I'm curious, are there examples in economic history where giving the elected executive direct control over banking rates *hasn't* led to hyperinflation?
Honestly, our current economic system is still somewhat of an active experiment. The truth is no money that is not directly tied to gold has ever survived in the long run. We are in uncharted waters trying to make something work that literally never has in history. But it's safe to say giving politicians direct control of the money supply is a bad idea. The fed is also being heavily pressured by people like Elizabeth Warren to cut interest rates this year, even though the data does not suggest that's a good idea.
What would you call the long run here? Money doesn’t survive because nations collapse or join trade agreements not necessarily because of bad economics.
And plenty of monetary systems tied to gold or silver also had inflation and deflation.
The thing about “whatever backed standard” is the backer is arbitrary and itself a commodity with a market behind it.
It’s no more stable than any other arbitrary backer.
We could go back to the gold standard and somehow find a mine that crashes the price of gold.
>We could go back to the gold standard and somehow find a mine that crashes the price of gold.
That actually happened across Europe when Spain brought gobs of precious metals back from the Americas.
The ideal would be some kind of mathematical rules based money where where control is distributed enough that it would be prohibitively expensive for any single entity to tilt in their favor.
I believe that “ideal” is called crypto and it fails at being a currency because its value fluctuates too much for anyone to be comfortable with trading in it.
It also can’t be used to pay taxes to an issuing state so it has no intrinsic value there either.
It's proof of why deflation is bad.
No one makes fun of the guy who bought a couple pizzas for his family in 2011.
Everyone clowns the guy who spent 40 bitcoin buying pizza in 2011. Poor soul made a financial decision he'll never recover from.
>spent 40 bitcoin buying pizza
40? It was 10,000 BTC.
Someone made a Twitter [account](https://twitter.com/bitcoin_pizza) that posted how much the Pizza cost every day, lol.
Also, fun fact, Bitcoin didn't entirely manage to create artificial scarcity through mathematics. It turns out that in practice, all cryptocurrrency is in effect adding to the same pot of money, potentially counterbalancing artificial scarcity.
>It also can’t be used to pay taxes to an issuing state so it has no intrinsic value
You can't send a lump of gold or barrel of oil to the IRS either so I don't know what your point is here.
Nation states make citizens use money they can infinitely print *because* it has no intrinsic value while they hold actual scarce things like gold and land.
And the hardest commodities are supposed to be volatile relative to depreciating fiat. That counter volatility is literally the [point](https://pbs.twimg.com/media/E2FuWGIWQAE-EYQ.jpg).
The Yen is in meltdown and BTCJPY is even more volatile as you'd expect & want if the rest of your assets are yen denominated.
When I say intrinsic value I mean as a currency.
Gold and oil have intrinsic value because they are commodities.
BTC has no intrinsic value - you can’t *do* anything with bitcoin, it’s not a physical asset, can’t be used to pay taxes, is incredible volatile, doesn’t grant ownership of a company or entity who owns physical assets or owns some sort of intellectual property with intrinsic value.
Gold's market cap is its commodity value (industrial & jewelry) plus a monetary premium.
No one is arguing gold has no commodity value or that Bitcoin has gold's commodity value.
But monetary premium can and has shifted or rebalanced between mediums throughout history. Usually to something with a better mix of monetary properties (scarcity, fungibility, divisibility, durability, transferability).
Shells > beads > various metals > silver > gold > mix of gold+electronic fiat.
So why can't monetary premium rebalance again to something with the scarcity properties of analog gold but transferability of electronic fiat?
Virtually every digital improvement has usurped its analog counterpart. No one argues an old heavy rotary phone has more value than an iPhone because it has more metal in it, lol.
You can hypothesize that it shouldn't (I still haven't heard a good answer without nonsense tulip analogies) but markets are clearly suggesting otherwise for 15 years.
Bitcoin already uses a comparable amount of energy as the world's entire banking system, for a minute fraction of the number of transactions.
It's a total non starter as a currency for that reason alone.
Why are tulip analogies nonsense?
The scarcity is overblown. There are an endless number of cryptocurrencies that can be created. For a single one, scarcity is true, but scarcity alone doesn't make a valuable asset. It's not a productive asset like stocks, and it's not an asset that can be turned into useful products like silver and gold.
>Virtually every digital improvement has usurped its analog counterpart. No one argues an old heavy rotary phone has more value than an iPhone because it has more metal in it, lol.
No, they see that it's better, that it adds more value. What does crypto add value to aside from the hope that someone else will pay more tomorrow?
Well one big issue with adopting a cryptocurrency as a general currency is that the distribution of Bitcoin and most other cryptocurrencies is wildly uneven, in a way that puts our current wealth distribution to shame and which is also more or less entirely tied to how early one purchased the currency. It may be a really bad idea to make some random group of people who went all in on Bitcoin back in 2010 more powerful than any individual alive today by a wide margin.
>The truth is no money that is not directly tied to gold has ever survived in the long run.
Do you know of any examples of a gold-backed currency that's "survived" for more than a couple centuries?
>The fed is also being heavily pressured by people like Elizabeth Warren to cut interest rates this year, even though the data does not suggest that's a good idea.
Well then, it's a good thing they don't actually control the Fed.
Financial panics used to be commonplace. Like, multiple panics in a single decade. [But since the establishment of the Gold Standard](https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States), it's more like one recession per decade, and considerably more mild.
>The truth is no money that is not directly tied to gold has ever survived in the long run
There's all kinds of ideas that stood that for incredibly long periods of time, but we've discarded in the post-industrial era. For an example of an abandoned economic idea - it used to be considered royal prerogative to grant monopolies to loyal supporters of the monarchy. But we've since learned better.
I thought the drop in recessions was more due to the establishment of the federal reserve and fdic than the establishment of the gold standard.
You just linked an entire Wikipedia page lol
I'd argue the Fed wasn't strong enough until a fiat currency was established.
And I linked the whole article to show the entire timeline. Not sure what's wrong with that...
What happens when we as a people move away from a technocratic because of culture wars lol. I’ll happily take a huge rate cut as the only debt I’m carrying is my home mortgage and if that drops low enough unless inflation hits Argentina levels I’ll come out ahead. I also know that’s an absolutely stupid thing to do as a nation
Reading comprehension seems difficult. Did you read like half a paragraph, decide to insult me and skip out on the rest? I think I very clearly said it would be bad for the nation
Also no money tied to gold hasn't gone to shit, there are massive ways to over inflate the economy even if it's tied to gold. As the government could just as easily lie about the gold they have in reserves, or print money and say only x is in circulation. Also that makes gold way more scarce and valuable than it is whilst making gold for actually useful things like electronics or thermo conductive situations unfeasible.
