CNBC: Nearly 25% of Americans are going into debt trying to pay for necessities like food

[Burgold]

This is the emperor has no clothes part of the great economy. The stock market is doing great. Everything else???

[tshile]

um. i don't know that the stock market is actually "doing great"

 

I have not, since late 2016, looked at any of my portfolios and been pleased with the overall picture. There are periods of time where things are nice, but grand scheme of things I'd prefer consistent steady gains over whatever the **** this is.

 

at its current rate I'm not sure if I'll be positive or negative next month under the trump admin. it swings that wildly that quickly, especially when he starts tweeting 

 

edit: I guess what I'm saying is I think its too volatile and I don't like that. I realize things have gone up a bit.

[Bozo the kKklown]

20 minutes ago, Burgold said:

This is the emperor has no clothes part of the great economy. The stock market is doing great. Everything else???

the sad thing is the stock market is not an indicator of anything with regards to the economy.

 

We are living in a corporatist hellscape. Just need fascism to finish the job.

[Burgold]

But that's what people have pointed to when claiming we're in a great economy. That, and low unemployment, I suppose. To be fair, people pointed to the Obama Stock Market too as a sign that things were going strong.

 

Maybe it's just my perspective or personal situation, but from what I see it doesn't feel like we are in a period of prosperity for all... or most.

 

 

[tshile]

27 minutes ago, Burgold said:

But that's what people have pointed to when claiming we're in a great economy. That, and low unemployment, I suppose. To be fair, people pointed to the Obama Stock Market too as a sign that things were going strong.

 

Maybe it's just my perspective or personal situation, but from what I see it doesn't feel like we are in a period of prosperity for all... or most.

 

 

 

The only people who make judgements about the economy (as a whole) using the stock market are stupid people (or at best, people stupid in regards to economics)

 

the economy was doing well within the context of the fact that we had an incredibly serious crisis that requires a gigantic salvage operation by the federal government. 

 

I would argue the economy right now is hard to judge because the Republicans came in and poured gas everywhere and lit the whole thing on fire. We’re still watching it burn and we won’t know for sure what’s left until the flames die down. But that’s their MO - pour gas everywhere and celebrate the gigantic bon fire they made (short term large improvements) and when it dies down and there’s nothing left and the economy falls apart blame the dems (cause they’ll be in charge when it happens)

 

its also also hard to judge an economy when the president is threatening tariffs against our largest trade partner on a whim, then canceling them, pulling us out of trade agreements, etc. 

 

Obama left us a fundamentally sound economy that needed some further nursing and some restructuring and reprioritizing of government spending. And we needed to fulfill the plan of that was the QE exit strategy.  We needed to focus on wage stagnation, underemployment, and the wealth gap. 

 

The republicans poured gas everywhere and lit it on fire. 

 

I dont know what the end result of that is. 

 

(But their ‘awesome numbers’ still aren’t high enough for their tax policy to “pay for itself”)

 

((just my opinion. We have people here who actually know this stuff, as always I defer to them if they choose to opine))

[Bozo the kKklown]

The economy isn’t doing well and hasn’t done well since the 70s for most Americans.

 

its all been a castle of sand. 

[Renegade7]

18 minutes ago, BenningRoadSkin said:

The economy isn’t doing well and hasn’t done well since the 70s for most Americans.

 

its all been a castle of sand. 

Wanna play???

 

 

[nonniey]

1 hour ago, Burgold said:

This is the emperor has no clothes part of the great economy. The stock market is doing great. Everything else???

1). In August 2018 Nominal wage growth went over 3% for the first time since early 2009  and has remained above 3% since but still below target of 3.4%.

2). Inflation has been kept under control despite the rise in wages (can be a 2 edged sword policies that keep inflation checked can limit ability to reach goal of 3.4% wage growth). 

3). Unemployment you've already pointed out.

 

[Burgold]

2 minutes ago, nonniey said:

1). In August 2018 Nominal wage growth went over 3% for the first time since early 2009  and has remained above 3% since but still below target of 3.4%.

2). Inflation has been kept under control despite the rise in wages (can be a 2 edged sword policies that keep inflation checked can limit ability to reach goal of 3.4% wage growth). 

3). Unemployment you've already pointed out.

 

This isn't fair because it has always been calculated this way, but it makes absolutely no sense for inflation calculations not to include food and fuel prices. How much a loaf of bread costs or a gallon of milk should be the primary way we judge inflation. Inflation should be based on the staples everyone needs or everything bought on a regular basis.

