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Old 02-04-2020, 09:40 PM
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Pres. Trump Couldn't Be Responsible For the Economy?


I am listening to the State of the Union speech in another room, as I write this. And President Trump is taking credit for the booming economy, naturally. But I just have one question. And yes it is a rhetorical one: President Trump couldn't possibly be responsible for the good economy, could he?

He isn't smart, or well-educated (like Pres. Obama was--sorry but it's true). He doesn't know what he is doing, clearly. And he can't even run his own business.

There is some other reason, isn't there?

I will start the discussion by throwing out a couple reasons. He may have inherited the Obama economy. I did hear that in a couple of places. He may just be surrounding himself with capable advisers. But every president does that. And it could just be coincidence.

What do the rest of you think?

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Last edited by Jim B.; 02-04-2020 at 09:41 PM. Reason: typo.
  #2  
Old 02-04-2020, 09:41 PM
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A president has relatively little ability to make the economy good on his own. He does, however, have immense power to make it worse.
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Old 02-04-2020, 09:45 PM
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President Trump injected something like 1.5 trillion dollars into the economy with his debt financed tax cuts. This did boost the economy, no lie. Much of the economic gains are due to Obama's policies; just take a look at the trends of the metric of your choice. I have no doubt that Trump has goosed the economy, but the costs are not clear yet. They will be.
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Old 02-04-2020, 10:07 PM
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I am as harsh a critic of Trump as there is, but in terms of the recent "growth," I would say that Trump's policies have had something to do with it. He's cut taxes and regulations, which have made businesses more profitable.

The flip side is that wealth continues to be concentrated into fewer hands, and the wage growth is being eaten up by tariffs. And they won't have much more in the bank when the economy collapses.

We're dealing with the same thing we always deal with when Republicans control the government: republicans favor growth over economic stability, increases in wealth over increases in employment.
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Old 02-04-2020, 11:03 PM
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His policies were the same as Bush's, except in one respect. The result should be the same. That one respect in which they differ is the trade war/tariffs thing, which can hardly help. Like Ronnie before him, it's all going on the credit card. Look at his history in business. Some real highs there, sure, but when it crashed, it crashed hard. Individuals go broke slowly, than all at once. Countries just do it all at once.
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Old 02-04-2020, 11:38 PM
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A certain amount of economic momentum is influenced by how people subjectively feel about their economic situation regardless of what the underlying numbers of financial metrics say. The Presidential bully pulpit can influence the psyche of the masses, making more people think things are going well.

And those people vote.
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Old 02-05-2020, 12:31 AM
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Quote:
Originally Posted by Jim B. View Post
He may just be surrounding himself with capable advisers. But every president does that.
Nope. This is Trump. And the boring explanation comes from reports like from The Atlantic, but for an entertaining way to look at it one has to check what John Oliver told us about how out there Trump's economic adviser Peter Navarro is.

https://www.youtube.com/watch?v=etkd57lPfPU
[Trade: Last Week Tonight with John Oliver (HBO)]
Quote:
Now Navarro is the author of a series of get rich investment books and like Trump he's obsessed with trade deficits in general and China in particular, saying trade with China is a zero-sum game. Meaning one country can only win if the other country loses and it is hard to overstate just how rare his views are among economists.

When The New Yorker profiled him they asked Navarro to help them find even one colleague who agreed with him, he gave them two names: one was Peter Morici, a University of Maryland professor who said of Navarro that "he has a rather severe position, that zero-sum statement, I have a problem with that, where's his proof"? And the other was a blogger named Allen Tonelson who Navarro described as a fine economist, to which Tonelson replied: "I do not hold an economics degree"...

And I'm guessing Tonelson also doesn't hold a degree in web design because this is the photo on the "about page" of his blog.. So if you are understandably wondering at this point then how on earth did Navarro get a job at the f***ing White House? Well it is way dumber than you are thinking..

Apparently Jared Kushner was tasked with finding Trump experts on Chinese trade and this is how he went about it: [Tim O'Brien Author, "Trumpnation"] "So Jared went on Amazon, he fired up his computer and he found some of Peter Navarro's books and he asked him to come to the White House.. that's how Peter Navarro ended up in the White House".. Yeah, Jared looked for experts on Amazon, that was his rigorous process..

Last edited by GIGObuster; 02-05-2020 at 12:32 AM.
  #8  
Old 02-05-2020, 05:04 AM
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The UK has the same employment rate as the US, following the exact same line.

So, given that the UK is being run by people who are not Donald Trump and they've been threatening a fair amount of economic havoc, via Brexit, I think that it's reasonable to say that whatever is causing insanely low unemployment rates is probably unrelated to politics nor good economic policy.