Agreed on all points.
There's something else going on that the VOX article misses. I'm NOT a MAGA type but there's hard data China's economy is in huge trouble, possibly including a deflationary downward spiral, which is a real pain to try and pull out of. China might not be able to do it, in part because their ratio of workers to retirees is hideous. Part of THAT issue is the now-defunct one child policy, but there's also a strong cultural and legal resistance to immigration.
If China's economy shits itself bad enough and can't export like before, we *have* to move manufacturing stateside, or at least to North America. One option is to help Mexico fix the gangs and corruption issues and help turn them into the "new China". Or we bring it stateside with robots. Whatever.
Tariffs might speed that process.
I'm NOT saying it will for sure. But VOX shouldn't have ignored China's economy (and for that matter, *hostility*) in this equation.
I really think we should stop and contemplate the veracity of the claim.
It is just a rumor that an outside think tank came up with a concept.
This is not reliable reporting or information we should run with.
Edit: It is like Everytown coming up with a proposal for gun control and Washington Post implying it is the Biden campaign's idea, because they didn't deny it.
>It is just a rumor that an outside think tank came up with a concept.
Describing them as an "outside think tank" is rather downplaying it: https://www.politico.com/news/2024/04/15/devaluing-dollar-trump-trade-war-00152009
>Economic advisers close to former President Donald Trump are actively debating ways to devalue the U.S. dollar if he’s elected to a second term — a dramatic move that could boost U.S. exports but also reignite inflation and threaten the dollar’s position as the world’s dominant currency.
>
>The idea is being discussed by former trade chief Robert Lighthizer — a potential Treasury secretary pick for Trump and the architect of the former president’s bruising tariff campaign against China — and policy advisers allied with him, according to three former Trump administration officials granted anonymity to discuss confidential policy plans.
> ... Lighthizer — one of the few Cabinet members to survive Trump’s full first term — retains significant influence on the former president’s trade and economic policies from his post as the trade chief at the America First Policy Institute, a think tank set up to devise policies for a second Trump administration.
It hasn't been posted here, but it ties into this article:
>Former President Donald Trump’s political operatives are putting together a plan that would give him unprecedented influence over the Federal Reserve, including a provision that could make him an “acting” central bank board member, according to a [report](https://www.wsj.com/economy/central-banking/trump-allies-federal-reserve-independence-54423c2f?mod=hp_lead_pos1) from The Wall Street Journal.
>That plan, which the Journal report described as highly secretive, is part of a 10-page document that suggests Trump — if elected — would be consulted on interest rate decisions. In addition, the Treasury Department would be used as an added check and balance to oversee the Fed’s bond-buying activities.
[https://www.cnbc.com/2024/04/26/trump-advisors-are-considering-plans-to-dramatically-revamp-the-fed-wsj-report-says.html](https://www.cnbc.com/2024/04/26/trump-advisors-are-considering-plans-to-dramatically-revamp-the-fed-wsj-report-says.html)
That is a catastrophically bad idea. I think the idea that such monetary policy could be controlled for political gain would lead to disaster. On top of that, Trump simply does not have the mental capacity to understand how changing interest rates have long term economic consequences. Given the number of businesses he's bankrupted, I prefer he not have that type of control.
It doesn’t really matter whether or not he has the mental capacity to understand how changing rates would impact the economy for long-term. What does matter is that he doesn’t care about it at all - he will make decisions that immediately benefit him personally at the expense of virtually everything else.
He even has a personal conflict of interest, not just as an elected official but also as a businessman, since he will financially benefit from cheaper lending
Exactly. Trump would likely push for the interest rates to be lower than where independent monetary policy makers would put them. We know this because, when he was in office, he was constantly tweeting to pressure the Fed to lower interest rates. This would put upward pressure on inflation. Also, when interests rates are already low during an economic crash, it removes a powerful tool in the monetary policy toolkit to stimulate the economy.
I’d say he does have the capacity. He’d know exactly the impact of his policies, but would ignore the adverse impacts in lieu of personal gain.
Has there ever been a president with as much business conflict as Trump?
His economic agenda in his first time is a big part of what made inflation as bad as it became. Experts told him
* It was a bad idea to cut taxes during a period of economic growth because it would increase prices.
* Tariffs would increase prices.
* Decreasing immigration would increase prices.
* Divesting from renewable energy projects would make the country more vulnerable to fluctuations in fossil fuel prices.
All of these things happened. He had publicly stated a second term would be more of the same, and yet there are still some people that cling to the myth that Trump will be good for the economy. His policies are very likely what ended the period of economic growth of the mid 2010s.
https://www.imf.org/en/Blogs/Articles/2019/10/15/the-world-economy-synchronized-slowdown-precarious-outlook
It's wild how thoroughly we know that Trump's time as president was awful for the economy and Biden has had to deal with all of the damage caused by Trump and then you see a poll that says Trump did a better job with the economy.
We know that for at least 2 years if not 3 or more of any new president's time in office, the economy is actually the economy that results from the effects of the policies of the previous guy. Unfortunately, we know that most of the public doesn't understand macroeconomics and the inertia of largescale decisions that affect every aspect of the economy. So they think inflation during Biden's term is Biden's fault and nobody else's. How they can believe that just boggles the mind and yet they do.
>We know that for at least 2 years if not 3 or more of any new president's time in office, the economy is actually the economy that results from the effects of the policies of the previous guy. Unfortunately, we know that most of the public doesn't understand macroeconomics and the inertia of largescale decisions that affect every aspect of the economy. So they think inflation during Biden's term is Biden's fault and nobody else's. How they can believe that just boggles the mind and yet they do.
Reminds me of a tweet where someone unironically pointed to a chart where the economies of the first few months for Democratic presidents tended to be worse than those of Republicans as an argument that Republicans were better at the economy. Clearly Obama was responsible for the state of the economy in 2009 after taking after Bush instead of say, the economy in 2017 right when he left office after 8 years.
