Author Topic: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?  (Read 2808 times)

ctuser1

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https://www.nytimes.com/2021/02/02/opinion/sunday/democrats-economy.html

Finally!! A mainstream media article on the 800lb gorilla

Anyone who ever looked at the data (especially the jobs data) would come to the same conclusion beyond all reasonable statistical doubt - that Republican administrations are horrible for the economy, at least when compared to the Democrats.

This is intuitive too! Championing vodoo economics and shunning experts WILL take it's toll on the economy.

Even so, I'm struck by the almost-religious belief among many people that the Democrats are "bad for business"!

It isn't quite possible (or desirable IMO) to directly counter Faux/Sinclair/Koch-army! But at a minimum, there should be much broader discussion on something that is of critical importance to the well-being of the US economy.

« Last Edit: February 02, 2021, 04:38:20 PM by ctuser1 »

Bloop Bloop Reloaded

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #1 on: February 02, 2021, 06:39:47 PM »
It depends on whether you see growth as being necessarily good for the economy.

Here in Australia the government spent massive amounts of stimulus during covid, to the point where household disposable income jumped massively (because of increased government payments). This has led to rampant inflation - CPI at 0.9% last quarter alone. I've anecdotally noticed a large increase in the price of food and entertainment.

If your view is that inflation is okay because it supports jobs etc (this is the mainstream view), then that's a good thing. You lose a little purchasing power and some economic efficiency in order to keep the beast well-fed and keep more people in jobs.

if your view is that we need to keep inflation down to keep efficiency and productivity high and benefit savers and those who are prudent with money, then a growing economy can be a bad thing if it's not growing organically.

Malcat

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #2 on: February 02, 2021, 06:46:44 PM »
Facts tend to get in the way of good narratives, so most people prefer to ignore them.

Myths are powerful forces to try and deconstruct.

ctuser1

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #3 on: February 02, 2021, 06:47:00 PM »
It depends on whether you see growth as being necessarily good for the economy.

I view private sector job growth as the "real" measure of the economy.

GDP growth is more of a fictitious number that does not correspond to anything real in the economy - jobs do. This also has "real" implications in how history is written.

e.g. in a world where GDP growth is championed over and above jobs, Reagan would be considered to have been a more "effective" president over Carter. When you measure job growth, IMO, you get a very different picture.

 
« Last Edit: February 02, 2021, 06:51:15 PM by ctuser1 »

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #4 on: February 02, 2021, 07:02:27 PM »
I would see productivity growth as the best measure.

ctuser1

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #5 on: February 02, 2021, 07:19:34 PM »
I would see productivity growth as the best measure.

Productivity = GDP / hours worked.

https://www.investopedia.com/terms/p/productivity.asp

GDP is a bad measure because:
1. It is disconnected from "real" reality. If you and I trade a bitcoin 100 times back and forth, we have raised the GDP by 100 X 1BTC.
2. It has much higher inertia than job growth. Business hire in "anticipation" of growth.

Productivity growth has problem #1, but a little less. It is issue #2 that kills productivity as a good measure of a political administration. Productivity growth is very sticky and plays out over a very long time. Measuring productivity growth in a couple of decade intervals is meaningful, over 4 year intervals it is meaningless.


BicycleB

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #6 on: February 02, 2021, 08:59:52 PM »
It's possible that immediate job growth or decline is not so meaningful either, at least as a measure of the overall impact of a President.

For example, imagine a president whose technique to generate a little bit of job growth in ordinary times is spending financed by heavy government debt. It could be that the debt slows down future growth in jobs as well as GDP, because said government lacks the ability to borrow during future crises when the spending would have greatest impact. Either phase, the initial spending or the later crisis, could involve Republican or Democratic Presidents. The President in crisis could be falsely viewed as "bad" for jobs as an effect of a previous President who was "good" for jobs, because the long term effect is falsely assigned to the new President.

ctuser1

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #7 on: February 02, 2021, 09:26:09 PM »
It's possible that immediate job growth or decline is not so meaningful either, at least as a measure of the overall impact of a President.

For example, imagine a president whose technique to generate a little bit of job growth in ordinary times is spending financed by heavy government debt. It could be that the debt slows down future growth in jobs as well as GDP, because said government lacks the ability to borrow during future crises when the spending would have greatest impact. Either phase, the initial spending or the later crisis, could involve Republican or Democratic Presidents. The President in crisis could be falsely viewed as "bad" for jobs as an effect of a previous President who was "good" for jobs, because the long term effect is falsely assigned to the new President.

That possibility is specifically addressed in the article:
Quote
First, it’s worth rejecting a few unlikely possibilities. Congressional control is not the answer. The pattern holds regardless of which party is running Congress. Deficit spending also doesn’t explain the gap: It is not the case that Democrats juice the economy by spending money and then leave Republicans to clean up the mess. Over the last four decades, in fact, Republican presidents have run up larger deficits than Democrats.

That leaves one broad possibility with a good amount of supporting evidence: Democrats have been more willing to heed economic and historical lessons about what policies actually strengthen the economy, while Republicans have often clung to theories that they want to believe — like the supposedly magical power of tax cuts and deregulation. Democrats, in short, have been more pragmatic.

A trend persisting for a century is a heck of a pattern to be explained away by randomness/chance/noise. It's possible, but extremely unlikely.

----------------------------------

The hypothetical scenario you had proposed actually happened for Carter. The oil crisis + the Volcker Fed raising the interest rates precipitated a recession.

If anything, that impacted the democratic scorecard.
« Last Edit: February 02, 2021, 09:32:39 PM by ctuser1 »

Gin1984

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #8 on: February 02, 2021, 09:56:32 PM »
It depends on whether you see growth as being necessarily good for the economy.

Here in Australia the government spent massive amounts of stimulus during covid, to the point where household disposable income jumped massively (because of increased government payments). This has led to rampant inflation - CPI at 0.9% last quarter alone. I've anecdotally noticed a large increase in the price of food and entertainment.

If your view is that inflation is okay because it supports jobs etc (this is the mainstream view), then that's a good thing. You lose a little purchasing power and some economic efficiency in order to keep the beast well-fed and keep more people in jobs.

if your view is that we need to keep inflation down to keep efficiency and productivity high and benefit savers and those who are prudent with money, then a growing economy can be a bad thing if it's not growing organically.
We've had that increase in groceries here in the US without any increase in disposable income. Could it just be that supplies are limited so costs go up?

deborah

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #9 on: February 02, 2021, 10:25:28 PM »
It depends on whether you see growth as being necessarily good for the economy.