Personal guesses:

1) The invention of the gig economy
2) Rebound from the recession

I'm not strongly leaning towards either of those and expect that it's probably neither, but I don't have a better guess, as yet.

For any other economic metrics, I would go with:

1) Rebound from the recession.
2) The Republicans printing money into the economy, to try and stay afloat, despite everything that Trump would try to do to break everything.
3) The Fed, for less self-serving reasons, doing the same and keeping interest rates relatively low despite the good economy. Trump's actions are driving up risk, which makes businesses want to act cautiously - which is bad for the economy - so the Fed is having to encourage them towards accepting more risk.

On these, I feel comfortable that they're the correct answer. Basically, on the latter two, Trump is such a clear disaster that everyone prepared for it in advance and have protected us from him, successfully.

Last edited by Sage Rat; 02-05-2020 at 05:06 AM.
  #9  
Old 02-05-2020, 06:53 AM
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Trump has revised what he has promised so much on the economy that people probably have forgot. These two were promised earlier on by Trump, 6% annual GDP growth, and that he would wipe out the entire $19 trillion dollar US debt (at the time) by the end of the eight years. He said wiping out the debt would actually be the easy part, the economy was going to be so good. Nowadays, Trump says, Who the hell cares about the budget?

Trump has said Obama was the only modern president in history to not give us 3.0% GDP. Thus far, Trump didn't give us 3.0% GDP either. He came close, 2.9% GDP, but again, so did Obama at 2.9% as well. For 2019, the GDP went down to 2.3% GDP. Shouldn't things have really taken off by now? And is this about the best the US can ever expect on GDP growth now? Trump has reset his goals many times, but seems to be shooting for just 3.0% GDP too, again, not any real significance from Obama.

Unlike the mess Obama inherited, Trump decided to borrow heavily when things were reasonably stabilized, and decided to go with trickle-down economics again, basically huge tax cuts for corporations and the rich. Most economists state (pretty much all), it's not going to pay for itself, not by a long shot, and will contribute to trillions of more dollars to our debt. It's all about now now now, me me me, and more more more, da hell with future generations, let them deal with climate change and the clean-up of the environment and the taxes that are going to go with it, which if the rich have their way, it'll go to the average working stiff having the burden of it.

For this administration, every trick, every manipulation in the book, from borrowing heavily, huge tax cuts mostly benefiting the rich, cutting ridiculously low interest rates, booming stock market mostly 10% owning 84% of the stocks, low unemployment, more deregulation ( which seems like a code word to look the other way, da hell with law and order and any protections), seriously all of this to achieve a mediocre 2.3% GDP last year, along with the trillion dollar annual debts from here on out that is projected. This is what a hot economy looks like now, does it? I actually think 2.3% would be fine, if it wasn't financed with trillion dollar annual deficits from here on out.

To compare, over the last 40 years China continues to roll along year after year, doubling, tripling, even quadrupling the US's GDP, some years it's double digit GDP. It won't be long before it becomes the number one economy. And they have done that with little debt, today their debt is the equivalent of US $ 5.2 trillion vs over $23 trillion for America and expect it to add at least a trillion dollars a year from here on out.

What is going to be done when the next US recession hits? Will they borrow heavily again, shoot for 2 trillion dollar annual debts, and cut interest to negative rates, of which Trump is already wanting now and hoping it will go. He's also advocating lower wages, and has wanted to cut SS, and other entitlements, although he hasn't got his way yet.

But maybe I'm being a little paranoid, perhaps Trump has got everything under control, and he needs a second term to accomplish the 6% GDP, and will wipe out the entire 23 trillion dollar deficit during the next term if re-elected. Yeah, that's when it's going to happen, just give him four more years, we know his word his good. He'll finally silence all doubters. He's a self-made businessman right? He didn't inherit 413 million dollars in today's money mostly through tax dodges from his father, he's never went bankrupt 6 times according to his critics, they must be mistaken. The climate change is truly a China made hoax, so not to worry. Among his strongest supporters are evangelicals, surely they know a good and godly man when they see one, how dare anyone question his faith. At least when it comes to the economy, he's over qualified in such matters, right?

Don't worry be happy. Trump's got this! MAGA
  #10  
Old 02-05-2020, 08:37 AM
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Yeah, he's had an effect. He's rammed through unnecessary tax cuts and propped up a middling economy on the nation's credit card. We'll pay for it with the environmental damage caused by the loosening of corporate regulation. The "good" times can't last and we'll be even less prepared to deal with things when they end. Congrats, conservatives. You're supposed to be the adults in the room when it comes to economic issues and you're just a hot fucking mess. But a few of you are getting really rich, so there's that.
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Old 02-05-2020, 10:01 AM
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As others said, giant corporate and personal income tax cuts have "goosed up" the economy in the short term. Deregulation is also a "gooser," though weakening environmental protections, consumer protections, and employee protections will reduce quality of life even if financial measures appear stronger. Recall that the Valdez oil spill "goosed" GDP UP! Wages paid for clean-up (or even to repair windows deliberately broken) pump up employment and GDP stats.