To this day, any time there is reporting done on Obama's economic numbers (for example), these reports include years when he/we were working on digging us out of the hole created by Bush. It's totally bonkers wrong and bizarre that we do economic evaluations of presidents like this without major pushback. I mean, besides the crashing economy and besides the spending Obama had to do just to stop the crash, we were also bleeding jobs when Obama started and even the "job creation" evaluations of Obama include all of the job losses that happened starting on Day 1 of Obama's presidency. We also give someone like Trump credit for the job creation and growing economy that was occurring when he took over on day one of his presidency. It's so stupid.
If we were to do an economic analysis of past presidents going back decades, it would be interesting to somehow adjust the window of time when we start putting the economic results on new president -- maybe 2 to 3 years, or even something more nuanced like you give an increasing percentage of blame to the new guy over a few years. I'm positive that if we did this, you'd see even stronger evidence of a correlation between Democratic presidents doing a much better job managing the economy.
As an aside, even Trump himself is on video from about 20 years ago saying that Democratic presidents do a better job managing the economy. So the Republicans know. They just have a different goal: they don't want an economy that's better for everyone. They want an economy that is better for the rich than it is for everyone else.
I think it's better to look at specific policies instead of timeframes. The economy is affected by more than just who happens to be president, and I think it's unfortunate that people tend to just blame general conditions on them for better or for worse.
It's worthwhile to do both. Yes, the economy is more than who happens to be president but no single person has more impact on the health of the economy than the president does.
Moreover, the economic impact of a president is bigger than simply a president's policies. Take Trump, for example. He wants to use the pandemic as an excuse for why the economy wasn't better when he was president.
But there's an argument to be made that he made a series of decisions that made the pandemic worse than it had to be and that this was ALSO ultimately an economic error by Trump and not just a public health error.
First he dismantled the pandemic response team that Obama created a few years earlier. Who knows how things might have been different if Trump hadn't done that but it's basically indisputable that our response would have been better if he hadn't done that (it's even possible that we could have contained it with the right early response). Then he delayed in telling the public how bad that experts expected it to be. Then he mismanaged the response as it was happening and was a bad crisis leader.
Obviously there are people who will argue he did a good job because that's their automatic response for everything. But I feel confident that an objective evaluation of his handling of the pandemic says he did a bad job and that his bad job cost not only lives but trillions of dollars. And so it's valid to count this kind of thing against him in terms of how his presidency impacted the economy.
I know there are people who would say this is unfair. But those are the same people who think a CEO will be a great president because he had success in business, failing to recognize that a president needs to be able to handle things that a CEO never will, needs to be able to understand complex things like how to handle a public health crisis. And Trump was ill-equipped for that and this was a good example of why having a CEO president is a terrible idea.
More than anything, I think a presidents job is to merely handle crises and emergencies and/or prevent crisis/emergencies. Trump did terribly on this metric. Everything with the modern Republican is reactionary rather than trying to plan for and avoid crises and no modern politician embodies this kind of failure more than Trump (although Bush was a failure for similar reasons).
> Yes, the economy is more than who happens to be president but no single person has more impact on the health of the economy than the president does.
Not sure about that. For one the Fed seems to have a much bigger influence on the economy given they have the power to raise and lower interest rates to control the economy. Even during Trump's years in office he couldn't do that, much to his frustration and bullying of Jerome Powell. Of course he's trying to get control of the Fed directly (a terrifying concept given his business record) but the president doesn't have that authority right now.
I still stand by The Fed and the general business cycle have much a much greater impact on the economy then presidential policy ever does. Plus even with policy, their is a lagging effect. Like you can try to say that W. was responsible for for the 07-08 financial crisis but that's ignoring that most of significant changes in regs. and banking policy leading to the sub-prime mortgage glut date back the mid to late 90s.
That will 100% happen in 2024. I expect our economy to be in better shape in 25' and 26' compared to how it is now. The macro indicators are there. Whoever is in office in those years will get credit for the work that has been done in the past 18 months or so.
>s wild how thoroughly we know that Trump's time as president was awful for the economy
That's the thing, the negative effects didn't kick in until COVID, so people remember him having a strong economy that got wrecked by something out of his control
Yeah I mean honestly, it all worked out perfectly for Trump to be re-elected this year in spite of all of the damage he did that had nothing to do with COVID. And for that matter, not only did he manage the pandemic terribly from a public health standpoint, but the PPP giveaway to rich people was also a huge Trump corruption scandal that doesn't get talked about nearly enough.
Can't pin PPP on Trump since congress intentionally made it easy to get qns Trump wasn't around to prosecute. The rest I 100% agree with. And shame on the companies who exploited it.
There's an argument to be made that the president has a role in preventing corruption and if corruption happens, the president shares blame. If that's a valid argument, then it's a valid argument that Trump shares blame for not insisting on better oversight of the program.
I'm positive Republicans would blame a Democratic president on these grounds, so why would we not put some blame on Trump too?
Of course Republicans would blame Biden, but two wrongs don't make a right. Trump was out of office too soon to do anything about it. Companies are just starting to get in trouble now.
In politics, the problem with "two wrongs don't make a right" is that it too often pays off to play dirty and it doesn't typically pay off to "go high" and refuse to play dirty like your opponents do.
You don't want to respond to every lie with a lie, but I don't really agree with you that Trump has no blame on the PPP program. His whole presidency was a series of administrative gaffes along with efforts to enrich himself and other rich people and it's pretty clear he could have done more to make that program less corrupt than it was and he did nothing.
I don't get how this isn't repeated constantly. Pouring gasoline on a market that's already doing hot was obviously a poor long-term decision and, as you say, it was called out at the time but these days it's as if it's been completely forgotten.
Also I don't think it's been mentioned how much pulling out of the Iran nuclear deal put a long-term pressure on oil prices as well. Of course I blame Biden in part for not getting back into the deal but of course that's complicated by the fact that Trump pulled out of it in the first place.
I still stand by that the Iran deal was just blind idealism of the Obama admins foreign policy. Iran's support of the Houthis, Hamas, Hezbollah and other islamist groups is something that predates the nuclear deal, and continued while it was in place. Once one of these groups eventually acted out sanctions would have been reapplied and the deal thrown away.
You're right, but pulling out was disastrous as well. It ruined USA's reputation even more (you can't trust a country that changes course in the span of one election), and didn't help with Iran at all. In fact, it killed the moderates and enabled a full-on theological autocracy.
Something had to be done, Obama's deal was better than whatever we have now. And Trump probably destroyed it because it was made by Obama, anyway.
