176 sats \ 41 replies \ @Cje95 2 Aug \ on: U.S. Job Market Signals Looming Recession news
Looks like it was a swing and miss with the soft landing! Whats worse is there still are several numbers that would typically say to keep the rates the same. Huge catch 22 for Powell and we are seeing it in the EU right now. They cut and inflation the next reading went up more than expected.
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You think this is caused from trumps presidency, or bidens?
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I'd take a little from column A and a little from column B.
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Or do you think it was bound to happen no matter what?
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Economic cycles are about clearing out the misallocations that have accumulated over time. Obama was largely president during a correction, which doesn't mean there were no misallocations, but most of the misallocations we're dealing with were caused by Trump and Biden era policies.
I wouldn't say it was bound to happen, because if they hadn't been such economic interventionists there wouldn't be much to correct.
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I wonder if the next president will have to deal with a worse economic cycle?
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They're going to deal with a major correction. How bad the next cycle is is still TBD.
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Major correction or a major depression?
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"Depression" is a more colloquial term, which to me implies a prolonged period of reduced economic activity. Corrections/recessions can be over fairly quickly, no matter how large they are, if the government doesn't prolong them with stupid policies.
Trump's policies prior to COIVD I dont think would have resulted in the huge issue we have had to deal with. The COVID response was going to be expensive but the biggest issue to me is that the Biden Admin has not allowed for billions in unspent COVID spending to be clawed back. Not to mention the PPP loan program was filled with fraud and while Trump signed the initial part into law in April 2020 Biden has been in charge and taken a lot of credit for the program "success" even as it failed realistically.
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The Covid stimulus was the larger part, but his restrictionist trade policies were also causing misallocations and made the supply chain less able to respond to Covid. To his credit, allowing more energy development was helping unwind some prior misallocations.
Maybe it was a wash, pre-Covid, but certainly not after.
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Oh yeah once COVID hit everything went out the window. Without COVID I think the US and China would have been able to really get into the trade stuff and "fix it" but COVID ended up driving that off the road because we needed things that only China had/made. I think long term we will be happier with those trade moves though because it really kick-started bringing back pretty fundamental things to the US or allied nations.
During COVID not a single person knew what was going on or how to react and it was a lose-lose situation for whoever was in office. I think some of the stuff being delayed from China though ended up saving lives as well. For instance, ventilators were thought to be good to help people recover only to kill a bunch of them.
Overall it was just crap timing with COVID hitting. Without that I think it all would have worked out and the issued we had with China in particular, would have been a whole lot smoother.
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Good point about the ventilators. That was pure serendipity.
There are two ways to look at it. If Biden gets all of the economic positive credit that started because of policies Trump laid down then I think Biden gets all of the inflation credit as well. It has been spun as if Trump caused the inflation but Biden saved the economy and I mean that just doesn't work.
I look at it more so from the COVID pandemic, which required a surge of government dollars to keep everything from collapsing. However, the rollout and implementation of it wasn't good hence the whole fraud issue. On top of that in Biden's 4 years his admin and Dem Members in Congress have prevented a lot of the unused funds from being clawed back. This would help lower the cost of everything since there are billions and billion in unused funds just sitting there. Using this money that is just sitting around would help slow down the money-printing machines in the US.
All of that it say is Trump caused some but it was required to prevent an economic collapse. The Biden Admin fumbled Trumps already enacted plans and then refused to take back unused money along with spending hundreds of billions more getting us in this situation.
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