US Gross Domestic Product, Second Quarter 2022 (Advance Estimate)(bea.gov)
bea.gov
US Gross Domestic Product, Second Quarter 2022 (Advance Estimate)
https://www.bea.gov/news/2022/gross-domestic-product-second-quarter-2022-advance-estimate
499 comments
I agree that we are in a recession.
>How did we get to a point where actual data can be outright denied or absorbed based on your political viewpoint?
Because the actual data is sending mixed signals. People equate recessions with job losses, but job growth is still high and unemployment remains incredibly low. Businesses equate recessions with reduced demand for goods and and services, yet demand remains strong enough to push prices and profits to record levels.
GDP has long been criticized for being a poor metric for the economy. But it's always been correlated enough with overall economic sentiment that it was Good Enough. It looks like we've finally gotten ourselves into a situation where the edge case issues with GDP surface.
Lastly, not everyone feels recessions the same. I was one of those people who benefited from the financial crisis, because I kept my job and lived in an apartment, so my income was going up while my costs went down. That doesn't take away from the devastation it caused to other people.
>How did we get to a point where actual data can be outright denied or absorbed based on your political viewpoint?
Because the actual data is sending mixed signals. People equate recessions with job losses, but job growth is still high and unemployment remains incredibly low. Businesses equate recessions with reduced demand for goods and and services, yet demand remains strong enough to push prices and profits to record levels.
GDP has long been criticized for being a poor metric for the economy. But it's always been correlated enough with overall economic sentiment that it was Good Enough. It looks like we've finally gotten ourselves into a situation where the edge case issues with GDP surface.
Lastly, not everyone feels recessions the same. I was one of those people who benefited from the financial crisis, because I kept my job and lived in an apartment, so my income was going up while my costs went down. That doesn't take away from the devastation it caused to other people.
They are not mixed signals, the data we use for signaling is flawed for the modern area
Take for example the U-3 unemployment number that you cite, what is missing from that is Workforce Participation, we have a pretty large drop-off in Work force participation which is leading to the false belief that employment is "fine", and the quote "mix signal" of being in a recession while still having lower unemployment.
Completely absent from most of these older metrics is the "gig-economy" which is really screwing with the data IMO.
Then you have U-6 Unemployment increasing while U-3 is dropping, I think U-3 is just a few months away from reversal and will start increasing soon
>>GDP has long been criticized for being a poor metric for the economy.
yes by MMT supporters that want to ignore the classic model of economics in favor of monetary manipulation for political purposes
Take for example the U-3 unemployment number that you cite, what is missing from that is Workforce Participation, we have a pretty large drop-off in Work force participation which is leading to the false belief that employment is "fine", and the quote "mix signal" of being in a recession while still having lower unemployment.
Completely absent from most of these older metrics is the "gig-economy" which is really screwing with the data IMO.
Then you have U-6 Unemployment increasing while U-3 is dropping, I think U-3 is just a few months away from reversal and will start increasing soon
>>GDP has long been criticized for being a poor metric for the economy.
yes by MMT supporters that want to ignore the classic model of economics in favor of monetary manipulation for political purposes
>>>GDP has long been criticized for being a poor metric for the economy. But it's always been correlated enough with overall economic sentiment that it was Good Enough.
>> yes by MMT supporters that want to ignore the classic model of economics in favor of monetary manipulation for political purposes
Huh?
Discussing the utility of and then issues with GDP has been a staple of Macro courses for decades. E.g., [1], but I'm really serious: every single macro textbook for as long as macro textbooks have existed has had some version of the question "Discuss the strengths and weaknesses (i.e., problems) of using GDP data".
[1] https://www.austincc.edu/sondg/Exams/macro/exam2.html
>> yes by MMT supporters that want to ignore the classic model of economics in favor of monetary manipulation for political purposes
Huh?
Discussing the utility of and then issues with GDP has been a staple of Macro courses for decades. E.g., [1], but I'm really serious: every single macro textbook for as long as macro textbooks have existed has had some version of the question "Discuss the strengths and weaknesses (i.e., problems) of using GDP data".
[1] https://www.austincc.edu/sondg/Exams/macro/exam2.html
A reasonable definition of recession is "you can't find a job", but, not only are we in the middle of a labor shortage, traditional good-economic-times like unionization are ramping up, and people are successfully demanding raises (and some households are voluntarily moving to single incomes).
On the other hand, the stock market is down this year, so if that's your definition, things are dire.
Honestly, this seems like stagflation to me, which has been historically known for breaking the definition of "recession".
Neither side wants to say that out loud, because it implies a decade-plus economic funk.
On the other hand, the stock market is down this year, so if that's your definition, things are dire.
Honestly, this seems like stagflation to me, which has been historically known for breaking the definition of "recession".
Neither side wants to say that out loud, because it implies a decade-plus economic funk.
That is actually a really poor definition of a recession. It overlooks many macroeconomic factors that can cause severe problems. "I can't improve my economic position" seems a lot closer, while still being a bad definition, and by that definition, we are deep in a recession.
> "you can't find a job"
that sounds like a depression, not a recession
that sounds like a depression, not a recession
MMT isn't against using GDP as a metric for the economy
The biggest actual policy disagreement between MMT and mainstream economics is how to achieve full employment. Mainstream economics primarily reaches for monetary policy (tweaking the interest rate), MMT primarily reaches for fiscal policy (create/spend money to give everyone a job).
I don't feel particularly strongly about one side versus the other, but we end up doing both anyways and our current model of changing the interest rate (i.e. recent rate hikes) out of lockstep with corresponding fiscal spending (i.e. Build Back Better) is inefficient when the two need to be kept in balance.
The biggest actual policy disagreement between MMT and mainstream economics is how to achieve full employment. Mainstream economics primarily reaches for monetary policy (tweaking the interest rate), MMT primarily reaches for fiscal policy (create/spend money to give everyone a job).
I don't feel particularly strongly about one side versus the other, but we end up doing both anyways and our current model of changing the interest rate (i.e. recent rate hikes) out of lockstep with corresponding fiscal spending (i.e. Build Back Better) is inefficient when the two need to be kept in balance.
> we have a pretty large drop-off in Work force participation
No, we don't.
While the LFPR is still down from the point it was prior to the 2020 recession, it has been continuing to increase fairly consistently after it's sharp rebound from the trough of that recession.
https://www.bls.gov/charts/employment-situation/civilian-lab...
No, we don't.
While the LFPR is still down from the point it was prior to the 2020 recession, it has been continuing to increase fairly consistently after it's sharp rebound from the trough of that recession.
https://www.bls.gov/charts/employment-situation/civilian-lab...
> what is missing from that is Workforce Participation,
Sure, but the statement I made was job growth ways high AND unemployment remained low. The AND is important for the very reason you point out; U-3 is not a useful stand alone metric. Combining it with job growth data helps provide a better picture of the job market.
Employment still grew by 375,000 jobs last month. This was far above expectations.
Sure, but the statement I made was job growth ways high AND unemployment remained low. The AND is important for the very reason you point out; U-3 is not a useful stand alone metric. Combining it with job growth data helps provide a better picture of the job market.
Employment still grew by 375,000 jobs last month. This was far above expectations.
>>GDP has long been criticized for being a poor metric for the economy.
> yes by MMT supporters that want to ignore the classic model of economics in favor of monetary manipulation for political purposes
It's been said that a cancer patient going through an expensive divorce is the best contributor to GDP.
You don't measure the health of a human by looking at their weight on a scale. When you go to the doctor for your annual checkup, they'll measure your BMI, blood pressure, body temperature, resting heart rate, and look at a few other indicators to get a very rough estimate of your overall health and how it compares to last year.
GDP is one indicator among many to measure the health of the economy. An important one, yes, but looking at GDP without also looking at employment figures, inflation data, the markets, etc. would be tremendously silly.
> yes by MMT supporters that want to ignore the classic model of economics in favor of monetary manipulation for political purposes
It's been said that a cancer patient going through an expensive divorce is the best contributor to GDP.
You don't measure the health of a human by looking at their weight on a scale. When you go to the doctor for your annual checkup, they'll measure your BMI, blood pressure, body temperature, resting heart rate, and look at a few other indicators to get a very rough estimate of your overall health and how it compares to last year.
GDP is one indicator among many to measure the health of the economy. An important one, yes, but looking at GDP without also looking at employment figures, inflation data, the markets, etc. would be tremendously silly.
> Take for example the U-3 unemployment number that you cite, what is missing from that is Workforce Participation, we have a pretty large drop-off in Work force participation which is leading to the false belief that employment is "fine", and the quote "mix signal" of being in a recession while still having lower unemployment.
Everyone is still very desparate for employees, so I don't think Workforce Participation is low because there aren't enough jobs and people are discouraged from the work force. Baby boomers are currently aging out of the job market at a n accelerated rate, so that must be one of the reasons (U-6 doesn't include that though). I think the current drug disaster is another (a lot of people are simply unemployable), but I'm not sure how to measure that.
Everyone is still very desparate for employees, so I don't think Workforce Participation is low because there aren't enough jobs and people are discouraged from the work force. Baby boomers are currently aging out of the job market at a n accelerated rate, so that must be one of the reasons (U-6 doesn't include that though). I think the current drug disaster is another (a lot of people are simply unemployable), but I'm not sure how to measure that.
A decent measure is the number of unique individuals with a negative background check showing: violent, financial, or drug charges. The best metric I know of that approximates this is linked below; and it’s woefully undercounting.
https://en.m.wikipedia.org/wiki/Felony_disenfranchisement_in...
https://en.m.wikipedia.org/wiki/Felony_disenfranchisement_in...
[deleted]
Of course we have a large drop off of workforce participation. Baby Boomers are retiring en masse; they’re reaching retirement age, and many of those who are close were offered buyouts to leave early.
It’s not the result of decreased hiring due to economic slowdown. It’s the opposite entirely; this is a contributing factor to the labor shortage.
It’s not the result of decreased hiring due to economic slowdown. It’s the opposite entirely; this is a contributing factor to the labor shortage.
> Businesses equate recessions with reduced demand for goods and and services, yet demand remains strong
This isn't true, major retailers have been reporting falling demand.
I'd cite the WSJ but for some reason I can't paste the link in this box, just Google "falling demand Wal-Mart"
> enough to push prices and profits to record levels.
Adjust both for inflation
This isn't true, major retailers have been reporting falling demand.
I'd cite the WSJ but for some reason I can't paste the link in this box, just Google "falling demand Wal-Mart"
> enough to push prices and profits to record levels.
Adjust both for inflation
Falling demand of non-necessities. People aren't buying "TVs". Which as you call out, is a stupidly strong recessionary signal.
Or, damn near every household bought a new TV during the pandemic lockdowns using their stimulus checks and now no one needs a new TV.
I think Walmart's story in particular is one of stupidly bad demand forecasting.
I think Walmart's story in particular is one of stupidly bad demand forecasting.
Fast food is reporting the same thing, McDonald's put out a report a few days ago, Yum! Brands is yet to report results for the quarter but similar results are expected. Target had a similar report to Walmart.
It is mostly discretionary spending that is down; Wal-Mart reported the largest fall in apparel iirc, but demand is demand. One would expect discretionary spending to fall first, and hopefully it stops there.
Again I apologize for not providing a direct citation due to my dumb mobile browser but these are days-old news stories and it should be easy to confirm
It is mostly discretionary spending that is down; Wal-Mart reported the largest fall in apparel iirc, but demand is demand. One would expect discretionary spending to fall first, and hopefully it stops there.
Again I apologize for not providing a direct citation due to my dumb mobile browser but these are days-old news stories and it should be easy to confirm
I know I've cut back on fast food because both product and service quality have declined dramatically, likely due to staffing shortages. Long wait times, cold food, and incorrect orders have pushed me to the point of staying away. It's a weird time, and it's hard to untangle all these additional factors. That said, I'm sure higher prices are having an impact as well.
Fast food is pricing itself out of the market. I think it's a great example of a sector that failed to innovate and is now incapable of providing a product worth buying at prices that are profitable.
McDonalds et al. probably should've been investing a lot more in automating their kitchens. The fact that a huge percent of locations -- and all drive-thrus -- still use humans for the ordering process is, similarly, inexcusable.
Unless the US massively increases its low-skilled immigration quotes, robotics firms will be the FAANG equivalents of the 2020s-2030s.
McDonalds et al. probably should've been investing a lot more in automating their kitchens. The fact that a huge percent of locations -- and all drive-thrus -- still use humans for the ordering process is, similarly, inexcusable.
Unless the US massively increases its low-skilled immigration quotes, robotics firms will be the FAANG equivalents of the 2020s-2030s.
If McDonalds can't afford to pay a living wage at the local cost of living, nobody will immigrate to work for them.
You can fit 3 generations in a single family home in an American suburb of a mid-sized city, and half the world's population would either (a) consider that a QoL improvement or at least (b) put up with it for a while to remit back home.
For all the doom and gloom in the USA, it's still an incredibly rich country.
To be clear: I'm not making a moral statement here. This is a statement of fact, not a statement of ethical preference.
For all the doom and gloom in the USA, it's still an incredibly rich country.
To be clear: I'm not making a moral statement here. This is a statement of fact, not a statement of ethical preference.
Can three people working at McDonalds own a single family home in an American suburb?
Someone working low-paid hourly wage work can probably make $20K. A few siblings + their parents = 5 people = $100K. Stagger availability schedules so there's always someone home with the kids, and share vehicles.
Suburb of top-tier cities? No. Cheapest suburb of a midwestern city? Absolutely.
Again, not saying it's reasonable. Just that it's possible.
Suburb of top-tier cities? No. Cheapest suburb of a midwestern city? Absolutely.
Again, not saying it's reasonable. Just that it's possible.
Houses in towns big enough for a McDonald's are $100,000.
Not suburbs, just towns, but there will be services and a hospital and so on.
Not suburbs, just towns, but there will be services and a hospital and so on.
Three families can....
Not across the board. Demand for consumer discretionary spending outside of the home is up. People are tired of sitting at home. They don’t want to buy a TV and binge Netflix. They did that for 2 years. They’re going out to eat, going on vacation. Trying to get on a flight.
But demand for services and "experiences" is way up.
I think it's unrealistic to expect retail goods to maintain the same highs they had during the pandemic. For a big chunk of the last two years, people couldn't go to concerts, bars and restaurants operated at limited capacity, vacation destinations had travel restrictions in place, etc. This lead people to take the discretionary income they would normally spend on those things and put it into retail goods that improve their lives stuck at home. TVs, game consoles, what have you. Now that restrictions are essentially nonexistent in the US, people are returning to those pre-COVID activities.
I think it's unrealistic to expect retail goods to maintain the same highs they had during the pandemic. For a big chunk of the last two years, people couldn't go to concerts, bars and restaurants operated at limited capacity, vacation destinations had travel restrictions in place, etc. This lead people to take the discretionary income they would normally spend on those things and put it into retail goods that improve their lives stuck at home. TVs, game consoles, what have you. Now that restrictions are essentially nonexistent in the US, people are returning to those pre-COVID activities.
The evidence does not suggest that demand for services and experiences is up. Demand for durable goods spiked when COVID checks went out, then returned to parity with demand for services and non-durable goods.
According to the fed, both of those have dropped over the last two years.
But people bought more TVs than normal during the pandemic, so it may also be part 'satiation' signal.
> This isn't true, major retailers have been reporting falling demand.
As OP said,
>> and services.
> Wal-Mart
WalMart's issue is that they have a massive inventory/demand mismatch. They already have the headwind of a shift from goods to services, and then on top of that they also massively mismanaged a shift in consumer preference within goods. I have a feeling that they are also feeling the squeeze from Amazon. Many households treat Prime as a fixed cost but the 20 minute drive out to Walmart is a real expense that can be substituted with Amazon purchases. Tonight's earnings will be interesting.
Compare to eg Visa [1].
I expect that the "last hoorah" spending of this summer will grind to a halt in the winter and by Q2 2023 we'll be able to see a massive decline in consumer spending during Q4 in particular.
But we aren't there yet, at least in aggregate, because consumers are spending like mad on services.
[1] https://www.reuters.com/business/finance/visa-quarterly-prof...
As OP said,
>> and services.
> Wal-Mart
WalMart's issue is that they have a massive inventory/demand mismatch. They already have the headwind of a shift from goods to services, and then on top of that they also massively mismanaged a shift in consumer preference within goods. I have a feeling that they are also feeling the squeeze from Amazon. Many households treat Prime as a fixed cost but the 20 minute drive out to Walmart is a real expense that can be substituted with Amazon purchases. Tonight's earnings will be interesting.
Compare to eg Visa [1].
I expect that the "last hoorah" spending of this summer will grind to a halt in the winter and by Q2 2023 we'll be able to see a massive decline in consumer spending during Q4 in particular.
But we aren't there yet, at least in aggregate, because consumers are spending like mad on services.
[1] https://www.reuters.com/business/finance/visa-quarterly-prof...
>I'd cite the WSJ but for some reason I can't paste the link in this box, just Google "falling demand Wal-Mart"
I'd rather not base my picture of the entire economy around a single retailer. What's going on with other retailers? Amazon, Best Buy, Target, etc? Have they more than picked up the slack that Wal Mart is seeing?
I'd rather not base my picture of the entire economy around a single retailer. What's going on with other retailers? Amazon, Best Buy, Target, etc? Have they more than picked up the slack that Wal Mart is seeing?
> I'd rather not base my picture of the entire economy around a single retailer
Or retailers in general. Retail spending is down because services spending is up -- people are going to the beach and buying plane tickets instead of buying TVs and patio furniture.
Regardless of whether we're in a recession, retailer numbers aren't a good indicator for the duration/depth/type. We spent all of 2020 hearing that demand was pulled forward. Well, it was pulled forward from somewhere, and now we are there.
> What's going on with other retailers?
Best Buy missed by a lot; sales down by over 10%; forecast was a 1% contraction.
Amazon tonight. Always complicated because of AWS, digital content, and now a substantial advertising business. If you want the retail details you have to go past the headline numbers.
Target in mid-August but expectations are similar.
My guess is that none of those companies will be hit has bad as Walmart because (1) Walmart was just particularly badly mismanaged, and (2) these other companies are just different in kind (particularly Amazon -- they could eg suffer retail losses while beating estimates on Advertising/Cloud)
Or retailers in general. Retail spending is down because services spending is up -- people are going to the beach and buying plane tickets instead of buying TVs and patio furniture.
Regardless of whether we're in a recession, retailer numbers aren't a good indicator for the duration/depth/type. We spent all of 2020 hearing that demand was pulled forward. Well, it was pulled forward from somewhere, and now we are there.
> What's going on with other retailers?
Best Buy missed by a lot; sales down by over 10%; forecast was a 1% contraction.
Amazon tonight. Always complicated because of AWS, digital content, and now a substantial advertising business. If you want the retail details you have to go past the headline numbers.
Target in mid-August but expectations are similar.
My guess is that none of those companies will be hit has bad as Walmart because (1) Walmart was just particularly badly mismanaged, and (2) these other companies are just different in kind (particularly Amazon -- they could eg suffer retail losses while beating estimates on Advertising/Cloud)
>Or retailers in general. Retail spending is down because services spending is up -- people are going to the beach and buying plane tickets instead of buying TVs and patio furniture.
