Jump to content
lokisnow

U.S. Politics: It’s beginning to look a lot like Rescission

Recommended Posts

With Christmas right around the corner,  rescission is coming back (Obamacare was eradicated by a federal judge) and recession is in the air.

oh and with brexit right around the corner, if Great Britain successfully nukes itself, the recession that’s percolating could turn into global financial crisis two (aka GFC2)!

happy holidays!

Share this post


Link to post
Share on other sites

Obamacare hasn't been eradicated by a federal judge.  Are we seriously at the point where if Drudge says so, it goes?

Share this post


Link to post
Share on other sites
21 minutes ago, lokisnow said:

With Christmas right around the corner,  rescission is coming back (Obamacare was eradicated by a federal judge) and recession is in the air.

The word "eradicate" does not mean what you think it means. Also, while there will certainly be a recession eventually and there are some people who are arguing it might come next years, the latter is far from certain and it's even less likely to start in the next few months (the past few quarters have been fine and there's usually some warning before a massive reversal).

Share this post


Link to post
Share on other sites

Now conservative sorts of people, what makes a future recession such an odious prospect?

Well, the current federal funds rate is just a little over 2%. That isn't a lot of room for the FED to cut rates. Just consider the FED rate before 2008 was at about 5% and that still wasn't enough room to cut.

The FED rate:

https://fred.stlouisfed.org/graph/?g=mqKN

In short, we could easily find ourselves right back in a liquidity trap situation. Perhaps that wouldn't be such a problem if half the country ie The Republican Party wasn't such a bunch of flamin' idiots. Obviously fiscal stimulus won't be forthcoming. Which leaves all the heavy lifting to the Central Bank, which will have to engage, in activities that go beyond just setting the short term rate, like purchasing long term assets, price level targeting, or setting a higher inflation target. But, all these possible levers will likely opposed by the conservative clown crew.

In short the combination of a low FED rate and a bunch of idiots, makes potentially for bad situation. Let's hope we don't have a repeat of the last 10 years.

Share this post


Link to post
Share on other sites
3 hours ago, lokisnow said:

With Christmas right around the corner,  rescission is coming back (Obamacare was eradicated by a federal judge) and recession is in the air.

You got to love how various Republicans were running around the country saying they supported the ban on pre-existing conditions, while at the same time backing a lawsuit to undo the ban.

Sounds to me like Republicans politicians simply don't have the courage to say what they really believe, the cowards.

Share this post


Link to post
Share on other sites
3 hours ago, Altherion said:

The word "eradicate" does not mean what you think it means. Also, while there will certainly be a recession eventually and there are some people who are arguing it might come next years, the latter is far from certain and it's even less likely to start in the next few months (the past few quarters have been fine and there's usually some warning before a massive reversal).

As an economic ignoramus, how often are those warning signs identified in advance, rather than in retrospect?

Would the UK committing suicide not count?

Share this post


Link to post
Share on other sites

Yes Judge Reed O'Connor sounds like a real conservative clown bullshit artist.

https://www.vox.com/policy-and-politics/2018/12/14/18141670/obamacare-unconstitutional-texas-judge-strikes-down-reed-o-connor

Quote

To do anything else would be, of course, immodest. As Judge Reed O’Connor writes, courts “are not tasked with, nor are they suited to, policymaking.” Yes, he is literally writing that as he tries to overturn Obamacare with a stroke of his pen. You can almost hear the “lol” he must’ve deleted from the first draft.

“If you were ever tempted to think that right-wing judges weren’t activist — that they were only ‘enforcing the Constitution’ or ‘reading the statute’ — this will persuade you to knock it off,” wrote law professor Nicholas Bagley. “This is insanity in print, and it will not stand up on appeal.”

The fact of the matter is that before the election of FDR conservative judges weren't exactly shy about turning over turning legislation, causing Oliver Wendell Holmes to quip, " The 14th Amendment does not enact Mr. Spencer's Social Statistics."

And it is my understanding that their is a push in conservative legal to go back to the days of Lochner (Make Lochner Great Again!) and who think that ruling was just wonderful.

I'm not real confident in judges' ability to make economic policy.

