patrick.net

Supply side economics is an excuse for the rich to hoard assets. It's not that there is no validity to supply side arguments, it just that there is proof out there that the demand side matters too.

It's like the idiots that seem to think that becasue taxes can be too high and at a level that inhibits growth, that therefore any level of taxes is too high for growth.

marcus says

Obviously an expert with his hand on the pulse of the American economy.

Right,

Much of the rapid rize in the chart are loopholes, and since you go into stores, flip over the merch, and its hecho "not in usa". In 1980 most of our big items like cars and planes, electronics and computers, tvs, washers, clothes were made in the USA, in 2000s few our our big and small items are made in the USA.

The US firms are marking up the products from overseas, and this was set into motion by democrats on their personal side of lazy degrees, and the political side by the Lawyers and timewasters creating laws that would benefit Lawyers, but fleece the American people.

So the chart is made by democrats to fool democrats, - show me the US driven production, not the 12 lawyer fleecing.

marcus says

Supply side economics

The only economics is supply side. If you dont want it, you would not buy it. Companies decide what they can make and profit by.

Quite using irrelevancies to try to hop onto group think.

Think for yourself - you will be better off.

Entitlemented says

So the chart is made by democrats to fool democrats

I frame it this way. We as a country have fought for capitalism to win over communism, becasue we believe in it, and also becasue of influence it gave us in the world. Our international policies led naturally to globalization. This was not democrats or republicans. This has been American policy in the world since shortly after WW2.

Now suddenly you want to over simplify and conclude that we don't manufacture enough here and that's democrats fault somehow ?

I'm all for us manufacturing more here, and I would bet that automation will allow us to do so.

But here's what you seem afraid to consider. More money in the hands of middle class consumers (and more people in the middle class) would obviously mean a much bigger domestic economy. If supply side is pushed too hard, it leads to less demand. It takes more than want or need to buy products.

Entitlemented says

Think for yourself - you will be better off.

If you can think for yourself, please put together an detailed argument as to why I'm wrong, instead of this nonsense - which ironically indicates that you are the one without a justification for your beliefs.

Entitlemented says

Quite using irrelevancies to try to hop onto group think.

Great job understanding and responding to my points. I'll be expecting more of the same.

WorkInProgress says

Can you explain this please? I can't read the small writing. I'm not being sarcastic.

1955 - 85 during the "good times" the workforce -- people working -- peaked at a +5% expansion rate, with normal range falling to -1% during the short, sharp recessions and +2 to +3% otherwise.

But since 1985 we're not getting those +5% workforce expansions any more and are lucky to get +2%:

(same graph since 1988)

Pension funds planned on +7% yields on their investments, but if the economy isn't growing by 7% a year that's simply not going to happen.

And demographically we're no longer expanding like we did when the baby boomers (and women) flooded into the workforce 1965 - 1985.

On top of that,

shows that per-worker productivity growth has fallen since the 1950-2000 period.

During that period productivity gains were around +3% per year, but coming out of the 2007-2009 recession productivity is around +1% at best.

So this is as good as it gets!

marcus says

Obviously an expert with his hand on the pulse of the American economy.

I prefer to believe that all these idiots on Patrick's site are paid psyops types. Wages paid in Russia (~$20/week) make China look like Hawaii.

Bellingham Bill says

WorkInProgress says

Can you explain this please? I can't read the small writing. I'm not being sarcastic.

1955 - 85 during the "good times" the workforce -- people working -- peaked at a +5% expansion rate, with normal range falling to -1% during the short, sharp recessions and +2 to +3% otherwise.

But since 1985 we're not getting those +5% workforce expansions any more and are lucky to get +2%:

(same graph since 1988)

Pension funds planned on +7% yields on their investments, but if the economy isn't growing by 7% a year that's simply not going to happen.

And demographically we're no longer expanding like we did when the baby boomers (and women) flooded into the workforce 1965 - 1985.

On top of that,

So, then, doesn't it make sense to believe an economic correction is inevitable and that staying in cash (or at least assets easily turned into cash) is advisable?

marcus says

Our international policies led naturally to globalization.

You wave wand stating international policies and globalization as this has any meat to a discussion.

Did you think that wrenching a huge percentage of real working/productive jobs was going to have a positive effect on the US economy, (and let the industrious countries also work productively)?

marcus says

Now suddenly you want to over simplify and conclude that we don't manufacture enough here and that's democrats fault somehow ?

http://www.history.com/topics/us-presidents/bill-clinton/videos/clinton-signs-nafta

See video, 200,000K job growth in few years promised, fears of US job loss are illegitimate, create a massive employment and trade zone, call on all of us for worker retraining, good jobs and better careers......................

WorkInProgress says

doesn't it make sense to believe an economic correction is inevitable and that staying in cash (or at least assets easily turned into cash) is advisable?

I rotated 75% of my 401K into the "safe 2% yield bonds" category late last year, yes.