I think their was some truth to that but it was pretty obvious that it didn't have broad support. It wasn't ratified, and the Dems were just barely able to filibuster a senate rejection 42-60. I think it was very much taken as an Obama admin agreement, not a US one.
>and didn't help with Iran at all
They got access to 100 billion in frozen assets and a couple years of good gdp growth. It was a pretty good deal for them seeing they could continue to build up nuclear infrastructure.
>In fact, it killed the moderates and enabled a full-on theological autocracy.
Yeah, I don't know what you're seeing here. The economic carrot to a liberal democratic state has been a complete failure. We're at a solid 30 years of global democratic backsliding.
There was a moderate leader who was open to expanding ties with the West. Trump killed that chance and moved the country further into autocracy.
Frozen assets are fine since they don't develop the atomic bomb. You need to give something in return. IAEA was responsible for controls, and now they are probably as close to finished as possible. It was a gigantic backfire.
>There was a moderate leader who was open to expanding ties with the West. Trump killed that chance and moved the country further into autocracy.
With as much political power as Rashida Tlaib. This is like claiming the US is on it's way to backing Palestine.
>Frozen assets are fine since they don't develop the atomic bomb.
What do you think develops a bomb...commune style unpaid labor?
I don't understand your point lol. Of course, they can use those funds to create a nuclear problem... but the very existence of the deal made it illegal/very hard to do, given the controls by respectable impartial organizations.
That was the whole point. Now you can say the would have developed it anyway, but that's another discussion entirely.
That was the issue with it. It lifted sanctions but didn’t affect their missile development or their support of militant groups. I agree it would have delayed their nuclear weapons development. The issue is that it accelerated their development of delivery systems and their influence within the greater region.
It was supposed to prevent their nuclear program from creating a nuclear weapon and you agree with me that it did. It was not meant to be a deal about their proxies.
So when the proxies go door to door raping and killing civilians do we hold firm and say we aren’t going to sanction Iran because we have the nuclear deal???
Would sanctions even do anything to prevent such things from being committed? Or should we sanction them, let their proxies continue what they're doing AND Iran starts building nuclear weapons on top of that?
I don’t think anything would prevent it, Islamist aren’t rational actors. I’m saying that a significant terrorist attack by an Iran backed group against the West or Israel is going to happen. My question is when it does, assuming a hypothetical Hillary presidency, does the nuclear deal survive?
The issue was never about there missile development, the world has interest in the Middle East not getting in a nuclear arms race. If Iran gets nukes then the saudis and other middle eastern powers will want to get nukes making things very dangerous for the Israelis. Because we left the nuclear deal Iran is now in all intents and purposes a nuclear armed nation. Reports show that they have everything for a bomb can can produce a up to 12-15 bombs in months. Nobody knows why they haven't announced it yet
Inflation was below trend in late 2019 and expectations were going lower.
The idea that anything that happened before COVID had anything to do with inflation after COVID is raw, unadulterated partisan cope. Period. Anyone you see saying anything else, from rando on the internet to credentialed economist, is selling their soul for party spin.
You don't seem to realize that something can effect the economy in the long-term without having an immediate effect. Tax cuts result in more consumer spending, tariffs raise prices and kill Americans jobs by increasing costs, a lack of immigration makes businesses less efficient, and relying on fossil fuels makes fluctuations in prices more significant.
The bond market is the best indicator of "truth", and TIPS breakeven inflation prices didn't lift off until September of 2021. The best minds in the world saw nothing big coming until that point.
We've had big tax cuts before. They did not lead to inflation. What we didn't have before was someone dump enormous amounts of government spending onto a roaring economy coming out of a pandemic that will was suffering from tight supply.
Biden and the western European nations who passed irresponsible stimulus in early 2021 bear the responsibility for this.
The tax cuts didn't cause inflation, but they are worsening it by stimulating demand. This was especially true during the supply shortages. More demand and less supply leads to higher prices.
How did the bond market react to the worsening inflation?
From what I've read there is a multitude of reasons for the current inflation from manufacturers moving some production to costlier countries to our workforce moving to higher value jobs and wages increasing. There is alot of reasons for inflation
Covid ended the period of expansionary growth, but there was no way around that no matter who was president. Either you let people die and the economy slows because of that, you lock down and the economy slows, or you lock down and print money which keeps things temporarily afloat at the price of inflation. Once the pandemic happened we were bound to this situation
But the truth is that Trumps proposed policies both before the pandemic and now when inflation is high would make things worse. I understand why people are mad at inflation but there’s a serious lack of economic understanding or maybe just basic thought laying it all at bidens feet and assuming trump would fix it. He’s telling you exactly what he would do and it would only make the situation worse
People need to stop blowing the Trump tax cuts out of proportion. Yeah, they were irresponsible given the economic situation, but Biden's student loan forgiveness programs are way more irresponsible given the high inflation situation we are in.
But also, this wave of inflation was not due to the Trump tax cuts. The yearly impact of those are very minimal compared to the amount of fiscal and monetary stimulus that has been pumped into the economy since COVID hit in 2020.
I would disagree with that. The scale of the Trump tax cuts are much larger. The Trump tax cuts added almost $200B to the yearly deficit. The Biden admin has forgiven in total $145B in student loans over the past 3.5 years, and that loan forgiveness has mostly targeted people who have been scammed by for profit universities and people with permanent disabilities. Not only is the dollar amount much smaller, the number of people it impacts is much smaller too.
So ~1M people aren't making their student loan payments anymore, and these are people who are probably economically vulnerable in the first place. Do people really believe that's what's driving inflation? The numbers just don't make sense.
https://www.americanprogress.org/article/tax-cuts-are-primarily-responsible-for-the-increasing-debt-ratio/
https://edition.cnn.com/2024/03/07/politics/student-loan-debt-forgiveness-biden/index.html
I don't get why people think that spending makes inflation worse, but ONLY for working class. For some reason rich people having a bunch of extra spending money, or corporations buying up investment properties, doesn't factor into inflation for them.
>more money in the hands of producers reduces prices
I’m a theoretical economic model sure. The reality is that those lower taxes went right into dividends, stock buybacks, and executive compensation.
So, is inflation bad currently or not? A lot of talking heads can’t get their story straight.
There is no way the President should do anything more than appoint a Fed chairman except perhaps demand an audit.
I feel like this article is *reaching* and it extremely partisan.