Quote

But if you want to know why Democrats are suddenly dotting the landscape with new proposals for Medicare-for-all and Medicaid-for-all, this ruling is a useful artifact. The basic idea behind Obamacare was that a public-private system based on Mitt Romney’s Massachusetts reforms would command some Republican support, or at least acceptance, and thus be easier to pass and to expand.

Republicans have proven that theory wrong. Instead, the private-public construction of Obamacare has given opportunistic Republicans their most effective attacks on the bill. Those attacks have been legal, like this assault on the regulations governing private insurance purchase, and political, like the attacks on high deductibles and complex shopping schemes.

 

Quote

But nearly a decade of constant and cynical assault on what was supposed to be a compromise bill has pushed the Democratic Party left on health care policy, and persuaded Democrats everywhere that trying to compromise or placate Republicans is foolish. The legacy of the GOP’s Obamacare repeal strategy won’t be the Affordable Care Act’s destruction, but Medicare-for-all’s construction.

Next time Democrats get a chance to do healthcare again, no real need to bother getting Republican support, since they aren't serious about the matter anyway, it seems. In short, it would seem that "working together" with Republicans leads to the non-cooperate, non-cooperate equilibrium. It looks the only choice here is just to steamroll right over the Republican Party.

At this point, I feel a bit like Conan The Barbarian praying to Crom for revenge.

Edited by OldGimletEye

Share this post


Link to post
Share on other sites

64.5% of registered voters in California voted in the 2018 midterm elections.  This is compared to 42.2% of registered voters that voted in 2014 and 75% of registered voters that voted in 2016

LA county increased its turnout from 31% in 2014 to 57% in 2018. Orange County had 71% turnout.

overall 43% of California ballots were counted after Election Day.

thefive rural counties that were testing a universal vote by mail all voted in higher percentages than the 64.5% average. California will roll out the system to more counties for he 2020 elections, probably also rural, which will probably help statewide republican stuff

https://www.latimes.com/politics/essential/la-pol-ca-essential-politics-may-2018-california-s-november-election-broke-a-1544814167-htmlstory.html#nt=card

Share this post


Link to post
Share on other sites
5 hours ago, OldGimletEye said:

Yes Judge Reed O'Connor sounds like a real conservative clown bullshit artist.

https://www.vox.com/policy-and-politics/2018/12/14/18141670/obamacare-unconstitutional-texas-judge-strikes-down-reed-o-connor

The fact of the matter is that before the election of FDR conservative judges weren't exactly shy about turning over turning legislation, leading Oliver Wendell Holmes to quip, " The 14th Amendment does not enact Mr. Spencer's Social Statistics."

And it is my understanding that their is a push in conservative legal to go back to the days of Lochner (Make Lochner Great Again!) and who think that ruling was just wonderful.

I'm not real confident in judges' ability to make economic policy.

 

Next time Democrats get a chance to do healthcare again, no real need to bother getting Republican support, since they aren't serious about the matter anyway, it seems. In short, it would seem that "working together" with Republicans leads to the non-cooperate, non-cooperate equilibrium. It looks the only choice here is just to steamroll right over the Republican Party.

At this point, I feel a bit like Conan The Barbarian praying to Crom for revenge.

Absolutely correct. The case for Medicare For All or UHC just got that much stronger.

Screw the Republicans. I've come to the conclusion that they're pure evil and the sooner we consign them to the dustbin of history the better off we'll all be. Run roughshod over them with a big "f you" and do what should have been done in the first place. 

Share this post


Link to post
Share on other sites
11 hours ago, Altherion said:

The word "eradicate" does not mean what you think it means. Also, while there will certainly be a recession eventually and there are some people who are arguing it might come next years, the latter is far from certain and it's even less likely to start in the next few months (the past few quarters have been fine and there's usually some warning before a massive reversal).

I'm actually responding to a post from the last thread, Altherion (I don't know how to quote outside of threads!). You wrote: "I doubt it. There's a significant difference in attitude towards poor people who don't make enough to pay taxes and rich people who play various games with the tax code to minimize their tax exposure. The same goes for poor people who get money from the government via the EITC and similar programs and rich people who get corporate subsidies. For example, the crowd protesting against Amazon's recent $3B subsidies in New York City is quite different from the one that opposes welfare and the like."