 

I will also say I'm dubious about the normal wage growth. I suspect we are seeing an outlier effect. Top wage growth has been growing, middle and lower not so much.

[nonniey]

5 minutes ago, Burgold said:

This isn't fair because it has always been calculated this way, but it makes absolutely no sense for inflation calculations not to include food and fuel prices. How much a loaf of bread costs or a gallon of milk should be the primary way we judge inflation. Inflation should be based on the staples everyone needs or everything bought on a regular basis.

True but was just reporting what is used and has been used.  Under those measurements the economy is doing better now that it has since 2008.  (Of course we all remember how quickly that changed). 

[tshile]

54 minutes ago, nonniey said:

Inflation has been kept under control despite the rise in wages

I don’t feel like this is an accurate statement. 

 

I think the fed fed has been targeting higher inflation and hasn’t been able to get it and I feel like i keep reading they’re not really sure why it’s stuck so low

 

@No Excuses @PeterMP Can you comment? I know one of you either knows that is or isn’t the case. 

[nonniey]

36 minutes ago, tshile said:

I don’t feel like this is an accurate statement. 

 

I think the fed fed has been targeting higher inflation and hasn’t been able to get it and I feel like i keep reading they’re not really sure why it’s stuck so low

 

@No Excuses @PeterMP Can you comment? I know one of you either knows that is or isn’t the case. 

Fed performs a balancing act. They want to keep inflation low but also have good economic expansion. The thought is if the economy grows too fast that leads to inflation so the Fed may raise interest rates to slow growth (if they think inflation could occur) while lowering the rates stimulates growth (or so the thinking goes).

[Springfield]

We are all one major medical ailment away from financial ruin.  Every single person on this board.

[PleaseBlitz]

21 minutes ago, Springfield said:

We are all one major medical ailment away from financial ruin.  Every single person on this board.

 

I don't think that's true.  I'd bet the top 20% of people on this board would be just fine.  Maybe more.

 

But 40% are one relatively minor medical ailment away.  Like, a broken finger or like minor food poisoning.  

 

What does $400 get you at your shop?  2 tires, installed?

[Simmsy]

4 hours ago, Burgold said:

But that's what people have pointed to when claiming we're in a great economy. That, and low unemployment, I suppose. To be fair, people pointed to the Obama Stock Market too as a sign that things were going strong.

 

Maybe it's just my perspective or personal situation, but from what I see it doesn't feel like we are in a period of prosperity for all... or most.

 

 

When Obama added more jobs, they were low tier jobs, definitely something you wouldn't bank a career on with life goals. This administration is taking the BS credit of the last administration and continuing to use these inflated numbers to embrace Trump. You can't set fire to the economy and claim everything is going to be ok. Once again, look at your paycheck, citizens.

[nonniey]

1 hour ago, Simmsy said:

When Obama added more jobs, they were low tier jobs, definitely something you wouldn't bank a career on with life goals. This administration is taking the BS credit of the last administration and continuing to use these inflated numbers to embrace Trump. You can't set fire to the economy and claim everything is going to be ok. Once again, look at your paycheck, citizens.

1). In August 2018 Nominal wage growth went over 3% for the first time since early 2009  and has remained above 3% since but still below target of 3.4%.

[NoCalMike]

It's not like the progressive left of the party sang the praises of Obama's recovery though without some criticisms.  The establishment did of course, they did what most career politicians do which is look at the same vague indicators to show how great things are, but there were voices throughout Obama's recovery that were trying to temper the uber-praise.  

 

For me, I think the biggest indicator of where the economy is should be how far your dollar stretches.  Where are wages in relation to inflation.   I don't care about more GDP being pushed out the door because that often has little to do with actual improved conditions for the workers themselves.  It often doesn't translate into more money in paychecks, but it does equal more profit for the company and we know where that usually goes. 

 

For all these Trump supporters that want to "MAGA" shouldn't they be asking the same questions as liberals such as why America used to be a country where a single income could raise a family yet now even a lot of dual income houses can barely afford to get by?

 

I live in Sacramento, which is nowhere near the cost of SF or Los Angeles, but I have so many co-workers going into their 30's who can't afford to live by themselves in apartments, and this making a wage that while isn't incredible isn't necessarily low either. 