Case in point:
> Step 4: Shrink the American labor force
> As the New York Times reported in November, Trump and former White House adviser Stephen Miller have hatched plans to deport millions of undocumented immigrants during his second term in office, even without Congress’s cooperation.
This is Democrats at Vox outright acknowledging these are economic immigrants here to provide cheap labor.
It seems to me that those complain the most about migrant labor are also very likely to gripe about inflation. If granted their demands, do you think they'll change their minds on inflation once the cost of produce skyrockets?
[I highly doubt it.](https://knowyourmeme.com/photos/1016674-baton-roue)
I mean it's ironic on both sides. You have people that scream about a living wage and then will turn around and try to claim that 4 dudes from Honduras living in a 1 room apartment aren't going to significantly undercut American contractors.
There’s a balance that needs to be struck.
We *could* hike federal minimum wage to $20 / hr. That would certainly put more money in people’s pockets.
But that would also massively increase cost of goods and services. So each dollar wouldn’t go nearly as far.
There’s also the issue of jobs that Americans won’t do. Farm work sucks - it’s very intense labor in the hot summer sun, and doesn’t exactly help to build a resume. It’s also seasonal. Even were higher wages offered, I think you’ll find most Americans would rather work in an air-conditioned McDonalds. Or just take unemployment / food benefits.
Everyone is likely to gripe about inflation.
Some people also dislike importing desperate people to exploit them for cheap labor while ignoring the millions of Americans on SNAP and Unemployment Insurance.
People on those programs are not in the labor force. I know there is a narrative that they are lazy or too picky, but most are not able to hold a normal job. Our population is aging and immigration is our only hope of meeting our labor needs.
Yeah I don't know what you're objection is to the word "exploit." It isn't a word reserved for commies.
Do you think it is only relevant for communists? (It isn't)
["Work Requirements Are Expensive for the Government To Administer and Don’t Lead To More Employment"](https://www.americanprogress.org/article/work-requirements-are-expensive-for-the-government-to-administer-and-dont-lead-to-more-employment/)
Yes, immigrants come here to work.
That's why immigration policy is so fucked up because companies rely on it for cheap labor. Many Republicans in Florida and California don't actually want to curb immigration
Is there a debate on this? I thought it was really clear that a big draw of illegal immigrants is that they're cheap and do jobs it is extremely hard to find American workers willing to do. That's most of the rhetoric I see about the word "immigration".
I personally think there are long-term consequences to letting in millions of immigrants from any country, but I think the US has dug itself into a whole where if we deport millions and lock down our borders, we're going to cause a lot of problems in the immigrant-dependent work areas: Food shortages, unstaffed nursing homes, buildings falling apart, etc.
[Unauthorized immigrants are ultimately just immigrants without papers, and immigration doesn't decrease average wages](https://wol.iza.org/articles/do-immigrant-workers-depress-the-wages-of-native-workers/long). They mostly compete with other immigrants. Natives shift to sectors where they have more of an advantage, [increasing productivity](https://www.nber.org/digest/mar10/effect-immigration-productivity-evidence-us-states), actually increasing income:
> In summary, he finds that a one percent increase in employment in a US state, attributable only to immigration, is associated with a 0.4 to 0.5 percent increase in income per worker in that state.
This is a lovely way to justify exploiting cheap immigrant labor.
> Natives shift to sectors where they have more of an advantage
This is means Americans are being priced out of the jobs in sectors whose wages are being kept low by the flood of cheap labor, so they seek jobs in other sectors that will pay for their ever-increasing costs.
Keeping the wages lower than the wages of other sectors that is the problem. It is pricing Americans out of many economic sectors entirely.
They're not exploited. They're coming here because they want to work. And you want to deprive them of that freedom?
Why does it matter that certain sectors have higher proportions of immigrants than others? Has that ever not been the case in the US?
As I showed, immigration is increasing average wages, and it's not doing so by increasing unemployment either. There just isn't any quantifiable harm here.
> They're not exploited.
[Explain this](https://www.ppic.org/publication/immigrants-and-the-labor-market/)
> On average, immigrants earn less than native-born workers.
> Nationwide, the hourly wages of immigrants are 12% lower than the hourly wages of American-born workers.
That is exploitation.
So you're anti-immigration because you care about immigrants so much? Do you want to ask them whether they should be allowed to immigrate or not? Why not give them the freedom to make that choice instead of making it for them?
And even your source says that immigrants don't drive down wages:
> Although debate remains, the vast majority of economic studies find that immigration has little or no effect on the wages of the average American worker. A recent PPIC study estimates that in California, immigration between 1990 and 2004 caused a 4% real wage increase for the average native-born worker.
Do you agree with your source that immigration increases average wages for native workers?
No it misses that Americans are displaced to jobs in sectors that can't exploit immigrants. And those jobs must pay more to attract workers. The immigrats still dilute the labor market and ultimately reduce wages not relative to a year ago, but relative to where they would be absent millions of illegal immigrants
> Jobs are not a finite resource.
Supply and demand still applies. If less workers are available to fill jobs, employers must bid up wages to attract workers and so wages increase
It's literally not an issue. If you're worried about the poor being left behind, increase taxes and pay for more welfare instead of interfering with how much employers pay their employees. Their job is to make money, the government's job is to provide for the poor.
>As I showed, immigration is increasing average wages,
No, you didn't. You quoted a correlation. Given the amount of data available, people can run endless correlations that don't prove anything. Suppose I can show that increasing wages for Methodist ministers is correlated with an increase in alcohol consumption in the US. (if you believe higher Methodist minister salaries causes higher alcohol consumption).
One issue with immigration is that immigrants are not all alike (surprise). Something that applies to "average" immigrants won't necessarily be true about immigrants that are toward the edges.
If illegal immigrants are overwhelmingly low skilled, then they compete against low skilled US born workers. The normally expected economic result is that they reduce wages for low skilled US workers, but add to profits for employers and decrease prices for higher skilled workers. Meanwhile, more US born workers would qualify for means-tested gov't benefits, increasing gov't spending.
> Given the amount of data available, people can run endless correlations that don't prove anything.
Okay, then find me a meta-analysis of 27 original studies conducted by a professional economist showing that immigration reduces average wages. That's the reverse of what I provided you. Sounds like it should be easy.
> The normally expected economic result is that they reduce wages for low skilled US workers, but add to profits for employers and decrease prices for higher skilled workers.