Here in Australia the government spent massive amounts of stimulus during covid, to the point where household disposable income jumped massively (because of increased government payments). This has led to rampant inflation - CPI at 0.9% last quarter alone. I've anecdotally noticed a large increase in the price of food and entertainment.

If your view is that inflation is okay because it supports jobs etc (this is the mainstream view), then that's a good thing. You lose a little purchasing power and some economic efficiency in order to keep the beast well-fed and keep more people in jobs.

if your view is that we need to keep inflation down to keep efficiency and productivity high and benefit savers and those who are prudent with money, then a growing economy can be a bad thing if it's not growing organically.
We've had that increase in groceries here in the US without any increase in disposable income. Could it just be that supplies are limited so costs go up?
Food harvest is a problem - we usually have backpackers and Pacific Islanders doing a lot of it, but they’ve been locked out by covid19 restrictions, so food is rotting in the fields. Entertainment will probably cost more per person because of the restrictions. This has been known for months, and doesn’t equate to inflation or higher wages. In fact the RBA is trying to get inflation to rise.

Bloop Bloop Reloaded

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #10 on: February 02, 2021, 10:33:00 PM »
Personally, I'd be happy with deflation, or at least stagnation, unless organic demand compels inflation.

BicycleB

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #11 on: February 02, 2021, 11:36:26 PM »
It's possible that immediate job growth or decline is not so meaningful either, at least as a measure of the overall impact of a President.

For example, imagine a president whose technique to generate a little bit of job growth in ordinary times is spending financed by heavy government debt. It could be that the debt slows down future growth in jobs as well as GDP, because said government lacks the ability to borrow during future crises when the spending would have greatest impact. Either phase, the initial spending or the later crisis, could involve Republican or Democratic Presidents. The President in crisis could be falsely viewed as "bad" for jobs as an effect of a previous President who was "good" for jobs, because the long term effect is falsely assigned to the new President.

That possibility is specifically addressed in the article:
Quote
First, it’s worth rejecting a few unlikely possibilities. Congressional control is not the answer. The pattern holds regardless of which party is running Congress. Deficit spending also doesn’t explain the gap: It is not the case that Democrats juice the economy by spending money and then leave Republicans to clean up the mess. Over the last four decades, in fact, Republican presidents have run up larger deficits than Democrats.

That leaves one broad possibility with a good amount of supporting evidence: Democrats have been more willing to heed economic and historical lessons about what policies actually strengthen the economy, while Republicans have often clung to theories that they want to believe — like the supposedly magical power of tax cuts and deregulation. Democrats, in short, have been more pragmatic.

A trend persisting for a century is a heck of a pattern to be explained away by randomness/chance/noise. It's possible, but extremely unlikely.

----------------------------------

The hypothetical scenario you had proposed actually happened for Carter. The oil crisis + the Volcker Fed raising the interest rates precipitated a recession.

If anything, that impacted the democratic scorecard.

I think we're trying to address different questions, so you are misunderstanding me.

I'm not trying to argue Dems vs Repubs. I'm saying that the main evidence quoted in the thread - number of jobs during a president's term - doesn't logically prove anything if the duration of the biggest effects is different from the timeframe being assumed.

The article has that cool moving chart that "proves" its point by showing the data for immediate effect upon taking office, a six month time lag and a year time lag. It does not address effects that take longer periods such as a decade, nor does the show much consideration of such long timeframes.

PS. I see the comment that a quote from the article addresses my point, but respectfully, the quote doesn't give an adequate analysis. Yes it briefly considers that one president's actions can have effects in another's term, but that part of quote assumes a partisan argument that I did not make, and therefore supports its point with a partisan analysis. The evidence it does cite - that Republicans run larger deficits - could be significant, but someone would have to find a way to determine the timing when that has its biggest effect, and also the timing when other policies discussed in the article have their biggest effect, combine the various effects over time (or separate them analytically despite their real life overlap) and show causation. That seems tricky to me and it's not at all clear from what the author writes that it was seriously tried. The rest of the article's discussion assumes short term results as the important ones.
« Last Edit: February 03, 2021, 12:15:57 AM by BicycleB »

ctuser1

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #12 on: February 03, 2021, 05:26:12 AM »
I'm not trying to argue Dems vs Repubs. I'm saying that the main evidence quoted in the thread - number of jobs during a president's term - doesn't logically prove anything if the duration of the biggest effects is different from the timeframe being assumed.

The article has that cool moving chart that "proves" its point by showing the data for immediate effect upon taking office, a six month time lag and a year time lag. It does not address effects that take longer periods such as a decade, nor does the show much consideration of such long timeframes.

PS. I see the comment that a quote from the article addresses my point, but respectfully, the quote doesn't give an adequate analysis. Yes it briefly considers that one president's actions can have effects in another's term, but that part of quote assumes a partisan argument that I did not make, and therefore supports its point with a partisan analysis. The evidence it does cite - that Republicans run larger deficits - could be significant, but someone would have to find a way to determine the timing when that has its biggest effect, and also the timing when other policies discussed in the article have their biggest effect, combine the various effects over time (or separate them analytically despite their real life overlap) and show causation. That seems tricky to me and it's not at all clear from what the author writes that it was seriously tried. The rest of the article's discussion assumes short term results as the important ones.

There has been serious research on this - FYI, and this paper has even be obliquely referenced in the NYT article : https://www.princeton.edu/~mwatson/papers/Presidents_Blinder_Watson_Nov2013.pdf.

Final two paragraphs from the conclusion from this paper:
Quote
It seems we must look instead to several variables that are mostly “good luck.” Specifically, Democratic presidents have experienced, on average, better oil shocks than Republicans, a better legacy of (utilization-adjusted) productivity shocks, and more optimistic consumer expectations (as measured by the Michigan ICE). The latter comes tantalizingly close to a self-fulfilling prophecy in which consumers correctly expect the economy to do better under Democrats, and then make that happen by purchasing more consumer durables. But direct measures showing increasing optimism after Democrats are elected are hard to find.

These three “luck” factors together (oil, productivity, and ICE) explain 46-62% of the 1.80 percentage point D-R growth gap. The rest remains, for now, a mystery of the still mostly unexplored continent. The word “research,” taken literally, means search again. We invite other researchers to do so.