>Regardless of whether we're in a recession, retailer numbers aren't a good indicator for the duration/depth/type. We spent all of 2020 hearing that demand was pulled forward. Well, it was pulled forward from somewhere, and now we are there.
All fair points.
>Best Buy missed by a lot; sales down by over 10%; forecast was a 1% contraction.
Ouch.
>Regardless of whether we're in a recession, retailer numbers aren't a good indicator for the duration/depth/type. We spent all of 2020 hearing that demand was pulled forward. Well, it was pulled forward from somewhere, and now we are there.
All fair points.
>Best Buy missed by a lot; sales down by over 10%; forecast was a 1% contraction.
Ouch.
Macro Econ 101: Unemployment is a lagging indicator. Always has been. Always will be. It's why it was silly for them to keep touting it as a measure of the economy's health.
We could even enter a prolonged, severe recession with low unemployment. How? Labor force participation. If it is low enough, there aren't jobs to cut.
Your last point is very valid, and much is a matter of perspective.
As far as mixed data... the only data throwing a contrary signal is unemployment, previously discussed. Inflation, rising interest rates, low consumer confidence, home prices turning over (speculative market areas currently), supply chain issues, and loss of wealth effect (markets have lost approximately $30 trillion this year), are all VERY recessionary.
We could even enter a prolonged, severe recession with low unemployment. How? Labor force participation. If it is low enough, there aren't jobs to cut.
Your last point is very valid, and much is a matter of perspective.
As far as mixed data... the only data throwing a contrary signal is unemployment, previously discussed. Inflation, rising interest rates, low consumer confidence, home prices turning over (speculative market areas currently), supply chain issues, and loss of wealth effect (markets have lost approximately $30 trillion this year), are all VERY recessionary.
to support your statement that unemployment is a lagging indicator -- very random observation of rural Carolinas annual horse roundup and sale. They keep and publish records of a traditional county horse auction there, and the 2006-2010 years are listed. You can see a big change in the prices among these relatively unconnected people and their auction, but it is lagging by two years versus the massive credit crunch that put so many high-leverage city companies out of business.
>Because the actual data is sending mixed signals. People equate recessions with job losses, but job growth is still high and unemployment remains incredibly low.
The data isn't mixed, people are just making an incorrect association.
Working more or longer isn't a good thing in its own right. In fact, it is bad it you are working more for less purchasing power.
employment growth has historically been associated with increased purchasing power, but the current situation is a deviation from this norm.
Talking about employment growth ignoring this fact is a bit of a bait and switch playing on this incorrect association.
The data isn't mixed, people are just making an incorrect association.
Working more or longer isn't a good thing in its own right. In fact, it is bad it you are working more for less purchasing power.
employment growth has historically been associated with increased purchasing power, but the current situation is a deviation from this norm.
Talking about employment growth ignoring this fact is a bit of a bait and switch playing on this incorrect association.
> Because the actual data is sending mixed signals. People equate recessions with job losses, but job growth is still high and unemployment remains incredibly low.
The definition of "recession" doesn't depend on what other things people think happen during a recession.
No one would be making this argument if it had happened while Trump was in office.
The definition of "recession" doesn't depend on what other things people think happen during a recession.
No one would be making this argument if it had happened while Trump was in office.
> The definition of "recession" doesn't depend on what other things people think happen during a recession.
It absolutely does depend on the factors that NBER has always looked at to judge recessions, like employment.
> No one would be making this argument if it had happened while Trump was in office.
That's a nonfalsifiable statement that does nothing but show your own political bias.
It absolutely does depend on the factors that NBER has always looked at to judge recessions, like employment.
> No one would be making this argument if it had happened while Trump was in office.
That's a nonfalsifiable statement that does nothing but show your own political bias.
> That's a nonfalsifiable statement that does nothing but show your own political bias.
It's political bias to notice that people behave politically?
Is it political bias to notice Republicans complain about the deficit when Democrats are in power or is it only political bias to notice that that Democrats complain about the deficit when Republicans are in power ?
It's political bias to notice that people behave politically?
Is it political bias to notice Republicans complain about the deficit when Democrats are in power or is it only political bias to notice that that Democrats complain about the deficit when Republicans are in power ?
It's nonfalsifiable but not for the reason you think :)
bshoemaker(1)
Descriptions of economic conditions are obviously politicized. This was probably always true to an extent, but it really took off during the early Obama years.
That said... my wealth manager has been and still is waffling when I ask him if we are in a recession. It's NOT just political; I don't even know my wealth manager's politics and I have absolutely no doubt he puts fiduciary responsibilities first and makes fact-based assessments.
Unemployment is low and the trend is mostly flat. Housing is doing fine. Consumer balance sheets are strong. Are we entering a recession? I think so. But there are a lot of "but"s which really do impact how smart and impartial people are thinking about where and how to deploy capital.
When I ask my wealth manager "are we in a recession?", he basically says "We might be in a recession. We might not be in a recession. Either way, we should not invest as if this is a typical recession."
Which I think pretty much sums things up.
That said... my wealth manager has been and still is waffling when I ask him if we are in a recession. It's NOT just political; I don't even know my wealth manager's politics and I have absolutely no doubt he puts fiduciary responsibilities first and makes fact-based assessments.
Unemployment is low and the trend is mostly flat. Housing is doing fine. Consumer balance sheets are strong. Are we entering a recession? I think so. But there are a lot of "but"s which really do impact how smart and impartial people are thinking about where and how to deploy capital.
When I ask my wealth manager "are we in a recession?", he basically says "We might be in a recession. We might not be in a recession. Either way, we should not invest as if this is a typical recession."
Which I think pretty much sums things up.
> Consumer balance sheets are strong.
Consumer debt is at record highs for overall debt, and household credit card debt is climbing towards record levels.
https://www.google.com/amp/s/www.cnbc.com/amp/2022/05/10/hou...
https://www.google.com/amp/s/www.cnbc.com/amp/2022/05/10/con...
Consumer debt is at record highs for overall debt, and household credit card debt is climbing towards record levels.
https://www.google.com/amp/s/www.cnbc.com/amp/2022/05/10/hou...
https://www.google.com/amp/s/www.cnbc.com/amp/2022/05/10/con...
The fastest-growing (and largest) category of that debt was mortgage debt, which is probably a positive economic indicator if anything, though note that that's based on Q1 data. Household debt servicing costs as a percent of disposable income are still lower than at any point between 1980 (the earliest data available) and the start of the pandemic. https://fred.stlouisfed.org/series/TDSP
Also keep in mind that those debt figures are in nominal USD. One positive effect of inflation is that it reduces the real cost of paying off debt.
Also keep in mind that those debt figures are in nominal USD. One positive effect of inflation is that it reduces the real cost of paying off debt.
Is this a positive effect? I think it is for lower inflation rates, but above a certain threshold the borrowing can get out of hand, people will go and get more loans, which will drive prices higher. Eventually the bubble pops and people go underwater.
Hey, remember back in 2009 or so when everyone was cheering that we were "out of" the Great Recession, but everyone not part of Wall Street was still bleeding? I feel like this might wind up being a reverse of that; and the reason for this is that most economic data are aggregates that are missing the whole picture.
GDP numbers are back up? Great - except that's just higher because the handful of companies that can really capitalize on 0% interest rates are doing so. Everyone else is still down from 2007.
Unemployment is falling? Great - except that those people are leaving the labor force or taking lower-wage jobs than they had before.
There's all sorts of ways that the headline numbers can hide the discontent of a large group of people under the rug. And likewise this can happen in the opposite direction. The economy as a whole can be screwed over in ways that happen to give small business owners or the working class more negotiating leverage or a greater share of the pie.
GDP numbers are back up? Great - except that's just higher because the handful of companies that can really capitalize on 0% interest rates are doing so. Everyone else is still down from 2007.
Unemployment is falling? Great - except that those people are leaving the labor force or taking lower-wage jobs than they had before.
There's all sorts of ways that the headline numbers can hide the discontent of a large group of people under the rug. And likewise this can happen in the opposite direction. The economy as a whole can be screwed over in ways that happen to give small business owners or the working class more negotiating leverage or a greater share of the pie.
> Hey, remember back in 2009 or so when everyone was cheering that we were "out of" the Great Recession, but everyone not part of Wall Street was still bleeding?
I also remember the whole expansion preceding the Great Recession, during which the bottom three quintiles all did worse, the second-to-top was basically flat, and most of the gains were in a narrow segment at the top of the top quintile.
“Recession“ vs “expansion“ (multidimensional as it is) is still not, and not intended to be, the same as any individual person’s, or even the median person’s, experience of the economy.
I also remember the whole expansion preceding the Great Recession, during which the bottom three quintiles all did worse, the second-to-top was basically flat, and most of the gains were in a narrow segment at the top of the top quintile.
“Recession“ vs “expansion“ (multidimensional as it is) is still not, and not intended to be, the same as any individual person’s, or even the median person’s, experience of the economy.
I've seen the word recession thrown around plenty in the press; who's avoiding saying it?
As pointed out by another commenter the NBER has never failed to declare a recession after two consecutive quarters of GDP reduction. This is a preliminary report, I would expect them to wait for the full report to actually declare it.
These things work a certain way. Whether that way is good or bad isn't relevant to this particular point, by expecting that way to change on a whim you're just being impatient.
As pointed out by another commenter the NBER has never failed to declare a recession after two consecutive quarters of GDP reduction. This is a preliminary report, I would expect them to wait for the full report to actually declare it.
These things work a certain way. Whether that way is good or bad isn't relevant to this particular point, by expecting that way to change on a whim you're just being impatient.
> As pointed out by another commenter the NBER has never failed to declare a recession after two consecutive quarters of GDP reduction.
That isn't 100% accurate. There is 1 example from 1947 where we had two consecutive quarters of negative GDP, but positive jobs, positive industrial production and positive consumer spending and NBER doesn't consider it a recession.
2001 was the opposite. It was called a recession without consecutive 2 quarters of negative GDP growth. [1]
[1] https://en.wikipedia.org/wiki/Early_2000s_recession#/media/F...
That isn't 100% accurate. There is 1 example from 1947 where we had two consecutive quarters of negative GDP, but positive jobs, positive industrial production and positive consumer spending and NBER doesn't consider it a recession.
2001 was the opposite. It was called a recession without consecutive 2 quarters of negative GDP growth. [1]
[1] https://en.wikipedia.org/wiki/Early_2000s_recession#/media/F...
> 2001 was the opposite. It was called a recession without consecutive 2 quarters of negative GDP growth.
Also 2020, and that wasn't even two down quarters with a gap; the whole recession was 2 months long.
Also 2020, and that wasn't even two down quarters with a gap; the whole recession was 2 months long.
> who's avoiding saying it?
No one is avoiding saying the word "recession". The current Executive Branch and Federal Reserve are both avoiding saying we are in a recession.
No one is avoiding saying the word "recession". The current Executive Branch and Federal Reserve are both avoiding saying we are in a recession.
Aren't recesssions - by necessity, always declared retrospectively? Or at least after they have already started, due to how they are measured.
Because for better or worse, while some other countries have purely formulaic recession criteria, the US doesn't. This can swing either way - the US never experienced two consecutive quarters of negative real GDP growth during the 2001 recession, for example. No one is denying that real GDP has shrunk for two consecutive quarters, they're just correctly pointing out that that's not how the US government defines a recession.
My impression is that layoffs have been mostly isolated to tech at this point. I do know a couple of recruiters (outside of tech) who've been laid off lately, so that could be the canary. But my impression is that all of the quantitative labor market indicators we have are still strong - likely stronger than we've ever seen in a recession.
My impression is that layoffs have been mostly isolated to tech at this point. I do know a couple of recruiters (outside of tech) who've been laid off lately, so that could be the canary. But my impression is that all of the quantitative labor market indicators we have are still strong - likely stronger than we've ever seen in a recession.
That's why it is important to have some verifiable agreed upon definitions. "Two quarters of negative growth" is something that anybody can understand and validate. Too simplistic? OK, make it more complex formula, whatever - but make it a formula, and make it fixed, so people can be sure neither Rs nor Ds can game it (at least not easily).
Instead what we're getting is "holistic criteria" which means pundits can argue on TV for hours (which they probably love to) and everybody gets to keep their partisan views and there's no objective meaning to any terms anymore. No wonder people have low confidence in "experts" and grasp at whatever they find on the internet to find some clarity.
Instead what we're getting is "holistic criteria" which means pundits can argue on TV for hours (which they probably love to) and everybody gets to keep their partisan views and there's no objective meaning to any terms anymore. No wonder people have low confidence in "experts" and grasp at whatever they find on the internet to find some clarity.
I'm not clear that "in a recession" is a particularly useful state to anyone.
Even with a complex formula, you're still dropping the useful details.
Even with a predictable complicated formula, you still have the question to debate: "does it matter?"
Even with a complex formula, you're still dropping the useful details.
Even with a predictable complicated formula, you still have the question to debate: "does it matter?"
People like certainty more than uncertainty, even if it's a bad certainty. That's why the have all these classifiers. It's easier to handle two situations "we're in a recession, we're not in a recession" than track about 50 economic parameters that are interwoven in a thousand complex ways. If you are a professional economist, you probably need to do the latter, but if you are a regular person, you probably have neither time nor capability to do it.
I fundamentally don't understand how low unemployment is a counterclaim against economic recession.
This is like saying sure you can't buy as much bread, but at least you are working longer.
The fact that more people are working to produce less than before describes an economy in decline.
What am I missing here?
This is like saying sure you can't buy as much bread, but at least you are working longer.
The fact that more people are working to produce less than before describes an economy in decline.
What am I missing here?
Low unemployment means there are plenty of jobs available. Those jobs are available because employers believe they can increase revenue by shelling out more money on headcount. So those employers believe there's still money to be made in the market.
That's an interesting take I'll have to give some more thought to. I don't think that it's clear that employers think the economy will grow in a way that yields more abundant and cheaper Goods. Maybe I'm Wrong and we'll see in GDP outpacing inflation from all of the new jobs. Maybe they just haven't had a chance to materialize in real GDP growth
GDP is an averaging function, that doesn't show the underlying distribution.
Poor people can be doing better while rich people are doing worse. Since economic activity is mostly about how the ultrawealthy are doing, there's always a recession when they're doing badly
Poor people can be doing better while rich people are doing worse. Since economic activity is mostly about how the ultrawealthy are doing, there's always a recession when they're doing badly
That's an interesting thought. Do you think poor people are helped more by the employment numbers than hurt by the inflation?
Unemployment isn't low because more people are working. It's low because retiring Boomers shrank the labor force.
Fewer workers = less production.
Fewer people looking for work = low unemployment.
Fewer workers = less production.
Fewer people looking for work = low unemployment.
> What I find pathetic is that saying we are in a recession is now a political stance.
This is such a weird information play. Recessions are defined after the fact by NBER. Always have. Always will be. There’s no set criteria.
Informally people cite the two quarters rule, but 2/5 past recessions (2000 and 2020) don’t follow that rule.
No one wants to communicate that nuance so we get mass confusion.
Sad to see that confusion even exists in HN.
What’s actually concerning to me is exactly that: every nuanced discussion in politics is now some gotcha where a reporter asks “yes or no” to a question that has a detailed answer.
This is such a weird information play. Recessions are defined after the fact by NBER. Always have. Always will be. There’s no set criteria.
Informally people cite the two quarters rule, but 2/5 past recessions (2000 and 2020) don’t follow that rule.
No one wants to communicate that nuance so we get mass confusion.
Sad to see that confusion even exists in HN.
What’s actually concerning to me is exactly that: every nuanced discussion in politics is now some gotcha where a reporter asks “yes or no” to a question that has a detailed answer.
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I think most of the recession talk is trying to drum up fears of 2007-2009. If we are in a recession, it's a pretty mild one. But that won't stop people from pretending that the sky is falling in order to motivate voters.
Welcome to the average recession. They usually aren't that bad for people outside of a certain small sector that gets hit hard. This time it was the crypto bros.
[deleted]
The average american does not know the technical definition of what a recession is. They just know recessions are bad. Whether or not it's acknowledged we're officially in a recession can itself have negative economic impacts due to panic.
Also, Powell himself has been iffy about whether or not we're in a recession
Also, Powell himself has been iffy about whether or not we're in a recession
> How did we get to a point where actual data can be outright denied or absorbed based on your political viewpoint? It's really pathetic. People will go to the ends of the earth just to protect politicians. Worse, even if we're in recession it's pretty mild, so I don't even know why there is so much handwringing about it.
That's because all politicians are liars and the media spin doctors will ensure that their lies gaslight the general public into believing them. The problem is, they can't deny the numbers and they know it, hence why they are beginning to change definitions.
Given the last administration brought the US into a recession 2 years ago with the same opposition, media and critics screaming at them, there is no more denying that this is a recession with these figures. The difference is, the current administration is trying to escape by changing definitions, which doesn't give much confidence in them and indicates that it may get even worse.
Now you see the same ones down-playing the inflation fears in November 2021 are trying to down play this recession very poorly with lots of damage control to save themselves and their careers. In reality we were no better off, and it looks like this is worse than the last administration.
And finally, the indicators for this with surging inflation was there since November 2021. Instead we have 'Stock market up 1% today on both this news and decades-high inflation.' [0] and later 'We are most certainly not in a recession.' [1]. Not only you have to look at it in the long term - not in 1 day, but you also don't wait for the figures to come out for you to then prepare for the worst. By then it is too late.
The denial is indeed pathetic.
[0] https://news.ycombinator.com/item?id=29508238
[1] https://news.ycombinator.com/item?id=31441710
That's because all politicians are liars and the media spin doctors will ensure that their lies gaslight the general public into believing them. The problem is, they can't deny the numbers and they know it, hence why they are beginning to change definitions.
Given the last administration brought the US into a recession 2 years ago with the same opposition, media and critics screaming at them, there is no more denying that this is a recession with these figures. The difference is, the current administration is trying to escape by changing definitions, which doesn't give much confidence in them and indicates that it may get even worse.
Now you see the same ones down-playing the inflation fears in November 2021 are trying to down play this recession very poorly with lots of damage control to save themselves and their careers. In reality we were no better off, and it looks like this is worse than the last administration.
And finally, the indicators for this with surging inflation was there since November 2021. Instead we have 'Stock market up 1% today on both this news and decades-high inflation.' [0] and later 'We are most certainly not in a recession.' [1]. Not only you have to look at it in the long term - not in 1 day, but you also don't wait for the figures to come out for you to then prepare for the worst. By then it is too late.
The denial is indeed pathetic.
[0] https://news.ycombinator.com/item?id=29508238
[1] https://news.ycombinator.com/item?id=31441710
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Hasn't the economy always been part of a political stance? The economy is one of the top 2/3 factors that people consider when voting, hence being important for re-election. It would be in the best interest of anyone trying to run for election to strategically paint a good/bad picture of the economy. This has been the case probably going back to the 1930s if I were to guess.
It certainly impacts people's votes, but when I go to a news site I don't think in the 70s, 80s, etc you'd find people trying so very hard to say a contracting economy is just a "transition" and not a recession. My point is mostly on what the press is doing in their reporting and trying to protect the current party in power ahead of the mid-terms. I know it would be the opposite if things were reversed, with Fox denying the economic reality. I just find it pretty pathetic. What would be the harm in reporting we are in a mild recession other than it runs counter to the White House?
The press is one of the most loathed things in the country and they always seem to dig their grave even deeper.