 

There was a transformation that took place in this country.  There were always rich, middle, & low income people, but balance has and continues to shift in one direction as to where it is all going.  The scheme is working, and the middle class is not only left fighting with each other about it, but also pointing their fingers at the lower class, all the while the wealthy are laughing all the way to the bank.

[Bozo the kKklown]

35 minutes ago, NoCalMike said:

For all these Trump supporters that want to "MAGA" shouldn't they be asking the same questions as liberals such as why America used to be a country where a single income could raise a family yet now even a lot of dual income houses can barely afford to get by?

Man! This is why I cannot bang with anyone who says our economy was great at any time the last 40 years. Something changed where one income isn’t enough. Where people can’t afford healthcare. Where people can’t buy homes despite not being near poverty, without being scammed like the subprime mortgage crisis. Where people have to work two or three jobs to make ends meet. This has been a frog slowly being boiled. The American worker is that frog. Yet none of us know it. And instead you have some nutters saying “well you don’t need to get a cellphone,” or “well you don’t need to pay for the internet,” among other things.

 

No matter who the president is, the American worker has been getting screwed. Even those who think they are doing good.

[PeterMP]

4 hours ago, tshile said:

I don’t feel like this is an accurate statement. 

 

I think the fed fed has been targeting higher inflation and hasn’t been able to get it and I feel like i keep reading they’re not really sure why it’s stuck so low

 

@No Excuses @PeterMP Can you comment? I know one of you either knows that is or isn’t the case. 

 

@nonniey

 

There has been very little increase in wages that hasn't been offset by the increase in inflation.

 

Median weakly earnings, CPI and seasonally adjusted were in Q1 2017 were $351.  Q2 2019, it is $357.

 

$6 bucks a week over 2.5 years is not good wage growth.

 

Inflation adjusted, percent wage growth looks like this:

 

 

Longer term, it looks like this.

 

 

So we're clearly even below the Jimmy Carter stagflation years (which the GOP will tell us were awful economic years).

 

Now, real total household incomes are up because more people are working more.  There are now more real 2 income homes then there were during the recession.

 

I'm a little confused as to why the Fed says they don't understand why inflation is low.  It isn't that hard.

 

(And I'm not the only one and some think the Fed is simply lying.)

 

1.  Inflation is low because demand is low because wage growth for most people is low.  Prices can't go up because nobody has enough money to buy more.  (After actually growing during the Great Recession, the US savings rate is actually declining again).

 

Demand is low because despite unemployment going down, there is still excess labor, especially when you take into account automation.  In addition, productivity increases have been low (and even negative since 2014) as companies aren't investing so wages can't grow.

 

Companies are sitting on profits (stock buy backs) and banks aren't lending (and are making money anyways; the Fed changed the interest rates on FDIC deposits during the economic crisis, to make it more advantageous to have money with the Fed, but never changed the rules back so banks make more than they used to by just taking the money and leaving it with the Fed).

 

Realistically, companies either don't believe the economy is actually better or they don't care (they are happy with the profits they are bringing in now).  Yes, they are hiring more people, but they are doing so as long as those people are coming at low wages. Wages stay low, demand stays low, inflation stays low.

 

2.  Population growth is low and a lot of economic growth is tied to population growth, especially with an aging population

 

(Look at Japan.)

 

3.  There is also an issue that the Fed is using outdated measures of inflation, but they seem to think they are perfect (which makes no sense to me.  At best any measure of inflation is a model of inflation).  For example, CPI doesn't include homes (it does include rents, but they haven't changed as much as home prices).  During the great recession, home prices plummeted so in reality, the great recession was massively deflationary.  Since then, home prices have been going up, which is really inflation.

 

But today, with the importance of going to college, pre-college education is important and that has an effect on homes.  The importance of owning a home has gone up over the last 50 years.  And despite the decreases during the great recession, they are now back up (not quite to where they are, but well over historical norms).

 

The other thing is stock prices.  Stock prices have gone up and owing stock is more important than ever and so is really inflation for many more people.

 

(My dad passed several years ago.  I started helping my mom with their investments.  My dad had a guaranteed pension that at his death passed to my mom at some percent (I think my mom alone gets 75% of what they would have gotten before my dad died).  My parents were pretty firmly middle class.  But to my dad, investing was not a necessity because of his guaranteed pension.  It was something he did for fun or when he happened to have some excess money at the end of a year so he invested very little.

