
It’s Official: This Is Now the Longest Economic Expansion in US History - Fifth_Star
https://thesoundingline.com/its-official-this-is-now-the-longest-economic-expansion-in-us-history/
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dalbasal
I think that GDP (and therefore inflation) don't actually measure what they
used to.

You can measure the number of cars being produced and houses built. It doesn't
really matter how you quantity value the value of a 1999 vw golf relative to
the 2019 model. Once iphones, Google, Spotify & such get thrown into the
mix... GDP just doesn't tell us much about how economic output has changed
over the last 20 years.

For the average person, I think we need to think in different terms. Housing,
education, transport, consumables and manufactured goods & services.

Generally I feel the trend (in Europe, at least) has been to big gains in the
latter categories and stagnation/negative growth in the former. Housing
affordability has gotten worse. Transport has gotten more expensive. Education
has gotten more expensive (both for students and in total) and is "worse" in
terms of leading to predictable career/income outcomes... a key decision-
driver of education choices.

Meanwhile consumables (food, washing detergent) have gotten cheaper.
Manufactured goods (furniture/iphones) have gotten _way_ better/cheaper.
Services are a mixed bag (financial services dragging the whole category
down).

These categories are generally not fungible. No reductions in the price of
food or iPhones (not even free) will help make housing more affordable.

GDP... I'm not sure what it really measures anymore. It's become totally
abstract. Meaningful within models but not indicative of anything about the
world.

I think it had meaning 40 years ago, but the etherealization of the economy
ate it.

All that said... Uniquely low GDP growth relative to high S&P returns.
Picketty is probably going nuts.. in soft spoken French.

~~~
ttoinou

       I'm not sure what it really measures anymore
    

What makes you think it has been at least once meaningful ?

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dalbasal
..the stuff it measured. Deltas in manufacturing volume. More steel = more
GDP. More refrigerators = more GDP.

There were always ambiguities. More lawyer fees = more GDP? Questionable.
But... The portion of simple more=more economic outputs has really shrunk
relative to the ambiguous ones where more<>more or price=0 or whatnot.

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apo
Quantitative easing is a powerful drug. During the 2008 crisis, most observers
didn't even seriously consider the possibility that the Fed could buy long-
term treasuries and mortgage securities. Those who did vastly underestimated
the scale on which the Fed would eventually do so.

But QE is also highly addictive. The next downturn will most likely take place
within the next 18 months. It's going to catch a lot of dumb money flat-
footed, and that means big declines in the stock market - something that has
now become simply not acceptable politically.

There's one more piece of candy in the jar though: negative interest rates.

Where the Fed decides to go with short term rates isn't really that important
anymore. Far more important is how it begins to lay the groundwork for
negative rates.

Because negative interest rates will transform the grossly distorted world
economy into something completely unrecognizable.

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helen___keller
>negative interest rates will transform the grossly distorted world economy
into something completely unrecognizable

Can you elaborate on this? I thought Japan had negative interest rates for
quite a while

~~~
sdfsaf
And they've been economically dying for almost 30 years.

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rhacker
Money is strange, right? It literally doesn't exist yet it can run out and
cause entire nations to go into chaos. Since it is literally a sociological
experiment, are we going to get to the point where we fine tune the allotment
such that we disable down-turns? It's almost as if we simply just get angsty
all at once, see a global therapist and the economy recovers.

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blts
Money is quite simple - it is the accumulation of value of individual work.
The same way batteries store electricity - money store value of work. The same
way batteries exchange stored electricity to perform work, money is exchanging
stored value to work of others that we desire.

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Excel_Wizard
The Labor Theory of Value is a fun toy model, but it isn't very accurate.

~~~
Nasrudith
Yeah even putting aside demand (just because someone spent 50 years making one
really good vase doesn't mean 50 years of pottery wouldn't be better even if
the potter had to dredge all of the clay themselves instead of using
apprentices or hired servants) it has been obviously broken since the
Industrial revolution at least but had predecessor cases that pointed out it
wasn't true. Aquaducts or irrigation canals alone snap it in half.

It goes from "effort to haul X ammount of water Y distance by N people" to
"and it just flows after this constant work".

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blts
You mistakenly equate effort with value.

~~~
randallsquared
They're explicitly arguing _against_ equating effort (labor) with value.

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api
Is it real growth or just inflation showing up primarily in asset prices?

At the street level it looks as if some recovery has occurred, but you
certainly can't compare it to the "roaring 90s." The average person has not
felt much of this.

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tryptophan
Both contribute to higher prices. Corporate profits are up a ton too, over the
past 5 years.

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mmargerum
Wonder how long it would continue if we stopped injecting a trillion dollars a
year into the system.

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pessimizer
Of course a less deceptive way to refer to it is as the slowest recovery from
a recession in US history.

~~~
logfromblammo
Username checks out.

Though to be even more pessimistic, the finance wizards have finally
rediscovered how to create a permanent recession at the bottom of the economy,
and a permanent expansion at the top, so as to multiplex the business cycle
over the class gradient, rather than over time.

Reagan economics yields to Antoinette economics.

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thatfrenchguy
Between the stock market going much higher than the actual growth, the
post-2008 inequality issues, the student debt disaster, the high risk from oil
companies being valued trillions of dollars and everyone being in passive
investing, I’m fascinated to see what the next crisis will be.

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bradknowles
It’s only the longest expansion in history, if you define expansion to being
grabbed by the pussy and kicked in the teeth.

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RickJWagner
I read somewhere the record belongs to Australia, with a 27 year expansion.

In that light, the US economy could go quite a while longer. I hope it does.

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yehaaa
How much of the expansion comes from borrowed money though?