The press is one of the most loathed things in the country and they always seem to dig their grave even deeper.
I see what you're saying as I reflect on the current landscape of media in general. To be fair I was born in the 90s, so no real idea of what the media landscape was pre-2000s basically. The media now is obviously much different, no internet back in the 70s, news sources were seemingly more trustworthy, there was maybe less political division?
To run a counterpoint though, recessions are self-reinforcing. I think what the Fed has tried to do with all its might is to keep the picture as rosy as possible. Once it is officially out there, companies start cutting budgets, people tighten their wallets anticipating harder times, and it just kind of goes in a few cycles like this.
To run a counterpoint though, recessions are self-reinforcing. I think what the Fed has tried to do with all its might is to keep the picture as rosy as possible. Once it is officially out there, companies start cutting budgets, people tighten their wallets anticipating harder times, and it just kind of goes in a few cycles like this.
I also find it pathetic. However the press is open to enterprising individuals. We don’t have to keep patronizing the same lousy news outlets. Who’s got the real scoop these days?
> How did we get to a point where actual data can be outright denied or absorbed based on your political viewpoint?
Our elites—I don’t mean that pejoratively, but descriptively—used to adhere to institutional values. When I joined a prominent NYC law firm 10 years ago nobody commented on the fact that it was named after someone who argued the pro-segregation other side of Brown v. Board. The institution, not only of the firm but the legal process itself-where even segregationists are entitled to their day in court—was a credo that transcended individual politics or individual notions of “justice” or “human rights.”
That flipped sometime in the last decade. Our institutions have been overtaken my millenarianism: https://en.wikipedia.org/wiki/Millenarianism. It’s a belief system that transcends institutional values—in the law, the media, everywhere.
Do you remember “The Resistance?” Where Clinton-supporting government employees pledged to work within the bureaucracy to defeat the agenda of the duly elected President—their boss? The craziness we’ve been seeing from conservatives lately is a reaction to that total abandonment of institutional values.
Our elites—I don’t mean that pejoratively, but descriptively—used to adhere to institutional values. When I joined a prominent NYC law firm 10 years ago nobody commented on the fact that it was named after someone who argued the pro-segregation other side of Brown v. Board. The institution, not only of the firm but the legal process itself-where even segregationists are entitled to their day in court—was a credo that transcended individual politics or individual notions of “justice” or “human rights.”
That flipped sometime in the last decade. Our institutions have been overtaken my millenarianism: https://en.wikipedia.org/wiki/Millenarianism. It’s a belief system that transcends institutional values—in the law, the media, everywhere.
Do you remember “The Resistance?” Where Clinton-supporting government employees pledged to work within the bureaucracy to defeat the agenda of the duly elected President—their boss? The craziness we’ve been seeing from conservatives lately is a reaction to that total abandonment of institutional values.
I am just wondering who the “institutionalists” you speak of were in East Pakistan in 1971.
I don’t think there were any. My sincere belief is that the greatest strength of British society, and American society by extension, is that the institutionalism. People will jump off a bridge if a court orders them to, and so long as the proper procedures were followed.
That’s breaking down in America, and politics here is increasingly reminding me of politics on the subcontinent.
That’s breaking down in America, and politics here is increasingly reminding me of politics on the subcontinent.
I don't think you could persuasively defend with evidence the claim that American politics resembles that of the subcontinent.
What distinguishes Americans, in my mind, is that they're rule followers. As long as the rules are followed, they will accept decisions that they disagree with, or even think are quite unjust. Folks on the subcontinent typically think in terms of right and wrong, or even lower than that, in terms of tribalism such as Hindus versus Muslims. I see Americans devolving into both those lesser forms of politics.
It's understandable that someone would reach that conclusion if all they observed was the J6 committee hearing videos. But on a day-to-day basis, people are behaving essentially the way they always have. People still call in zoning violations expecting issues to get resolved, and they still jaywalk. Nobody's asking for a bribe to install the cable.
We’re not there yet, but we are well on the way to becoming a third world country politically. Trump is a politician fit for a third world country. But we also had members of Congress recently abandon their institutional roles and get themselves arrested at protests. I think even Sanders had more dignity than that.
John Lewis was arrested at protests five times as a member of congress and the republic was fine and likely better for it.
Like many thousands of people, Sanders was arrested at civil rights protests. I don't like Sanders, at all, but he certainly gained "dignity points" for that. The logic you're using to flatten things down isn't working; it's equating things that can't reasonably be equated.
Surely this happened in the 60s (getting arrested)
p_j_w(2)
We have a well established definition for what a recession is, and none of it has to do with anecdotes or political grudges.
> Worse, even if we're in recession it's pretty mild, so I don't even know why there is so much handwringing about it.
Ideologies tend to deal in binaries. We are either in a recession and the sky is about to fall or everything is great. Jobless recoveries or full employment recessions don't fit into binary narratives.
Ideologies tend to deal in binaries. We are either in a recession and the sky is about to fall or everything is great. Jobless recoveries or full employment recessions don't fit into binary narratives.
You're making it political with your comments, then you are surprised it is political? Hah
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yes i have a hard time seeing robert reich arguing that unemployment is what matters if trump was in office and midterms were 4 months away
How much air time is Fox News spending on the falling gas prices? How much time did they spend on the subject when prices were rising?
Also, his latest tweet on the subject seems pretty balanced: https://twitter.com/RBReich/status/1552739457433972737?ref_s...
Also, his latest tweet on the subject seems pretty balanced: https://twitter.com/RBReich/status/1552739457433972737?ref_s...
lol that’s pretty funny. forgot he’s the type that just wants the govt to keep printing money despite the massive inflation. that’s the number one goal in his life.
and yes fox news is right leaning but atleast they’re open about it. and a 10% drop after a 2x increase isn’t that exciting
and yes fox news is right leaning but atleast they’re open about it. and a 10% drop after a 2x increase isn’t that exciting
/opinion without any evidence
I like to believe that there is a bigger picture here. Oversimplification: An economic downturn when there is a rise in nationalist sentiment had given birth to people like hitler.
Maybe if the majority perceives that everything is fine, when it isn’t, might help prevent that?
I like to believe that there is a bigger picture here. Oversimplification: An economic downturn when there is a rise in nationalist sentiment had given birth to people like hitler.
Maybe if the majority perceives that everything is fine, when it isn’t, might help prevent that?
> Real gross domestic product (GDP) decreased at an annual rate of 0.9 percent in the second quarter of 2022 (table 1), according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 1.6 percent.
That makes two back-to-back quarters of real GDP contraction. To some, this is a recession, but it's the NBER that puts the stamp on it. AFAIK, NBER has never failed to put the recession stamp on back-to-back drops in GDP.
It's worth noting that yield curve inversion predicted recession four months ago:
> The 2-year and 10-year Treasury yields inverted for the first time since 2019 on Thursday, sending a possible warning signal that a recession could be on the horizon.
https://www.cnbc.com/2022/03/31/2-year-treasury-yield-tops-1...
It's also worth noting that 2y-10y yields have been deeply inverted (~20 basis points) for most of July and are in that state today.
Still one more thing to note: the earliest warning signal of them all appears to be an inversion of the eurodollar futures curve:
https://www.reuters.com/business/finance/eurodollar-futures-...
It started inverting last year. The inversion steepened. It is now in a very deep inversion in the long end that is marching steadily to lower maturities.
That makes two back-to-back quarters of real GDP contraction. To some, this is a recession, but it's the NBER that puts the stamp on it. AFAIK, NBER has never failed to put the recession stamp on back-to-back drops in GDP.
It's worth noting that yield curve inversion predicted recession four months ago:
> The 2-year and 10-year Treasury yields inverted for the first time since 2019 on Thursday, sending a possible warning signal that a recession could be on the horizon.
https://www.cnbc.com/2022/03/31/2-year-treasury-yield-tops-1...
It's also worth noting that 2y-10y yields have been deeply inverted (~20 basis points) for most of July and are in that state today.
Still one more thing to note: the earliest warning signal of them all appears to be an inversion of the eurodollar futures curve:
https://www.reuters.com/business/finance/eurodollar-futures-...
It started inverting last year. The inversion steepened. It is now in a very deep inversion in the long end that is marching steadily to lower maturities.
1947 saw two Qs neg growth amd no recession.
This is something that everyone who is actually interested in the topic will have heard of because it's been mentioned repeatedly by the experts. And yet this thread is filled with confident statements by people who clearly have put zero effort into forming their opinion. Sad.
This is something that everyone who is actually interested in the topic will have heard of because it's been mentioned repeatedly by the experts. And yet this thread is filled with confident statements by people who clearly have put zero effort into forming their opinion. Sad.
>yet this thread is filled with confident statements by people who clearly have put zero effort into forming their opinion.
It's funny when you read so many people on HN talk about others speaking outside of their areas of expertise when someone is talking about tech and then come to articles like this where a bunch of programmers try to sound like experts on the economy. Hubris is not in short supply.
It's funny when you read so many people on HN talk about others speaking outside of their areas of expertise when someone is talking about tech and then come to articles like this where a bunch of programmers try to sound like experts on the economy. Hubris is not in short supply.
1947 was 75 years ago. Taking 1 example per lifetime doesn’t constitute any sort of evidence to the contrary.
On the other hand, we just went through a once per lifetime pandemic and a once per lifetime consumer stimulus package. Supply chains are wrecked and we're in a period during which international trading patterns could massively change. Meanwhile,
* China is still purusing zero COVID.
* There's a land war in Europe with Russia effectively cut off from the Western world.
* German manufacturing, once a workhorse, is being crushed by energy costs
* much of the developing world is swimming hard against the current just to stay alive.
I don't think we are in a situation analogous to 1947, of course, and I do think we are in or at least heading into a more-than-technical recession. But "irrelevant because that only happens after once in a lifetime extremely disruptive events" is a pretty... odd... take in 2022.
* China is still purusing zero COVID.
* There's a land war in Europe with Russia effectively cut off from the Western world.
* German manufacturing, once a workhorse, is being crushed by energy costs
* much of the developing world is swimming hard against the current just to stay alive.
I don't think we are in a situation analogous to 1947, of course, and I do think we are in or at least heading into a more-than-technical recession. But "irrelevant because that only happens after once in a lifetime extremely disruptive events" is a pretty... odd... take in 2022.
> On the other hand, we just went through a once per lifetime pandemic and a once per lifetime consumer stimulus package
And—relatedly—a once-in-ever declaration of a recession of less than one quarter, because of how uniquely sharp the decline in output, employment, and all the recession-relevant measures was, even though it quickly reversed direction due to stimulus and other policy responses.
So it's kind of weird people today pretending that the 2-consecutive-doen-quarter thing has always been an ironclad definition of a recession.
And—relatedly—a once-in-ever declaration of a recession of less than one quarter, because of how uniquely sharp the decline in output, employment, and all the recession-relevant measures was, even though it quickly reversed direction due to stimulus and other policy responses.
So it's kind of weird people today pretending that the 2-consecutive-doen-quarter thing has always been an ironclad definition of a recession.
> German manufacturing, once a workhorse, is being crushed by energy costs
Hmm, maybe Germany can solve this the same way they "solved" ballooning Berliner rents: just pass a law saying how much energy should cost. Simple. They do love regulations over there.
Or just ask Gerhard Schröder and the rest of their former chancellors who were in bed with Russia, to blow their hot air through the pipes this winter. They have enough of it.
Hmm, maybe Germany can solve this the same way they "solved" ballooning Berliner rents: just pass a law saying how much energy should cost. Simple. They do love regulations over there.
Or just ask Gerhard Schröder and the rest of their former chancellors who were in bed with Russia, to blow their hot air through the pipes this winter. They have enough of it.
Lmao yeah just cap the prices that won't cause a shortage
The OP comment said: "AFAIK, NBER has never failed to put the recession stamp on back-to-back drops in GDP."
The comment you replied to gave evidence that directly contradicts the OP comment.
The comment you replied to gave evidence that directly contradicts the OP comment.
Good point, thanks for the clarification. Worth noting that the role of arbiter of recessions for NBER only came into being in the 1960s, long after that incident. And 1947 marked the first year the US produced a quarterly GDP report.
This Twitter thread has details:
https://twitter.com/bencasselman/status/1552411779040419841
The comparison between an economy transitioning from war footing and one transitioning from pandemic footing might be relevant.
This Twitter thread has details:
https://twitter.com/bencasselman/status/1552411779040419841
The comparison between an economy transitioning from war footing and one transitioning from pandemic footing might be relevant.
> Worth noting that the role of arbiter of recessions for NBER only came into being in the 1960s, long after that incident.
So? The NBER business cycle dating work covers back into the 19th century, even if some of it was done retrospectively. If anything, the fact that it applied it's methodology this way to times when there could not possibly have been any policy impact to its decisions just further undermines the idea that exceptions to the 2-consecutive-down-quarter rule are about current political convenience.
> And 1947 marked the first year the US produced a quarterly GDP report.
NBER was doing income and product reports before the government did, the government actually directly was motivated by NBER’s prior work in starting to do them.
So? The NBER business cycle dating work covers back into the 19th century, even if some of it was done retrospectively. If anything, the fact that it applied it's methodology this way to times when there could not possibly have been any policy impact to its decisions just further undermines the idea that exceptions to the 2-consecutive-down-quarter rule are about current political convenience.
> And 1947 marked the first year the US produced a quarterly GDP report.
NBER was doing income and product reports before the government did, the government actually directly was motivated by NBER’s prior work in starting to do them.
2-10 spread went through the pre-GFC record of -28 bps a day or two ago.
I'm a little sanguine about the inverted yield curve as a real signal this time around, to be honest.
We're in an environment of very rapidly rising short-term interest rates, specifically as the Fed attempts to try to manage inflation; with back-to-back 75 bps increases. That tends to have a curve flattening effect as the yield curve is nominal; short term yields rise more than longer tenors if the market believes that inflation will decrease as real yields will be higher.
We're in an environment of very rapidly rising short-term interest rates, specifically as the Fed attempts to try to manage inflation; with back-to-back 75 bps increases. That tends to have a curve flattening effect as the yield curve is nominal; short term yields rise more than longer tenors if the market believes that inflation will decrease as real yields will be higher.
GFC = Global Financial Crisis (2007-08)
Doesn’t a Fed typically lower rates during a recession?
At least at some point, in order to bring a country out of the recession.
At least at some point, in order to bring a country out of the recession.
There have been predictions that the Fed would exhaust its capability to regulate the economy through monetary stimulus for years with the end result being inflation and recession. Anecdotally, over the course of my life the size of fiscal and monetary stimulus has only increased. During the 90s we would stimulate with a few points of interest reduction, then in the 2000s we had 08 leading into permanent QE through the 10's. The 2020's have seen stimulus activities far in excess of '08.
The Fed has no mandate to generate or maintain economic growth.
The two areas in which it does have a mandate are price stability and sustainable employment. Usually, recessions are accompanied by a loss of jobs, so that's where the Fed would intervene; that isn't happening thus far which is another reason why economists are split over what is really going on in the economy.
The two areas in which it does have a mandate are price stability and sustainable employment. Usually, recessions are accompanied by a loss of jobs, so that's where the Fed would intervene; that isn't happening thus far which is another reason why economists are split over what is really going on in the economy.
Employment has fallen slightly recently: https://fred.stlouisfed.org/series/CE16OV
Not dramatically though, a more charitable view would say that employement levels are fairly flat.
Not dramatically though, a more charitable view would say that employement levels are fairly flat.
The unemployment rate is also extremely low by historical standards, even when taking into account the various measures of unemployment. There is also plenty of evidence that businesses are finding it unusually difficult to hire employees. The Fed is probably fine with the unemployment rate rising pretty significantly because they probably don't see the current rate as being sustainable.
> The Fed has no mandate to generate or maintain economic growth.
Correct. And yet they let inflation get this bad, so it seems like they're trying to avoid recessions even though they haven't been told to.
Correct. And yet they let inflation get this bad, so it seems like they're trying to avoid recessions even though they haven't been told to.
Or they believed it would be transitory and any action would upset longer term price and employment stability.
You don't need to guess; you can go read the minutes of prior Fed meetings here:
https://www.federalreserve.gov/monetarypolicy/fomccalendars....
https://www.federalreserve.gov/monetarypolicy/fomccalendars....
The Fed lowers rates when lowering rates could plausibly help. The Fed has a dual mandate to control inflation and maximize employment. Employment remains incredibly strong while inflation is obviously too high which is the clearest possible signal to tighten. The Fed won't/can't react to changes in the stock market, supply chain or foreign policy. It's not just "loosen during recession, tighten during expansion".
Also, as the Biden administration is quick to point out, US industrial output is up.
So, people are accepting fewer, apparently better employment offers, manufacturing is being onshored, but (due to lower supply of foreign slave labor and exploitable US workers) profits are down, and inflation is up.
Since unemplyoment is low, the Fed mandate seems pretty clear at this point. Interest rates should go up. The market will tank for a few years because inflation and paying workers screws with profits, then bounce back (in real terms) once corporate debt, etc unwinds, and productivity starts to rise again.
Rigid and weak corporations will be displaced by startups and existing companies that are able to adapt/innovate.
It's weird to me that Fox News's staunchly anti-China, pro-US manufacturing Fox News's viewership is so bent out of shape.
Aren't we experiencing exactly the effect Trump's tariffs were supposed to achieve?
So, people are accepting fewer, apparently better employment offers, manufacturing is being onshored, but (due to lower supply of foreign slave labor and exploitable US workers) profits are down, and inflation is up.
Since unemplyoment is low, the Fed mandate seems pretty clear at this point. Interest rates should go up. The market will tank for a few years because inflation and paying workers screws with profits, then bounce back (in real terms) once corporate debt, etc unwinds, and productivity starts to rise again.
Rigid and weak corporations will be displaced by startups and existing companies that are able to adapt/innovate.
It's weird to me that Fox News's staunchly anti-China, pro-US manufacturing Fox News's viewership is so bent out of shape.
Aren't we experiencing exactly the effect Trump's tariffs were supposed to achieve?
Not to delve into politics, but I defy to you explain what the Trump administration actually intended the output of the tariffs on China to be. Trump very consistently said the tariffs were retaliatory for China "taking our money" with the trade deficit being his evidence. He sent separate negotiating teams in the form of Steven Mnuchin and Peter Navarro who were pushing two separate agendas neither of which aligned with Trump's nonsensical reasoning. As far as I can tell, the tariffs were pure PR as Trump did not care about or even understand the intricacy of that or any other policies he advocated. And FOX, of course, isn't really conservative news, it's Republican news.
In reality, there is a case for tariffs on China that has nothing to do with trade deficits. Biden can't just end them because it will make him look soft and let them off the hook for IP theft and other abuses. Really the president should not have this authority at all, Congress should be doing it.
In reality, there is a case for tariffs on China that has nothing to do with trade deficits. Biden can't just end them because it will make him look soft and let them off the hook for IP theft and other abuses. Really the president should not have this authority at all, Congress should be doing it.
The Fed learned under Volcker back in the early 80s that prioritizing killing inflation is the best way to ensure medium and long-term economic and employment growth, even if it causes lower growth or recession in the near-term. That’s likely the playbook Powell is operating under now.
Perhaps, but the Fed chair is a political appointment and the politicians learned a different lesson.