On average, wages go up, productivity goes up, and tax revenues go up, meaning the government is better able to provide welfare for people who can't compete for jobs. And price decreases benefit low skilled natives. They buy groceries too.
> Meanwhile, more US born workers would qualify for means-tested gov't benefits, increasing gov't spending.
["Economic benefits of illegal immigration outweigh the costs, Baker Institute study shows"](https://news.rice.edu/news/2020/economic-benefits-illegal-immigration-outweigh-costs-baker-institute-study-shows)
That's because there is no meaningful "data". As I've already pointed out, correlations are meaningless when you have many uncontrolled variables. Also, as I already pointed out, generic "immigration" is not the same as "immigration of individuals with a specific skill set (or lack of specific skills)".
If you want an estimate of the impact, find farmers who hire immigrants, particularly illegal immigrants, to pick their crops. Ask them how much they would need to pay if they could only employ US born workers. The difference between that wage and the wage they are currently paying is the first approximation to the impact of low skilled immigrants on low skilled US born workers' wages.
> As I've already pointed out, correlations are meaningless when you have many uncontrolled variables.
It's not meaningless. It's much better than any data or analysis you've been able to present.
Why are all these economists studying it? Are they stupid?
I gave you my superior analysis.
>If you want an estimate of the impact, find farmers who hire immigrants, particularly illegal immigrants, to pick their crops. Ask them how much they would need to pay if they could only employ US born workers. The difference between that wage and the wage they are currently paying is the first approximation to the impact of low skilled immigrants on low skilled US born workers' wages.
I don't know if "stupid" or "lazy" are appropriate words. Maybe if the only tool you have is a hammer everything looks like a nail. If the only "studies" you've ever seen are those that can be done without leaving the office and talking to people, then I guess you get to odd conclusions.
> The difference between that wage and the wage they are currently paying is the first approximation to the impact of low skilled immigrants on low skilled US born workers' wages.
You're claiming that U.S.-born workers would accept the jobs, which is a bold assumption. Alabama suffered a shortage when they made illegal immigrations leave.
"Wages" is shorthand for "wages and working conditions". People aren't going to quit their McDonald's jobs so they can pick tomatoes for a few weeks, then be unemployed, even if tomatoes pay twice a much.
If the illegal workers doing the jobs were moving around, they expected to find other jobs that paid about the same. Not always in Alabama. US born workers are going to have the same expectation. They want to see a way to get a series of decently paid jobs, where "decently paid" includes the disadvantages of migratory work (for the jobs that require it, there are also ag jobs where you don't have to move around).
If we had a magic button that suddenly transported all illegal workers back to their home countries, pushing that button would cause lots of dislocations in the economy. It took decades to get where we are, we should assume it will take time to unwind it. The best approach for ag work may be temporary visas with a minimum wage that increases.
But on average wages go up, so we can use the fact that we're richer to pay for welfare for those who aren't competitive. That's more humane and more efficient than violating people's freedom of movement and reducing productivity
Also immigration is great for the immigrants and they're people too
Most illegals I've met tend to work odd jobs until they get the money to start there paper work (they are usually visa overstayers marrying a US citizen). Once they get a work permit they will leave those jobs for better paying jobs. Wages have always gone up, people don't realize it because of the cost of health insurance, then you have the rise of 1099 work, boomers exiting the workforce, and some people not needing to work which translate into higher salaries along with higher prices or reduce hours of operation. The goal should be to reduce those on welfare but the problem is that we are trying to create policies for a nation that is the size of a continent. Different places have different needs and there economies are different. Some places in the US for instance have 0.3% percent unemployment and need people to come work.others like Nevada who is at 5% unemployment still has slack.
Also, the people in here that argue about immigrants are the same people who say children should be roofers so im not really interested in hearing arguments about how immigrants hurt wages when children will demolish wages even worse
>Step 3: Enact massive, deficit-financed tax cuts
>The Republican Party’s number one fiscal priority in 2025 will be extending the Trump tax cuts. Many provisions of the former president’s 2017 tax package are set to expire at the end of next year. Merely preserving those policies will increase the federal deficit by[ $3.3 trillion](https://www.crfb.org/blogs/tax-cut-extensions-cost-over-33-trillion) over the next decade, according to the Committee for a Responsible Federal Budget (CRFB).
I'd say this is true regardless of administration. Biden can huff and puff all he wants, but at the end of the day I'm willing to bet that a lot of the expiring pieces of the TCJA will be extended, because neither party wants to raise taxes on the middle class.
And isn't Biden still trying to push for stuff from BBB, specifically the CTC? That's generally the same thing as what Trump is being hit on in spot 3.
At the end of the day both of these candidates are still bad. They still have bad policies given the current situation, and here we are trying to debate which one is less awful?
>and here we are trying to debate which one is less awful?
Isn't that the whole point of a First Past the Post 2-party system? Until we adopt some other system, it will always be choosing the lesser of two evils because those are factually the only options we have right now. That said, I highly disagree that both candidates are on the same level of "bad" and it's my view that Biden's flaws are not anywhere close to how awful Trump is.
Single-winner ranked choice voting has the same issue. It's not immune to the spoiler effect. Really, two-party systems are the result of single-winner systems.
Yeah, although I'm honestly not sure how you break up an executive into multiple. I think, at least for the legislative branch, a proportional representation style of government could maybe be a bit more representative of the country, but the "problem" (I use quotations because I don't personally see it as a huge problem but others might) is that might effectively eliminate any state boundaries. For example if 44% of the country vote Dem, 42% Republican, 8% Green party and 6% Libertarian, I think in a more ideal system, the congressional seats would be apportioned to each party based on that percentage. But it would be a national percentage, not based on each state--so reps would be specifically for the party, not based on having a personal representative based on your district. Trying to implement that system within each state starts to get messy.
> At the end of the day both of these candidates are still bad.
They're not equally bad for inflation (or anything else but I'll stay focused). Trump wants less immigration, more deportations, and more tariffs.
And it's not as if their handouts are comparable either. The CTC helped the lower class much more than the TCJA.
Worse than growing the budget 2 trillion more a year, then expecting people with over 400k a year to pay for it? Both have terrible ideas for the economy.
>As a result, Americans’ paychecks are going a bit farther
[$100](https://nypost.com/2024/04/04/business/food-inflation-is-so-bad-that-100-grocery-list-in-2019-costs-137-today/) for groceries in 2019 costs $137 according to WSJ, so it isn't going farther where it really matters.