(The suggestion that Trump has attracted competent advisors was very laughable. The incompetence of Cabinet members and other key advisors today is unprecedented.)

In a recent thread, I objected when a fellow Doper called this a "fake" economy. But on reconsideration, his may be a good description:

* Stock prices which many use as a proxy for the economy's strength are inflated by over-leveraging. The "Schiller P/E ratio" is higher now than it was at the 1929 peak. The present Schiller P/E was exceeded only during the 1997-2000 "irrational exuberance." (Robert Schiller is a Nobel-Prize winner specializing in areas like P/E prediction.)
* The median American worker has seen little improvement in his economic condition; many tens of millions say their situation is as bad as, or worse than it was at the 2009 crash. Wages have NOT kept pace with productivity growth. Americans have suffered home foreclosures, rising debt, rising medical costs. Many need two jobs. Employees in the "gig economy" often earn less than minimum wage. The Trump "boom" has mainly helped the people who didn't need help.
* Much economic growth is in sectors like finance which do not benefit the real economy. (Similarly to the Valdez spill mentioned above, when Wells Fargo cheats its customers of a billion dollars, those profits get ADDED to GDP. No "book balancing" there.)
* Rising productivity is largely the result of robots and other efficiencies which do not improve employment or quality of life. Of course this isn't to Trump's credit (or blame).
* Inequality continues to rise. The top 0.1% of Americans are estimated to have $20 trillion in total wealth when wealth cached in tax havens is included this is far more than the total for the bottom 90%.

Since the economy is fueled by massive tax cuts, high debt, and a stock market which many consider over-valued, does this mean a rude awakening is likely soon? Maybe. But I expect Trump to "goose" some more by passing temporary payroll tax reductions later this year to keep the boom going and ensure his re-election. Then, beginning in 2021, expect inflation or recession or both.
  #12  
Old 02-05-2020, 10:09 AM
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Trump inherited tremendous wealth from his father. He managed to leverage that wealth through a combination of fraud and debt in order to keep the money flowing into his accounts. All along, he's claimed that his cash flow was due to his amazing business acumen.

President Trump inherited a great economy from Obama. He managed to leverage that economy through a combination of fraud and debt in order to keep the money flowing into the stock market. All along, he's claimed that the economy's strength is due to his amazing business acumen.
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Old 02-05-2020, 10:21 AM
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Originally Posted by Velocity View Post
A president has relatively little ability to make the economy good on his own. He does, however, have immense power to make it worse.
One of Trump's ideas to reduce the debt:

Bob Woodward book: Gary Cohn was 'astounded at Trump's lack of basic understanding' about the federal debt


Quote:
During the first meeting between President-elect Donald Trump and his top economic adviser, Trump appeared confused by elements of the federal debt and US monetary policy.

...

During the meeting at Trump Tower in November 2016, Cohn touched on a series of economic issues, including the Federal Reserve. Cohn told Trump that the Fed would most likely increase interest rates during his term. Trump then offered an idea of how to deal with the rising rates.

"We should just go borrow a lot of money, hold it, and then sell it to make money," Trump said, according to the book.

While Trump was correct that many private businesses issue debt at a time of low interest rates, Cohn was "astounded at Trump's lack of basic understanding" about what the government borrowing would mean, Woodward wrote.

During the campaign, Trump ran on a promise to eliminate the federal debt during his presidency. Borrowing more would increase the deficit and add to that debt, Cohn explained. The president-elect offered a solution.

"Just run the presses print money," Trump said, according to Woodward.

Cohn suggested that would be detrimental to the fiscal and economic health of the US, since printing vast amounts of money is thought to lead to inflation. But Trump returned to the idea later in the conversation.

...

"It was clear that Trump did not understand the way the US government debt cycle balance sheet worked," Woodward wrote.
Quote:
Originally Posted by Red Wiggler View Post
Yeah, he's had an effect. He's rammed through unnecessary tax cuts and propped up a middling economy on the nation's credit card. We'll pay for it with the environmental damage caused by the loosening of corporate regulation. The "good" times can't last and we'll be even less prepared to deal with things when they end. Congrats, conservatives. You're supposed to be the adults in the room when it comes to economic issues and you're just a hot fucking mess. But a few of you are getting really rich, so there's that.
[my bold]

Trump is reportedly not worried about a massive US debt crisis as he'll be out of office by then

Quote:
President Donald Trump is said to not be worried about setting the US up for a massive debt crisis because he doesn't think it'll erupt until after he leaves office.