Carter appointed Volcker and put America on chemotherapy. He caught blame for both inflation and de-leveraging withdrawal symptoms. Reagan got to take America off chemotherapy and take credit in the popular conscience for both reduced inflation and the re-leveraging boom. The political lesson: putting America on chemotherapy is important but politically somewhere between "thankless" and "suicidal."
When Powell was confirmed, it was with this context in mind. Politicians were thinking "do I want to be the next Carter"? I am worried that they only confirmed Powell because they thought he would not be the next Volcker. Of course, now that he has been confirmed for the next 4 years, he has some freedom to diverge from expectations. We'll see.
Carter appointed Volcker and put America on chemotherapy. He caught blame for both inflation and de-leveraging withdrawal symptoms. Reagan got to take America off chemotherapy and take credit in the popular conscience for both reduced inflation and the re-leveraging boom. The political lesson: putting America on chemotherapy is important but politically somewhere between "thankless" and "suicidal."
When Powell was confirmed, it was with this context in mind. Politicians were thinking "do I want to be the next Carter"? I am worried that they only confirmed Powell because they thought he would not be the next Volcker. Of course, now that he has been confirmed for the next 4 years, he has some freedom to diverge from expectations. We'll see.
In Volker time, federal debt (as a fraction of the GDP) was low, he could raise rates without crippling the budget with interest payments.
With today's federal debt level the fed is screwed: it cannot raise rates even close to inflation without busting the budget and cannot lower them (to fight a recession) without spiking inflation.
My bet is on long term rates-below-inflation period to deflate debts, similar to post-war period in the 1940s. And lots ofrhetoric. But it will be a painful ride.
With today's federal debt level the fed is screwed: it cannot raise rates even close to inflation without busting the budget and cannot lower them (to fight a recession) without spiking inflation.
My bet is on long term rates-below-inflation period to deflate debts, similar to post-war period in the 1940s. And lots ofrhetoric. But it will be a painful ride.
The Fed does not have the mandate to do what is convenient for the budget. That's not their problem. Obviously this is naive and I'm sure the Fed is under all kinds of pressure, but the Fed is supposed to kill inflation by raising rates to whatever it takes, as long as they don't kill jobs at the same time. The government is supposed to figure something out themselves.
You could also just reduce the money supply by abolishing QE and introducing negative interest rates on liquid deposits and cash.
Then everyone can run a balanced budget and watch their debt melt away.
The reason why we have price controls aka the zero lower bound of interest is that we would rather become eternal debt slaves (money supply has always been growing exponentially even under a gold standard) than face nominal losses that force us to face an umcomfortable truth that from this point onwards you will never earn anything again from owning abundant physical capital and that you will have to work for your own money instead of making others work for it.
Then everyone can run a balanced budget and watch their debt melt away.
The reason why we have price controls aka the zero lower bound of interest is that we would rather become eternal debt slaves (money supply has always been growing exponentially even under a gold standard) than face nominal losses that force us to face an umcomfortable truth that from this point onwards you will never earn anything again from owning abundant physical capital and that you will have to work for your own money instead of making others work for it.
In this case, the Fed is stimulating a (hopefully mild) recession, by raising interest rates, in order to bring inflation down.
Until rates are above inflation (now around 8%) I would say the Fed is still pumping up the economy, but it's hard to see the Fed push up rates to that level like Volker did the last time the US had high inflation. The Fed set the federal funds rate at 20% in June of 1981 when inflation was about 15%. If the US has to finance much of its debt at 15% something will seriously break.
In 1974, President Ford had Whip Inflation Now buttons printed up, and 1981 was seven years later. So Volcker's dramatic raise was in that context. Whereas people are more used to a more moribund economy since 2008 with very low interest rates, inflation, and lots of QE, with the subprime bailout followed by the Covid stimulus. Actual non-negligible inflation and an actual interest rate is something people have started seeing more recently.
From what I recall there was a fairly long period pre Volker where there were very half hearted attempts to get inflation under control without going for the kill so to speak.
I think the Fed knowing that history will try to kill it dead first time, because if they don't they know they'll likely have to go even higher with interest rates at the second attempt and the higher they're forced to go the more danger there will be to US financing operations as you say.
I think the Fed knowing that history will try to kill it dead first time, because if they don't they know they'll likely have to go even higher with interest rates at the second attempt and the higher they're forced to go the more danger there will be to US financing operations as you say.
> Doesn’t a Fed typically lower rates during a recession?
Recessions have weak employment (that's one of the most important factors NBER looks at to determine recession, among the key reasons they have declared two of the last three recessions without two consecutive down GDP quarters, and one of the key reasons the present two consecutive down GDP quarters is arguably not a recession.)
The Fed dual mandate relates to price stability and full employment (it doesn't independently consider recession per se.) It typically lowers rates in a recession to nudge back toward full employment.
Employment remaining strong and inflation remaining high, thought, it raises rates, even if some people think it may be a recession.
Recessions have weak employment (that's one of the most important factors NBER looks at to determine recession, among the key reasons they have declared two of the last three recessions without two consecutive down GDP quarters, and one of the key reasons the present two consecutive down GDP quarters is arguably not a recession.)
The Fed dual mandate relates to price stability and full employment (it doesn't independently consider recession per se.) It typically lowers rates in a recession to nudge back toward full employment.
Employment remaining strong and inflation remaining high, thought, it raises rates, even if some people think it may be a recession.
Though not unprecedented, they're typically not fighting inflation and a recession at the same time.
Challenge is when you're facing a recession while also trying to control inflation. See "stagflation" [1].
[1] https://www.investopedia.com/terms/s/stagflation.asp
[1] https://www.investopedia.com/terms/s/stagflation.asp
> inversion of the eurodollar futures curve
Can anyone enlighten us non-specialists as to how that particular contract works?
Can anyone enlighten us non-specialists as to how that particular contract works?
Let's see who breaks first.
The real scary moment will be when you see the White House and Democrats re-define what stagflation is.
After all, this is a recession. Inflation is comically high - despite the incredibly massaged CPI number. The third and last criteria for stagflation is high unemployment, which it seems like we're heading into as soon as this last post-lockdown boom in consumer spending falls off a cliff.
Stagflation is very scary and it's going to be either the end of the USD, or further raising rates into a recession. Either way will produce untold suffering and cost hundreds of thousands of lives. And we're going full ESG and trying to make energy (and food) as expensive as possible. This is definitely a first and credit has to go to Western leaders because it really takes talent to self-destroy to this extent.
After all, this is a recession. Inflation is comically high - despite the incredibly massaged CPI number. The third and last criteria for stagflation is high unemployment, which it seems like we're heading into as soon as this last post-lockdown boom in consumer spending falls off a cliff.
Stagflation is very scary and it's going to be either the end of the USD, or further raising rates into a recession. Either way will produce untold suffering and cost hundreds of thousands of lives. And we're going full ESG and trying to make energy (and food) as expensive as possible. This is definitely a first and credit has to go to Western leaders because it really takes talent to self-destroy to this extent.
Yeah stagflation is a lot more scary and some think it's already here.
Well if MMT goes too I’m all for it
How can one profit from this? Any good short positions?
The exact opposite, Buy long positions at a discount
But you need to time the dip with this strategy, otherwise you're underwater in the meantime.
I think the question was, "How can I profit as things get worse?" Or, "What are good ways to protect myself as things go downhill?"
My recommendation? Reduce expenses. And think about investing in ways to reduce those expenses - Toilet paper is expensive, buying a bidet can save money after X uses. Meat can be expensive, see if a farmer in your area is willing to sell you the meat of a full cow at a discount for you to freeze and use over the course of X months.
I think the question was, "How can I profit as things get worse?" Or, "What are good ways to protect myself as things go downhill?"
My recommendation? Reduce expenses. And think about investing in ways to reduce those expenses - Toilet paper is expensive, buying a bidet can save money after X uses. Meat can be expensive, see if a farmer in your area is willing to sell you the meat of a full cow at a discount for you to freeze and use over the course of X months.
> But you need to time the dip with this strategy, otherwise you're underwater in the meantime.
Being temporarily underwater is fine, unless you think that economic growth will stop, or you are a day trader.
Dollar cost average if you can.
Being temporarily underwater is fine, unless you think that economic growth will stop, or you are a day trader.
Dollar cost average if you can.
>My recommendation? Reduce expenses. And think about investing in ways to reduce those expenses
That's funny, I would recommend the exact opposite given the inflationary situation.
I would accelerate buying durable objects that you would like to have eventually, instead of waiting.
Saving money beyond a safety buffer is a bad idea when cash is losing 10% of its value per year and stocks are going down.
That's funny, I would recommend the exact opposite given the inflationary situation.
I would accelerate buying durable objects that you would like to have eventually, instead of waiting.
Saving money beyond a safety buffer is a bad idea when cash is losing 10% of its value per year and stocks are going down.
Buy SPY, wait 10 years, $$$, Profit.
Is there some science to these observations or are we just reading tea-leaves post-facto?
> To some, this is a recession
Not "to some", two back-to-back negative GDP stats has been the definition of a recession for my entire life. Now suddenly it's questionable, because the current administration would like to shrug away its failures, and too many in the media are helping them do it.
This ad-hoc re-definition of language to suit political purposes is scary and Orwellian.
Not "to some", two back-to-back negative GDP stats has been the definition of a recession for my entire life. Now suddenly it's questionable, because the current administration would like to shrug away its failures, and too many in the media are helping them do it.
This ad-hoc re-definition of language to suit political purposes is scary and Orwellian.
Your conspiracy theory is laughable, primarily because "the current administration" doesn't have any control over the "official" marking of recessions, which is done by the National Bureau of Economic Research, which is a private, independent non-profit.
Why does everything you personally don't agree with have to be a "conspiracy theory"? Seems like a trend these days!
The comment I am replying to is pretty clearly arguing that not calling the current situation a recession is due to the current administration not wanting to call it that:
> Now suddenly it's questionable, because the current administration would like to shrug away its failures, and too many in the media are helping them do it.
Whether or not I agree with the assessment of the current administration wanting to "shrug away its failures" has nothing to do with it. The parent comment was clearly arguing the theory, which is total bullshit on its face, that the reason it hasn't been officially designated a recession is because the administration doesn't want it to. The reason this theory is total bullshit is because it's pretty obvious the administration has no control over how the NBER marks recessions.
I think it's fair to designate theories which are total bullshit on their faces as "conspiracy theories".
> Now suddenly it's questionable, because the current administration would like to shrug away its failures, and too many in the media are helping them do it.
Whether or not I agree with the assessment of the current administration wanting to "shrug away its failures" has nothing to do with it. The parent comment was clearly arguing the theory, which is total bullshit on its face, that the reason it hasn't been officially designated a recession is because the administration doesn't want it to. The reason this theory is total bullshit is because it's pretty obvious the administration has no control over how the NBER marks recessions.
I think it's fair to designate theories which are total bullshit on their faces as "conspiracy theories".
Imagine for a moment that a recession was something quite rare, but extremely desirable and good. But outside of that difference, all of the current state of the word's definition would remain. Do you honestly believe the current administration wouldn't be parading out that we're in a recession, along with all of the usual media making front page news of it?
So we use the usual rule of thumb to claim it's a recession when it's a good thing, but instead try claim it's not a recession until a given think-tank says so when it's a bad thing.
So we use the usual rule of thumb to claim it's a recession when it's a good thing, but instead try claim it's not a recession until a given think-tank says so when it's a bad thing.
The whole rationale for this line of argument is just bizarre.
If there is some desire to obfuscate what is actually going on in "the media", well, the media is doing a pretty shitty job of obfuscating it. All the major news outlets have the GDP report as top news stories on their sites. Some easy "liberal media" examples:
1. NYTimes: "G.D.P. Report Shows a Drop, Fanning Fears of a U.S. Recession - A key measure of economic output fell for the second straight quarter, raising fears that the United States could be entering a recession."
2. WaPo: "What causes a recession? The dominoes leading toward a new recession have started falling, so what happens next? There are two scenarios that could play out." And also "U.S. economy shrinks again in 2nd quarter, reviving recession fears", and perhaps very relevant to this discussion, "The 8 economists who decide if the U.S. is in a recession"
So the major news outlets are accurately (and loudly) reporting what is going on. I know in my lifetime it has pretty much always been argued that the official "start and end dates" of recessions are marked after the fact (e.g. I recall clearly the start date for the Great Recession was pushed earlier by the NBER after their research had concluded). But these news outlets certainly aren't hiding anything, nor even trying to dissemble - they're just reporting things as the current facts show.
But then some conspiracy theorists (and yes, I believe that term totally applies) are trying to argue that because news outlets aren't saying "we are officially in a recession" that it is "Orwellian".
If there is some desire to obfuscate what is actually going on in "the media", well, the media is doing a pretty shitty job of obfuscating it. All the major news outlets have the GDP report as top news stories on their sites. Some easy "liberal media" examples:
1. NYTimes: "G.D.P. Report Shows a Drop, Fanning Fears of a U.S. Recession - A key measure of economic output fell for the second straight quarter, raising fears that the United States could be entering a recession."
2. WaPo: "What causes a recession? The dominoes leading toward a new recession have started falling, so what happens next? There are two scenarios that could play out." And also "U.S. economy shrinks again in 2nd quarter, reviving recession fears", and perhaps very relevant to this discussion, "The 8 economists who decide if the U.S. is in a recession"
So the major news outlets are accurately (and loudly) reporting what is going on. I know in my lifetime it has pretty much always been argued that the official "start and end dates" of recessions are marked after the fact (e.g. I recall clearly the start date for the Great Recession was pushed earlier by the NBER after their research had concluded). But these news outlets certainly aren't hiding anything, nor even trying to dissemble - they're just reporting things as the current facts show.
But then some conspiracy theorists (and yes, I believe that term totally applies) are trying to argue that because news outlets aren't saying "we are officially in a recession" that it is "Orwellian".
If Trump was still the president, these headlines would be "we are in a recession" (which is in fact the case), not "fears of recession". Which we are, per the definition that existed so far. The media has no reason to wait for the NBER to make the exact same call they've made every single time in the past.
Ahh yes, every bit of news reporting that doesn't show the Democrats in the worst possible light, and Trump in the best possible light, is the result of "media bias", facts be damned.
The constant whining by Trump and his supporters over "the media is so mean to me" has long since passed Chicken Little proportions.
The constant whining by Trump and his supporters over "the media is so mean to me" has long since passed Chicken Little proportions.
> Why does everything you personally don't agree with have to be a "conspiracy theory"?
This literally invented false historical facts (about the historical official definition of a recession) to support a claim of a political conspiracy (of the media doing Orwellian thought manipulation through language redefinition to support a favored political faction.)
This literally invented false historical facts (about the historical official definition of a recession) to support a claim of a political conspiracy (of the media doing Orwellian thought manipulation through language redefinition to support a favored political faction.)
By the definitions of "conspiracy" and "theory", this idea that Biden is secretly causing an independent agency do misrepresent economic data is, objectively, a conspiracy theory. If there is some proof it happened, then it would be called a conspiracy.
There is quite a trend toward calling things conspiracy theories these days, but there are more conspiracy theories being spread these days.
I think is is probably due to the well-documented conspiracies between the conservative (and some of the radical liberal) press and foreign propagandists to spread misinformation in the US, and conspiracy theories are an effective way to achieve that goal.
There is quite a trend toward calling things conspiracy theories these days, but there are more conspiracy theories being spread these days.
I think is is probably due to the well-documented conspiracies between the conservative (and some of the radical liberal) press and foreign propagandists to spread misinformation in the US, and conspiracy theories are an effective way to achieve that goal.
You'll get upvoted and I'll get downvoted because your political bias is the orthodoxy here, but the NBER has officially called a recession every single time we had 2 consecutive quarters of negative growth. It's unreasonable to expect anything else in this case.
If Trump was still president, the media would most definitely be calling this a recession. And they would be correct in doing so.
If Trump was still president, the media would most definitely be calling this a recession. And they would be correct in doing so.
> the NBER has officially called a recession every single time we had 2 consecutive quarters of negative growth
Because the other indicators they look at (employment, consumption etc.) have been consistent with recession in those cases. They've also called recessions without two consecutive down quarters (either with an up quarter in between, or most recently with a single down quarter), because the other indicators were strongly indicating recession. Right now jobs are up.
Employment is strong, consumption is strong, the 1Q drop (not sure about 2Q because I haven't seeb details yet) was associated with a jump in imports as consumer purchases of imported goods shot up.
Honestly, there's probably a problem with the entire concept of “recession” as a binary label, but the same multidimensional set of factors that has allowed multiple recessions to be determined without two consecutive down quarters supports non-recession with two consecutive down quarters.
Because the other indicators they look at (employment, consumption etc.) have been consistent with recession in those cases. They've also called recessions without two consecutive down quarters (either with an up quarter in between, or most recently with a single down quarter), because the other indicators were strongly indicating recession. Right now jobs are up.
Employment is strong, consumption is strong, the 1Q drop (not sure about 2Q because I haven't seeb details yet) was associated with a jump in imports as consumer purchases of imported goods shot up.
Honestly, there's probably a problem with the entire concept of “recession” as a binary label, but the same multidimensional set of factors that has allowed multiple recessions to be determined without two consecutive down quarters supports non-recession with two consecutive down quarters.
> two back-to-back negative GDP stats has been the definition of a recession for my entire life.
No, it hasn't, and two of the last three NBER-identified recessions have not met that definition. It has always been multidimensional, it's just that historically the other factors have always [0] pointed toward recession with two down quarters, and sometimes also without. Having strong employment, etc., despite two down quarters in GDP is a historical aberration.
[0] EDIT: as another poster notes, not always—the 1947 non-recession being an example
No, it hasn't, and two of the last three NBER-identified recessions have not met that definition. It has always been multidimensional, it's just that historically the other factors have always [0] pointed toward recession with two down quarters, and sometimes also without. Having strong employment, etc., despite two down quarters in GDP is a historical aberration.
[0] EDIT: as another poster notes, not always—the 1947 non-recession being an example
That definition was only ever a rule of thumb. The fact is, you can't define it. It's like setting a temperature that is officially "cold". The current economic indicators are almost completely unprecedented in the growth is weak, inflation is very high and yet employment remains historically strong. As much as GDP represents the broadest indicator of economic health, if you're looking for a headline to apply to the masses, it's going to be when we see broad-based negative wealth effects in which case inflation and employment/wages are the most important indicators and they're flying in opposite directions right now. Declaring that this is or isn't a recession is essentially irrelevant. It's officially cold when you feel cold.
In the US, the NBER is the institution that calls recessions. The NBER has never once failed to call two consecutive quarters of negative growth as a recession. It's a foregone conclusion at this point.
But wait, according to the mainstream media now, we shouldn't listen to the NBER either, they're all just a bunch of "white economists":
https://www.cnn.com/2022/06/30/economy/recession-economists-...
But wait, according to the mainstream media now, we shouldn't listen to the NBER either, they're all just a bunch of "white economists":
https://www.cnn.com/2022/06/30/economy/recession-economists-...
CNN headline: Who decides if the US is in a recession? Eight White economists you've never heard of
Is this a joke? It's like something you'd overhear at brunch from a group of co-eds
Is this a joke? It's like something you'd overhear at brunch from a group of co-eds
Now recessions are racists then?
That wouldn't be the implication of a title like that and I suspect you know you're being disingenuous. It would mean that some of our most important decisions are being made by people from a single background that doesn't reflect the makeup of their stakeholders, the American public.
