ex-President Trump

I am explaining that the guy who mentioned the fact democrats tried to re-invent the definition of recession is right about the fact they did try (and it was obscene that they did), but it's not something that applies to this moment in time

I have heard this as well but don't buy it. This article just talks about polls where people say how they think they're doing, it doesn't cite any hard data.

I imagine that if you asked poorer people how they were doing in 2019, most then would also have said they were having trouble making ends meet. That's basically what being poor means.

For my entire life I've heard news stories about people having trouble paying their bills. Not cyclically, but every year. Maybe things really were easier for Americans in the 1950s, but that was due to historical events that are not likely to happen again (and most of us hope will not happen again). Since then, Americans have had the tendency to spend beyond their means, so they're always feeling like things are tight.

It's people being asked if it's harder than the year before, not hard in general.

We have some hard data, i mentioned to you that rent inflation has been higher than nominal wage growth

Here some data

https://www.cbsnews.com/news/rent-cost-u...

from 2019 to 2023, rents grew 10% more than nominal wages. Do you realize how insanely bad for renters that is? keep in mind normal people expect, as a baseline for NORMAL years and NORMAL outcome to have an improvement. Even staying put for 4 years would be felt as a really bad and sad outcome.

Here they are very significantly worse off (on the biggest expense in their livelihood) in 5 years. That's real income crunch, a loss of consumption power, a recession (for those households). And a prolonged one, and an horrendous one (10% real loss is almost unheard of for the whole economy, that's more than the great financial crisis in aggregate).

Then you can check car prices which grew even more than rents. And higher rates mean a way bigger monthly cash payment for loans on a car than 5 years ago, for the same car.

Yes, the rent is still too damn high, but in most cities in the western US it stopped going up as fast in 2020 as it was previously. I guess the big rent increases just hit here sooner.

But the rent is connected to the purchased housing prices, which have gone up even more in the last 10 years or so. Which was at least partially caused by the artificially low interest rates which went on for years.

I'm hoping there will soon be a correction in housing costs but one that doesn't lead to any other crises.

No wait it's not "still too damn high" *it became a lot worse than it was before*. That's the point, it's relative changes that define a recession at the societal level, and it's relative personal changes that get people to claim they are worse off than before or not.

man rent increased MORE now because higher rates make it harder to buy , it's the other way around. People who could have bought 10 or 7 years ago can't now, so they rent, putting higher pressure on rents.

So, given you now know renters in aggregate are far worse off than they were 5 years ago, do you understand why a ton of people claim things are worse than they were? and remember some people might not be renters themselves and be fine personally, but have relatives who rent...

So you have this 59y old with a decent 401k , a fixed rate mortgage, a job where wages are growing decently, who is better off than 5 years ago. His 26y daughter though is in economic hell. The 59y old respondent doesn't feel like he is doing SUPER GREAT vs 5 years ago, but if for him alone he would answer that yes things are good.

Then he thinks of his daughter who has it as bad as it ever was basically, he can't recall a moment in time when life was worse for a 26y old except perhaps 2009 exactly. And he then answers that no, things aren't going well at all, because his daughter is prominent in his mind.

Yeah, that one is probably all because of covid and the related shutdowns, which you and I both agree should not have been taken anywhere near as far as they were. Those shutdowns had to have negative economic effects of some manner, and auto prices is where it was probably the heaviest.

Sure, but even saying "things are worse than they were" doesn't mean that things are still going downhill.

We had the fed pumping the gas with close to 0% fed rates when the economy was already doing fine, then we had covid (with too many shutdowns), then the government made the mistake of sending out checks. (And part of why people feel worse off now is because those checks have stopped).

All this was bound to result in an eventual drop in real incomes, and it's not surprising that it mostly came out of the pockets of poorer people.

But that doesn't mean that things are currently getting worse, and I don't think they are currently getting worse even for most lower income people.
There's nothing more that could be done right now to make things improve faster for them apart from some serious redistribution, which I'm pretty sure you would not support.

A significant drop in real incomes is a recession , for the people with lowered incomes. It's a terrible economy. It's things not going the way they should be.

You can't change the topic from "false, things are great" to "ok things are terrible for many but it was inevitable".

Topic was "why do people claim things are bad".

You started by saying it was because they are stupid.

Actual reality is, things are objectively bad , worse than before (vs a baseline which is constant improvement, not stagnation, remember), for a lot of households, not randomly, specifically households who rent and have low savings

No, the topic was generally why people think we're currently in a recession, and my statement was specifically about your clip saying peeple are pessimistic about income growth over the next 1-2 years.

The economy had a major shock which takes awhile to get over, but real incomes are now increasing, and they're likely to continue increasing over the next 1-2 years.

You said covid and the shutdown were to blame for an economic slowdown, but in reality covid was not a significant contributor to the economic slowdown. Printing 3x the normal rate of money for 2 years, the shutdown that was too severe and lasted too long and the govt throwing around so much money were a disaster.

Trump talked about executing people in multiple meetings

Former US attorney general Bill Barr casually CHUCKLES on national tv
recalling POTUS ruminating on the possibility of DOMESTIC assignation.

Shutdowns were not the major driver. You can't force people to behave as if their isn't a pandemic. Their was going to be a massive drop in GDP regardless. Sweden had far looser official shutdowns, but saw the same economic impact as peer nations.

https://www.ncbi.nlm.nih.gov/pmc/article...

A global pandemic was always going to effect the economy in a majorly bad way.

