018. In view of a political ideology best described as a revival of a Coolidge-Hoover ethos in economic ideology and great levels of corruption that one could not ascribe to Coolidge and Hoover, we could easily see a market crash as severe and protracted as the one beginning in the autumn of 1929.

My prediction: we're going to see Americans trying to recover as they did in the early 1930s, trying to piece their lives back together with small-scale enterprise that must cultivate customers who have little to spend. I expect American living standards to fall to levels now characteristic of Chile or Mexico... but if there is anything good about Donald Trump and the Congressional stooges who follow the gospel of Ayn Rand, it will be that such will be discredited.

Trump economics is nothing more than getting people to work harder for their pay and pay more for what they buy so that elite profits and executive compensation can get even greater. It is grossly unjust and ineffective at achieving anything except for a privileged few.

The real regeneracy comes when we demand more of ourselves and of our institutions. The only good thing to say about the economic downturn is that we will find plenty of cheap rentals, raw materials, and inventories in the fire sale without the fire. But at least the rigid low glass ceilings will be gone with the corrupt corporations that fail. We will have to rebuild based on family and community, and we will no longer see conspicuous consumption as the ratification of personal virtue.

In AA terms, the Regeneracy is "hitting bottom". With Donald Trump the bottom for most Americans could well be a replay of the 1930s. We're due for an FDR or Lincoln... and maybe it takes a Buchanan, a Hoover, or a Trump to make such possible.  One totals the car, one has a family breakdown, one gets busted for writing NSF checks, one loses a job, or one loses a license and must take public transportation  (thirty-minute wait for the bus whatever the weather, hour-long drive with all the stops on the way in to work instead of a twenty-minute drive on most days) to get to work, and repeat on the way back. An observation: when I worked in downtown Dallas for a coupe of days, I never saw so many sullen people as I saw waiting for the city bus to take them home... cold and wind in the winter, or either hard rain or brutal heat in the summer.
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist  but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.


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