As a thought exercise, would you think it's not notable if the 8 person board was entirely female .. or entirely black?
As a thought exercise, would you think it's not notable if the 8 person board was entirely female .. or entirely black?
I would absolutely think it was notable because if I saw “Women Economists” or “Black Economists” I would obviously be concerned the women or black economists are being treated badly.
It’s shocking that you somehow think race or gender can effect the categorization by economists of economic conditions. It’s fairly quantitative situation and I’m at a loss how different backgrounds would effect that analysis.
It’s shocking that you somehow think race or gender can effect the categorization by economists of economic conditions. It’s fairly quantitative situation and I’m at a loss how different backgrounds would effect that analysis.
I mean in your mind ... if all the economists you saw in leadership positions in the US were black I suspect you would think that's notable. That was the thought exercise I was asking you to do.
Black unemployment vs White?
Would a black economist measure black unemployment or white unemployment differently?
>Now recessions are racists then?
Everything else is, so why not?
CNN in January 2020: "Coronavirus task force another example of Trump administration's lack of diversity" <https://www.cnn.com/2020/01/30/politics/donald-trump-coronav...>
Everything else is, so why not?
CNN in January 2020: "Coronavirus task force another example of Trump administration's lack of diversity" <https://www.cnn.com/2020/01/30/politics/donald-trump-coronav...>
Was that actually the headline before?
The title I get is the same minus the "white". I wonder if it's A/B testing.
The title I get is the same minus the "white". I wonder if it's A/B testing.
https://imgur.com/a/yW4IXum
I took a screenshot as I had a hunch it would be changed once enough people saw it.
Edit: shows up without the “White” also for me now:
https://imgur.com/a/84X6RKj
I took a screenshot as I had a hunch it would be changed once enough people saw it.
Edit: shows up without the “White” also for me now:
https://imgur.com/a/84X6RKj
I also saw the original headline that said:
> Who decides if the US is in a recession. Eight White economists you've never heard of.
> Who decides if the US is in a recession. Eight White economists you've never heard of.
It reads like racism to me.
I mean, CNN is basically the left version of Fox News, it’s not representative of center media.
That's not really a fair comparison. CNN sometimes plays up controversy for eyeballs, but Fox is an outright manipulator. Tucker Carlson is touting fascism and Sean Hannity was literally taking phone calls from the Oval Office asking what they wanted him to say on air. They are also being sued for libel for promoting baseless election fraud conspiracy theories. Saying they're equivalent is like saying a pigeon is like a squid because they both have a beak.
https://www.theguardian.com/media/2022/jul/04/fox-oan-newsma... https://www.cnn.com/2022/04/29/politics/hannity-text-message... https://nymag.com/intelligencer/2021/08/tucker-carlson-has-s...
https://www.theguardian.com/media/2022/jul/04/fox-oan-newsma... https://www.cnn.com/2022/04/29/politics/hannity-text-message... https://nymag.com/intelligencer/2021/08/tucker-carlson-has-s...
It's closer to the center than the other major news network, MSNBC.
I upvoted you because downvoting to disagree is dumb, but I disagree, CNN is totally way far left.
CNN is indeed way far left. But there are three major news networks - Fox, CNN and MSNBC. Of those, Fox is pretty far right, CNN is far left, and MSNBC is farther left than CNN.
https://adfontesmedia.com/wp-content/uploads/2022/01/Media-B...
https://adfontesmedia.com/wp-content/uploads/2022/01/Media-B...
Do you have an example of "center media"? Asking because I earnestly want some of that.
I usually just read the AP or Reuters. FiveThirtyEight is definitely liberal but I appreciate their numbers perspective as well.
Here's a couple media bias charts. https://www.poynter.org/fact-checking/media-literacy/2021/sh...
Like other commenter said, AP and Reuters are best at being center / neutral for now.
Like other commenter said, AP and Reuters are best at being center / neutral for now.
The Financial Times is relatively centrist in their coverage.
[deleted]
What is a recession if not loss of buying power and material wellbeing?
How is more people working for less pay a counterargument against recession.?
How is more people working for less pay a counterargument against recession.?
All things being equal, more people working is a an increase in buying power. The decreased buying power of wages is only negative relative to the amount people being paid a wage. Which itself is a function of both employment opportunity and size of the labor force. The recent rise in inflation is definitely correlated with a rise in wages albeit at a slightly lower rate resulting in a roughly 1% lag in the past year. If you map out wages paid per GDP you can get an idea of how much of a share of economic growth has been going to workers and it's a been a pretty solid, steady decline since 1970:
https://fred.stlouisfed.org/graph/fredgraph.png?g=Sfun
So, that sucks, but it doesn't make a useful definition of recession. This is the result of massive, global macroeconomic forces. It's basically a slow reset of the post-WWII global order.
https://fred.stlouisfed.org/graph/fredgraph.png?g=Sfun
So, that sucks, but it doesn't make a useful definition of recession. This is the result of massive, global macroeconomic forces. It's basically a slow reset of the post-WWII global order.
Im not sure I follow your argument.
>All things being equal, more people working is a an increase in buying power.
This isnt an absolute. If you have 1 person working for $1/day and go to 2 people for $0.5/day, buying power hasn't changed.
You can have more people working, and people working longer, for less and less material goods.
I think any meaningful definition of economic growth/recession must address the fundamental question of is there more material goods and wellbeing in a country today than yesterday.
I agree that the allocation of those goods is a separate question entirely.
>This is the result of massive, global macroeconomic forces. It's basically a slow reset of the post-WWII global order.
I think that what we are seeing is the start of a realization that part of historic GDP growth was actually a fiction, in that more tangible goods were not produced.
This is why a small increase in wages sent inflation through the roof.
In theory, US real GDP per capita has gone up 33% since 2000[1]. This looks fine on paper as long as the growth is just accumulating in a bank account. Once people actually try to consume more, it becomes obvious that there isn't 33% more stuff to buy.
>All things being equal, more people working is a an increase in buying power.
This isnt an absolute. If you have 1 person working for $1/day and go to 2 people for $0.5/day, buying power hasn't changed.
You can have more people working, and people working longer, for less and less material goods.
I think any meaningful definition of economic growth/recession must address the fundamental question of is there more material goods and wellbeing in a country today than yesterday.
I agree that the allocation of those goods is a separate question entirely.
>This is the result of massive, global macroeconomic forces. It's basically a slow reset of the post-WWII global order.
I think that what we are seeing is the start of a realization that part of historic GDP growth was actually a fiction, in that more tangible goods were not produced.
This is why a small increase in wages sent inflation through the roof.
In theory, US real GDP per capita has gone up 33% since 2000[1]. This looks fine on paper as long as the growth is just accumulating in a bank account. Once people actually try to consume more, it becomes obvious that there isn't 33% more stuff to buy.
[deleted]
citilife(1)
Has that been the definition, or has that just been your understanding, which may have been wrong? Has there really been a redefinition?
I mean, if we just take Wikipedia as a gauge, they have defined it according to the NBER, dating back to 2008 [1].
[1] https://www.nber.org/news/business-cycle-dating-committee-an...
[2] https://en.wikipedia.org/w/index.php?title=Recession&diff=pr...
[3] https://en.wikipedia.org/wiki/Talk:Recession
[4] https://twitter.com/RepublicanStudy/status/15516279756401909...
I mean, if we just take Wikipedia as a gauge, they have defined it according to the NBER, dating back to 2008 [1].
A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.
[1] https://www.nber.org/news/business-cycle-dating-committee-an...
[2] https://en.wikipedia.org/w/index.php?title=Recession&diff=pr...
[3] https://en.wikipedia.org/wiki/Talk:Recession
[4] https://twitter.com/RepublicanStudy/status/15516279756401909...
Also from Wikipedia: While national definitions vary, two consecutive quarters of decline in a country's real gross domestic product is commonly used as a practical definition of a recession.
From the Oxford dictionary (recession): a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
It's only now that we're seeing all this slimy lawyering about the definition of recession. "Well acksually, technically..."
From the Oxford dictionary (recession): a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
It's only now that we're seeing all this slimy lawyering about the definition of recession. "Well acksually, technically..."
We can accept that lots of people believe 2 consecutive quarters of GDB decline define a recession, while also admitting that the group that officially defines a recession in the US hasn't done any sort of Orwellian redefinition at all.
It appears, once again, the people trying to refine the word are accusing the people keeping the historical usage as the changers. It's projection all the way down.
The NBER has called a recession every single time we had two back-to-back quarters of negative growth. The news media is known to aggressively jump to conclusions to produce headlines. It's a notable exception that they are so cautious all of a sudden about what is really a foregone conclusion.
In those instances, were there also declines in real income, employment, industrial production, and wholesale-retail sales? In the current climate, are those things declining? Maybe the answer to those questions help explain the discrepancy.
Real earnings has been in a sharp decline since 2020, now mostly thanks to inflation: https://fred.stlouisfed.org/series/LES1252881600Q
I don't have the time to link the other stats, but they're not so rosy either, except employment. One good stat and several bad ones is still a recession.
I don't have the time to link the other stats, but they're not so rosy either, except employment. One good stat and several bad ones is still a recession.
I think that chart shows that things are going back to normal. The reason weekly earnings were at an all time high in q2 of 2020 is because the low wage earners all got laid off because of the pandemic. Now that things are going back to normal, the low wage earners are going back to work at approximately the same real wage (although nominally it's probably a bit higher because of inflation).
That's quite an interesting bias and probably accurate, but one issue you run into here is that wages now are lower than even Q3 2019 which is well before any of this kicked off. And the current trajectory is downward.
So it seems safe to say that real earnings are indeed decreasing, rather than regressing to some past mean.
So it seems safe to say that real earnings are indeed decreasing, rather than regressing to some past mean.
In the USA, "officially" a group of 8 economists at the National Bureau of Economic Research decides when a recession starts. I suspect other countries have their own definitions.
"The NBER's definition emphasizes that a recession involves a significant decline in economic activity that is spread across the economy and lasts more than a few months. In our interpretation of this definition, we treat the three criteria—depth, diffusion, and duration—as somewhat interchangeable. That is, while each criterion needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another. For example, in the case of the February 2020 peak in economic activity, the committee concluded that the subsequent drop in activity had been so great and so widely diffused throughout the economy that, even if it proved to be quite brief, the downturn should be classified as a recession." [1]
Planet Money (podcast on NPR) did an episode [2] a little while ago about it that I recommend listening to. They talk with one of the 8 economists. It was honestly refreshing hearing the economist talk about it, I got the impression that it was a more neutral take on the circumstances rather than pushing a narrative.
[1] https://www.nber.org/research/business-cycle-dating
[2] https://www.npr.org/2022/06/24/1107581150/recession-referees
"The NBER's definition emphasizes that a recession involves a significant decline in economic activity that is spread across the economy and lasts more than a few months. In our interpretation of this definition, we treat the three criteria—depth, diffusion, and duration—as somewhat interchangeable. That is, while each criterion needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another. For example, in the case of the February 2020 peak in economic activity, the committee concluded that the subsequent drop in activity had been so great and so widely diffused throughout the economy that, even if it proved to be quite brief, the downturn should be classified as a recession." [1]
Planet Money (podcast on NPR) did an episode [2] a little while ago about it that I recommend listening to. They talk with one of the 8 economists. It was honestly refreshing hearing the economist talk about it, I got the impression that it was a more neutral take on the circumstances rather than pushing a narrative.
[1] https://www.nber.org/research/business-cycle-dating
[2] https://www.npr.org/2022/06/24/1107581150/recession-referees
In other words, if it looks like a recession and quacks like a recession then it might be a recession.
And yes it much more complicated - especially it also depends on how much outside pressure NEBR has. I think there is a large pressure not to declare recession since we still have a high inflation and feds needs to continue raising rates.
And yes it much more complicated - especially it also depends on how much outside pressure NEBR has. I think there is a large pressure not to declare recession since we still have a high inflation and feds needs to continue raising rates.
What if it looks like a bug and it sounds like a humming noise?
https://www.nytimes.com/2022/07/12/opinion/employment-wages-...
https://www.nytimes.com/2022/07/12/opinion/employment-wages-...
That’s not what the Phantom Tollbooth told me.
the reason for the weirdness is that it doesn’t look like a recession in the labor market. Layoffs have been almost exclusively limited to tech, and within tech pre-profit or highly speculative (cryptoshovels) companies. This is important because in the US economic system labor power drives income drives inflation. (This isn’t true in all countries.)
When the employment outlook changes, and I expect it will, we will be in a traditional recession.
When the employment outlook changes, and I expect it will, we will be in a traditional recession.
I was under impression that unemployment is a lagging indicator. The last thing employers want to do is let people go - they will try to cut here, cut there, stop hiring etc.
My problem with that is:
> significant decline in economic activity
What is "significant"?
> more than a few months
How long exactly?
All I gather from their description is that they basically just get a "feel" for it. That's why so many people choose to follow the two negative quarter thing - it's objective and clearly defined, but maybe less accurate (particularly in cases like now where unemployment is still really low).
> significant decline in economic activity
What is "significant"?
> more than a few months
How long exactly?
All I gather from their description is that they basically just get a "feel" for it. That's why so many people choose to follow the two negative quarter thing - it's objective and clearly defined, but maybe less accurate (particularly in cases like now where unemployment is still really low).
You're approaching it from the standpoint that it's an exact science, but it's more of a social science and you can't really pin down exact specifics, but only best guesses. Unfortunately (and I fell into this camp for a long time) many people see economics and see the mathematical models and assume that it must be scientific or precise, but the marketing campaign to legitimize economics unfortunately confused many of us into that misconception.
It's helpful to think of economics as a field under the branch of political science, which itself isn't very scientific.
It's helpful to think of economics as a field under the branch of political science, which itself isn't very scientific.
I like to think of it as not really one or the other, but as both. It’s like a venn-diagram intersection of finance and sociology. Some elements of economics are purely quantifiable, and some elements are purely human.
Both of those are up to the consensus of the group of economists. They regularly talk about it with each other and compare with historical data mostly. Keep in mind economics is a social science, not exact science.
It would strike me more as "feeling it out", but they are not in a rush to announce it is or is not a recession until they have a better feel. Everyone seems to be rushing to call it a recession as early as possible. The economist I heard talking had a "wait and see" attitude on the podcast which was refreshing to hear.
It would strike me more as "feeling it out", but they are not in a rush to announce it is or is not a recession until they have a better feel. Everyone seems to be rushing to call it a recession as early as possible. The economist I heard talking had a "wait and see" attitude on the podcast which was refreshing to hear.
So it depends on if it's an election year and how much pressure is on them? Got it.
I'd say listen to the economists that are actually apart of the group and form your own opinion. I didn't get that impression personally. Although I'm sure there is some impact.
Of course it does. It always did at least at the margins.
Economics is a social science. It is probably the most data-driven of the set, but it is inescapably human, and therefore ultimately comes down to judgment.
Has a technical recession ever not resulted in an actual recession as declared by NBER?
Yes. In 1947.
"And it’s rare for there to be two consecutive quarters of negative GDP without a recession. In fact, George Washington University professor Tara Sinclair said the only time on record appears to have been 1947."
From: https://www.washingtonpost.com/politics/2022/07/25/biden-adm...
"And it’s rare for there to be two consecutive quarters of negative GDP without a recession. In fact, George Washington University professor Tara Sinclair said the only time on record appears to have been 1947."
From: https://www.washingtonpost.com/politics/2022/07/25/biden-adm...
Great question! Not that I'm aware of (EDIT:
sseagull provided a good example in 1947). To be fair, I can't think of any time where we've seen 2 quarters of negative GDP growth while maintaining "full" employment and wage growth. This is an unusual recession if it is a recession.
This is a recession. During a recession, the economy tends to lose 10% of its employment or more. Usually this is from loss of jobs. This time, inflation has cut everyone's pay by between 10 and 30% depending on who you ask. The CPI says 10%, but a lot of necessities, like energy and food, are up a lot more.
[deleted]
they're all unusual at the time
there are too many variables for a circumstance that doesn't happen very often for it to ever be the same
there are too many variables for a circumstance that doesn't happen very often for it to ever be the same
I don't like GDP as a measure of how well our economy is doing.
We need a whole new measurement. A quality of life index, which measures the real cost of living, not in dollars, but in number of hours required to earn the necessities of life: shelter, food, water, and by extension, the things required to get those: transportation (to and from work, avg distance), certification (aka education), and medical insurance.
We need a whole new measurement. A quality of life index, which measures the real cost of living, not in dollars, but in number of hours required to earn the necessities of life: shelter, food, water, and by extension, the things required to get those: transportation (to and from work, avg distance), certification (aka education), and medical insurance.
The Sahm Rule real time recession indicator, which has been a pretty accurate indicator of recessions since the '60s, is saying that we've come out of the pandemic-induced recession, and not yet started a new one.
https://fred.stlouisfed.org/series/SAHMREALTIME
https://fred.stlouisfed.org/series/SAHMREALTIME
No group of people, Republican or Democrat, can stop the perpetual cycles of human history. At best, we can only delay the inevitable.
Not even science can prove that the observed cycle is inevitable.
There have been people in the past who noticed the cycle and came up with methods at stopping the cycle.
There have been people in the past who noticed the cycle and came up with methods at stopping the cycle.
Rocks when dropped will eventually fall. You can catch the rock and hold on to it, but will eventually put it down, you can do something crazy like build a wind machine that keeps the rock afloat, but entropy demands the machine go out one day and the rock will fall.
Best case is you catch the rock, and put it down gently so it doesn't break, but rock will go down.
Best case is you catch the rock, and put it down gently so it doesn't break, but rock will go down.
In this analogy, political corruption is playing the role of gravity.
Covid could have been prevented by mechanisms that Trump removed. The US inexplicably kept juicing the economy with zero interest rates through the end of Obama and all of Trump. 2008 could have been prevented by depression-era regulations that were removed due to heavy lobbying and traceable payments to (bipartisan) politicians. Whatever bubbles pop next (crypto seems likely to be one of them) will probably have been fueled by that same deregulation.
Covid could have been prevented by mechanisms that Trump removed. The US inexplicably kept juicing the economy with zero interest rates through the end of Obama and all of Trump. 2008 could have been prevented by depression-era regulations that were removed due to heavy lobbying and traceable payments to (bipartisan) politicians. Whatever bubbles pop next (crypto seems likely to be one of them) will probably have been fueled by that same deregulation.
This is beyond political corruption, it's human corruption. Inherent to the way people respond to incentives.
People inherently will try to put things to their benefit and to what incentives them. It takes a lot of structure to make the cost benefit of the incentives to outweigh the perceived benefits. It starts with something relatively good, but slightly pushed and snowballs from there. "I got stuff done that fed all these people! Surely making sure i get a little extra food is fair.....". Maybe someone notices and say "thats not fair", then why would the person go through a bunch of effort to make sure everyone is fed again and not just themselves? Altruism?
Every social structure ever created to stop this has failed in Human history, its reasonable to say every one that will ever get created will. They will be exposed to powerful forces of erosion and entropy. Maybe you can get a machine system that rules over humans that has different incentives or something, but any system that seeks to curb corruption will fall sooner or later. You can try to make in the system a desire to repair itself, but that in itself becomes an incentive and then we see purges.
