Trump’s presidency is 1/8 done. The economy is still on Obama’s autopilot. Where’s the DOOOM?!?
Trump’s presidency is 1/8 done. The economy is still on Obama’s autopilot. Where’s the DOOOM?!?
Today marks half a year since Donald Trump took the Oath of Office as President. I just wanted to note that, so far, absolutely nothing of significance has been enacted to affect the economy. It’s still basically Barack Obama’s expansion.
Of note, where have all the Doomers gone? Zero Hedge has turned into a Trump + Putin fanboi club. The left-wing purists who were sure that everything stunk and the next crash is right around the corner have moved on to other things. The writers who had been bleating about imminent recessions – almost every year since 2009 – are now just talking about very slow GDP growth. I’m almost tempted to become a contrarian!
Basically, everything of note is positive, although much has been or is decelerating. Over the next 6-12 months, if Washington leaves the economy alone, I expect job growth to continue, the unemployment rate to decline a little, prime age labor force participation to increase, and nominal wage growth to remain steady if participation increases a lot, and maybe increase more if participation only increases a little, although the positivity of most of these things will probably decelerate.
One eighth of the way through Trump’s presidency, Obama’s autopilot is still engaged.
” The left-wing purists who were sure that everything stunk and the next crash is right around the corner have moved on to other things. ”
It’s not the leftwing purists, it’s the center left sellouts who are crying wolf like it’s the end of the world. They have no agenda to run on except minor tinkering and not being Trump.
The Fed has been tightening since 2013 over misplaced fears of inflation.
May just be my reading list but Doom is still on the agenda of John Hussman, Wolf Richter, Mish, the roiling black mass of editors and commenters at ZH (they had a week of YELLOWSTONE ABOUT TO BLOW for God’s sake).
Doom usually follows several years of heated growth based on some unsustainaible factor. Granted, in the oughts that “heated growth” hit no higher than a 3.8% increase in real GDP. But the fastest increase in real GDP since the Great Recession was a measly 2.6% in 2015. Its not like the economy has scaled to commanding heights under Obama, so we’ve gotten used to growth rates between one and a half and two and a half percent. In other words, doom is now the status quo. That isn’t to say we can’t have an even worse doom, but the economy has been very lousy for a while now.
well
i keep hearing about how well the economy is doing. and guess who is getting the credit for it.
I think people overestimated the zeal and effectiveness of the Republicans having control of the House, Senate, Supreme Court and White House. If you have been following Republican rhetoric since Obama or Clinton, for that matter, took office, you might imagine them passing all sorts of legislation repealing Obamacare, cutting financial regulation, slashing taxes and so on. It’s been six months, and they’re still trying to repeal Obamacare.
It’s feels like Asimov’s ‘Foundation and Empire’ where Bel Riose has completed the Prior Enclosure, a supposedly an undefeatable military tactic, and everyone is sure that the Foundation is done for, In the book, Bel Riose’s downfall was predicted by the esoteric science of psychohistory, but by no one else expected it. Military victory was impossible, but the Thousand Year Plan took imperial politics into account as well. Bel Riose was doomed by greater forces.
It was a great story, probably the best part of the original Foundation trilogy, but it was science fiction. The Republicans have been baying like wolves alongside the racing sleigh for eight years, and now they have completed their Prior Enclosure. The Foundation – read Obamacare – is outclassed, isolated and surrounded, and the only thing stopping the Republicans from administering the coup de grace seems to be some mysterious psychohistorical force.
I’m not too sure just how strong this force is. So far, the Republicans have been focused on Obamacare. We haven’t seen their new budget. They have just started the rounds of appointments. It is way too soon for the effects of leadership changes at various government organizations to be felt. Even the Fed has only been raising rates cautiously, but bank lending has been a decreasing component of economic stimulus as the capital glut has grown.
The Republican agenda, as stated and as generally implemented, is deeply unpopular, but it does tick off the right people so many people have voted for it. This seems to be a factor in the current health care impasse. I’m not a psychohistorian, so I can’t grok all the forces at work with any precision, but I can see them at work now that they are in action. Will these forces stymie other “reforms”? Will the Republicans come up with some grand compromise that lets them move forward? I’m not sitting around the vault waiting for the next simalcrum of Hari Seldon to appear.
As long as the economy stays on autopilot and the Republicans fail to pass any major legislation, or at least any legislation with major policy changes, one can imagine the Obama boom, such as it is, to continue. Six months is not a very long time. We are still flying on an Obama era budget. The doom and gloom people may have overestimated the Republicans in the face of the forces of psychohistory, or they may have merely gotten the timing wrong.
Or the same people frustrated and angry with lack of improvement in their lives during the Obamq years, who voted for Trump for change, may decide to vote for change again and throw Trump and his people out.
Or the people will get fooled again… because they keep on believing the same lies.
As for the R’s, I am reasonably sure they don’t give a damn about Obamacare (Romneycare). They just think they had to deliver on their campaign promise after teaching the people to hate Obamacare.
Meanwhile they are dismantling environmental protections, and legal protections, and will probably usher in a thousand years of rule by a few families with all the money, and no one the wiser.
Except they won’t have a planet worth living on.
Who knows? After midterm losses, if sizable enough, Trump may have to work with Democrats and still be eager to sign anything that passes. He isn’t really a policy guy.
“Today marks half a year since Donald Trump took the Oath of Office as President. I just wanted to note that, so far, absolutely nothing of significance has been enacted to affect the economy. It’s still basically Barack Obama’s expansion.”
And when an internet bubble bursts a few months into your presidency who do the lunatics on the left blame? The predecessor or the inheritor?
The Nasdaq went up 7 fold from January 1992 to January 2000. But in 2002 it was only double what it was in January 1992. We see how much of the 1990s was an illusion.
Jay,
I know on no one that thought Bush had anything to do with the dot com bubble bursting. No one.
You got up this early to build a straw man? On a Sunday?
Furthermore, I would look to Greenspan.
Run,
To a point. At the same time, the 90s were the only time where the middle class actually saw wage increases. That was not because of the Nasdaq.