 

I find this really interesting now that you mention it. Why is it okay for the rich to mess with the tax system, but for the poor or working class, it's considered an assault against the country? I just can't see a logical reason for this--I mean, I believe the rationale is that once you've gotten rich, you've somehow "earned" it. But if this country allowed you to be rich, shouldn't your sense of patriotism kick in (of course not, I know, this is just the logical argument I think)? If you make a ton of money, how much should you give back to support your country's infrastructure and those less fortunate? It has to be obvious that not everyone can be rich, but with some giving back (and I believe in a heavy tax rate for people making a million plus a year), you can support a better quality of life for every American.

Of course I know how silly this sounds--appealing to the patriotic nature of the heartless, dead-inside rich!

Share this post


Link to post
Share on other sites
31 minutes ago, Crazy Cat Lady in Training said:

Absolutely correct. The case for Medicare For All or UHC just got that much stronger.

Screw the Republicans. I've come to the conclusion that they're pure evil and the sooner we consign them to the dustbin of history the better off we'll all be. Run roughshod over them with a big "f you" and do what should have been done in the first place. 

I absolutely think they are pure evil too. There is no moral goodness left in that party aside from a few outliers (I think John Kasich has some good morals, though he is also an enemy of teachers--or perhaps teacher unions, and I chalk this up to him being misinformed more than being in the pocket of some wealthy donor). Either way, the Republicans are represented by Mitch McConnell and Donald Trump and both of these men have shown a willingness to put themselves (and their positions of power) over the good of the country. 

Mulvaney as the new Chief of Staff is another problem. While it's almost funny that Trump can't get anyone but a low level ass kissing goon to do this important job, Mulvaney is a monster. He hates America's lower classes. And he'll do anything Trump says.

These guys hurt our fellow countrymen by cutting entitlements (entitlements meaning, to me, that every American has a right to a good supply of food and affordable housing). They have ignored climate change so long, obstructed progress so long, that my son and someday his children will likely live in a terrible environment. These people are monsters, and they have to go. Sometimes I hear people say, "These old men will die out then things will get better." There isn't time to wait for them to die out. But how can we convince Americans that these people are hurting them? To vote them out? We can't. And it's scary.

Share this post


Link to post
Share on other sites

Trump named a sad muppet to CoS. Thick and Mulvaney should make a disastrous pairing

Edited by Morpheus

Share this post


Link to post
Share on other sites
7 hours ago, Which Tyler said:

As an economic ignoramus, how often are those warning signs identified in advance, rather than in retrospect?

Would the UK committing suicide not count?

It's practically impossible to predict one-off events and even without them the warning signs are not unambiguous. The people arguing that a recession will come in 2019 claim that some of these signs are already here (or almost here). For example, the yield difference between long term and short term US Treasury bonds is fairly small and even briefly went below zero for some maturities earlier this month. People refer to this as an "inverted yield curve" and it is a pretty good forecaster of recessions... but of course hasn't actually inverted yet.

The people who have access to nearly all information on the matter (including the one-off possibilities) and are the closest to being neutral experts work for the Federal Reserve and they're still raising the federal funds rate (or at least that's what everyone expects -- see what happens this Tuesday). As long as this is the case, I'd be wary of people crying recession -- although of course it is certainly possible.

Share this post


Link to post
Share on other sites
1 hour ago, Altherion said:

It's practically impossible to predict one-off events and even without them the warning signs are not unambiguous. The people arguing that a recession will come in 2019 claim that some of these signs are already here (or almost here). For example, the yield difference between long term and short term US Treasury bonds is fairly small and even briefly went below zero for some maturities earlier this month. People refer to this as an "inverted yield curve" and it is a pretty good forecaster of recessions... but of course hasn't actually inverted yet.

The people who have access to nearly all information on the matter (including the one-off possibilities) and are the closest to being neutral experts work for the Federal Reserve and they're still raising the federal funds rate (or at least that's what everyone expects -- see what happens this Tuesday). As long as this is the case, I'd be wary of people crying recession -- although of course it is certainly possible.

Experts are 100% accurate at predicting recessions, three months after said recession started.

before they start? experts are about 7% accurate at predicting recessions. Right now, many indicators point to recession (every investment category is ending the year down, the market is on a month long downturn, the yield curve has inverted, China is all of a sudden panicking re tariffs, the fed is spooked off of interest rate raises, the big funds are exiting the market for safe havens en masse, car makers are closing factories and making massive layoffs) etc, but the experts are all singing their usual pre-recession "la la la nothing to see here" song that they always sing before a recession (and somehow they always make out like bandits exiting the top of the market) perhaps their singing invokes the confidence fairy and buys them time to cover their exposes asses?