You can build a tower to keep your rock up and defy gravity, but that tower WILL fall one day.
People inherently will try to put things to their benefit and to what incentives them. It takes a lot of structure to make the cost benefit of the incentives to outweigh the perceived benefits. It starts with something relatively good, but slightly pushed and snowballs from there. "I got stuff done that fed all these people! Surely making sure i get a little extra food is fair.....". Maybe someone notices and say "thats not fair", then why would the person go through a bunch of effort to make sure everyone is fed again and not just themselves? Altruism?
Every social structure ever created to stop this has failed in Human history, its reasonable to say every one that will ever get created will. They will be exposed to powerful forces of erosion and entropy. Maybe you can get a machine system that rules over humans that has different incentives or something, but any system that seeks to curb corruption will fall sooner or later. You can try to make in the system a desire to repair itself, but that in itself becomes an incentive and then we see purges.
You can build a tower to keep your rock up and defy gravity, but that tower WILL fall one day.
An analogy can only serve to clarify a concept. If I'm already aware of a concept, then the analogy is deceptive. It serves no logical purpose other then to deceive. It literally serves no other purpose. For some reason when humans hear an analogy there is a slight catharsis when the brain puts two puzzle pieces together and relates the analogy to the original concept. This catharsis serves to delude the brain into thinking the analogy serves as supporting evidence when it is in fact nothing.
Can you prove that the business cycle is inevitable? Why would an analogy prove anything?
I also literally said that there have been methods used to stop the business cycle. And yes these methods have been successful at completely impeding it... but at great cost. It's called communism.
So literally I've proved the statement wrong by showing the existence of a counter example. The proof hints at the possibility that there are other systems besides capitalism or communism that are undiscovered or not created yet that could impede the business cycle without the associated cost. Others could say that communism as defined by the manifesto was never really implemented or that the current examples of communism failed for different reasons OTHER then communism.
Either way, the cycle being inevitable is categorically false.
Can you prove that the business cycle is inevitable? Why would an analogy prove anything?
I also literally said that there have been methods used to stop the business cycle. And yes these methods have been successful at completely impeding it... but at great cost. It's called communism.
So literally I've proved the statement wrong by showing the existence of a counter example. The proof hints at the possibility that there are other systems besides capitalism or communism that are undiscovered or not created yet that could impede the business cycle without the associated cost. Others could say that communism as defined by the manifesto was never really implemented or that the current examples of communism failed for different reasons OTHER then communism.
Either way, the cycle being inevitable is categorically false.
Some of them may actually want that cycle to happen.
But we can stop lying about the definition of a recession. Biden admin changing the definition to avoid loss political points is about as nonsensical as blaming inflation squarely on Putin. The disinformation needs to stop.
I don't get why people are getting all riled up by this. Of course the White House will try to put a positive spin on things, the same would have been done by the Republican party (or any other political party in the world). As noted above the President can't technically change the definition of a recession anyway, it's another agency that does that. So much ado about nothing...
I don't get why people are getting all riled up by this.
Because conservative media is feeding people the talking point, and they are aren't really applying too much critical thought to the matter.
Because conservative media is feeding people the talking point, and they are aren't really applying too much critical thought to the matter.
left wing media is making fun of this guy too
protip: everyone can perceive which ways the parties are different, when people refer to both sides they are referring to the ways they are the same, not the ways they are different
protip: everyone can perceive which ways the parties are different, when people refer to both sides they are referring to the ways they are the same, not the ways they are different
Yeah; but people get cranky when you point out that one side is propped up by foreign propagandists that have explicitly said they're trying to destabilize the US.
I think the more harmful thing this extreme political shitfighting is doing is stopping just seriously getting on with doing everything possible to improve things.
"We're not actually in a recession." So what?! Just acknowledge things aren't good and get to fixing them, be honest with the public and have some bloody integrity for once.
The US (and UK, and Australia, etc) partisan political playground fighting is ridiculous and the media (inc. social media) spends far too much time supporting it.
"We're not actually in a recession." So what?! Just acknowledge things aren't good and get to fixing them, be honest with the public and have some bloody integrity for once.
The US (and UK, and Australia, etc) partisan political playground fighting is ridiculous and the media (inc. social media) spends far too much time supporting it.
Exactly. The question of recession is red herring and distraction.
More people are working and can buy less. This is not a good thing.
Lets talk about what we can do to improve things.
More people are working and can buy less. This is not a good thing.
Lets talk about what we can do to improve things.
And the political gain is so minor. It's not like people are unaware of their own economic experiences and this will change any minds.
The cost in trust is very high, and the gain so small.
The cost in trust is very high, and the gain so small.
If a placebo can cure an ailment caused by sentiment then should the patient be lied to? How much of a recession is consumer sentiment? And is lying always a bad thing?
rajin444(2)
Wow the scale on the historic chart on that page is just nuts! Looking at Q2 & Q3 of 2020 - it just dwarfs everything and nearly makes the chart unreadable for the scale of numbers that we usually think of as important - where a full percent is real and two percent is big. I mean it makes sense given the pandemic, but seeing the economy shrink at a 30% annual rate one quarter and then bounce right back by the same amount the next quarter is insane. I wonder the last time it changed that quickly.
I fundamentally don't understand the argument that we're not in a economic recession because employment is high.
This is like saying sure you can't buy as much bread, but at least you are working longer.
The fact that more people are working to produce less describes an economy in decline.
What am I missing here?
This is like saying sure you can't buy as much bread, but at least you are working longer.
The fact that more people are working to produce less describes an economy in decline.
What am I missing here?
Whenever I want to try and understand what may be happening in the economy, I rewatch[1] Ray Dalio’s 2013 video on how the economic machine works.
Bits about a “recession” come up around the 12-18min mark with relevant info beyond.
That said, I don’t know enough to map/equate these simple types of economic explanation with current actual state.
[1] https://youtu.be/PHe0bXAIuk0
Bits about a “recession” come up around the 12-18min mark with relevant info beyond.
That said, I don’t know enough to map/equate these simple types of economic explanation with current actual state.
[1] https://youtu.be/PHe0bXAIuk0
The way that the White House, and by extension the administrative branch of the government has decided to redefine "recession" and imply that the economy is doing really well right now is actually scary.
These people do have huge levers that control our lives that they can pull. Their actions do have massive effects on the American economy, and by extension the economy of the rest of the world. The actions they're taking are legitimately horrifying.
I seriously don't think these people understand what the lives of normal people are actually like. The white house had the gall to put out a tweet bragging that gas prices had come down, and that this could be saving people $35/mo, and how much that is helping.
Gas if still $4.2 national average per gallon. That's HUGE, and the direct actions of the administration are to blame for this.
These people do have huge levers that control our lives that they can pull. Their actions do have massive effects on the American economy, and by extension the economy of the rest of the world. The actions they're taking are legitimately horrifying.
I seriously don't think these people understand what the lives of normal people are actually like. The white house had the gall to put out a tweet bragging that gas prices had come down, and that this could be saving people $35/mo, and how much that is helping.
Gas if still $4.2 national average per gallon. That's HUGE, and the direct actions of the administration are to blame for this.
> and imply that the economy is doing really well right now is actually scary.
We're not seeing a decline in employment or spending. The really bad symptoms of a bad economy aren't there yet.
> Gas if still $4.2 national average per gallon. That's HUGE, and the direct actions of the administration are to blame for this.
Which direct actions? And frankly, gasoline prices do not amount to a signficant amount of spending by American families. Food and housing costs are also up and wages down (adjusted for inflation) which account for a lot more money that people actually spend than energy. However gasoline prices are also way down from a month ago, yet food/rent are still up.
We're not seeing a decline in employment or spending. The really bad symptoms of a bad economy aren't there yet.
> Gas if still $4.2 national average per gallon. That's HUGE, and the direct actions of the administration are to blame for this.
Which direct actions? And frankly, gasoline prices do not amount to a signficant amount of spending by American families. Food and housing costs are also up and wages down (adjusted for inflation) which account for a lot more money that people actually spend than energy. However gasoline prices are also way down from a month ago, yet food/rent are still up.
It's been suggested the employment is because people are being forced to take on multiple jobs to make ends meet, not because there are more people getting jobs.
Gas affects the prices of nearly everything in the economy so I have no idea how you would conclude it's not a large portion of spending. I work in commodities and we are seeing massive price increases simply due to fuel & freight costs.
Gas affects the prices of nearly everything in the economy so I have no idea how you would conclude it's not a large portion of spending. I work in commodities and we are seeing massive price increases simply due to fuel & freight costs.
https://fred.stlouisfed.org/series/LNS12026620
https://fred.stlouisfed.org/series/U6RATE
That doesn’t appear to be the cae
https://fred.stlouisfed.org/series/U6RATE
That doesn’t appear to be the cae
This is good data, but I am guessing it does not take into account the gig economy which I wonder what the effect of that is.
The government can stimulate employment by pumping money into its favored causes. So what you end up with is plenty of people employed but not producing things that people actually want. Unfortunately, we can't even imagine the wonders that people might have produced if their resources were instead allocated towards satisfying consumers.
They didn't redefine recession, that's been defined by NBER. I agree there's some spin, but this statement isn't correct.
The NBER is a private think tank. You may be confusing them with the Bureau of Economic Analysis, which is an independent federal agency.
No, it is the NBER. Even the BEA says the NBER officially defines recessions:
https://www.bea.gov/help/glossary/recession
https://www.bea.gov/help/glossary/recession
There’s no official definition. It’s like saying you’re sick, you can be sick even if doctors can’t point to what’s wrong with you, and you aren’t necessarily sick even if you have a condition. The two quarters thing is just a really widely recognized rule of thumb. The idea that there’s some sort of official definition every economist agrees on is incorrect. The idea that there’s an organization that owns the word recession is also wrong.
“Every record has been destroyed or falsified, every book rewritten, every picture has been repainted, every statue and street building has been renamed, every date has been altered. And the process is continuing day by day and minute by minute. History has stopped. Nothing exists except an endless present in which the Party is always right.”
1984 does not apply here in any way shape or form.
Rewriting definitions to fit a narrative, in my mind, is very applicable.
Good thing no one is rewriting definitions. “Recession” has no agreed upon definition, the federal government relies on the NBER to officially tell us if we’re in a recession. They haven’t said so yet.
Next thing they’ll go for the statistics bureau itself in order to massage the numbers closer to the source as possible, no need anymore of this Orwellian double-talk. At least that’s what they were doing in the ‘80s in the Eastern-European country while I was a kid, officially we had record maize and wheat production, in practice bread and cooking oil were rationed.
I don't remember the book ever mentioning architecture, a form of history itself.
> That's HUGE, and the direct actions of the administration are to blame for this.
I’ve been hearing from some people that the rise in gas prices is this administration’s fault.
However, when I look at prices here in the EU, gas prices have risen much more. Is that the current US admin’s fault as well?
What specific tools should the exec use in this situation? EO no more oil exports? EO limiting the record petro industry profits?
What is the complete argument for why this is Biden’s fault?
I’ve been hearing from some people that the rise in gas prices is this administration’s fault.
However, when I look at prices here in the EU, gas prices have risen much more. Is that the current US admin’s fault as well?
What specific tools should the exec use in this situation? EO no more oil exports? EO limiting the record petro industry profits?
What is the complete argument for why this is Biden’s fault?
> Gas if still $4.2 national average per gallon. That's HUGE, and the direct actions of the administration are to blame for this.
https://www.reuters.com/business/energy/shell-reports-record...
"Shell (SHEL.L) posted record results on Thursday, with a $11.5 billion second-quarter profit smashing the mark it set only three months ago, lifted by strong gas trading and a tripling of refining profit. The company also announced a $6 billion share buyback programme for the current quarter but did not raise its dividend of 25 cents per share. It said shareholder returns would remain 'in excess of 30% of cash flow from operating activities'."
https://www.reuters.com/business/energy/shell-reports-record...
"Shell (SHEL.L) posted record results on Thursday, with a $11.5 billion second-quarter profit smashing the mark it set only three months ago, lifted by strong gas trading and a tripling of refining profit. The company also announced a $6 billion share buyback programme for the current quarter but did not raise its dividend of 25 cents per share. It said shareholder returns would remain 'in excess of 30% of cash flow from operating activities'."
What do you think this is the type of comment, which the administration also keeps making, actually means?
The subtext is: these companies are doing well, and that's a bad thing. How do you think that effects their desire to bring down costs for consumers?
And also: yeah, their profits are up, because due to the actions of the administration people are uncertain about their ability to buy this stuff in the future, and the futures cost goes up.
Watch the end of this clip: https://www.youtube.com/watch?v=0tOQ5AaFJdU
The question is: do you think this will accelerate us towards a a green energy future.
Her answer: yes, and that's a good thing for the following reasons.
BTW, a green energy future is one where these oil companies are out of business. The energy secretary is saying that she wants these companies to accelerate their own demise at a decreased profit, and how there eventual disappearance is a good thing.
Yeah, gas prices are up. No kidding.
The subtext is: these companies are doing well, and that's a bad thing. How do you think that effects their desire to bring down costs for consumers?
And also: yeah, their profits are up, because due to the actions of the administration people are uncertain about their ability to buy this stuff in the future, and the futures cost goes up.
Watch the end of this clip: https://www.youtube.com/watch?v=0tOQ5AaFJdU
The question is: do you think this will accelerate us towards a a green energy future.
Her answer: yes, and that's a good thing for the following reasons.
BTW, a green energy future is one where these oil companies are out of business. The energy secretary is saying that she wants these companies to accelerate their own demise at a decreased profit, and how there eventual disappearance is a good thing.
Yeah, gas prices are up. No kidding.
These companies are not going to invest in new production anyway, they are going to return dividends to shareholders. You are setting up a straw man.
Haven't the oil companies stated they feel its doing more right by their investor putting the money back to the shareholders than invest in a project that has a likelihood of getting shut down by the government?
they can't bc investors are scared af about what the future is. biden and his buddies been attacking oil and gas for years now then they wanna flip a switch and have everybody go back to investing in production. then 2 yrs from now they gonna go back to attacking it and straight up cancelling projects and refusing to permit shit and companies won't be able to pay off the assets.
it was a mistake to focus on attacking o&g when alternatives still aint ready yet.
it was a mistake to focus on attacking o&g when alternatives still aint ready yet.
You realize big hedge and mutual funds have started including ESG in their shareholder prospectuses too?
yes lol but most of those just have to invest like 20% of their assets in esg or smth. esg is also more commonly exclude oil companies so they aren't the shareholders pushing that. it's kinda funny some of the big esg funds literally have energy companies as their top performing picks rn.
After watching sleepy Joe cancel the Keystone pipeline who in their right mind would invest in new infrastructure?
If inflation stays around 9%, you can expect many companies to post record profits every quarter in dollar terms.
Companies with heavy capital investment will see huge gains in % profit as their debt obligations are inflated away.
Companies with heavy capital investment will see huge gains in % profit as their debt obligations are inflated away.
Is the idea here that SHEL.L suddenly became a profit focused company after all these decades?
what's your point? you dont think the administration plays any role in the increased gas prices, it's only the evil+greedy oil execs?
I’m sure both oil refinery executives and the executive branch of the us government wish that they did have that much control over gas prices. The reality is that gas prices are set by market mechanisms of an international commodity. Gas costs what it costs.
Correct, the last POTUS that did something to meaningfully impact gas/oil prices was Bush II when he invaded Iraq, and Obama a little bit when he decreased Iranian oil sanctions.
For better or worse, we don't live in anything resembling a command economy.
For better or worse, we don't live in anything resembling a command economy.
There is a regulatory aspect as well. The current regulatory environment is not encouraging an increase in refinery capacity, and that seems to be our current bottleneck.
This is not a value judgment as to whether this is right or wrong.
This is not a value judgment as to whether this is right or wrong.
Should Joe Biden get some streamers and make a poster to show his support for oil refineries? He isn’t in charge of spending; that’s Congress. Maybe he should issue an executive order forcing oil refining capacity back online? Then you’d bitch about government overreach.
i pointed that out below and got downvoted.
> you dont think the administration plays any role in the increased gas prices
Essentially correct. Presidents have very little control over this.
Essentially correct. Presidents have very little control over this.
Then why is the Biden admin bragging about lowering prices this summer?
If the other side claims you can control them to score points when they go up, why would you not point out when they go down?
Yes, they do. They control things like this.
https://www.cnbc.com/2022/02/24/biden-administration-pausing...
We could drill our away out of this problem, but we are not, because the the biden administration is being held hostage by the progressive left. And before you start calling me a republican, im not one, but this is just a really stupid idea because it's decisions like this that will cause republicans to be elected in 2022 and 2024 - the american public isnt going to take higher gas prices for the team to fight climate change at this point, they are going to vote people into office that will lower them. biden doesnt realize this because he is surrounded by people that think a like and are too rich to be unaffected by inflation, or he doesnt care -- either way, it s a bad position
https://www.cnbc.com/2022/02/24/biden-administration-pausing...
We could drill our away out of this problem, but we are not, because the the biden administration is being held hostage by the progressive left. And before you start calling me a republican, im not one, but this is just a really stupid idea because it's decisions like this that will cause republicans to be elected in 2022 and 2024 - the american public isnt going to take higher gas prices for the team to fight climate change at this point, they are going to vote people into office that will lower them. biden doesnt realize this because he is surrounded by people that think a like and are too rich to be unaffected by inflation, or he doesnt care -- either way, it s a bad position
https://www.marketplace.org/2022/03/07/why-do-we-import-russ...
> Now, you could be excused for asking yourself: “Wait a second, I thought the U.S. had a bunch of oil in the Permian Basin in Texas and the Bakken Shale in North Dakota. Why the heck are we importing oil?” Turns out the answer is part chemistry and part economics.
> ...
> That’s because they take longer to process and need specialized refining equipment. This cheap, lower-quality crude comes from Canada, Venezuela and Russia, among other spots. Back in the late 1990s and early 2000s, it was the product U.S. refiners were buying.
> “A lot of refineries, especially in the Gulf Coast, made a very expensive bet to invest in this equipment that would allow them to save money on input costs by processing, you know, lower-quality crude,” said Richard Sweeney, an assistant professor of economics at Boston College.
---
We can't drill our way out of this because we can't refine the oil that we produce.
Here's another article from 2019 - https://financialpost.com/commodities/energy/the-great-oil-p...
> Refiners who invested billions to turn a profit from processing cheap low-quality crude are paying unheard of premiums to find the heavy-sour grades they need. The mismatch is better news for such OPEC producers as Iraq and Saudi Arabia, who don’t produce much light-sweet, but pump plenty of the dirtier stuff.
> Now, you could be excused for asking yourself: “Wait a second, I thought the U.S. had a bunch of oil in the Permian Basin in Texas and the Bakken Shale in North Dakota. Why the heck are we importing oil?” Turns out the answer is part chemistry and part economics.
> ...
> That’s because they take longer to process and need specialized refining equipment. This cheap, lower-quality crude comes from Canada, Venezuela and Russia, among other spots. Back in the late 1990s and early 2000s, it was the product U.S. refiners were buying.
> “A lot of refineries, especially in the Gulf Coast, made a very expensive bet to invest in this equipment that would allow them to save money on input costs by processing, you know, lower-quality crude,” said Richard Sweeney, an assistant professor of economics at Boston College.
---
We can't drill our way out of this because we can't refine the oil that we produce.