TL;DR:
1. Luck plays a role, and explains about half of the gap in growth (not jobs, where difference is MUCH bigger).
2. They set up many other plausible hypothesis (e.g. fiscal/monetary policy) and disprove them. You are basically trying to argue this point as hypotheticals - it has been addressed in this paper. e.g. your "timing" question would be specifically countered by the "Trends and mean reversion" chapter in this paper. Much of the other statistical tools would also implicitly counter it. e.g. very simplistic approach, not taken in this paper probably because it would seem silly in a serious economic research - if you only take the second/third terms of same-party-presidency - does the effect disappear? But there are other, more serious statistical tests in the paper disproving some of this simpler counters like the ones you are proposing to disprove the result.

If you were a professor guiding my PhD thesis in economics, then I would probably not propose such a partisan and "useless" topic for my PhD dissertation. I would likely not even present a conference paper with the level of evidence that exists without basically giving a "I dunnno" answer in the end - just like Blinder and Watson did. If I did any of that, you or anyone else would be more than justified in handing me my a*se backwards.

That ivory tower criticism, however, does not address the problem that Heritage/AEI and the rest of the right wing propaganda network has basically run away with the narrative exactly backwards and brainwashed most of the American population.

How do you address that?
 
Option 1: Set up an easy to disprove hypothesis like "No, economic data does not suggest Republican presidents are better for the economy. Arguably, a lot of data exists tentatively indicating just the opposite, subject to further serious research.".

Option 2: Ignore the easy to disprove, partisan hypothesis; set up a goal that is worthy of serious research; try to find evidence for such positive hypothesis; and conclude "I dunno".

To me, it seems Option 2 is better when deciding the topic for a PhD dissertation, while Option 1 is infinitely better when dealing with the likes of Heritage/AEI/Faux/Sinclair.

Do Heritage/AEI/Faux/Sinclair provide the standard of evidence demanded by option 2 (that you seem to be demanding) when dealing with this topic?
« Last Edit: February 03, 2021, 06:49:01 AM by ctuser1 »

BicycleB

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #13 on: February 03, 2021, 06:11:14 PM »

There has been serious research on this - FYI, and this paper has even be obliquely referenced in the NYT article : https://www.princeton.edu/~mwatson/papers/Presidents_Blinder_Watson_Nov2013.pdf.

Final two paragraphs from the conclusion from this paper:
Quote
It seems we must look instead to several variables that are mostly “good luck.” Specifically, Democratic presidents have experienced, on average, better oil shocks than Republicans, a better legacy of (utilization-adjusted) productivity shocks, and more optimistic consumer expectations (as measured by the Michigan ICE). The latter comes tantalizingly close to a self-fulfilling prophecy in which consumers correctly expect the economy to do better under Democrats, and then make that happen by purchasing more consumer durables. But direct measures showing increasing optimism after Democrats are elected are hard to find.

These three “luck” factors together (oil, productivity, and ICE) explain 46-62% of the 1.80 percentage point D-R growth gap. The rest remains, for now, a mystery of the still mostly unexplored continent. The word “research,” taken literally, means search again. We invite other researchers to do so.

TL;DR:
1. Luck plays a role, and explains about half of the gap in growth (not jobs, where difference is MUCH bigger).
2. They set up many other plausible hypothesis (e.g. fiscal/monetary policy) and disprove them. You are basically trying to argue this point as hypotheticals - it has been addressed in this paper. e.g. your "timing" question would be specifically countered by the "Trends and mean reversion" chapter in this paper.

Thanks for the info! I accept my concerns as met.




talltexan

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #14 on: February 11, 2021, 11:30:15 AM »
I've thought that the problem is that we're using the party of the President rather than accounting for the "super cycles" of power.

The middle third of the twentieth century was dominated by progress through the New Deal and Civil rights (think of it as the FDR-LBJ era). It took a fantastically conservative backlash to the to position Reagan in the WH and show the way to our current supercycle of conservative dominance (think of it as the Reagan-Gingrich-McConnell era).

Eisenhower may have been President, but liberals were very much setting the agenda during the 1950s and 1960s, sort of the way Clinton and Obama were forced to triangulate from the right to achieve anything meaningful during the current super-cycle.

J Boogie

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #15 on: February 11, 2021, 11:41:17 AM »
To answer the question the article poses, the Reagan administration and the intense landslide that gave him his 2nd term kind of reinforces the idea that small-gov Repubs are good for the economy. His classic quote that govt is the problem, not the solution comes to mind.

Whether it was causation or correlation is beside the point for the article; for millions of Americans his presidency solidified the idea that a Republican president will equal a ~150% increase in the DJIA over their 2 terms.

Never mind equal/greater increases occurred during Obama's and Clinton's tenures respectively - if you have the story to point to as a Republican that treehugger Jimmy Carter tried and failed to revive the economy and freedom lover Ronald Reagan succeeded, you point to that story.

It's a great rhetorical device to have on your side especially as things become a lot less clear cut and easily digestible moving forward.


ctuser1

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #16 on: February 20, 2021, 09:56:38 PM »
I've thought that the problem is that we're using the party of the President rather than accounting for the "super cycles" of power.

The middle third of the twentieth century was dominated by progress through the New Deal and Civil rights (think of it as the FDR-LBJ era). It took a fantastically conservative backlash to the to position Reagan in the WH and show the way to our current supercycle of conservative dominance (think of it as the Reagan-Gingrich-McConnell era).

Eisenhower may have been President, but liberals were very much setting the agenda during the 1950s and 1960s, sort of the way Clinton and Obama were forced to triangulate from the right to achieve anything meaningful during the current super-cycle.

If you take the jobs numbers, and try to discount any such patterns to see if a counter-narrative emerges or not, you will notice that nothing like that is there.

My professional training is as an Engineer. I like to think of this as a signal vs. noise issue. You can try to frame any test on the raw jobs numbers, and will quickly realize that the signal has been so strong and consistent that no plausible noise would come close to explaining it. Democratic administrations have tended to add a lot more - double - as many jobs as Republican administrations do.

Unfortunately the one or two academic papers on this topic only focus on growth numbers, and not jobs. I suspect that may be because they want to reach a somewhat ambivalent conclusions and to avoid being branded a biased partisan.


talltexan

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #17 on: February 22, 2021, 09:49:59 AM »
I remember living through 1992 at a time when GDP growth was high, but the labor market led many to believe that the economy was still bad. I think the economic signals that affect voting are more salient when they're grounded in jobs than in GDP, which is not available as soon and is noisier.

