
Partisan Divide Over Economic Outlook Worries Ben Bernanke - jonwachob91
https://www.nytimes.com/2017/04/24/business/dealbook/partisan-divide-over-economic-outlook-worries-ben-bernanke.html
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nzjrs
I feel like no one here has read the article, and is just having their fun
doing some character assassination.

    
    
      > “The election result completely reversed people’s views 
      > of the state of the economy. Republicans who thought that 
      > we were in a dystopia now think things look great, and 
      > Democrats, the opposite. And it shows that it isn’t all 
      > based on an objective assessment of the economy.”
    

Seems a pretty salient and uncontroversial observation.

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maxxxxx
That's one thing that drives me crazy when I talk to people. When the other
party does something they are outraged but when their own guy does it, it's
suddenly OK. I guess the parties have achieved the final goal. People are not
even capable of looking at a situation anymore and make up their mind. Instead
they just blindly follow what they are being told.

~~~
Pigo
I believe in a quite majority that is perfectly capable of independent thought
and self-awareness, but lacking news outlets they trust to give them anything
but narrative. It could be the slow death of newspapers that led us here.

~~~
maxxxxx
The lack of newspapers they trust is just a consequence of political parties
undermining that trust. You still can read the New York or Wall Street Journal
and get enough information to form a reasonable opinion.

~~~
mythrwy
I disagree. Media seems to me to have gotten much more sensationalist and
click baity over the last decade and often really stretches the facts in
interests of agenda. To be fair maybe they feel this is necessary to survive
in the face of the internet.

Trust is hard to establish but only takes an instant to break.

~~~
maxxxxx
I agree that media has gotten more sensationalist. CNN for example is just
horrible. But I would still say that it's not difficult to filter out real
facts if you want to. Most people don't want to though.

~~~
mythrwy
Ya, true enough. Most people want to believe what they want to believe.

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tray5
It's impossible for economic policy to not be politicized. Look around the
world, all political parties are distinctly grouped by their economic beliefs.
If anything, the US political landscape needs to be more far more political on
the economy. Differentiating republicans and democrats on their economic
policies is almost impossible. Especially compared to literally every other
country (excluding dictatorships). This almost identical belief about the
economy has made an incredibly toxic and arbitrary system where people
misplace their anger at each other because they have not been educated on what
the true source of their anger is or what their alternatives are! It's made an
ugly tribal political system where it's us vs them.

~~~
Consultant32452
I agree. The economic policies of Democrats and Republicans is really
indistinguishable from Goldman Sachs economic policy.

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jevgeni
Private enterprises don't have economic policies.

~~~
Consultant32452
You don't think private enterprises lobby for economic policy? Maybe you're
just making an argument about wording?

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jevgeni
Wording is important. The current US president is a good example of what
happens, when one is careless with one's language.

GS doesn't define U.S. economic policy. It might lobby for some specific
issues, sure. But it isn't interested in defining the entirety of economic
policy.

Also, I don't see lobbying as a problem, if it is transparent.

~~~
Consultant32452
Wording is important. And I intentionally worded my OP to convey my concern
that US economic policy is indistinguishable from GS wishes. It's just a
little artistic expression, and it was clearly effective since you apparently
knew exactly what I meant. I'm not writing an article in the Quarterly Journal
of Economics here. When US economic policy is indistinguishable from the
wishes of GS, GS may as well have an economic policy.

~~~
jevgeni
What bothers me is the conspiracy-theory-like obsession with GS. No mention of
JPM, or BofA, or Citi, and so on. It's not about you concretely, just in
general what I often hear and see. Your comment was just an example of the
focus.

It's like GS is the only bulge bracket bank with lobbying interests and deep
Washington connections. GS are mostly smart and mean. Sure. But do you really
think that their competition does nothing and lets them dictate their
interests in DC willy-nilly?

~~~
Consultant32452
It's because GS alum are consistently finding themselves in high political
office. Rahm Emanuel, Obamas Chief of Staff, was on the GS payroll for $3k/mo
while in office. His job description at GS was to "introduce us to people."
Here's an article about GS ties to Trump's White House.
[https://www.nytimes.com/2017/01/12/business/goldman-sachs-
co...](https://www.nytimes.com/2017/01/12/business/goldman-sachs-completes-
return-from-wilderness-to-the-white-house.html)

BofA, JPM, etc. definitely have ties, but it never seems to be as blatant as
with GS.