Here's another article from 2019 - https://financialpost.com/commodities/energy/the-great-oil-p...
> Refiners who invested billions to turn a profit from processing cheap low-quality crude are paying unheard of premiums to find the heavy-sour grades they need. The mismatch is better news for such OPEC producers as Iraq and Saudi Arabia, who don’t produce much light-sweet, but pump plenty of the dirtier stuff.
> We could drill our away out of this problem, but we are not, because the the biden administration is being held hostage by the progressive left.
Saying this doesn't make it true.
https://apnews.com/article/fact-checking-452931879750
> The U.S. was producing 11.185 million barrels of crude oil per day in 2021, compared with an average of 11.283 million barrels per day in 2020, according to data from the U.S. Energy Information Administration. The latest data shows that for the week of March 4, 2022, the U.S. is producing 11.6 million barrels per day.
> While there was a dip in oil production in February 2021 due to winter storms in Texas, said Mark Finley, a fellow in energy and global oil at Rice University in Houston, the U.S. remains the world’s biggest producer of crude oil.
https://apnews.com/article/joe-biden-business-science-enviro...
> Approvals for companies to drill for oil and gas on U.S. public lands are on pace this year to reach their highest level since George W. Bush was president, underscoring President Joe Biden’s reluctance to more forcefully curb petroleum production in the face of industry and Republican resistance.
Saying this doesn't make it true.
https://apnews.com/article/fact-checking-452931879750
> The U.S. was producing 11.185 million barrels of crude oil per day in 2021, compared with an average of 11.283 million barrels per day in 2020, according to data from the U.S. Energy Information Administration. The latest data shows that for the week of March 4, 2022, the U.S. is producing 11.6 million barrels per day.
> While there was a dip in oil production in February 2021 due to winter storms in Texas, said Mark Finley, a fellow in energy and global oil at Rice University in Houston, the U.S. remains the world’s biggest producer of crude oil.
https://apnews.com/article/joe-biden-business-science-enviro...
> Approvals for companies to drill for oil and gas on U.S. public lands are on pace this year to reach their highest level since George W. Bush was president, underscoring President Joe Biden’s reluctance to more forcefully curb petroleum production in the face of industry and Republican resistance.
You can't look at the oil market in isolation like that. Saudi was dumping oil at that point, producing way more than necessary. So much so futures went negative. That is not the case today.
> That is not the case today.
As a deliberate political choice by the Saudis.
https://theintercept.com/2022/02/15/saudi-arabia-gas-price-o...
As a deliberate political choice by the Saudis.
https://theintercept.com/2022/02/15/saudi-arabia-gas-price-o...
Which is largely irrelevant.
As is the President re: gas pricing.
Which is not true either, as the dip we've seen over the past several weeks can attest. We've deeply tapped into our reserves (much more than expected as released yesterday) to achieve this. It seems like it might be short sighted and short lived.
Also if the president has no effect on gas prices why was ours groveling at the feet of the Saudi Prince?
Also if the president has no effect on gas prices why was ours groveling at the feet of the Saudi Prince?
> Also if the president has no effect on gas prices why was ours groveling at the feet of the Saudi Prince?
Because they're the people who can have an effect?
If Biden could tweak gas prices, he wouldn't have to do that.
Because they're the people who can have an effect?
If Biden could tweak gas prices, he wouldn't have to do that.
Among other things, that profit owes to the fact that the price for their product was substantially higher at sale time than at the time when they bought their inputs. If your issue is that someone made a profit, then you want the market price to be lower.
I personally don't think mandating all actors to altruistically abstain from transacting at market price would be a sound policy, but that seems to be what liberals want.
I personally don't think mandating all actors to altruistically abstain from transacting at market price would be a sound policy, but that seems to be what liberals want.
I'm liberal and don't want central planning. It terrifies me that we are headed down that road at all; even seeing trial balloons for price controls. It always ends very, very badly and there's no reason to think this time would be different.
Price controls on medicine in Europe have worked very well compared to America's "free market" by pretty much any measure.
Subsidized by America's spending on R&D for the rest of the planet, just like the military.
That's the industry PR line, at least.
https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p...
> The biggest spender, Johnson & Johnson, shelled out $17.5 billion on sales and marketing in 2013, compared with $8.2 billion for R&D. In the top 10, only Roche spent more on R&D than on sales and marketing.
https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-p...
> The biggest spender, Johnson & Johnson, shelled out $17.5 billion on sales and marketing in 2013, compared with $8.2 billion for R&D. In the top 10, only Roche spent more on R&D than on sales and marketing.
That doesn't seem to contravene what was being said? The assertion was that the US (via higher prices) is what pays for the R&D. Not they they exclusively spend all the US profits on R&D. If the companies suddenly made 20 billion less, I'd expect the proportionate expense on Sales vs. R&D to stay roughly the same?
Most of Europe doesn't have price controls, but purchasing controls.
They are similar but different.
They are similar but different.
what new medicines have come out of europe recently? (serious question)
The Pfizer vaccine for one.
And mRNA tech came from Europe? (seems like it came from USA to me) And isn't Pfizer an American company? You're talking about the German company right? Would they have been able to do without Pfizer backing them?
Looks like two Germans, one a Turkish immigrant.
https://www.cnn.com/2020/11/10/europe/biontech-pfizer-vaccin...
https://www.cnn.com/2020/11/10/europe/biontech-pfizer-vaccin...
How's that vaccine working out?
really well. Vaccinated people are still 3x less likely to get sick than unvaccinated.
Not just Europe—price controls (de jure or de facto, the latter via e.g. establishing a monopsony) are, as best I can tell, the main unifying factor in healthcare systems in the entire OECD except the US. Those systems differ a lot, but at some point and on some level, they all fall back on price controls, apparently to good effect.
Just looking through the OECD's datasets [0], I see a lot of health care quality and utilization measures missing for the US and many other OECD countries. How are you defining "good effect"?
[0] https://stats.oecd.org/Index.aspx?QueryId=49344#
I was able to find some incomplete data that suggests the US is pretty good on the metric of wait time, compared to many European countries and Canada:
https://www.oecd-ilibrary.org/sites/242e3c8c-en/1/3/2/index....
[0] https://stats.oecd.org/Index.aspx?QueryId=49344#
I was able to find some incomplete data that suggests the US is pretty good on the metric of wait time, compared to many European countries and Canada:
https://www.oecd-ilibrary.org/sites/242e3c8c-en/1/3/2/index....
I wrote a lot longer explanation but deleted it. Suffice it to say other systems are good enough that functionally no-one wishes they had the US system instead, and it'd sure be weird if every single other OECD state had been relying on price controls this long if they weren't having some beneficial effect.
My short-version argument would be—and I'm a little annoyed at having to explain this, because I've been explaining it to people on the Internet for 20 damn years, it's so not-hard to find this info that it's kinda difficult not to have been exposed to it, and it seems like it should be common knowledge at this point and like some folks are going way out of their way not to understand it—that the "good effect" is precisely that the US spends 50-100% more than any of these countries, per capita, and does not smoke the rest on practically every metric, instead doing a little better in some areas, a little worse in others, middle-of-the pack on others still. It sure as hell looks like we're paying a huge premium for similar outcomes, which also explains why there aren't a lot of people in other countries begging their governments to adopt a system like ours (a fact one has to explain when cherry-picking metrics to make the US look good—OK, so why aren't others rushing to copy us? At least some of them should be, if we actually do have an unambiguously better system).
The "good effect" is that other health care systems spend far less, and also don't bankrupt people over medical bills, while achieving roughly comparable results.
If I came to you and told you I had a process to produce a Tesla knock-off that produced a car a little better in some ways, a little worse in others, but pretty damn comparable, at 50-70% of what it costs Tesla to produce a car, and then showed you dozens of factories I'd already built that were demonstrably doing exactly that, you wouldn't ask me how I was defining "good effect" when I used that to describe the results of the One Weird Trick of my process. It's obvious.
Were you not aware of the vast differences in costs & accessibility between OECD healthcare systems? By which I mostly mean between the US and everyone else.
My short-version argument would be—and I'm a little annoyed at having to explain this, because I've been explaining it to people on the Internet for 20 damn years, it's so not-hard to find this info that it's kinda difficult not to have been exposed to it, and it seems like it should be common knowledge at this point and like some folks are going way out of their way not to understand it—that the "good effect" is precisely that the US spends 50-100% more than any of these countries, per capita, and does not smoke the rest on practically every metric, instead doing a little better in some areas, a little worse in others, middle-of-the pack on others still. It sure as hell looks like we're paying a huge premium for similar outcomes, which also explains why there aren't a lot of people in other countries begging their governments to adopt a system like ours (a fact one has to explain when cherry-picking metrics to make the US look good—OK, so why aren't others rushing to copy us? At least some of them should be, if we actually do have an unambiguously better system).
The "good effect" is that other health care systems spend far less, and also don't bankrupt people over medical bills, while achieving roughly comparable results.
If I came to you and told you I had a process to produce a Tesla knock-off that produced a car a little better in some ways, a little worse in others, but pretty damn comparable, at 50-70% of what it costs Tesla to produce a car, and then showed you dozens of factories I'd already built that were demonstrably doing exactly that, you wouldn't ask me how I was defining "good effect" when I used that to describe the results of the One Weird Trick of my process. It's obvious.
Were you not aware of the vast differences in costs & accessibility between OECD healthcare systems? By which I mostly mean between the US and everyone else.
I am asking you to define "good effect" precisely because it seems to be subject to the kind of cherry picking you don't like.
I'm a median to upper-middle American, and I get great value from my healthcare. It's not obvious to me that a system that raises the experience for mean, or even the bottom end, of the distribution would be a good thing for me in many respects: emergency wait time, access to top percentile specialists, out of pocket costs, just to name a few. It also seems to me that you neglect to factor in that people of means, the world over, come to the US to access care from world leading treatments in many conditions. So they might not want American care in their country, but plenty surely want it for their own bodies.
Put simply: your "good effect" often smuggles in assumptions about which part of the curve to treat, and implicitly undervalues degradation of the status quo for others. You, as is the habit of liberals, would like to have a debate wherein your moral values about who deserves what and who should be deprived, is taken for granted. I'm sorry, it's not immediately obvious to me that a system where 10,000 people wait 6-12 months for lifesaving operations is better than one where 1,000 people can get the operation in a month and the other 9,000 might have to go into debt to do the same.
I'm a median to upper-middle American, and I get great value from my healthcare. It's not obvious to me that a system that raises the experience for mean, or even the bottom end, of the distribution would be a good thing for me in many respects: emergency wait time, access to top percentile specialists, out of pocket costs, just to name a few. It also seems to me that you neglect to factor in that people of means, the world over, come to the US to access care from world leading treatments in many conditions. So they might not want American care in their country, but plenty surely want it for their own bodies.
Put simply: your "good effect" often smuggles in assumptions about which part of the curve to treat, and implicitly undervalues degradation of the status quo for others. You, as is the habit of liberals, would like to have a debate wherein your moral values about who deserves what and who should be deprived, is taken for granted. I'm sorry, it's not immediately obvious to me that a system where 10,000 people wait 6-12 months for lifesaving operations is better than one where 1,000 people can get the operation in a month and the other 9,000 might have to go into debt to do the same.
> It's not obvious to me that a system that raises the experience for mean, or even the bottom end, of the distribution would be a good thing for me in many respects
Ah—I usually assume the Rawlsian "Veil of Ignorance" POV when it comes public policy issues, personally, as I think is fairly common. Sure, if that's your perspective, literally nothing matters except how a policy affects you, personally, right now, so my analysis may not hold—but that's not an especially useful perspective from which to consider public policy when discussing it with strangers, and I'm not really sure why you'd even engage on this in public if the only thing you care about is whether a policy is good for you, right this second (circumstances are subject to change, after all)
At least you're up-front about it, rather than hiding it. I don't mind that when it's made explicit—I just also, again, don't get why you'd engage, and wonder whether you might have guessed in advance the sort of more-typical POV I was taking, so really could have understood what I meant by "good effect" without my needing to explain it. What were you trying to accomplish here?
Ah—I usually assume the Rawlsian "Veil of Ignorance" POV when it comes public policy issues, personally, as I think is fairly common. Sure, if that's your perspective, literally nothing matters except how a policy affects you, personally, right now, so my analysis may not hold—but that's not an especially useful perspective from which to consider public policy when discussing it with strangers, and I'm not really sure why you'd even engage on this in public if the only thing you care about is whether a policy is good for you, right this second (circumstances are subject to change, after all)
At least you're up-front about it, rather than hiding it. I don't mind that when it's made explicit—I just also, again, don't get why you'd engage, and wonder whether you might have guessed in advance the sort of more-typical POV I was taking, so really could have understood what I meant by "good effect" without my needing to explain it. What were you trying to accomplish here?
Do you have anything other than unearned moral condescension? It is not my experience that clicking your tongue at people and badgering them to prioritize the collective over their own individual health outcomes in a healthcare policy is compelling.
So why would I engage? Because you seem to be advocating policies that would directly (and potentially negatively) affect my health outcomes, and your justification is "but you're just a statistic".
So why would I engage? Because you seem to be advocating policies that would directly (and potentially negatively) affect my health outcomes, and your justification is "but you're just a statistic".
I was about to explain, but from my selfish POV it's actually better if you keep posting like this. So... carry on.
https://www.usatoday.com/story/money/economy/2022/05/07/oil-...
> The net profit margin of S&P 500 companies, which include energy giants such as Chevron and Exxon Mobil, in the first quarter has been running at 12.3% based on estimates and earnings reported so far, according to FactSet. That’s down from a peak of 13.1% in the second quarter of last year, but above the pre-COVID-19 level of about 11%.
As with food, they've realized the public will pay higher margins than they previously thought they could get away with.
> The net profit margin of S&P 500 companies, which include energy giants such as Chevron and Exxon Mobil, in the first quarter has been running at 12.3% based on estimates and earnings reported so far, according to FactSet. That’s down from a peak of 13.1% in the second quarter of last year, but above the pre-COVID-19 level of about 11%.
As with food, they've realized the public will pay higher margins than they previously thought they could get away with.
[deleted]
>I personally don't think mandating all actors to altruistically abstain from transacting at market price would be a sound policy, but that seems to be what liberals want.
Ding Ding Ding!
The relevant question is why isn't there competition to drive the market price down.
If it appears that there is a monopoly or oligopoly extracting value from it's market position, the solution is diversification, not profit controls.
Profit controls just drive prices higher as companies strive to inflate their COGs
Ding Ding Ding!
The relevant question is why isn't there competition to drive the market price down.
If it appears that there is a monopoly or oligopoly extracting value from it's market position, the solution is diversification, not profit controls.
Profit controls just drive prices higher as companies strive to inflate their COGs
[deleted]
Wait until you hear about ESG which governs some trillions of dollars of assets. ESG is a way for politicians/elites to force ideology on the public without having to go through the electoral process and gaining public support. This power is exercised through the proxy of corporations. It is anything but democratic. It is totalitarian/authoritarian.
Mastercard is already experimenting with CO2 emissions based spending habits: https://www.mastercard.us/en-us/vision/corp-responsibility/p...
I am the last one to believe in these types of things but it is getting to a point where I feel like we're being boiled like a frog.
Climate/ESG initiatives have lost respect in my eyes, I'd like to support sensible things but this is how we'll get totalitarianism on our hands. Then there is the whole WEF agenda.
Mastercard is already experimenting with CO2 emissions based spending habits: https://www.mastercard.us/en-us/vision/corp-responsibility/p...
I am the last one to believe in these types of things but it is getting to a point where I feel like we're being boiled like a frog.
Climate/ESG initiatives have lost respect in my eyes, I'd like to support sensible things but this is how we'll get totalitarianism on our hands. Then there is the whole WEF agenda.
?? Gas is up in the rest of the world too so it's pretty easy to disprove that it's due to the direct actions of the Biden administration.
Direct actions like what? U.S. crude production is near all-time highs. Gas is expensive because ridiculous Americans will pay it and the oil companies figured that out. Shell just announced a $12 billion quarterly profit.
The only thing I want to see out of Biden on gas prices is a windfall tax on oil companies where the funds are dedicated to lithium exploration.
The only thing I want to see out of Biden on gas prices is a windfall tax on oil companies where the funds are dedicated to lithium exploration.
Direct actions like immediately cancelling the keystone XL pipeline.
Imagine you're a company which builds refining and extraction infrastructure. The government wants you to build more capacity to bring down the cost fuel, but 18 months ago. you watched them just straight up cancel a project which was already half finished.
Would you go for this? I wouldn't.
And you have a bunch of land lease contracts which allow you to extract oil. Without these contracts your business will collapse. The government has said that they won't give you any more until you use the ones you have. But again: they've spent the last 18 months cancelling projects, and talking about how we need to make a transition away from your business.
Do you trust that once you use up the remaining leases you have, that they're really going to give you more? I wouldn't trust that.
Imagine you're a company which builds refining and extraction infrastructure. The government wants you to build more capacity to bring down the cost fuel, but 18 months ago. you watched them just straight up cancel a project which was already half finished.
Would you go for this? I wouldn't.
And you have a bunch of land lease contracts which allow you to extract oil. Without these contracts your business will collapse. The government has said that they won't give you any more until you use the ones you have. But again: they've spent the last 18 months cancelling projects, and talking about how we need to make a transition away from your business.
Do you trust that once you use up the remaining leases you have, that they're really going to give you more? I wouldn't trust that.
> Direct actions like immediately cancelling the keystone XL pipeline.
It's unlikely an unfinished pipeline for export purposes had a significant impact on current gasoline prices.
https://apnews.com/article/fact-checking-895299166310
"Experts tell The Associated Press that the Keystone XL pipeline cancellation isn’t affecting what’s happening in the oil market today. It was never operational when it was shut down, and was not slated to go into service until 2023, according to a press release from TC Energy, the company constructing the project."
"Even if the Keystone XL pipeline had been completed, the amount of oil it was designed to transport would have been a drop in the bucket for U.S. demand, experts noted. The U.S. used nearly 20 million barrels of oil a day last year, while global consumption of oil was near 100 million barrels. The pipeline would have contributed less than 1% to the world supply of oil, according to AP reporting."
It's unlikely an unfinished pipeline for export purposes had a significant impact on current gasoline prices.
https://apnews.com/article/fact-checking-895299166310
"Experts tell The Associated Press that the Keystone XL pipeline cancellation isn’t affecting what’s happening in the oil market today. It was never operational when it was shut down, and was not slated to go into service until 2023, according to a press release from TC Energy, the company constructing the project."
"Even if the Keystone XL pipeline had been completed, the amount of oil it was designed to transport would have been a drop in the bucket for U.S. demand, experts noted. The U.S. used nearly 20 million barrels of oil a day last year, while global consumption of oil was near 100 million barrels. The pipeline would have contributed less than 1% to the world supply of oil, according to AP reporting."
You are talking past parent. They are saying the cancellation is a signaling mechanism that gives them no confidence to build out new refineries and other infra that is required to lower prices.
[deleted]
[deleted]
$11.5 billion in profits on $103.06 billion in revenue is a profit margin of less than nine percent. That doesn't seem all that unreasonable to me.
9% is exceptionally high for some industries (eg, commodities or retail). For example, Wal-Mart is closer to 3%. Its not unusual to see targets of close to 4%.