I doubt any economists are unaware of the political winds when they work on these studies. Many embrace them, even, as their funding comes from organizations that try to influence them. Indeed, some I know would love nothing better than to randomly choose the President and see what happens.

As I type this, I realize that this is kind of what we go in 2000.

Bloop Bloop Reloaded

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #18 on: February 22, 2021, 01:29:30 PM »
I don't think the government is there to 'create' jobs. That's for private industry. Creating unnecessary or inefficient jobs leads to inflation and hurts the financially prudent.

PKFFW

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #19 on: February 22, 2021, 07:14:41 PM »
I don't think the government is there to 'create' jobs. That's for private industry. Creating unnecessary or inefficient jobs leads to inflation and hurts the financially prudent.
Deflation from high unemployment also hurts the financially prudent, it's just not as obvious.

Bloop Bloop Reloaded

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #20 on: February 22, 2021, 07:26:27 PM »
Deflation is mainly a good thing for the financially prudent. Inflation is like a rising tide that lifts all boats but makes it harder for your relative purchasing power to increase. Deflation is a receding tide that shows who's swimming naked. Those with a healthy income and asset position stand to do better in relative terms from deflation.


PKFFW

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #21 on: February 22, 2021, 08:51:56 PM »
Deflation is mainly a good thing for the financially prudent. Inflation is like a rising tide that lifts all boats but makes it harder for your relative purchasing power to increase. Deflation is a receding tide that shows who's swimming naked. Those with a healthy income and asset position stand to do better in relative terms from deflation.
The negative consequences can be found in your quoted statement.  As I mentioned though, they are not as obvious as the effects of inflation though.

Bloop Bloop Reloaded

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #22 on: February 22, 2021, 08:55:46 PM »
Every negative has a positive and vice versa.

ctuser1

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #23 on: February 22, 2021, 09:11:40 PM »
I think it is a valid point that a Soviet style jobs for life program is a very bad idea for any economy.

I'd argue that failed libertarian ideas are worse in the present context, however. e.g. The idea of the mythical libertarian ubermensch, who apparently doesn't rely an iota on the wider economic system and hence only stands to benefit from a deflation despite the stress it causes on the wider economic system. It causes a lot of wrongheaded policies in the US Economy and exacts a terrible toll on it.

We aren't talking about the theoretical. The context is failed libertarian policies in the US. Had the context been recovery from the failed soviet policies in 90's Russia, it would have been much more logical to be more scared of the "socialist" ideas than "libertarian" ones. In this day and age however, the typical American concept of "libertarianism" (e.g. "deflation" is "good") is the clear and present danger for the economy I inhabit. I can understand the theoretical concern for the danger that the soviet style jobs program could pose, but that is simply not very relevant while discussing the US job/payroll numbers for the past 50+ years.

------------

On second reading, my post reads like an attack. It isn't meant to be, however!

Please realize that as "self sufficient" you decide you are, you are actually dependent on a symbiotic relationship with the "society" or "markets" the moment you choose to store economic value that you hope to redeem X years in the future. There is very little economic consumption that you can store on your own. Maybe you can store a bag of dry rice for a few years. But when you are looking to redeem stored value 10/20/30 years hence, you are basically relying on society to grant you a part of it's economic output at that point in return for a piece of otherwise useless paper (or a piece of shiny, useless metal) from 30 years ago.

A real deflation causes extremely high economic turbulence. Most of the time it causes major macro issues. Even when it may not (e.g. I've seen economists claim that US economy from 1800 - 1900 was claimed to have "deflated" for "good" reasons), at a minimum it came with multiple great-depression level crashes. None of this is likely "desirable" by anybody, even the winners, who lived through it. How do I know? Well, I was a survivor/winner of the 2008 crisis where I basically survived when 90%+ of my co-workers got laid off around me, and my position was eliminated twice and I barely found something else to survive in my job by the skin of my teeth. I have people in my linkedin friends list who literally went from being a million-dollar-a-year-trader-in-hedge-fund to a realtor-in-new-jersey today. '08 was much milder compared to multiple of the depressions that happened in the US in 1800's. So I can only imagine what the farmer in Kansas or Pennsylvania - who won in the end - must have felt going through them every so many years like clockwork. Living in Australia, which had no recessions for 30+ years before COVID, maybe you see reality differently than I do.

The foundational idea of the Libertarian philosophy is freeloading, i.e. to deny or minimize such reliance on society even when taking full advantage of them. They basically want all the benefits of such social system, while eschewing their own responsibility in maintaining that system. I'd request you to please resist that temptation.
« Last Edit: February 23, 2021, 05:46:42 AM by ctuser1 »

PKFFW

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #24 on: February 22, 2021, 11:18:19 PM »
Every negative has a positive and vice versa.
Maybe, maybe not.

My point was that even the financially prudent stand to lose from a deflationary cycle.  An unbiased look at most research would tend to lead one to the conclusion that low level inflation (which is the worst case scenario being discussed here if the Government were to embark on a jobs program through infrastructure projects and the like) is a much, much better problem to have than deflation.  Even for the financially prudent.

talltexan

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #25 on: February 23, 2021, 07:15:35 AM »
I believe the 2016 Republican platform still calls for a return to the gold standard. There's your deflation.

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #26 on: February 23, 2021, 08:26:31 AM »
To answer the question the article poses, the Reagan administration and the intense landslide that gave him his 2nd term kind of reinforces the idea that small-gov Repubs are good for the economy. His classic quote that govt is the problem, not the solution comes to mind.

Whether it was causation or correlation is beside the point for the article; for millions of Americans his presidency solidified the idea that a Republican president will equal a ~150% increase in the DJIA over their 2 terms.

Never mind equal/greater increases occurred during Obama's and Clinton's tenures respectively - if you have the story to point to as a Republican that treehugger Jimmy Carter tried and failed to revive the economy and freedom lover Ronald Reagan succeeded, you point to that story.

It's a great rhetorical device to have on your side especially as things become a lot less clear cut and easily digestible moving forward.

What we are hopefully starting to understand now though in the current political environment is that Reagan made a bunch of short-term trade-offs that in the long run ended with labor getting the short end of the stick.

Reagan is responsible for the destruction of unions, failure to keep the minimum wage at a reasonable level, privitization of government work, and the giant monopolizations of almost every industry. At the time, those industries promised reduced costs that would be passed on to the end consumer.

That was true for a while, but corporations made sure to take larger chunks for themselves too.

Politically, there really isn't a difference between Reagan and Trump. They actively worked against the long-term interests of labor and did everything they could to consolidate power into private corporations that in return fund their campaigns.