Sources close to the presidency told The Daily Beast that Trump had repeatedly shrugged off any concerns about the rising national debt because it was projected to come to a head only after he would finish a second term.

During a 2017 briefing with senior officials, Trump responded to a presentation of charts and graphics by saying, "Yeah, but I won't be here," according to a source The Daily Beast said witnessed the comment.
Debt/deficit, global warming, etc... Not Trump's problem.
  #14  
Old 02-05-2020, 11:20 AM
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The way I see it is should the economic numbers hold, he will get a sizeable amount of independents to be re-elected. Because I believe a large number of people aren't into politics or policy, but they vote, and they vote based on their pockets. It is hard to argue the case for a total upheavel of the economy the way it is. The economy is not a simple machinery. But the case for Trump is a lot simpler than a case for structural change. Trump will reel of percentages no matter if they are just continuing on from where Obama left them.

A large number of people will say why mess with something that is doing fine.
  #15  
Old 02-18-2020, 03:51 PM
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I came across this clip today and it's good for a laugh:

Obama has not caused the Trump economy: Art Laffer

Laffer is the guy who came up with the Laffer Curve, which basically is used by conservatives when they say cutting taxes will increase government revenue, i.e. tax cuts pay for themselves.

According to Laffer, Obama isn't an economist and doesn't understand economics while Trump is an economist and has a deep understanding of economics.

Obama was also poorly served by his economic advisers while Trump's advisers, guys like Steve Mnuchin and Larry Kudlow, are geniuses.

I guess Trump was triggered by Obama's tweet about the economy and the puppets have their marching orders to push back and refute the facts.

I guess they want for us to know how the genius Trump has saved us from bumbling and ignorant Obama and his economy.

Last edited by dasmoocher; 02-18-2020 at 03:54 PM.
  #16  
Old 02-18-2020, 05:34 PM
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Trump gave a huge tax cut to the wealthiest Americans.

Q: What do wealthy people, that already have all the money they need for anything they want, do with extra cash?
A: They invest it. Mostly in the stock market.

Q: What effect does this have on stock prices?
A: It increases the demand for stocks, especially blue-chip stocks upon which the market indices are based. Indeed, much of the investment will be in index funds, which specifically target these bell-weather stocks. Stock prices in general, and stock indices in particular rise in response.

Thus Trump's signature achievement (tax cut for the wealthy) probably has improved the stock market indices. Many will argue that this is just the sort of thing that creates a bubble, and is thus a bad thing in the long term.

Ignoring the stock market, the economy isn't doing great. Trump has exploded the budget deficit. Wages are not keeping pace with inflation. His idiotic tariffs have closed factories, and farms are going bankrupt at record rates. He is stealing money from the military to build his ill-conceived wall. GDP growth is slower than Obama's last three years, and far below Trump's 2016 campaign promises.

Trump's solution (as reflected in his FY 2021 budget proposals) to the deficit issue is massive cuts to Social Security and Medicare. That may be the one issue that could possibly make a dent in the mental wall many of his supporters seem to have. If not, hopefully the 2018 election results indicate they won't be needed to save the country.
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Last edited by Kevbo; 02-18-2020 at 05:37 PM.
  #17  
Old 02-19-2020, 12:02 PM
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Quote:
Originally Posted by Kevbo View Post
Trump gave a huge tax cut to the wealthiest Americans.

Q: What do wealthy people, that already have all the money they need for anything they want, do with extra cash?
A: They invest it. Mostly in the stock market.

Q: What effect does this have on stock prices?
A: It increases the demand for stocks, especially blue-chip stocks upon which the market indices are based. Indeed, much of the investment will be in index funds, which specifically target these bell-weather stocks. Stock prices in general, and stock indices in particular rise in response.

Thus Trump's signature achievement (tax cut for the wealthy) probably has improved the stock market indices. Many will argue that this is just the sort of thing that creates a bubble, and is thus a bad thing in the long term.

Ignoring the stock market, the economy isn't doing great. Trump has exploded the budget deficit. Wages are not keeping pace with inflation. His idiotic tariffs have closed factories, and farms are going bankrupt at record rates. He is stealing money from the military to build his ill-conceived wall. GDP growth is slower than Obama's last three years, and far below Trump's 2016 campaign promises.

Trump's solution (as reflected in his FY 2021 budget proposals) to the deficit issue is massive cuts to Social Security and Medicare. That may be the one issue that could possibly make a dent in the mental wall many of his supporters seem to have. If not, hopefully the 2018 election results indicate they won't be needed to save the country.
Wages have grown faster than inflation every year of the past four years. Farm bankruptcies are nowhere near their high which was 30-40 years ago.
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