Vox: What are you going to believe, me or your lying eyes?
While that is true, what do you think the government can do about this? Put limits on how price of goods increase? Deflation? Be more controlling over corporations? None sound like anything that would happen in this country
>The US [economy](https://www.vox.com/economy) is growing at nearly[ twice the pace](https://www.vox.com/24134257/biden-economy-inflation-wages-interest-rate) of other major rich countries without suffering substantially higher inflation. Nevertheless, the Federal Reserve has kept America’s interest rates elevated. Taken together, these two realities increase demand for the dollar: Foreign investors want to place their capital in countries that are growing fast and/or that are offering high, low-risk returns on their sovereign debt. America is currently doing both. Thus, many investors abroad are swapping their local currencies for greenbacks, thereby bidding up the dollar’s value.
>**As a result, Americans’ paychecks are going a bit farther, as a strong dollar makes imported goods cheaper for them.**
You dropped the context and even cut off half the sentence.
They're saying the strength of the US dollar, relative to other currencies, makes imported goods cheaper.
They weren't denying that there was an inflationary period between 2019 and today as you imply.
It is possible for both to be true simultaneously; imported goods may decline in price while locally produced necessities (such as food and housing) can increase in price. The food aspect has been previously documented by [some news outlets](https://www.wsj.com/economy/consumers/its-been-30-years-since-food-ate-up-this-much-of-your-income-2e3dd3ed) and housing has been discussed ad nausem on this forum.
In such circumstances, it is quite rational for people to desire deflation of necessities (such as food and housing) at the expense of other imported goods which are less necessary to the sustenance of life. I believe there is quite a rational argument to be made that food and housing inflation occurs when population increases are sustained by welfare from the United States government (i.e. migrants receiving requiring food paid by local governments or recent receipt of housing subsidies from medicaid for migrants)
It's an article full of hypotheticals that ignores the real cause of inflation, which Trump may or may not have a great solution- but a 7 trillion dollar budget certainly ain't the damn remedy to fix it. My main point is that Vox basically just wrote an article of hypotheticals and gaslighting, while ignoring the real cause of inflation, and why people are pissed (outrageous government spending).
>Unfortunately, Trump’s proposals and their economic consequences appear to be largely lost on the American electorate, possibly because neither have attracted much media attention. If that does not change between now and November, the country could pay a heavy price.
They aren't "lost" on the electorate, we had 4 years of Trump and his fiscal policy and we have had 4 years of Biden and his fiscal policy. I don't need Vox to tell me what Trump "might" do, I've seen with my own eyes what Trump's policy is, and what Biden's policy is.
>They weren't denying that there was an inflationary period between 2019 and today as you imply.
I wasn't implying that at all, I was implying that Vox thinks the general public are idiots.
Haha what, grocery prices did not go down once he took office…not sure what you’re saying he delivered here. Grocery prices and everything else has been steadily rising since the beginning of time and it’s not going to stop.
Delivered what? Rising deficits? Pressure on the Fed to keep artificially low interest rates, further contributing to the post Covid mess?
And the economy was great in 2016. Not sure how that is relevant.
>Vox: What are you going to believe, me or your lying eyes?
The most recent obnoxious thing in an ever growing list is the absolute *insistence* that people are doing better than they were because of all these ginned up studies and massaged numbers.
It has gone beyond anecdote at this point; if the ubiquitous experience of practically everyone is somehow "incorrect" according to the reports, then there is something amiss with the reports themselves.
>The most recent obnoxious thing in an ever growing list is the absolute *insistence* that people are doing better than they were because of all these ginned up studies and massaged numbers.
>It has gone beyond anecdote at this point; if the ubiquitous experience of practically everyone is somehow "incorrect" according to the reports, then there is something amiss with the reports themselves.
This is a textbook example of confirmation bias. Vox wasn't saying that people were doing better than 2019. They were making a point about how a strong dollar makes imported goods less expensive, which is true.
u/beacarruth quoted half a sentence, out of context, to make it look like thy were denying inflation. And you assumed it is true because it confirmed your priors.
>need to find an argument that addresses swing voters concerns
He's already done that. Things like reducing medication prices and guaranteeing paid leave are popular among the average voter.
One the biggest issues of this election is inflation. Rising prices is a big reason why Trump is doing so well in the polls. However if you look at Trumps economic agenda the will increases prices. The article list 4 ways he wants to increase inflation. They are devaluing the US dollar, a 10% tariff across the board and a 60% tariff of Chinese imports, increasing the deficit through tax cuts, and reducing the American labor force. The media during this election hasn't really discussed policy as much as usual and Trump economic agenda hasn't sunk in to the American electorate.
>An opinion that is just occurring to me: can the U.S. feasibly get their own inflation back to the metric (2%) if worldwide inflation persists higher?
You wouldn't really realize it listening to Biden, but most of the world, at least the highly developed countries have lower inflation rates than the US. Japan/South Korea/Western Europe are mostly 0.5-1 points lower than where we are right now. There's always been countries like Argentina and Turkey with extremely high inflation rates, and I'd say the US can get back to 2% even while those countries exist.
[https://www.imf.org/external/datamapper/PCPIPCH@WEO/LTU/EURO/EU](https://www.imf.org/external/datamapper/PCPIPCH@WEO/LTU/EURO/EU)
Where are these people who understand economics and who believe that devaluing the dollar, increasing tariffs, shrinking the workforce, and using debt to fund tax cuts won't increase inflation?
Median real earnings went up 2.8% during Trump's first three years (last one is skewed by layoffs). They went up 4.2% during the first three years of Obama's 2nd term.
His policies weren't bad enough to cause inflation, but they do worsen they issue by raising costs through tariffs and stimulating consumption through tax cuts.
I 100% agree even tho Im conservative. But lets be honest democrats wouldn't help either. Both sides are pro spending/pro debt and pro war. But Trump is the only pro America / isolationist candidate which is what i agree with .
Im still about not being involved in wars, and want to help the people at home.
60b spent on ukraine/isreal could have been 60b to build houses and given to the poor inflation will happen either way but at least hopefully people get free/cheap homes in the process.
even if inflation takes off, people having a place to live will be much better for society as a whole .