I don't blame anyone who voted for Reagan at the time, but in hindsight, Reagan's destruction of the American economy should be completely apparent.

Bloop Bloop Reloaded

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #27 on: February 23, 2021, 02:34:15 PM »
I don't think there's a dichotomy between labor and capital. Each of us every time we invest in shares, or start a small business from home, or get promoted to 'partner' in a firm, are mixing the distinction between labor and capital. So many of my friends and colleagues are now partners at firms, having started from humble roots. As long as there is a workable path for the talented to do this, I'm not too bothered.

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #28 on: February 24, 2021, 11:07:05 AM »
I don't think there's a dichotomy between labor and capital. Each of us every time we invest in shares, or start a small business from home, or get promoted to 'partner' in a firm, are mixing the distinction between labor and capital. So many of my friends and colleagues are now partners at firms, having started from humble roots. As long as there is a workable path for the talented to do this, I'm not too bothered.

I'm glad that upward mobility is still the rule of things in Australia.

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #29 on: February 24, 2021, 12:30:53 PM »
Here in Canada we play a similar game.  The right wing Conservative party campaigns on fiscal responsibility and being pro-business.  When elected they repeatedly, consistently rack up the national debt while cutting taxes for the wealthy.

Sooner or later they lose an election, and the centrist Liberal party gets in.  Their track record on debt and spending is comparable, though they tend to spend it on things rather than just hand out tax cuts.

In some provinces we occasionally get saddled with the NDP (democratic socialist-ish), who inflict 4 or more years of competent governance, and usually leave office with some kind of budget surplus and a net increase in average income.  Immediately the 'fiscally responsible' pro business party takes over and starts racking up big debts again while doing nothing to help the economy or the people.

Cultural myths are hard to counter with evidence or facts because they aren't based on those things.

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #30 on: February 26, 2021, 05:36:03 AM »
I think an important part is who benefits from each set of party policies. Generally, the richest benefit more from right-wing policies, because it allows them to concentrate more wealth in their greedy tiny hands. Left-wing policies tend to redistribute wealth to general society, which (up to a point) is better for the economy as a whole, as enables more overall economic activity and results in more job creation.

Since a lot of / most media is owned by a handful of uber-wealthy, is it any surprise that the policies that benefit them receive distorted coverage?

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #31 on: February 26, 2021, 08:39:01 AM »
I don't think there's a dichotomy between labor and capital. Each of us every time we invest in shares, or start a small business from home, or get promoted to 'partner' in a firm, are mixing the distinction between labor and capital. So many of my friends and colleagues are now partners at firms, having started from humble roots. As long as there is a workable path for the talented to do this, I'm not too bothered.

I'm glad that upward mobility is still the rule of things in Australia.

Certainly among my group of friends it is very evident - we all came from humble beginnings and have at least achieved middle class status if not upper-middle class. But I'm in a particular demographic where most of my friends went to selective high schools. Our parents weren't rich enough (or snobby enough) to enrol us in private schools but we were able to at least go to the better public schools. But I guess that's meritocracy in action.

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #32 on: March 01, 2021, 06:17:26 AM »
Are you friends mostly fifty and older?

ctuser1

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #33 on: March 01, 2021, 06:37:23 AM »
The decline of upward mobility after Regan's war on America is a well documented feature of the US economics.

One chart that summarizes the visual impact well:
https://www.visualcapitalist.com/the-decline-of-upward-mobility-in-one-chart/

Australia may be very different because I am not sure it had an economic downturn to speak of in the last 30+ years, before COVID. When you let in millions of young blood into your economy (==immigrants @double the rate of US), then you tend to not get downturns simply because of the continuous expansion fueled by all those immigrants.

Note:
I posted the above chart because it is visually appealing. There are many nits to be picked with this specific chart and data. e.g. just because children fail to earn more than their parents do not necessarily mean that is a problem with "declining" mobility. If you have such qualms, there are probably a few thousand other academic papers and other such you can google out from reputable journals that adjust for any such caveats. At the end of the day, it IS well documented that upward mobility has declined. Anyone in the US can see the decline with their own eyes when they drive through rust belt areas.
« Last Edit: March 01, 2021, 06:39:28 AM by ctuser1 »

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #34 on: March 01, 2021, 11:47:44 AM »
Are you friends mostly fifty and older?

We are early to mid 30s.

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #35 on: March 01, 2021, 01:28:17 PM »
When you say "partner at firms" do you mean lawyers or something else? I do have one friend who's an attorney and has bought into being a shareholder of her Austin law firm, but her background was in a very tony area of Houston. My BIL is an attorney, turned 35 last year, but cannot see a path to make partner in the next few years because his home equity isn't large enough that he could buy in (no one would finance).

Bloop Bloop Reloaded

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #36 on: March 01, 2021, 01:37:32 PM »
Yes, partners at law and consulting firms. But they are salaried partners with small equity stakes. Full equity partner would be achievable in late 30s or early 40s. Our partners don't make that much money anyway - salaried partner starts in low 6 figures and equity partner starts at mid 6 figures. So it's not rich per se, just upper middle class.

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #37 on: March 01, 2021, 01:57:55 PM »
The decline of upward mobility after Regan's war on America is a well documented feature of the US economics.

One chart that summarizes the visual impact well:
https://www.visualcapitalist.com/the-decline-of-upward-mobility-in-one-chart/

Australia may be very different because I am not sure it had an economic downturn to speak of in the last 30+ years, before COVID. When you let in millions of young blood into your economy (==immigrants @double the rate of US), then you tend to not get downturns simply because of the continuous expansion fueled by all those immigrants.

Note:
I posted the above chart because it is visually appealing. There are many nits to be picked with this specific chart and data. e.g. just because children fail to earn more than their parents do not necessarily mean that is a problem with "declining" mobility. If you have such qualms, there are probably a few thousand other academic papers and other such you can google out from reputable journals that adjust for any such caveats. At the end of the day, it IS well documented that upward mobility has declined. Anyone in the US can see the decline with their own eyes when they drive through rust belt areas.

The decline in the rust belt areas may be true, and there are pockets of chilling poverty. But broadly, I don't think the charts in that article mean what seems to be implied.

The first chart does show that fewer people today earn more than their parents, but that's because the bar is higher. The multiple charts in the linked article all support this. Clearly the people born in 1940 had parents who earned a lot less - the parents were mostly poor. Once the 1940 generation got a big pay bump, it was harder to surpass the new level. Each decade had a higher and higher bar to meet. If upward mobility is narrowly defined as earning more than your parents, it's true that there has been a decline, but it's because the mass already has higher incomes now.