I do agree with you that it isn't unexpected during a period of sanctions on a country that produces ~10% of the worldwide oil supply, though. Profits naturally will rise for the remaining players.
I do agree with you that it isn't unexpected during a period of sanctions on a country that produces ~10% of the worldwide oil supply, though. Profits naturally will rise for the remaining players.
Oil is the textbook commodity and the expected profit margin on commodities is ~zero. That's the nature of a commodity: a good so interchangeable, with so many competing producers, that the profit margins are inevitably minimized.
By ~zero do you mean "covering just the cost of capital over a full cycle"? This is a textbook example of a capital intensive and cyclical industry.
The problem is that supply naturally reacts slowly and ~1/10th of the supply was removed from the global market. I've heard people act as if that's a small shift, but its really not small at all over the short term.
Not all commodities are equally recoverable at similar costs though, and in a world where we need more oil/copper/iron than can come out of the cheapest mine, there will be profit
The swing in the higher granularity data going to quarterly is .. impressive. Scary impressive. If its not a measurement artifact, its a real quirk of the situational pressures.
[deleted]
tiahura(7)
swayvil(4)
So it’s official now
According to the White House, it is not
[1] https://www.whitehouse.gov/cea/written-materials/2022/07/21/...
[1] https://www.whitehouse.gov/cea/written-materials/2022/07/21/...
Kind of amazing how this administration isn’t getting the kind of ridicule that would be expected if the previous administration tried to deny a recession was happening according to the objective definition by including a subjective qualifier.
Is this not the same thing as ‘alternate facts’?
Is this not the same thing as ‘alternate facts’?
It's fairly obvious there are political bias in american media and always has been. If your party is hostile to increasing federal government or regulatory capture you will be under a microscope and even sacrifice some credibility to attack you, otherwise you can bumble around, redefine common terms, deflect and mislead and have the entirety of relevant and 'trusted' media sources run cover for you indefinitely.
>and always has been
Even just 15 years ago it was nowhere this overt or coordinated. The turning point seems to be shortly after JournoList and CabalList started when different independent media organizations began to collude to push a unified "narrative" rather than the truth.
Even just 15 years ago it was nowhere this overt or coordinated. The turning point seems to be shortly after JournoList and CabalList started when different independent media organizations began to collude to push a unified "narrative" rather than the truth.
Workaccount2(3)
i don't much like the former guy but there's def a slant. i'm pretty sure joe is this close sharpieing in "no" in front of "recession" on his slides.
up until literally 2 weeks ago the media was on about the "biden boom" (lmao)
up until literally 2 weeks ago the media was on about the "biden boom" (lmao)
What do you mean they aren't being ridiculed? Biden's approval rating is literally worse than Trump's was -> https://projects.fivethirtyeight.com/biden-approval-rating/?...
No.
They are basing it off facts. The NBER is the one who defines a recessions. They haven't done so (that I'm aware of) as of right now.
It might be that it will eventually be the case, but the arbitrator of this hasn't ruled on it.
Calling it a recession officially now would be the alternate fact.
Basically, it's like how someone can be guilty of something, but you still have to say "alleged" before referencing the crime.
Yes, you might have a million witnesses, but they aren't guilty until they are guilty.
And I'd much rather have a government that abides by these rules than not. Offhanded remarks based on willful disregard to order should not be encouraged.
They are basing it off facts. The NBER is the one who defines a recessions. They haven't done so (that I'm aware of) as of right now.
It might be that it will eventually be the case, but the arbitrator of this hasn't ruled on it.
Calling it a recession officially now would be the alternate fact.
Basically, it's like how someone can be guilty of something, but you still have to say "alleged" before referencing the crime.
Yes, you might have a million witnesses, but they aren't guilty until they are guilty.
And I'd much rather have a government that abides by these rules than not. Offhanded remarks based on willful disregard to order should not be encouraged.
Come on. The NBER is not a government organization. This sophistry is just that.
But it is not the objective definition:
https://www.politifact.com/factchecks/2022/jul/27/instagram-...
https://www.politifact.com/factchecks/2022/jul/27/instagram-...
What conclusion are you trying to draw from this subjective view?
That the definition of a recession has always been 2 quarters of negative GDP. The administration now believes there is nuance in the numbers, so what was the accepted definition in the past is no longer.
The fact the media on whole has decided it's ok to redefine a commonly accepted definition when the administration promotes it lends itself to the media being a mouthpiece for the administration.
I am willing to understand nuance and a changing definition, as I am sure there are parts of the economy people are learning to deal with. Gig workers, workers headed back from retirement and more. This doesn't even touch on the self fulfilling prophecy of hearing that the country is in a recession.
I am less willing to accept a change in a short timeframe and right before numbers are released.
The fact the media on whole has decided it's ok to redefine a commonly accepted definition when the administration promotes it lends itself to the media being a mouthpiece for the administration.
I am willing to understand nuance and a changing definition, as I am sure there are parts of the economy people are learning to deal with. Gig workers, workers headed back from retirement and more. This doesn't even touch on the self fulfilling prophecy of hearing that the country is in a recession.
I am less willing to accept a change in a short timeframe and right before numbers are released.
I mean I hear you on "changing the definition" from the commonly accepted two quarters of declining GDP numbers- though that was never actually official, you are mistaken about that- the NBER is the "official" source and they declare it based on a range of factors that there is some subjectiveness to- its not a direct formula.
However, wouldn't you agree there is nuance here? In Q4, GDP rose 6.9%, a number so big that we haven't seen that in decades- it appears around the early 1980s was the last time we saw those kinds of numbers. There has been a lot of whipsaw effects as we get out of covid- supply chains are all over the place, companies placing orders to get goods in to avoid snarls, only to now find that demand for goods, which boomed during the pandemic, has now eased as people have reverted to spending on going out and traveling, etc... There seems to be a lot of mismatch in supply and demand again.
The unemployment rate is at 3.6%- an astonishingly low number- these lows were last seen in the 1960s and 1970s.
On the flipside, inflation is high, gas prices are high and that hurts a lot of people- I live in a city, so this is mostly irrelevant and driven by forces out of anyone in the US govt's control.
There is evidence of some rockier times ahead, but when I think "recession" I think of a lot more pain than what we are currently experiencing.
However, wouldn't you agree there is nuance here? In Q4, GDP rose 6.9%, a number so big that we haven't seen that in decades- it appears around the early 1980s was the last time we saw those kinds of numbers. There has been a lot of whipsaw effects as we get out of covid- supply chains are all over the place, companies placing orders to get goods in to avoid snarls, only to now find that demand for goods, which boomed during the pandemic, has now eased as people have reverted to spending on going out and traveling, etc... There seems to be a lot of mismatch in supply and demand again.
The unemployment rate is at 3.6%- an astonishingly low number- these lows were last seen in the 1960s and 1970s.
On the flipside, inflation is high, gas prices are high and that hurts a lot of people- I live in a city, so this is mostly irrelevant and driven by forces out of anyone in the US govt's control.
There is evidence of some rockier times ahead, but when I think "recession" I think of a lot more pain than what we are currently experiencing.
>That the definition of a recession has always been 2 quarters of negative GDP.
Well, if you want to be specific, the NBER (which calls the game on what is a recession or not) defines it as "a significant decline in economic activity that is spread across the economy and that lasts more than a few months."
The "two quarters of declining real GDP" (GDP increased by 7.8% in nominal terms) is the pop-economics yardstick.
Are you aware we had a recession in 2001? And yet that managed to happen without having two consecutive quarters of negative GDP.
Well, if you want to be specific, the NBER (which calls the game on what is a recession or not) defines it as "a significant decline in economic activity that is spread across the economy and that lasts more than a few months."
The "two quarters of declining real GDP" (GDP increased by 7.8% in nominal terms) is the pop-economics yardstick.
Are you aware we had a recession in 2001? And yet that managed to happen without having two consecutive quarters of negative GDP.
> This doesn't even touch on the self fulfilling prophecy of hearing that the country is in a recession.
That's not how recessions work. There is always people predicting a recession and always people predicting a turnaround or growth. It's quite simple, however, to engineer a recession when you raise interest rates for such a heavily indebted economy.
That's not how recessions work. There is always people predicting a recession and always people predicting a turnaround or growth. It's quite simple, however, to engineer a recession when you raise interest rates for such a heavily indebted economy.
>That's not how recessions work.
I am unsure the point you are making. My point was related to mindset and I should have clarified. If a group of people, normal non economic expert citizens, believe a recession is here they change their behavior. The media plays a part in amplifying it. At that point it doesn't matter what is happening at a macro economic level.
I am for introducing nuance to the judgement of a recession or not. I am not for doing it right before numbers are released the admin saying, "Well, there is nuance in the determination" before the numbers are released. At best all you are doing is introducing confusion to the non economic expert citizens and at worst you are attempting to gaslight people.
I hope that helps explain my thoughts.
I am unsure the point you are making. My point was related to mindset and I should have clarified. If a group of people, normal non economic expert citizens, believe a recession is here they change their behavior. The media plays a part in amplifying it. At that point it doesn't matter what is happening at a macro economic level.
I am for introducing nuance to the judgement of a recession or not. I am not for doing it right before numbers are released the admin saying, "Well, there is nuance in the determination" before the numbers are released. At best all you are doing is introducing confusion to the non economic expert citizens and at worst you are attempting to gaslight people.
I hope that helps explain my thoughts.
[deleted]
The news media is not nearly as objective as they claim to be. And, they exercise a considerable amount of discretion when it comes to either amplifying a potential controversy or downplaying it.
That’s because it’s not politically convenient to hold to that definition. When the other party is in the Whitehouse it will be though.
“It’s not about what’s true, it’s what you can get people to believe.”
“It’s not about what’s true, it’s what you can get people to believe.”
Soon people will start disappearing from photos, back to the future style.
Or Stalin Style.
It’s because the media leans democrat. But make no mistake Fox News, BBC, and other moderate or right leaning news sources will call this a recession.
The news has for the most part has not called out Biden’s many missteps. Not even John Oliver is making fun of it.
The news has for the most part has not called out Biden’s many missteps. Not even John Oliver is making fun of it.
Oliver's most recent ditty did roast Biden remarking 'I can taste it. I think he could've done more to roast previous administration policies.
Oh man if you think the BBC is even "moderate" than I have a bridge to sell you.
Yes, BBC isn't moderate just like NPR isn't moderate anymore. May be in the 20th century, BBC and NPR were neutral. But, that's clearly and indisputedly not true anymore. They're all left leaning.
jddddd(1)
jeffbee(3)
> Kind of anazing...
Get used to it. We're back to the status quo (of incompetent media). In fact, it was the same for the previous admin, just in a different way.
The System doesn't like outsiders. If you haven't paid your dues, sucked up, kissed the ring, etc. then you're marginalized. Put another way, how would it look if someone with no experience was decently effective? Say about as effective as the current highly experienced (politician) that's POTUS?
I'm no fan of Don T, but given humam nature and The System, he was doomed to "fail" no matter what. As in, perception is reality (and most people now have a bias that isn't going to change).
Get used to it. We're back to the status quo (of incompetent media). In fact, it was the same for the previous admin, just in a different way.
The System doesn't like outsiders. If you haven't paid your dues, sucked up, kissed the ring, etc. then you're marginalized. Put another way, how would it look if someone with no experience was decently effective? Say about as effective as the current highly experienced (politician) that's POTUS?
I'm no fan of Don T, but given humam nature and The System, he was doomed to "fail" no matter what. As in, perception is reality (and most people now have a bias that isn't going to change).
It's worth adding - especially for the down voters - that prior to leaving The Daily Show, Jon Stewart was the most trusted source for news for a fair percentage of the population. The channel for TDS was on...Comedy Central.
Believing in the mainstream media is the adult equivalent of believing in Santa Claus.
Believing in the mainstream media is the adult equivalent of believing in Santa Claus.
honest question: has there ever been two quarters of negative GDP with this much job growth?
Government forcing people out of their jobs and then allowing them to come back into the work force is not job growth in the sense of anything meaningful. So no it probably hasn't been seen before, but it's irrelevant, if I took your 10 dollars today and gave you back 8 dollars next week, your bank account isn't growing unless you only look at this weeks balance and choose to ignore the extremely recent past.
That doesn't make sense since employment is near capacity right now and the worker shortage is still very real. Mind you this is now long after all the covid benefits have dried up.
The worker shortage is at least partly bc of people leaving the workforce, not just bc of creation of new jobs (compared to pre-Covid 2020).
Employment is higher than it was before Covid and unemployment is down at around the same level. To put it in terms of your metaphor, the bank has given you back $10.10 or so for your $10.
Except it isn't actually higher.
https://www.bls.gov/charts/employment-situation/civilian-lab...
https://www.bls.gov/charts/employment-situation/civilian-lab...
You can quibble with the exact threshold, but it certainly isn’t 80% of pre-Covid employment:
https://www.statista.com/statistics/269959/employment-in-the...
https://fred.stlouisfed.org/series/PAYEMS
https://www.statista.com/statistics/269959/employment-in-the...
https://fred.stlouisfed.org/series/PAYEMS
Certainly not 80%, but by all metrics, both mine and yours, it is still below what it was before.
Actually, 158 is greater than 157.
158 is a projection into the future, not a current number.
It is also not adjusted for population growth, the way labor participation is.
It is also not adjusted for population growth, the way labor participation is.
Those charts don't seem to be lower now than before.
But when you give back the $8, you just need to tell them that "bank account growth" only matters week to week. Boom, they're now $8 richer thanks to you!
According to many of Biden's economic advisers, it is.
For example: "Of course economists have a technical definition of recession, which is two consecutive quarters of negative growth."
-- The head of Biden's National Economic Council, in a past life, apparently.
You can find many other examples in the past of his advisors defining a recession as two quarters of negative GDP. And you can find many examples in the past of the press defining a recession as two quarters of negative growth.
"two negative quarters in a row is a standard indicator for an economic recession."
-- Washington Post, fact checking Donald Trump
What has changed?
For example: "Of course economists have a technical definition of recession, which is two consecutive quarters of negative growth."
-- The head of Biden's National Economic Council, in a past life, apparently.
You can find many other examples in the past of his advisors defining a recession as two quarters of negative GDP. And you can find many examples in the past of the press defining a recession as two quarters of negative growth.
"two negative quarters in a row is a standard indicator for an economic recession."
-- Washington Post, fact checking Donald Trump
What has changed?
What has changed?
The party in power.
The party in power.
If it were Trump in office, that article would been disembowelled all over Twitter
Well. His admin did have some astoundingly incompetent and insane people.
Funny how the news media has been inb4'ing the recession.
[deleted]
It's probably lower. Just like the previous quarter GDP was revised lower.
No.
seems so, although id argue the recession light came on in the cockpit sometime around late 2020...we just chose to ignore it. doubling down on 2010s speculative monetary policy of near negative interest is just wishful thinking, but directing relief grants to multibillion dollar industries was bad comedy.
its really hard to imagine how the fed assumed 'free money' was a sober policy to drive one of the worlds largest economies on. the best we can hope for now is the student and automotive credit bubbles dont burst under the strain of half-percentage-point increases, which i suspect will continue throughout 2023 as inflation crests 15%.
its really hard to imagine how the fed assumed 'free money' was a sober policy to drive one of the worlds largest economies on. the best we can hope for now is the student and automotive credit bubbles dont burst under the strain of half-percentage-point increases, which i suspect will continue throughout 2023 as inflation crests 15%.
Congress and the previous and current administrations are also responsible for the "free money", not just the Fed. Lot of blame to go around.
Is dollar going to stop being world reserve currency with 15% inflation?
Not if the rest of the world is at 30%…
If we survived the economics of the 80s, we can survive the 2020s.
Next, pick a country and its inflation rate. The Euro? https://www.nytimes.com/2022/07/01/business/eurozone-inflati...
Pick another currency that meets the requirements of being a reserve currency and then look at its inflation rate.
Next, pick a country and its inflation rate. The Euro? https://www.nytimes.com/2022/07/01/business/eurozone-inflati...
Pick another currency that meets the requirements of being a reserve currency and then look at its inflation rate.
In the 80s inflation was high, but interest rate was above inflation. This time inflation is 8% above interest rate.
That is the result from the rate of inflation changes being so steep. As it is, the interest rate is being adjusted at the fastest reasonable (and predictable) rate. There were more than a few people shocked with the first 0.75% increase... not so many this past time.
For addressing inflation, the fed's tools are rather blunt (adjusting interest rate). The issues of disrupted logistics and energy cost increases are ones that the fed has little direct control over. The monetary policy tools are being used to the greatest degree they can. The fiscal policy tools have been left rather idle as those require political will to use.
Returning to the reserve currency question - is there another currency that meets the requirements? Saying "the euro" is ok - and that represents the second largest reserve currency holdings, but, if you are pointing to inflation, it is hitting just as hard in Europe. The yen and the pound sterling have their own issues and China's currency has another set of issues.
The crystal ball gazing of "what about 15% inflation and reserve currency" misses out on what is happening to the rest of the world and what can and is being done to address inflation.
For addressing inflation, the fed's tools are rather blunt (adjusting interest rate). The issues of disrupted logistics and energy cost increases are ones that the fed has little direct control over. The monetary policy tools are being used to the greatest degree they can. The fiscal policy tools have been left rather idle as those require political will to use.
Returning to the reserve currency question - is there another currency that meets the requirements? Saying "the euro" is ok - and that represents the second largest reserve currency holdings, but, if you are pointing to inflation, it is hitting just as hard in Europe. The yen and the pound sterling have their own issues and China's currency has another set of issues.
The crystal ball gazing of "what about 15% inflation and reserve currency" misses out on what is happening to the rest of the world and what can and is being done to address inflation.
[deleted]
Not according to many commentators on CNBC.
I don’t understand all the details.
Personally, I think it would be great to understand the economy at a more basic level rather than what’s put out for the general public to consume in the often overly simplified terms.
For example, the condition of the economy vs the Fed raising rates will be interesting.
The Fed is trying to slow the economy but much of the inflation problem is supply side related.
I don’t understand all the details.
Personally, I think it would be great to understand the economy at a more basic level rather than what’s put out for the general public to consume in the often overly simplified terms.
For example, the condition of the economy vs the Fed raising rates will be interesting.
The Fed is trying to slow the economy but much of the inflation problem is supply side related.
CNBC? That’s a great non-partisan source you cited there.
Yes, it is actually pretty good. In the morning, Joe tends to lean a bit right and Andrew leans a bit left.
Ever watch Fox Business? They talk politics all day long. I try to deal with it during commercial breaks but it can’t seem to stick to business.
Ever watch Fox Business? They talk politics all day long. I try to deal with it during commercial breaks but it can’t seem to stick to business.
Are you confusing CNBC with MSNBC?
They clearly have a mix of D R and I.
Have you ever actually watched?
If you want cable news that isn’t complete D good R bad, or the reverse, CNBC is the way to go.
Have you ever actually watched?
If you want cable news that isn’t complete D good R bad, or the reverse, CNBC is the way to go.
I think we all know that if a Republican were President the entire narrative would shift, with most of the press saying we're in recession while Fox, etc would say unemployment is still low which is what matters.
How did we get to a point where actual data can be outright denied or absorbed based on your political viewpoint? It's really pathetic. People will go to the ends of the earth just to protect politicians. Worse, even if we're in recession it's pretty mild, so I don't even know why there is so much handwringing about it.