But I mentioned that I also thought the shutdowns were far more than necessary and the checks being sent out were stupid and inflationary.

I have said here several times that I thought both those things were bad and Trump was wrong to have started both of them.

Sure if as peers you use nations that locked down very little... why not the UK as peer which has a very similar economy and is nearby?

Norway locked down less than most countries and didn't even mandate masks lol

Again, no evidence that government policy was the main driver in GDP/economic decline and quite a bit of evidence consumer behavior was.

Pretty big evidence from american states, which locked down very unequally under the same economic system, the perfect real life experiment.

This study failed to demonstrate statistically significant, beneficial effects of statewide lockdown measures in 2020, while also finding major adverse economic impacts. There was no significant association between a state’s openness score and the rate of excess mortality rate in 2020. However, our analyses also demonstrate that there were potent adverse effects of these lockdown measures on both unemployment rates and employment growth. This suggests that locking down businesses, instituting curfews, and gathering restrictions were not ultimately effective at saving lives during the pandemic’s first year in 2020. These results argue that (re)instituting any of the statewide public health lockdown measures for this pandemic is ill advised. These results also raise strong cautions regarding consideration of these measures for a future, similar aerosol-spread pandemic.

https://www.ncbi.nlm.nih.gov/pmc/article...

Feel free to disregard the claims about lockdown efficacy to prevent deaths, it's not relevant for our topic.

But the economic cost of lockdowns is easily proven beyond reasonable doubt by the state by state differences

///

Lockdowns and the US Unemployment
Crisis*
We analyse the short-term impact of social distancing measures on the US labour market,
using a panel threshold model with high frequency (weekly) data on unemployment across
US states. We find that changes in the restrictiveness of mandated social distancing, as
measured by the Oxford Stringency Index, exert a strong immediate impact on initial
unemployment. The unemployment rate is not immediate affected but follows within a
very short time (two to four weeks). We also document a substantial asymmetry between
tightening and easing: the impact of tightening restrictions is twice as large as that of
easing them. The state of the endemic, proxied either by cases or fatalities, constitutes a
marginal facto

https://docs.iza.org/pp170.pdf

The Covid-19 pandemic led to an unprecedented recession and spike in unemployment as policy
makers had to resort to lockdowns to limit the spread of the disease.
This paper provides evidence on the impact of the lockdowns on labour markets in the US. We
document considerable heterogeneity among individual states, both in terms of the labour market performance and the time path of the restrictions imposed.
We used panel threshold models specified for US states and based on weekly data. Two labour
market indicators are used, namely the insured unemployment rate (IUR) and initial jobless
claims (IJC). The details policy responses to the pandemic are proxied by the different components of the Oxford stringency index. Again, these individual indicators (e.g. school closures,
prohibitions on mass gatherings, etc.) shows considerable variation across the US.
We find an impact of the policy measures on the labour market, which is strong, rapid and asymmetric.
The impact is rapid: the unemployment rate increases within 2-4 weeks of policy measures being
taken and unemployment claims respond almost immediately.
The impact is asymmetric: tightening measures has an impact that is about 50% greater than
that of easing measures.
The overall ‘Oxford Stringency Indicator’, an average of eight different policy intervention types,
has the strongest impact on labour markets. Applying the same methodology using its individual
components show that the results are very robust, and that school closures and stay-at-home
regulations are the most critical for the labour market

That doesn’t divorce lockdowns from consumer behavior. Governments locked down when consumers were least likely to spend and opened up when things got better. Of course economic metrics followers similar patterns. The raw Sweden data is pretty clear, 6.1% loss in gdp with very open policies. There is no reason to thibk there is anything governments could have done to avoid a huge recession

Again you are covering up the objective disaster of lockdowns enacted after Sept 2020, which what probably would have happened anyway march to may 2020.

A GDP loss in Q2 and Q3 2020 was inevitable (magnitude depending on tourism relevance in your country among other things, and cowardice of the population).

But after that an extremely quick rebounding would have been automatic everywhere, and at absolutely 0 mandated restrictions that recession would have been the sharpest and quickest to solve V recession in recorded economic history everywhere.

The added damage of lockdowns (broadly defined here as any interference with normal business regulations up to Feb 2020) was a lot worse than the inevitable short term damage of the arrival of COVID itself.

Also remember that if you think lockdowns save lives, they decrease per Capita GDP vs counterfactual. Every time a retiree dies everyone else is better off objectively, in real per Capita GDP sense.

Letting COVID kill some elders 1-3-5y earlier is an economic boom for all survivors

lol:
Not because miss yellen said this it mean recession definition changed ….
Grog already explain it ….
2 negative quarter is a general idea which usually is a good barometer.
Regardless we aren’t presently in a recession and yes the bottom 20% always are in a recession even when the economy is booming , that is why they are called poor people .

No idea why u feel rent is so special .
Rent is part of cpi and yes there was a jump in prices like everything else and cpi is going down , slowly but it’s coming down .
Furthermore rents comes lot slower then other inflation data simply because people rent 1 year at a time not changing every month like other cpi items .

We see how rent definitely going down in aggregate.
https://en.macromicro.me/collections/5/u...

https://en.macromicro.me/charts/24/cpi-h...

How an economy slowdown when you lash out huge amount of money in the economy ?
Explain that to me ….

All poker dealers who get taxed on their tips will greatly benefit when President Trump (once he's officially reinstated) outlaws the IRS to tax your tips.

and it's not the IRS taxing incomes, and defining what income is, it's congress.