The "Size of Income Classes By Year" chart shows this more clearly. Note that over time, the % of people in the 2 bottom income categories shrank. Fewer people are in the bottom groups! They're moving into the high income groups. And within the high groups, more and more are moving from the middle group into the high ones. The most recent year has more high incomes and fewer low incomes than any previous time shown.  According to that chart, people have been getting richer (at least in income terms) all the way to the present.
« Last Edit: March 01, 2021, 02:04:57 PM by BicycleB »

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #38 on: March 02, 2021, 09:58:41 AM »
I don't think there's a dichotomy between labor and capital. Each of us every time we invest in shares, or start a small business from home, or get promoted to 'partner' in a firm, are mixing the distinction between labor and capital. So many of my friends and colleagues are now partners at firms, having started from humble roots. As long as there is a workable path for the talented to do this, I'm not too bothered.

I'm glad that upward mobility is still the rule of things in Australia.

Certainly among my group of friends it is very evident - we all came from humble beginnings and have at least achieved middle class status if not upper-middle class. But I'm in a particular demographic where most of my friends went to selective high schools. Our parents weren't rich enough (or snobby enough) to enrol us in private schools but we were able to at least go to the better public schools. But I guess that's meritocracy in action.

Aren't your parents multi-millionaires?

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #39 on: March 02, 2021, 01:10:33 PM »
They are now, but when I was growing up they (and I) were new migrants to the country who spoke no English and had little money. I spent most of my childhood living in a little flat which was rented. My parents spent not a cent on academic tuition for me and I went to public schools all the way through my education. I was never deprived but we never had much money. My parents didn't crack the million net worth mark till I was in university. Since then they've quintupled it (in about 15 years) but my childhood was a financially modest one, which taught me good saving habits.

My friends have come from similarly modest backgrounds. The great thing about my state (Victoria) is that it gives preferential entry to its selective schools to students who are bright but come from poor backgrounds. Likewise, there are university scholarships specifically for high achievers from poor backgrounds. All of this helps to ensure that we have a meritocracy and that rich parents aren't a prerequisite for academic success.

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #40 on: March 02, 2021, 01:15:59 PM »
Upward mobility in Australia is still very easily achievable.  So long as you start from at least middle class of course.  And it certainly helps if you are white as well.

Start from poverty, and it's still technically possible, it just doesn't actually happen all that often in reality, and you will just have to work a heck of a lot harder.  And that's perfectly ok and as it should be because it'll teach you not to be lazy and make poor decisions like your parents, which will only help your kids in their upward mobility journey.

ctuser1

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #41 on: March 02, 2021, 06:59:22 PM »
The decline of upward mobility after Regan's war on America is a well documented feature of the US economics.

One chart that summarizes the visual impact well:
https://www.visualcapitalist.com/the-decline-of-upward-mobility-in-one-chart/

Australia may be very different because I am not sure it had an economic downturn to speak of in the last 30+ years, before COVID. When you let in millions of young blood into your economy (==immigrants @double the rate of US), then you tend to not get downturns simply because of the continuous expansion fueled by all those immigrants.

Note:
I posted the above chart because it is visually appealing. There are many nits to be picked with this specific chart and data. e.g. just because children fail to earn more than their parents do not necessarily mean that is a problem with "declining" mobility. If you have such qualms, there are probably a few thousand other academic papers and other such you can google out from reputable journals that adjust for any such caveats. At the end of the day, it IS well documented that upward mobility has declined. Anyone in the US can see the decline with their own eyes when they drive through rust belt areas.

The decline in the rust belt areas may be true, and there are pockets of chilling poverty. But broadly, I don't think the charts in that article mean what seems to be implied.

The first chart does show that fewer people today earn more than their parents, but that's because the bar is higher. The multiple charts in the linked article all support this. Clearly the people born in 1940 had parents who earned a lot less - the parents were mostly poor. Once the 1940 generation got a big pay bump, it was harder to surpass the new level. Each decade had a higher and higher bar to meet. If upward mobility is narrowly defined as earning more than your parents, it's true that there has been a decline, but it's because the mass already has higher incomes now.

The "Size of Income Classes By Year" chart shows this more clearly. Note that over time, the % of people in the 2 bottom income categories shrank. Fewer people are in the bottom groups! They're moving into the high income groups. And within the high groups, more and more are moving from the middle group into the high ones. The most recent year has more high incomes and fewer low incomes than any previous time shown.  According to that chart, people have been getting richer (at least in income terms) all the way to the present.

What you state is a fair criticism of the data I posted. But such criticism obviously does not rise to the level of making a counter case stand on it's own legs.

Do you happen to have an assertive case to make, supported by data that:
If upward mobility is narrowly defined as earning more than your parents, it's true that there has been a decline, but it's because the mass already has higher incomes now.

As for my position, my impression that upward mobility has gone down is not based on just this one data point. There is a multitude of other data supporting the case that economic inequality has increased, that economic mobility has stagnated, and that entrepreneurship and business formation has gone down a lot! All of that data also fits in with my anecdotal experience (and this is as a person who is clearly economically privileged).

Do you have a different opinion/conclusion? Any honest research and data that can point me to such a different conclusion?

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #42 on: March 02, 2021, 11:31:46 PM »
I don't have a conclusion, but so far feel that the various views I've seen on such matters seem incomplete.

Several related measures of social health as measured by income and wealth - social mobility, income inequality, wealth inequality - are said to be weak and declining in the US, yet several related measures of social health as measured by income and wealth - income per capita, productivity, square feet of living space, building code standards, percent of billionaires whose wealth is not inherited - are near or at historical highs.

My temptation is to take the "Size of Income Classes by Year" chart as useful data because it 1) seems to come from reasonable source, 2) seems to reconcile several seemingly conflicting aspects, and 3) seems in tune with data I've seen elsewhere.

Fwiw, I'm quite content with that chart as providing an assertive case. My perception is that I'm simply pointing out something that's evident in the data shown.

To me the different factors listed in second paragraph of this post are only part of the picture of human well being, but taking several factors together is more important than looking at one factor. Fwiw, I feel that income amount is much more important than whether the amount is more or less than parents' income, even though that too affects one's feelings. So the apparent fact that the high incomes of today's parents are harder to beat than their grandparents' lower incomes is very much a sign of progress.

