US Economy 30% Down (Annualised)

[ROB]

What are the bets for the next quarter?

I bet the slide will ease significantly, but still shitville for a while yet.

Wouldn't want to be poor in the coming few years though. Teachers and nurses will be the new working class royalty (ie they actually have a stable job). And teachers maybe not.

The rich will be picking up some serious bargains when the stock market catches up (down) with the real economy. Hope you guys have been saving up.

[snaark]

My prediction is ... we're all fucked.

But seriously, it depends on two things:
- whether the US congress & senate can agree on a follow-up stimulus that actually helps normal people; and
- how bad corporate bankruptcies are going to get

In any case, anyone expecting a V-shaped recovery is going to be disappointed.

[ROB]

That is the weird thing. Every Keynesian and most Austrian economists seem to want stimulus. Yet a lot of government seem to want austerity.

This is gonna be a long one.

[snaark]

I find it amazing how quickly most governments have taken to it (stimulus I mean). In Germany they've thrown everything at it - even money transfers to Southern Europe. This was anathema just a few years ago. It took me a while to get my head around it, not being a trained economist and all. I mean why debt-gdp per se is not what's important. The bigger question, I think, is what other long-term effects it will all have. We're definitely entering a new era in economics. Its a pity that Keynes isn't here to figure it all out. I mean, there are plenty of clever economists in the world, but no towering figure that everyone will listen to.

[ROB]

There are a few but there have always been 2 main streams of economics so plenty of room to ignore according to political preference.

Sowell for conservatives/ libertarians / Austrians
Krugman for Keynesian
Kelton for MMT

The real debate at the moment is how much “debt” a country can carry. Sowell = low. Krugman = middle. Kelton = high (but constrained by inflation).

Japan has fucked up Sowell’s team. Literally could only barely spend their way out of stagflation.

[snaark]

I like Krugman's NYT column but I don't think he's really that active as an academic economist anymore. I "read" (i.e. as audiobook) Sowell's book on Basic Economics, but it seemed a little outdated to me.

Keynes was a giant at the time, who would be invited by presidents and prime ministers to advise them. Milton Friedman had the same influence decades later. These days there are too many voices, but as you said pretty much everyone agrees on stimulus.

As Robert Shiller says, MMT isn't all that modern, it's just a new spin on Keynesianism. With QE the Fed holds most of the debt and the treasury issues it, so it's just one branch of govt borrowing from another. As long as interest rates stay low you can keep doing that almost forever (like Japan). At least that's how I understand it.

Wish I'd studied macroeconomics but I'm too old to do another degree.

[ROB]

Yeah MMT just seems to be a reframing of Keynesian with a “job guarantee” thrown in. Haven’t read Kelton’s new book yet (or TBF Graebar’s old one other than a quick skim). Seems interesting, but its cultish fans kind of put me off a bit.

[snaark]

I lump job guarantees together with UBI in terms of plausibility.

At the moment I'm reading (by reading I mean listening to on Audible, which is how I "read" most books these days) Heather Boushey's book on inequality, which is sorta in the same camp as Pickety and others. Interesting stuff, though like Pickety it's a bit depressing. Lots of other econ books on my reading list. Can't get through them quick enough.

[denise]

so really what is it that you want from US.

[ROB]

To not take the rest of us down with you.

[el3so]

As long as you people pay your non-socialized medical bills, you can do whatever you want.

[el3so]

I lump job guarantees together with UBI in terms of plausibility.

Both concepts seem like another pie in the sky idea. History shows us governments aren't particularly efficient at redistributing wealth or providing sustainable employment.
The idea of the value of money will be maintained at all costs because there are no realistic alternatives. Doubt the numbers involved are bigger than those in the credit crisis. In the meantime I will keep buying high and selling low, if anything it helps pass the time...

[ROB]

I lump job guarantees together with UBI in terms of plausibility.

Both concepts seem like another pie in the sky idea. History shows us governments aren't particularly efficient at redistributing wealth or providing sustainable employment.
The idea of the value of money will be maintained at all costs because there are no realistic alternatives. Doubt the numbers involved are bigger than those in the credit crisis. In the meantime I will keep buying high and selling low, if anything it helps pass the time...

I remain open to the idea that one or both might work, but I gotta admit I don’t hold out a lot of confidence. Worth a try, but not worth hanging your hat on.

[el3so]

Worth a try

It has the same kind of mass appeal as "tax the rich" but is even less supported by reality. Great way to sell books in the 21st century though.
Our current system of close-to-universal income in case of unemployment, illness, handicap and retirement has been stressed these past 20 or so years due to population pyramid and the "new" economy (20 ditch diggers replaced by 1 ditch digging machine operator and 1 part-time ditch digging machine mechanic).

People getting into politics all look for short-term results (re-election every 4/5/6 years) whereas long term solutions are required. The music is bound to stop at some time, the turd they have been pushing along the carpet hasn't been getting smaller.

[snaark]

The problem I have with all these things is that the don't actually address the causes of inequality. They're just a sop to the far left.

UBI has been tried in a couple of places (I think Finland was one) and it's never been a roaring success. I suspect probably because it's basically just welfare (i.e. barely enough to live off) by another name. The other problem is that it's a solution to a problem that hasn't actually arrived yet and perhaps never will, i.e. half of all jobs being wiped out by automation.

Guaranteed jobs just sounds like a terrible idea. Who the fuck wants to work with someone who was given their job because they were unqualified to work anywhere else?