 

My mom still works and with my dad's pension has never had to cash out any of their investments.  My mom is in her earlier 70s (and so would my dad would be, if he was still alive).  I'm in my mid-40s.  Today, I have more invested then my parents ever have combined.  And my wife has her own retirement/investment accounts (e.g. IRAs).  Despite having ~25 years on me and it being 1 person vs. 2, I have more money invested than my parents.

 

To fund my retirement, I have to buy more stocks so stock prices affect me more than my parents (and this is generally true at a generational level).

 

If the Fed included home prices and/or investment prices (e.g. stocks) as part of inflation, the picture would be different.

[PeterMP]

9 minutes ago, BenningRoadSkin said:

Man! This is why I cannot bang with anyone who says our economy was great at any time the last 40 years. Something changed where one income isn’t enough. Where people can’t afford healthcare. Where people can’t buy homes despite not being near poverty, without being scammed like the subprime mortgage crisis. Where people have to work two or three jobs to make ends meet. This has been a frog slowing being boiled. The American worker is that frog. Yet none of us know it. And instead you have some nutters saying “well you don’t need to get a cellphone,” or “well you don’t need to pay for the internet,” among other things.

 

No matter who the president is, the American worker has been getting screwed. Even those who think they are doing good.

 

This is Elizabeth Warren's two income trap.

 

https://www.vox.com/policy-and-politics/2019/1/23/18183091/two-income-trap-elizabeth-warren-book

 

Moving out to suburbs to better schools for many families they needed a second income.  But all that did is drive up home prices. (the ratio of home prices/household income was generally under ~3.5).  That reduced flexibility to families so that if you lose one income, you are now in trouble.

 

(And I don't think it is just really home prices.  It is everything associated with a home.   Homes are bigger, which just means more stuff.)

 

In chasing better homes (better neighborhoods and schools) families are pushing themselves closer and closer to the economic brink.)

 

 

[Bozo the kKklown]

I was going to bring Japan up @PeterMP. That’s what America is like for millennials and many Gen Xers.

 

We are in so much trouble in this country and I am wondering when people will realize a politician won’t save them.

[NoCalMike]

23 minutes ago, BenningRoadSkin said:

Man! This is why I cannot bang with anyone who says our economy was great at any time the last 40 years. Something changed where one income isn’t enough. Where people can’t afford healthcare. Where people can’t buy homes despite not being near poverty, without being scammed like the subprime mortgage crisis. Where people have to work two or three jobs to make ends meet. This has been a frog slowly being boiled. The American worker is that frog. Yet none of us know it. And instead you have some nutters saying “well you don’t need to get a cellphone,” or “well you don’t need to pay for the internet,” among other things.

 

No matter who the president is, the American worker has been getting screwed. Even those who think they are doing good.

 

Which is why the right-wing is pushing so hard for people to blame immigrants and the poor.  Keep people looking in the wrong direction. 

[Bozo the kKklown]

5 minutes ago, NoCalMike said:

 

Which is why the right-wing is pushing so hard for people to blame immigrants and the poor.  Keep people looking in the wrong direction. 

And also why they are terrified of “The Squad.” Those women see the jig and are calling it out.

[nonniey]

1 hour ago, PeterMP said:

 

@nonniey

 

There has been very little increase in wages that hasn't been offset by the increase in inflation......

 

 

That is why I mentioned the goal of 3.4%  wage increases have improved (best in 11 years) but they are not there yet.  Bottom line the economy is the best it's been in 11 years.

[PeterMP]

8 hours ago, nonniey said:

That is why I mentioned the goal of 3.4%  wage increases have improved (best in 11 years) but they are not there yet.  Bottom line the economy is the best it's been in 11 years.

 

You are talking about nominal wage growth, which doesn't take into account inflation.  Even changed to CPI, it isn't that impressive.

 

You are talking about this:

 

 

But that's nominal and doesn't correct for inflation.  Real wage growth from June 2018-2019 was only 1.5%.

 

https://www.bls.gov/news.release/pdf/realer.pdf

 

Which is not an 11 year high.  We over 2% some months in 2015-16.

 

 

(and over larger history that's a small number even those months over 2% are small numbers)

 

And I'd tell you that CPI isn't really adjusting for the true costs of inflation.

 

The economy is certainly doing better than it was.  I think the question is the economy doing as well as it should be for the most number of people.

 

And the answer to that question is no.  During what at least appears to be a time of strong economic growth, many people aren't really doing that much better.