Elsewhere, I've read data that seemed convincing in saying that social mobility in America is low compared to many European countries now and possibly USA in the past, if social mobility is measured by where the child ends up in the income distribution vs where the parent was. In other words, not can you out-earn your parent, but rather, does having a poor parent mean that your children too will have a poor parent compared to other parents. Low social mobility in that respect seems bad for society.

So it looks like our hierarchy continues generation to generation, but the rungs of the ladder are higher than they were. Higher rungs are good (more rich people, fewer poor people - exactly what we want!) but the failure to give poor kids a fair chance is bad. Will be glad to revise my opinion as I learn more.


PS. Reading your questions to me, it seems that your definition of upward mobility may be different from and broader than the definition used in that article. Please bear in mind I only addressed the definition in the article, not your definition (which I had no way of knowing).

Fwiw, I am willing to stipulate that economic inequality has increased, that economic mobility has stagnated (in the sense of lessened - I do feel there are still individual examples of mobility), and pending clearer information, that entrepreneurship and business formation has lessened. None of these mean that today's person at any given percentile earns less than their parent earned at the same percentile, but they are good support for the idea that rising to a different percentile is harder than before.
« Last Edit: March 03, 2021, 12:19:44 AM by BicycleB »

ctuser1

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #43 on: March 03, 2021, 07:00:49 AM »
Fwiw, I feel that income amount is much more important than whether the amount is more or less than parents' income, even though that too affects one's feelings. So the apparent fact that the high incomes of today's parents are harder to beat than their grandparents' lower incomes is very much a sign of progress.

You are comparing material consumption across decades and axiomatically declaring that to be more important than one's share in the "present day" economy.

A black teen mom from Mississippi should be considered better off than 99% of Somalians and 90% of the world's population when measured by her absolute resource consumption. How relevant is her 1%er status for any policy consideration/discussion?

Crossing such distances to compare absolute material consumption seems fruitless to me. Time travel is yet less useful for this comparison. A poor American today is likely "better off" based on some cherry picked measures than the Cherokee chief from 500 years ago. Iphone X is no longer a signal of one's status as another "Jones" in 2021 as it was in 2018.

Just thinking out loud (not based on any research I have seen - although I won't be surprised if it exists) - to me a good measure seems to be how much of the present society's wealth does a person share. e.g. take the total economic output, divide by # of people, where does a person land in his/her ability (as in having the option to, whether he/she actually does it is irrelevant) to marginally claim that share (Note: it has to be a marginal measure because savings complicate stuff and the "market" will be distorted if all Mustacians decided to liquidate their savings together.)?

« Last Edit: March 03, 2021, 07:28:43 AM by ctuser1 »

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #44 on: March 03, 2021, 08:35:29 AM »

Even so, I'm struck by the almost-religious belief among many people that the Democrats are "bad for business"!

I've been thinking about this a lot lately and why the Democrat messaging is so bad. 
I'm coming to the conclusion that Republicans just hate people.  (I've voted R almost my entire life up until Trump).
The message is that R's are "business minded", but in reality, Rs are only good for big business.  If you're an individual, and you hope to start a small business, you were screwed until the ACA de-coupled insurance from employment.  If you're big business, you want your employees to be tethered to you and unable to survive without you.   The only reason I could succeed as a small business in government consulting is because I partner with a larger business and because there is regulation imposed for working with small businesses.  Those regulations are no longer deemed important by republicans.

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #45 on: March 03, 2021, 06:00:48 PM »
Fwiw, I feel that income amount is much more important than whether the amount is more or less than parents' income, even though that too affects one's feelings. So the apparent fact that the high incomes of today's parents are harder to beat than their grandparents' lower incomes is very much a sign of progress.

You are comparing material consumption across decades and axiomatically declaring that to be more important than one's share in the "present day" economy.


I had thought you asked for opinions. I gave mine because you asked, and labeled it as such ("I feel..."). Not sure it should be taken as an axiom! :)

You're certainly free to have a different opinion. Your opinions are often among the most informative on the board, I appreciate them.
« Last Edit: March 03, 2021, 06:09:21 PM by BicycleB »

ctuser1

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #46 on: March 04, 2021, 04:41:06 AM »
Fwiw, I feel that income amount is much more important than whether the amount is more or less than parents' income, even though that too affects one's feelings. So the apparent fact that the high incomes of today's parents are harder to beat than their grandparents' lower incomes is very much a sign of progress.

You are comparing material consumption across decades and axiomatically declaring that to be more important than one's share in the "present day" economy.


I had thought you asked for opinions. I gave mine because you asked, and labeled it as such ("I feel..."). Not sure it should be taken as an axiom! :)

You're certainly free to have a different opinion. Your opinions are often among the most informative on the board, I appreciate them.

I appreciate your opinions too.

Having been a avid computer coder by choice since my teens, I have an innate habit of reducing logical propositions to axioms and rules of inferences. I was simply attempting to do that with your position with an aim to understand it more fully and respond to it. I have been told by many people that my attempts to reduce human interaction to such stark mathematical/logical terms often distills out nuance and puts words in people's mouth. If I did so here and caused offence then I did not intend that.


BicycleB

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #47 on: March 04, 2021, 02:21:27 PM »
Fwiw, I feel that income amount is much more important than whether the amount is more or less than parents' income, even though that too affects one's feelings. So the apparent fact that the high incomes of today's parents are harder to beat than their grandparents' lower incomes is very much a sign of progress.

You are comparing material consumption across decades and axiomatically declaring that to be more important than one's share in the "present day" economy.


I had thought you asked for opinions. I gave mine because you asked, and labeled it as such ("I feel..."). Not sure it should be taken as an axiom! :)

You're certainly free to have a different opinion. Your opinions are often among the most informative on the board, I appreciate them.

I appreciate your opinions too.

Having been a avid computer coder by choice since my teens, I have an innate habit of reducing logical propositions to axioms and rules of inferences. I was simply attempting to do that with your position with an aim to understand it more fully and respond to it. I have been told by many people that my attempts to reduce human interaction to such stark mathematical/logical terms often distills out nuance and puts words in people's mouth. If I did so here and caused offence then I did not intend that.

Ah, that makes more sense! I couldn't understand why you were pursuing the line you did, and the axiomatic part was confusing to me - first time experiencing it. Color me not offended.

That said, viewing it axiomatically doesn't capture the nuance that I intended to convey. I'll explain a bit more in case it's helpful.