I kept 25% in equities just to keep some upside exposure.

This is just for game-theory considerations -- market goes up, yeay, I still have a job and everyone is happy. Market is down or flat, no big losses to take.

Plus I can take long and short positions in my IRAs that are more flexible and leveraged than the 401K.

BUT . . . I don't necessarily see a "correction" coming anytime soon, as the Fed dumped a shipload of money on the economy 2011-2014:

and AFAICT we're still enjoying the after-effects of having too much capital in the system.

We could have smooth sailing for another 5-10 years for all I know. One of my theses is the ongoing baby boomer -> gen Y workforce rotation is going to be very stimulative, as all these retirees will switch from savers to spenders, increasing domestic demand a lot, while being retirees means there will be jobs opening for Gen Y too.

Plus when the boomers die they will pass on their wealth to their heirs, who are waiting, like me, with bated breath for all this free money!

WorkInProgress says

but housing is the main driver of why we're all broke.

with rents rising 5-10% per year you're better off buying, but to buy in high...

I agree with this wholeheartedly, in addition to the cost of healthcare. Most everything else seems to have tracked around normal inflation rates or less. Housing and healthcare have raped our standard of living.

Ironman says

Bellingham Bill says

as all these retirees will switch from savers to spenders, increasing domestic demand a lot,

Not going to happen.

Of course it will. They aren't going to spend like drunken sailors, but many will be consuming almost as much as when they were working, but they won't be working, thus putting money into the economy that is in addition to wages (to others) that are being spent on consumption. It's a demand side thing.

anonymous says

Who’s responsible? Who took your prosperity?

That ass clown Ronald Reagan.

Ironman says

Now solve this math equation: How long will their retirement money last before they just have Social Security as their only source of income?

See a problem?

Why do you confuse Marcus? His students aren't around on Sundays to help him.

"....said that all free-market economies are accompanied by some amount of consumer error, simply because sellers are always exploring every possible method of parting people from their money.
Hidden fees and overpriced services took away real wealth, but unrealistic expectations created fantasies of future wealth whose evaporation is probably an even bigger source of disappointment."

Maybe this helps explain why the poor saps have been so easy to mesmerize with bullshit:

50% of American adults cannot read a book written at an eighth grade level

45 million are functionally illiterate and read below a 5th grade level

20% of Americans read below the level needed to earn a living wage

50% of the unemployed between the ages of 16 and 21 cannot read well enough to be considered functionally literate

According to the 2007 California Academic Performance Index, research shows
that 57% of students failed the California Standards Test in English.

There are six million students in the California school system and 25% of those students are unable to perform basic reading skills

To determine how many prison beds will be needed in future years, some states actually base part of their projection on how well current elementary students are performing on reading tests

http://literacyprojectfoundation.org/community/statistics/

Robert Sproul says

50% of American adults cannot read a book written at an eighth grade level

45 million are functionally illiterate and read below a 5th grade level

20% of Americans read below the level needed to earn a living wage

50% of the unemployed between the ages of 16 and 21 cannot read well enough to be considered functionally literate

90% cannot do simple addition.

Ironman says

What is the average life expectancy for a Baby Boomer?

Now solve this math equation: How long will their retirement money last before they just have Social Security as their only source of income?

See a problem?

Yes, I see a big problem. But this doesn't mean that boomers in retirement won't be consuming a lot and adding to the economy. If people had to be in great shape financially to drive the economy, we would already be in big trouble now.

THe point is that the boomers are a big demographic that's leaving the workforce but continuing to spend. Millions of them are well off. Perhaps half or more of them aren't, but they will still be living and spending.

Perhaps the situation you describe will cause an added cost to the government, and some govt spending that has to directed towards supporting these folks with subsidized housing or nursing or whatever - which would be money redirected away from military, corporate welfare, or we get less tax cuts or whatever, but in any one of these, it's adding to the domestic consumption driven part of the economy.

Robert Sproul says

Maybe this helps explain why the poor saps have been so easy to mesmerize with bullshit:

50% of American adults cannot read a book written at an eighth grade level

45 million are functionally illiterate and read below a 5th grade level

20% of Americans read below the level needed to earn a living wage

Yes this is sad, but also helps to explain how we got a President Trump.

marcus says

Perhaps half or more of them aren't, but they will still be living and spending.

Or just consuming without spending:

Ironman says

@marcus

OK, I realize the last math question was too difficult, here's an easier one (I hope for you).

If Boomers continue to spend in retirement like they did while they were still working (like you're asserting), how much money do they need to have saved at retirement?

Marcus won't get that either.
Hey Marcus, here's a hint.....It's more than zero. :)

Ironman says

Strategist says

Marcus won't get that either.

I hope he wakes up one of his students sleeping in class today to help him.

No. I hope one of his students wakes HIM up in class. He's only there for the pension.