Share this post


Link to post
Share on other sites
30 minutes ago, lokisnow said:

before they start? experts are about 7% accurate at predicting recessions.

Be fascinated where/how you got that figure considering different experts predict different things at different times.  Really tough thing to reliably operationalize.

Share this post


Link to post
Share on other sites
18 minutes ago, DMC said:

Be fascinated where/how you got that figure considering different experts predict different things at different times.  Really tough thing to reliably operationalize.

It's the internet.

Unattributed statistics are for illustration, not accuracy.

After all 87.4% of internet statistics are made up on the spot!

Share this post


Link to post
Share on other sites
15 minutes ago, Which Tyler said:

It's the internet.

Unattributed statistics are for illustration, not accuracy.

After all 87.4% of internet statistics are made up on the spot!

As 90.3% of the people reading them know.

Share this post


Link to post
Share on other sites
57 minutes ago, DMC said:

Be fascinated where/how you got that figure considering different experts predict different things at different times.  Really tough thing to reliably operationalize.

I was remembering an article I read yesterday and both my memory and mental math were wrong, it's actually 3.33% accurate at predicting recessions:

https://www.bloomberg.com/news/articles/2018-12-14/recession-signal-hard-to-miss-if-stocks-are-taken-at-their-word?srnd=premium

Loungani previously reported that only two of the 60 recessions of the 1990s had been anticipated a year in advance.

it was even worse for 2009, as zero of 49 recessions around the globe in that year were predicted ahead of time.

***

TLDR, the Smart money is getting out and shouting really really really loudly to the dumb money (not suspicious how loudly they're shouting) that everything is fine.

Share this post


Link to post
Share on other sites
57 minutes ago, lokisnow said:

I was remembering an article I read yesterday and both my memory and mental math were wrong, it's actually 3.33% accurate at predicting recessions

Yeah the sentence before what you quoted reads:

Quote

Meanwhile, a 2014 study by Prakash Loungani of the International Monetary Fund found that not one of 49 recessions suffered around the world in 2009 had been predicted by the consensus of economists a year earlier.

How the hell are they measuring "the consensus of economists?"

Share this post


Link to post
Share on other sites
10 hours ago, Simon Steele said:

I find this really interesting now that you mention it. Why is it okay for the rich to mess with the tax system, but for the poor or working class, it's considered an assault against the country? I just can't see a logical reason for this--I mean, I believe the rationale is that once you've gotten rich, you've somehow "earned" it. But if this country allowed you to be rich, shouldn't your sense of patriotism kick in (of course not, I know, this is just the logical argument I think)? If you make a ton of money, how much should you give back to support your country's infrastructure and those less fortunate?

There is some effort to portray corporate welfare as a bad thing, but it's not at the same level as the portrayal of payments to the poor. In other words, there isn't an entire party unanimously against it. For example, Amazon's plan for New York was supported by both the mayor of New York City and the governor of New York State -- both of whom are Democrats. There are some Democrats (and also some Republicans) against it, but usually this winds up being more or less the losers vs. the winners with a few "This is terrible!" people thrown in on the losing side. The same thing happens when the politicians giving away resources are Republican: there is some infighting and criticism from the other side, but it's not coherent.

Furthermore, there's a threshold at zero which I suspect is not trivial. Our tax code is designed so that it takes either an expert or some fairly sophisticated software to figure out what any given individual's or organization's contribution should be. There's all sorts of loopholes, exceptions, special cases, etc. etc. and practically everyone tries to game the system to minimize what they pay. Even in the case of large corporations, a tax break may, at least in theory, be a good thing for everyone. For example, if Amazon was expanding not into New York City (which is already a global hub), but to some place that was in desperate need of jobs, it would still pay some taxes (even after the break) and employ tens of thousands of people who will also pay taxes so it makes sense to lure it with a giveaway. However, when an individual or a private organization gets back more in taxes than they pay, this person or group had better be doing something really valuable for the community... and in the case of poor people, this is usually not the case.

Share this post


Link to post
Share on other sites
Guest
This topic is now closed to further replies.

×