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Thread: U.S. economy bounces back sharply

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    Re: U.S. economy bounces back sharply

    Quote Originally Posted by donsutherland1 View Post
    It appears that you assume that politics and ideology play a disproportionately large role when it comes to explaining macroeconomic performance. Hence, you appear to assume my points are also rooted in politics and ideology.

    Political factors are just one element in shaping the nationís economic performance. If political factors were the leading explanation, the nation could experience continual robust recession-free growth, as the public being self-interested would continually choose the policy makers who knew how to manage the economy. Any other choice would be irrational. Moreover, when it came to economic policy, there would be interparty consensus. Unfortunately, thatís not the case.

    Politics plays some role in the whole scheme of things, but pundits greatly overstate that role. Upon President Reaganís taking office, numerous Democrats argued that the economy was doomed (and claimed that their narrative had credibility during the 1981-82 downturn). When President Obama took office, numerous Republicans held similarly gloomy views. Both political narratives proved incorrect.

    Quite frankly, I could care less who is in the White House when discussing the economy. Iím interested in discussing the state of the economy as it really is and its direction. If one wants to credit/blame the President, thatís a separate matter.

    With respect to the Q1 economic performance and what ultimately proved to be a temporary contractionóand economists nailed the temporary nature of that contractionówas, in part, due to weather-related disruptions. It was not solely due to bad weather.

    One saw references to weather in preceding economic reports and also the Fedís own discussion of economic conditions. The weather-related explanation was not something that was suddenly introduced when the GDP data was revised to show a significant quarterly contraction.

    There were some additional factors, too. For example, China underwent a growth pause of sorts where its growth fell below the levels it had been sustaining in recent years. Since then, China has experienced a pickup in its growth rate.

    Moreover, Iím not ignoring ďmillions of struggling Americans.Ē For example, Iíve also posted data concerning longer-term unemployment, broader measures of unemployment, and information about people not in the labor force and compared them to the pre-recession figures. Although June saw some nice improvements, those figures remain generally well above pre-recession figures.

    http://www.debatepolitics.com/breaki...post1063481874

    Finally, I do care what works/does not. I read through the empirical data and the many reports that are regularly published. The factors impacting the economy are numerous and their interactions highly complex. Not all of those interactions are well understood or well-modeled, leaving large areas of uncertainty. Not surprisingly, economic forecasts beyond the shortest-term ones are often subject to large error.
    One more time.

    How can we guage the effectiveness of economic principles and or " solutions " without objective analysis ? If you or any other Obama supporter " cared " you wouldn't be perpetuating talking points.

    You would be offering a honest and comprehensive account of our current economic conditions AND you would be criticizing the policies that have led to the worst peace time " recovery " in our Nation's history.

    You wouldn't be predisposed to spinning superficial economic data that's intended to ignore the continued struggles of Millions of Americans who have had to become dependant on Government support in one way or another.

    Thats right, every bit of " positive economic " data released by this White House is on a fundamental level designed to white wash over the growing class of impoverished, dependant Americans.

    Dont believe me ? When was the last time Obama publicly acknowledged the 20 million new food stamp recipients ? When was the last time he publicly acknowledged the fact that so many of the new jobs created are part time or that our disability rolls have doubled ? ? When was the last time he publicly acknowledged the growing poverty numbers ?

    You know instead of his BS victory speeches about economic " growth ".

    Increasing poverty rates bothers Obama and the Democrats NOT because they're concerned about the plight of those afflicted. But because it makes them look bad and thats cold hearted.

    Hey, I would like to think that everyone, including you sincerely cares about the welfare of the people who have been struggling for the last 6 years but then again, I'm not a Obam supporter.

    That means I can be loyal to objectivity and truth and not to ideology.
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    Re: U.S. economy bounces back sharply

    Quote Originally Posted by Fenton View Post
    One more time.

    How can we guage the effectiveness of economic principles and or " solutions " without objective analysis ? If you or any other Obama supporter " cared " you wouldn't be perpetuating talking points.
    The weather impact was mentioned in such publications as the Fed's Beige Book. Those publications were released well prior to the July release of the 2.9% contraction (now revised to 2.1%).

    You would be offering a honest and comprehensive account of our current economic conditions AND you would be criticizing the policies that have led to the worst peace time " recovery " in our Nation's history.
    Policies have had some impact. The expiration of the payroll tax holiday and fiscal cliff tax deal had a modest negative impact on growth. But non-policy factors have played a large role, too. Household deleveraging had a large impact on dampening personal consumption expenditures growth (still the largest component of GDP).

    Thats right, every bit of " positive economic " data released by this White House is on a fundamental level designed to white wash over the growing class of impoverished, dependant Americans.
    The Bureau of Economic Analysis releases the GDP data.

    Increasing poverty rates bothers Obama and the Democrats...
    The poverty rate is remains 2.5 percentage points above the pre-recession figure of 2007 (15.0% vs. 12.5%). The 2013 figure will be released in September. The question as to what role policy plays and what role non-policy factors plays in its remaining elevated remains to be determined. Without doubt, the recession fueled the increase.

    But what about the lack of response/delayed decline since the end of the recession? If that lack of response were unique, one could have a stronger argument regarding the policy front specific to the current Administration. However, that pattern also occurred following the 1990-91 recession and very mild 2001 recession. That stickiness suggests larger factors may be at play. No definitive conclusions have been reached. Some arguments that have been made concern muted real income growth, rising income inequality, etc. Even if those factors play a large role, root causes are also not a matter of consensus. Some progressives suggest that making the Tax Code more progressive/increased income redistribution could address some of that matter. Other literature argues that an ongoing secular economic transition related to the evolution of the information revolution is leading to the increasing automation of low-skill/repetitive-type work with income increasingly being skewed toward knowledge/creative work and that this trend is behind growing income inequality. Such literature hints that increased and improved education may be the most relevant approach for dealing with that inequality. If the latter argument is correct, how to improve education at all levels and how to develop a coherent approach to training workers are examples of questions that would need to be addressed. I suspect that literature to which I refer concerning a secular economic transition is closer to explaining the root cause of growing income inequality and anemic growth in real median wages in the U.S.