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bsaunder
“You have to recognize realistically that A.I. is qualitatively different from
an internal combustion engine in that it was always the case that human
imagination, creativity, social interaction, those things were unique to
humans and couldn’t be replicated by machines,” he said. “We are coming closer
to the point where not only cashiers but surgeons might be at least partially
replaced by A.I.”

I think the politicians will finally get it when income tax revenues start
eroding (maybe as soon as this year?). I'd expect this to force a pivot to a
sales/transaction tax model. Hopefully (but I'm not optimistic) this is paired
with a final capitulation on the necessity of a UBI.

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rodionos
Quote from him ca 2006 - we haven't seen a nationwide housing bubble.
Predicting is hard, even if you have tons of data. Greenspan used to take long
hot baths (according to his book I read) to finalize the estimates. Guess
what, he was really good at it.

~~~
jonwachob91
He said the same thing in his book "Courage to Act". I genuinely believed it
until I read "The Short". You didn't have to have tons of data to predict the
bubble, you just had to take the time to read the loans. Everyone saw this
bubble long before Bernanke did.

~~~
bryanlarsen
Everybody saw the bubble, it made the cover of the Economist many times in the
4 years before the crash.

The hard part is predicting when and how it would pop, and nobody could do
that. Tons of people lost their shirts shorting against the bubble. They
weren't wrong, just early.

"The market can stay irrational longer than you can stay solvent" \- Keynes

The how was important -- everybody acknowledged that the market was in a
bubble, but many people predicted that it wouldn't pop catastrophically as it
did.

~~~
justinzollars
found it!
[http://www.economist.com/node/4079027](http://www.economist.com/node/4079027)
they def called that one. "Interest-only loans"

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jevgeni
I feel a lot of commenters here don't differentiate between economics as
subject of policy and economics as tool for politics.

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ue_
Economy has always been political, since thr discipline was founded as
political economy, the part which modern economists have excised from their
expertise. Good books on political economy include those by Ricardo, Smith,
the excellent critique of political economy Capital by Marx and those books by
Proudhon.

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pjmorris
Bernanke made the choice to resolve bad housing loans by handing out trillions
(through the purchase of mortgage-backed securities) to the lenders instead of
the borrowers. I think his analysis would be improved if he recognized that
was a political decision, not just an economic one.

~~~
jevgeni
Not handing out, but lending out.

Bailing out households would be a far more political decision. The Fed could
impose constraints on banks participating in TARP, to make sure the money gets
paid back. The same wouldn't be possible to practically do with households.

~~~
maxerickson
In addition to the loans and direct investments in banks, there was a large
asset purchase program:

[https://en.wikipedia.org/wiki/Public%E2%80%93Private_Investm...](https://en.wikipedia.org/wiki/Public%E2%80%93Private_Investment_Program_for_Legacy_Assets)

It can be cost neutral by way of selling the assets back to the market, but
that isn't happening at any sort of rapid clip. The Fed currently has ~$1.8
trillion of mortgage backed securities.

[https://fred.stlouisfed.org/series/MBST](https://fred.stlouisfed.org/series/MBST)

The bailout targeted the entire economy. Imagine the pinch we'd be in if
housing all of the sudden wasn't too expensive to buy (and thus not a glorious
asset for all the people that have it).

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jevgeni
Thank you for the insight! I haven't considered "sector targeting". 1.8
trillion USD MBS is a bit unsettling, I must say.

~~~
maxerickson
It's "only" about 12% of the market.

[https://www.federalreserve.gov/econresdata/releases/mortouts...](https://www.federalreserve.gov/econresdata/releases/mortoutstand/current.htm)

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dustingetz
"To Mr. Bernanke, when the economy — as well as the basic statistics that
undergird it — becomes politicized, the result is bad policy. “A lot of the
emotion is not really susceptible to nuanced policy arguments,” he said,
shaking his head."

Not the same! He didn't say that!

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makosdv
He is correct in a way. As long as the government is trying to "control" the
economy, it will be "politicized". The only way to not "politicize" the U.S.
economy is to get rid of the Federal Reserve, etc.

