I count on lower interest to kick down the can a bit longer down the street.
Maybe in two to six years... I even wouldn't be surprised if trump gets reelected, does everything to "rescue" the economy (while more and more people suffer on a personal level) and when he leaves... Bang... It's the fault of the next guy!
I think sustained low interest rates will be seen as the cause of the crisis in the post mortem for two reasons:
1. Corporations took on mountains of low interest debt to fuel stock buy-backs. This "made sense" because earnings growth readily outpaced interest on the loans.
2. Investors took out mountains of low interest debt to fuel stock purchases. This "made sense" because earnings growth readily outpaced interest on the loans.
We are in a dangerous compound leverage situation. The moment growth looks to have subsided, investors are going to deleverage en masse, causing a cascade of sales and stock price plunges. Companies will no longer be able to pay the mortgages on their buy-back bonds, and will make cuts, which will just make the bleeding worse. Cue massive corporate bankruptcies and bailouts.
I have a thesis that interest rates and rate of growth will trend towards each other over the long term. Investors assume that the market will always return ~7%, which I think it has only done because long term interest rates were a little under ~7%. The next collapse may drag long-term growth down to the ~3% range, which will be doubly-bad for companies paying bonds with interest rates near that.
Many politicians do similar because there is little practical incentive to sacrifice the short-term for the long-term. You are typically judged by the economy here and now, not 15 years away. Thus, shorter-term decisions create debt and pension problems down the road.
Do we blame the person or the incentive system?
That being said, the world is entering a recession, and the USA cannot hide from that forever. It will catch up (or down) to it in a year or two.
It's pretty well known that Trump has been irksome to many in the intelligence community and the "establishment" (both status quo Republicans and Democrats). I wouldn't be surprised if the powers that be help move the crash along so that it occurs when Trump is in office. As it appears now, many want the country to move in a leftwards direction - more government intervention and regulation. The best way to achieve that would be having an example of why our current system is unsustainable (think of the momentum and public approval of FDR's "New Deal" after the Great Depression occurred, which many, perhaps somewhat incorrectly, attribute to laissez-faire economics and lack of government intervention) and the economy at this point, whether rightly or wrongly, is completely tied to Trump. He's been taking credit for it for some time. If it goes belly up, most people will not take his accusations of manipulation and wrongdoing (i.e. Fed policy) seriously.
This reads exactly like right-wing "deep-state" Q-anon nonsense.
If I was KGB and had deep tentacles into elected officials I'd spread rumors about how the the CIA/FBI/etc. were trying to overthrow the government, other conspiracies, etc.
> As it appears now, many want the country to move in a leftwards direction
If by many then you mean "many voters" then yes. Most of the dyed-in-the-wool alphabet soup / military types, the same ones who would be deep state material, are pretty ardent republicans. Mueller, for example, is a lifelong republican who was a Marine Corps officer in Vietnam -- solid freemarket GOP type.
I didn't mean to imply any overthrow of the government or any sort of vast conspiracy, I was referring more to 'manufactured consent' along the lines of Chomsky. Even if there's no intentional manipulation of Fed policy for one reason or another, a socialist (or democratic socialist) would certainly find more success in selling their ideas to voters in the middle of an economic crisis, especially if most voters view it as primarily Trump's fault.
If a recession, or an even greater economic downturn, is inevitable it would seem to me that the Fed could either delay the inevitable, or quicken it. The Fed is supposed to be politically independent, but politicians present and past have tried to influence and pressure them. In a notable instance, LBJ physically threatened the then Fed chairman - probably a little worse than how Trump tries to influence today (mean-spirited tweets mostly). Of course, no Fed chairman will admit they changed course due to political pressure, but we'll probably never know if that's completely true:
I understand that many 'deep state' actors are Republicans - I believe your implication is that, because they are Republicans, they would oppose popular policy proposals from Democrats like Medicare-for-All, Free Higher Education, and certainly sweeping proposals like the Green New Deal. But is that true? I think there's a real possibility that many of these Republicans are more loyal to statism than they are to any concrete political ideology.
It seems that any time a government is formed, it becomes an entity that continues to grow and continues to spend, some faster than others. The establishment of fiat money systems probably accelerates the pace of this pattern as there's more room to be fiscally irresponsible or to simply pass the burden along to the next generation. The national debt of the US is evidence of this - regardless of whether it's a Dem or Republican in the Oval Office, spending continues and so do military misadventures. It's easier to paint the Dems as the 'statist' party as their proposals typically involve government intervention, but I think the question needs to be asked: when's the last time a conservative president 'conserved' something?
I got the feeling that the article was more about how indicators are retrospective; they’re based on events that happened in the past, and not reflective of today’s economy.
It was more about how we don’t know what will cause this next recession.
Just an opinion, but I don't think Bernie can get elected. I think that 'democratic socialism' can be sold to enough voters to get elected, but I don't think Bernie is charismatic or endearing enough to be the person to do it.
I think the most electable is Biden, but I don’t think he’s progressive enough to get the nomination. The rest are not centrist enough to win a general election.
Centrism won with Clinton I and Bush. Clinton II lost because Clinton II was a terrible shoehorned candidate—a kind of negative Bob Dole. A Kerry would have won.
Wouldn't bet on Sanders winning, unfortunately. The DNC/pollsters/media outlets are taking steps to screw him over leading up to/during the primaries, similar to 2016. At that point, it's safe to bet Trump will win
They are also taking steps to screw Andrew Yang and Tulsi Gabbard over. The former had his mic cut at the debate and the latter has supposedly been prevented from buying Ad campaigns by Google (in addition to the completely unfair press she often times receives - for an example, look at how the mainstream press covered her when she went to meet Assad)
Expect alarming headlines on any number of topics. The economy, especially.
Keep calm and carry on. If at all possible, remember which publications posted alarming headlines of which types. It'll help you identify their inclinations.
Maybe in two to six years... I even wouldn't be surprised if trump gets reelected, does everything to "rescue" the economy (while more and more people suffer on a personal level) and when he leaves... Bang... It's the fault of the next guy!