Current Events > Why is the economy doing so well?

(+) Yeah! (+)

Don't just say Trump or Obama. Is it something particular that they did? Is it the tax cuts, deregulation or tariffs? Or a combination of them? Or is it something else?
---

Not because of Trump. But whenever it dips it will be because of Trump.
---

Largely because
It's not.
---

What goes up must come down.
---

Johnny_Nutcase posted...

What goes up must come down.

Are you saying that this is natural recovery, or that it is due for a crash?
---

UnfairRepresent posted...

Largely because
It's not.

How do you evaluate the economy if not through traditional means? Market is way up, gdp growth is outperforming lofty predictions and there are jobs available for people who want them.
---

Couple reasons:

1) Economic cycles. The economy has actually been doing very well for many years, although 2014-2016 we stagnated, we actually left that stagnation cycle nine months before Trump was elected. Most fund managers have been ultra-bullish since March 2016.

2) The business-focused tax cut. It nearly doubled potential operating incomes (net profits) after tax, providing dramatic potential for capital expenditure and/or stock buybacks. Companies who saw room to expand operating revenue did so; those who did not could use the extra profits to either buy up their stock--providing them with both an asset to make future capital expenditures and a reward to their shareholders--or make capital expenditures designed to cut operating costs, widening their profit margin--again, rewarding shareholders.

None of this is particularly helpful to workers, which is the main criticism from the left. It's great for investors, though.

Dat_Cracka_Jax posted...

there are jobs available for people who want them.

Not...really. We're actually facing a skills shortage. There's a huge misalignment between people who are looking for work (or who have given up looking and are either long term unemployed or working jobs way beneath their skillset, but would take a good job if the opportunity were available) and employers looking for skilled workers.

What we need most right now is a massive retraining program designed to allow working-class families whose breadwinners worked in dying/dead industries to shift to other work. The problem is there is political opposition to many of our fastest-growing industries.
---

Darkman124 posted...

Couple reasons:

1) Economic cycles. The economy has actually been doing very well for many years, although 2014-2016 we stagnated, we actually left that stagnation cycle nine months before Trump was elected. Most fund managers have been ultra-bullish since March 2016.

2) The business-focused tax cut. It nearly doubled potential operating incomes (net profits) after tax, providing dramatic potential for capital expenditure and/or stock buybacks. Companies who saw room to expand operating revenue did so; those who did not could use the extra profits to either buy up their stock--providing them with both an asset to make future capital expenditures and a reward to their shareholders--or make capital expenditures designed to cut operating costs, widening their profit margin--again, rewarding shareholders.

None of this is particularly helpful to workers, which is the main criticism from the left. It's great for investors, though.

Dat_Cracka_Jax posted...

there are jobs available for people who want them.

Not...really. We're actually facing a skills shortage. There's a huge misalignment between people who are looking for work (or who have given up looking and are either long term unemployed or working jobs way beneath their skillset, but would take a good job if the opportunity were available) and employers looking for skilled workers.

What we need most right now is a massive retraining program designed to allow working-class families whose breadwinners worked in dying/dead industries to shift to other work. The problem is there is political opposition to many of our fastest-growing industries.

Thanks for the response. I was looking at this from an investor perspective, as my 401k and IRA have seen great growth since the election.

I'd support a retraining program. It is clear that we need more skilled labor (and people who actually want to learn the skill).

If the market continues to boom, I don't see why I shouldn't vote for trump in 2020 if he's a candidate. I don't want to change anything that could upset that.
---

Dat_Cracka_Jax posted...

If the market continues to boom, I don't see why I shouldn't vote for trump in 2020 if he's a candidate. I don't want to change anything that could upset that.

You're welcome to vote your personal interests. If the performance of your investment portfolio is your primary concern, I would say that republicans are generally the party you want to support. I won't begrudge you that.

For most people, the performance of your investment portfolio is not their concern, and they'll vote their interests, which are almost never represented by republicans. I hope you don't begrudge them, that, either.

Dat_Cracka_Jax posted...

I'd support a retraining program. It is clear that we need more skilled labor (and people who actually want to learn the skill).

Honestly, it surprises me that this is not a point the left and right can agree on. It would, in may ways, act as a subsidy to business, and it'd limit the degree to which H1-B visas are needed to fill the skills shortage. Some on the left argue the H1B is used to find workers who will take less than market wages, but the process of bringing in such workers has costs of its own, and long-term domestic workers with those skills are preferable both for performance of the broader domestic economic system (as their incomes are spent locally) and the growth of the middle/upper middle class.
---

For who?
---

Dat_Cracka_Jax posted...

If the market continues to boom, I don't see why I shouldn't vote for trump in 2020 if he's a candidate. I don't want to change anything that could upset that.

The problem with many of the policies that are being implemented by the current administration is that they help the economy in the short term, but with gains that are not sustainable and will cause problems after the next presidential election.
Also, don't forget that the Trump administration's policy seems to be "facts can be ignored as long as it helps the economy".

Darkman124 posted...

Dat_Cracka_Jax posted...

If the market continues to boom, I don't see why I shouldn't vote for trump in 2020 if he's a candidate. I don't want to change anything that could upset that.

You're welcome to vote your personal interests. If the performance of your investment portfolio is your primary concern, I would say that republicans are generally the party you want to support. I won't begrudge you that.

For most people, the performance of your investment portfolio is not their concern, and they'll vote their interests, which are almost never represented by republicans. I hope you don't begrudge them, that, either.