1. I am sharing with you a mental model that leads me to some conclusions about upward mobility, and its relation to general well being of Americans.
2. My model is my best guess about how things work for most people, but it could be wrong and I'm fine if people feel that it's wrong. In the sense that I personally think it's correct based on what I've seen so far, it's my opinion.
3. My model posits that more than one factor affects well being as detailed below.
4. Two of the model's factors are income (as measured by inflation-adjusted dollars) and upward mobility. Other factors can be ignored for now.
5. Upward mobility means a person's rise from their parents' relative rank in the nation's income distribution during their childhood (say, 10th percentile if they're a poor kid) to a higher one (say, 90th percentile if they become an engineer, perhaps). Measuring this requires actual results comparing a beginning time in childhood and a later time during adulthood. Changes over time are an essential element of the definition. My understanding from sociology classes and general reading is that this definition of upward mobility is fairly common, and it appears to be the one which the posted article uses. Therefore I (and the charts in the article you posted) compare across decades.
6. Income has a profound effect on well-being, at least up to a fairly high level. Most posters in MMM seem to agree agree this is true up to $75,000/year or so for most people. I personally think - it's a part of my model - that for representative members of the general population, the positive effect of more income is roughly logarithmic, which implies there's no ceiling. It also implies that increases from 10k to 25k are more important than 25k to 50k, from 50k to 75k are more important than 75k to 100k, and so on.
7. Rank in the income distribution affects well being by affecting self-esteem. Low rank makes you feel bad, high rank makes you feel good. I posit this is a real part of well being. Upward mobility, meaning upward change in rank over time, therefore has a positive effect too.
8. At lower income levels, the material aspect of income is most important. At higher levels, the esteem aspect of rank rises in importance relative to material income, perhaps overshadowing it. I'm not clear on the exact relation but I feel that for most people, the material aspect is predominant. Roughly, I'd guess that at 75k, the factors have equal influence. I'm open to feedback on this relation but it's the guess in my head, thus is the model I'm sharing. For this thread, the key part is that I'm assuming that for most people, income is more important than rank even though rank is important. (This is based on a mixture of personal feeling, observation of others, listening to others and reading. Obviously it's something that others may have different data or opinions about.)

Based on this model, plus the data in the article, my conclusions follow automatically (as far as I can see). Let me know if that's helpful or not! :)
 
« Last Edit: March 04, 2021, 02:33:58 PM by BicycleB »

ctuser1

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #48 on: March 05, 2021, 07:02:19 AM »
8. At lower income levels, the material aspect of income is most important. At higher levels, the esteem aspect of rank rises in importance relative to material income, perhaps overshadowing it. I'm not clear on the exact relation but I feel that for most people, the material aspect is predominant. Roughly, I'd guess that at 75k, the factors have equal influence. I'm open to feedback on this relation but it's the guess in my head, thus is the model I'm sharing. For this thread, the key part is that I'm assuming that for most people, income is more important than rank even though rank is important.

1. My opinion is that the lower income level, at which material consumption is a primary determinant of well-being, does not exist in the US or anywhere in any first world country. The poorest of the poor in the US, the ones subsisting on food stamps, medicaid and all other forms of assistance probably consume more energy, calories and other resources than most people considered "middle class" in third world countries. He/she has world class emergency medical care available if health emergencies do arise - something not available to 90% of the world population. 50+% poorer countries like India (and a much higher percentage in sub-saharan africa) are sustained by the kind of menial agricultural jobs that go unfilled in the US and other first world countries. In those places, the resource/energy usage can stay so ridiculously low also because of the extreme recycling and other cultural habits that were common in the US in the 19th century, but no longer.
So I feel that the economic level at which the material aspect is predominant is simply not relevant when we are discussing the US. US (or any other first world economy) is no longer in an "extreme resource constraint" stage.

2. If survival level resource usage - calories, units of energy - are no longer constrained by one's earning potential - what is? Well, how about culturally imposed "need"s? The ability to own a vehicle of one's own, preferably a gas guzzler (my neighbor's 40yo daughter - welfare dependent - drives one), to NOT have to take any menial tasks like farm-work that come their way - like majority of the people in Sub-Saharan Africa or India (not sure about China) would, to NOT have to live in a tiny 400sq. ft. apartment while on section 8 like many middle class people in Japan would do, etc. etc. etc.

3. Once we get to the cultural "needs", the focus must also shift to the other end of the economic spectrum. The society is splitting into two halves. The top 1%, along with the tentatively-tagging-along top 10%, AND their children, have a different set of economic options available to them compared to the bottom 90%. When the "othering" is complete - i.e. the bottom 90% is no longer able to relate at all to the top 10%, scary stuff like violent revolution, January 6th etc. happen.

4. While we are focusing on the other end of the economic spectrum - what is it that the top 10% buying with all their economic firepower, anyway? Someone like me - wealthy beyond the wildest imaginations of a middle-class denizen in e.g. Djibouti, Africa - is working on buying freedom that FI gives me. Someone with a couple more zeros in his account is working on buying influence in local politics. Someone with a few more of those precious zeros are buying influence in the national politics and politicians. Notice how none of these are about buying resources, and not even culturally imposed needs. Physical resources simply play no role in the economics that this section of the society operate in.

Due to the reasons above comparing material resource consumption especially across generations seems like a very misleading indicator.

I live on a street/neighborhood that was build from 1900's. I own the last house built on this neighborhood on 1979. Till about 1970's, this neighborhood was considered the tony part of the town. Now, the beachfront houses have taken that status and the millions of $$ price tags. I still know a couple of neighbors who grew up on this street and are in their 70's now. When in their childhood, they lived in the "rich" part of the town with one parent working some blue collar job. Today, while they still work some blue collar job, they live in the decidedly "poorer" part of the town. If you compared the absolute resource usage from their childhood to today, you would likely conclude they are much "richer" today. That would likely not capture their experience at all, however. I *know* they feel economically left behind with all these rich NYC commuters buying up the million $ homes around them, and I *suspect* they form part of the 35% Trump voters from this precinct in the last election. 
« Last Edit: March 06, 2021, 05:47:02 AM by ctuser1 »

WhiteTrashCash

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Re: NYTimes Article - Why Are Republican Presidents So Bad for the Economy?
« Reply #49 on: March 06, 2021, 10:36:28 AM »
I’m amused by the Republicans who think I wasn’t really poor as a kid because I grew up with a refrigerator in the house, even though I was so hungry that I would eat plastic and pencils sometimes just to have something in my stomach. It must be entertaining to live in their fantasy world.