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    Re: US GDP Grows 4% in Q2, Beating Expectations

    Quote Originally Posted by Dittohead not! View Post
    I've noticed the same thing.
    Socialism, however, is an economic system in which the means of production is owned and ruin by the government.
    Yes and we've had touches of it. Just recently General Motors was taken from the stockholders and operated by the government. The company was freed after the debt was forgiven but it was a socialized company for a while. I read never ending hatred of corporations from the left on this forum and the desire to have the government get involved with how they are managed. It is horrifying to me. Definitely trending toward socialism. Hopefully we can reverse the trend.

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    Re: US GDP Grows 4% in Q2, Beating Expectations

    Apparently the 'bounce back' maybe a dead cat...or a sick one anyway.

    'The Chicago purchasing managers index unexpectedly plunged to 52.6 in July from 62.6 in May.
    Economists were expecting the index to climb to 63.0.

    "A monthly fall of this magnitude has not been seen since October 2008 and left the Barometer at its lowest level since June 2013," said MNI Chicago in its press release'


    Chicago PMI, July 2014 - Business Insider

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    Re: US GDP Grows 4% in Q2, Beating Expectations

    Quote Originally Posted by fmw View Post
    Yes and we've had touches of it. Just recently General Motors was taken from the stockholders and operated by the government. The company was freed after the debt was forgiven but it was a socialized company for a while. I read never ending hatred of corporations from the left on this forum and the desire to have the government get involved with how they are managed. It is horrifying to me. Definitely trending toward socialism. Hopefully we can reverse the trend.
    The General Motors bailout and subsequent control by government is an example of an experiment in socialism. It didn't last long.
    Does the "left" really want the government to start running corporations, or are they simply opposed to the corporations running the government?
    "Donald Trump is a phony, a fraud... [he's] playing the American public for suckers." Mitt Romney

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    Re: US GDP Grows 4% in Q2, Beating Expectations

    This isn't a bounce back. It's makeup work for what didn't happen during the winter; it's no net increase.
    Quote Originally Posted by Top Cat View Post
    At least Bill saved his transgressions for grown women. Not suggesting what he did was OK. But he didn't chase 14 year olds.

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    Re: U.S. economy bounces back sharply

    Quote Originally Posted by DA60 View Post
    Apparently the 'bounce back' maybe a dead cat...or a sick one anyway.

    'The Chicago purchasing managers index unexpectedly plunged to 52.6 in July from 62.6 in May.
    Economists were expecting the index to climb to 63.0.

    "A monthly fall of this magnitude has not been seen since October 2008 and left the Barometer at its lowest level since June 2013," said MNI Chicago in its press release'


    Chicago PMI, July 2014 - Business Insider

    It would seem that the Obama apologist are more concerned with manufacturing the facade of economic improvement than they are in providing a objective and comprehensive analysis.

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    Re: U.S. economy bounces back sharply

    Quote Originally Posted by Fenton View Post
    It would seem that the Obama apologist are more concerned with manufacturing the facade of economic improvement than they are in providing a objective and comprehensive analysis.
    I have said it many times before...partisan politics is destroying America.

    It staggers my mind that SO many intelligent people are so completely blind to the absolute ridiculousness of Neo-Keynesian economic theory (something the left has seemingly fully embraced).

    What kind of a moronic system believes in spending massive amounts of debt money to prop up an economy...but if it does not work, just spend even more.

    Throwing money at a problem until there is no more money to throw requires no skill and a suspension of common sense.

    Forget innovation or experimentation or new ideas or hard work or even free market...just spend, spend, spend. Whether it's cash or credit...if you can get it...spend it. And it does not matter what you buy...just buy it.

    And the truly sad and frustrating part is that when all this eventually fails...most Keynesian's (like Krugman) will simply say 'we did not spend enough, fast enough'.

    Keynesianism...a moocher's paradise.

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    Re: U.S. economy bounces back sharply

    Quote Originally Posted by apdst View Post
    This isn't a bounce back. It's makeup work for what didn't happen during the winter; it's no net increase.
    IMO, it is premature to suggest that the 4.0% annualized growth in Q2 marks the start of a sustained period of faster economic growth e.g., annualized real growth consistently above 3%.

    The "makeup" as you termed it reflected demand that had been deferred, in large part, for the temporary factors that led to a very bad first quarter. Weather was one factor, but not the only one. Aside from non-weather-related issues, some slowing following the robust Q4 activity (3.5% annualized rate) might also have contributed to the bad Q1 outcome.

    Over the past year, GDP has grown 2.4%. The average annual growth rate since the end of the recession has been 2.1%. At least for me, it is too soon to be sure that economic growth is now moving onto a path that will see it accelerate materially from its post-recession average. Barring subsequent data, I still believe the narrative of modest to occasionally moderate growth remains more likely than the start of a period of sustained robust growth, at least through the rest of this year.

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    Re: U.S. economy bounces back sharply

    Quote Originally Posted by DA60 View Post
    Means nothing...wait for the final revision (then few will pay attention).

    They dropped Q1 from +0.1% initially all the way down to -2.1% in th final revision...clearly (IMO) they are either incompetent and/or being influenced.
    Means nothing? You'll be surprised to know that good news has quite an effect on spending habits. Sadly, it seems that too many profit by focusing on the negative, making a grand living actually.

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