Right, social issues mean nothing to me. They don't benefit me in any way. I vote in my, and my family's best interests. I can't wrap my head around not doing so.
---

Dat_Cracka_Jax posted...

Right, social issues mean nothing to me. They don't benefit me in any way. I vote in my, and my family's best interests. I can't wrap my head around not doing so.

If you're voting in your family's best interests, you might want to also consider the limitations of how your portfolio can help your family. If you have children, the cost of education is something to consider, along with the cost of their healthcare once they are no longer supported on your employer insurance plan.

Also, you might consider how climate change will impact your family's long-term safety and well-being, and whether GOP-supported ecological practices pose risk to them.
---

Dat_Cracka_Jax posted...

I can't wrap my head around not doing so.

Some people care about more than just themselves.
---

Darkman124 posted...

Dat_Cracka_Jax posted...

Right, social issues mean nothing to me. They don't benefit me in any way. I vote in my, and my family's best interests. I can't wrap my head around not doing so.

If you're voting in your family's best interests, you might want to also consider the limitations of how your portfolio can help your family. If you have children, the cost of education is something to consider, along with the cost of their healthcare once they are no longer supported on your employer insurance plan.

I have 529 plans that benefit from a strong market. I don't see that they have repealed the 26 year old can stay on parents plan, and that should be more than enough time for them to get their own plan.
---

Dat_Cracka_Jax posted...

I don't see that they have repealed the 26 year old can stay on parents plan, and that should be more than enough time for them to get their own plan.

They haven't repealed that, no. What they did do, unfortunately, was kill the mandate, which was the only thing keeping insurance premiums from spiraling rapidly out of control, as the high risk pool is now the only group of people who actually have a reason to be on insurance all the time. Healthy people subsidize sick people, but when you don't have healthy people being required to do so, many of them won't participate, and the relative cost of the high risk pool grows rapidly--a cost that passes to the rest of the insured.

So over time, you're gonna see the costs of those premiums go up and up, and likely they'll cover less each year. My insurance has been cutting certain kinds of medical procedures from their coverage.
---

COVxy posted...

Dat_Cracka_Jax posted...

I can't wrap my head around not doing so.

Some people care about more than just themselves.

I do too. I have a family to care about
---

Darkman124 posted...

Dat_Cracka_Jax posted...

I don't see that they have repealed the 26 year old can stay on parents plan, and that should be more than enough time for them to get their own plan.

They haven't repealed that, no. What they did do, unfortunately, was kill the mandate, which was the only thing keeping insurance premiums from spiraling rapidly out of control, as the high risk pool is now the only group of people who actually have a reason to be on insurance all the time. Healthy people subsidize sick people, but when you don't have healthy people being required to do so, many of them won't participate, and the relative cost of the high risk pool grows rapidly--a cost that passes to the rest of the insured.

So over time, you're gonna see the costs of those premiums go up and up, and likely they'll cover less each year. My insurance has been cutting certain kinds of medical procedures from their coverage.

So how does the mandate effect employer plans? What did they look like prior to the mandate?
---

Dat_Cracka_Jax posted...

So how does the mandate effect employer plans? What did they look like prior to the mandate?

The mandate itself did not directly impact employer plans, but the new rules of the ACA set up certain things that are required to be covered, and that high risk pool members be able to participate.

The mandate was a cost-control measure. By negating it, the annual increases we were already seeing under the ACA are expected by economists to rapidly spiral out of control, becoming much larger and making insurance much more expensive for all participants, as more and more healthy people drop their coverage.
---

Okay. I got what you're saying now. Hopefully it just causes the whole program to be forced to fold.
---

Dat_Cracka_Jax posted...

Don't just say Trump or Obama

Trump's America
Thanks Obama
---

Dat_Cracka_Jax posted...

Okay. I got what you're saying now. Hopefully it just causes the whole program to be forced to fold.

Impossible. If you are a politician and you re-allow pre-existing conditions to be a basis for refusing insurance to the high risk pool, you'll lose your job in the best case scenario. Treating the high risk pool as a bunch of people who should just go die somewhere is politically toxic.

Much more likely, what will happen is the structural problem will grow and grow until its cost is so high that Americans will choose some form of single-payer coverage as a way to reduce the cost. As-is, the Mercatus study commissioned by Koch industries already showcases that our present system costs more than a single-payer one would. It's just that employers and workers are paying for it presently, with the government paying for about one third to half of it via tax deductions for the employer system.

But we'll probably have to get to something like 2:1 cost before the public demand is loud enough, though that has more to do with how the senate and house are dominated by people elected by a minority of Americans.
---

MysteryMan923 posted...

Not because of Trump. But whenever it dips it will be because of Trump.

It already did that. And of course the left jumped on Trump. But when it spiked back up, well, now thats because of Obama!
---

Darkman124 posted...

None of this is particularly helpful to workers, which is the main criticism from the left. It's great for investors, though.

There is no possible policy that is good for workers in both the short and long term, and very few that are good for either.

Nomadic View posted...

MysteryMan923 posted...

Not because of Trump. But whenever it dips it will be because of Trump.

It already did that. And of course the left jumped on Trump. But when it spiked back up, well, now thats because of Obama!

I've said all along through dips and rises that only idiots give one presidency full credit. There was clearly a boom throughout Obama's time that Trump continued. However the rate of increase hasn't changed much, telling us that Trump has done just that, continued Obama's economy. It's BOTH of theirs right now. If we see a spike or a drop due to the tariffs, that is entirely on Trump because Obama had nothing to do with those.