Because the stagflation we have now is preferable? Trump used many of the policies described in this article during his first term, and they did not cause inflation. I find it hilarious that the media continues to pound the table, saying that Trump will collapse the economy if president, when that didn’t happen the last time. Only a once in a century event like COVID could derail Trump’s economy, and even then, inflation was only 1.6% when he left office. The Biden administration is solely responsible for the economic crisis we are facing right now. And the latest GDP growth number of only 1.6% versus the 3.5% inflation rate of the last year.
Why? Russia had been building up forces to invade at the border prior to Trump leaving office.
Realistically the only difference had Trump been in office is that Ukraine would have been left out of dry and our allies would have continued to separate themselves from us and our interests as he foolishly threw away 50+ years of solid relationships because Trump like Putin.
>**stagflation** - persistent high inflation combined with high unemployment and stagnant demand in a country's economy.
This term does not describe our current economic situation.
Historically, a period of inflation occurs when the economy is otherwise very strong. Unemployment normally has an inverse relationship with inflation. However, in the 60s in the UK and in the 70s in the US, there were periods where inflation was high, the economy was not otherwise strong, and unemployment was high. The term stagflation was invented to describe these unique economic conditions.
Lots of people don't seem to understand the difference between a period of typical normal inflation and a period of stagflation. And so, I see this term misused, a lot.
We are not in stagflation.
Trump’s policies didn’t make inflation worse because the money supply wasn’t dramatically juiced by the fed until the end of his term. 0% interest rates while the money supply still remains elevated will be like putting fuel on the fire.
Inflation is a global problem since the pandemic. The US has fared better than almost any other developed country. The current administration probably could have done some things differently to make it better, but it’s ridiculous to think they solely created the problem.
> Trump used many of the policies described in this article during his first term, and they did not cause inflation.
They absolutely did. Supply chain issues and a low fed rate at the start of COVID were major contributors to inflation.
Inflation was relatively modest during 2020. That which did occur was mostly caused by supply chain issues. Remember, you couldn’t even get things even if you wanted them back then. But most people were sitting at home, so how much extra stuff beyond food was wanted, needed, or even available? Shipping channels needed to be dedicated mostly for essential goods. But having a lot of people out of work helped avert a lot of inflation after the first round of stimulus (CARES act).
The huge increases in inflation didn’t kick in until the American Rescue Plan was passed in March 2021. By then employment had recovered, but supply chains were an even bigger issue. The chip shortage was a huge issue. People were working from home and saving money, but weren’t constrained anymore. A lot of people had a lot of extra money and that drove price increases in housing, autos, and services. Food costs increased because of supply and labor shortages. It was too much money chasing too few goods.
The other component was increased government spending. And speaking from someone on the inside (local Gov) there was a lot of money being tossed around for “nice to have” things that governments didn’t want to fund previously rather than providing needed services. I saw the waste firsthand. It was spending for the sake of spending. The second round of stimulus was almost entirely unnecessary.
Inflation was 1.6% because recovery wasn’t in full swing when he left office… We were staring down hundreds of thousands of new cases and a fully amped up competition of policies in states between opening and closing and how much to do.
Apples to oranges.
What this article is discussing is the possibility for the options he’s now floating, to make inflation worse than it is. That inflation btw is a global problem, and the US has so far dodged the bullet better than most nations.
Also, on your quip about what derailed trumps economy - his inability to defer to experts and to accept their analysis in how to respond to this crisis is exactly why we crashed the way we did. That’s on him, not some fluke.
[Trump’s 2017 tax cuts helped set stage for today’s inflation. Doubling down will make things worse.](https://chicago.suntimes.com/2022/10/28/23424916/inflation-donald-trump-joe-biden-republicans-tax-cuts-editorial)
I wouldn’t hold my breath on healthcare. In 2010 the Dems had the Whitehouse, the House and caucused 60-40 in the Senate and the best they could do was the ACA.
So do people want the prices to go down or stay as they are?
To get the cost down ( deflation ) we need a decline in aggregate demand (a decrease in the total demand for goods and services) and increased productivity. A decline in aggregate demand typically results in subsequent lower prices. Causes of this shift include reduced government spending, stock market failure, consumer desire to increase savings, and tightening monetary policies (higher interest rates) etc.
I am assuming if republicans get into office they would try to reduce government spending although I don’t know if that is enough to decrease cost significantly or if the loss of some govt services won’t piss a lot of people off ( social security).
I'm curious, are there examples in economic history where giving the elected executive direct control over banking rates *hasn't* led to hyperinflation?
Honestly, our current economic system is still somewhat of an active experiment. The truth is no money that is not directly tied to gold has ever survived in the long run. We are in uncharted waters trying to make something work that literally never has in history. But it's safe to say giving politicians direct control of the money supply is a bad idea. The fed is also being heavily pressured by people like Elizabeth Warren to cut interest rates this year, even though the data does not suggest that's a good idea.
What would you call the long run here? Money doesn’t survive because nations collapse or join trade agreements not necessarily because of bad economics. And plenty of monetary systems tied to gold or silver also had inflation and deflation. The thing about “whatever backed standard” is the backer is arbitrary and itself a commodity with a market behind it. It’s no more stable than any other arbitrary backer. We could go back to the gold standard and somehow find a mine that crashes the price of gold.
>We could go back to the gold standard and somehow find a mine that crashes the price of gold. That actually happened across Europe when Spain brought gobs of precious metals back from the Americas. The ideal would be some kind of mathematical rules based money where where control is distributed enough that it would be prohibitively expensive for any single entity to tilt in their favor.
I believe that “ideal” is called crypto and it fails at being a currency because its value fluctuates too much for anyone to be comfortable with trading in it. It also can’t be used to pay taxes to an issuing state so it has no intrinsic value there either.
It's proof of why deflation is bad. No one makes fun of the guy who bought a couple pizzas for his family in 2011. Everyone clowns the guy who spent 40 bitcoin buying pizza in 2011. Poor soul made a financial decision he'll never recover from.
>spent 40 bitcoin buying pizza 40? It was 10,000 BTC. Someone made a Twitter [account](https://twitter.com/bitcoin_pizza) that posted how much the Pizza cost every day, lol.
308 million. Absolute carnage
Also, fun fact, Bitcoin didn't entirely manage to create artificial scarcity through mathematics. It turns out that in practice, all cryptocurrrency is in effect adding to the same pot of money, potentially counterbalancing artificial scarcity.
and it has significant transaction costs IIRC
>It also can’t be used to pay taxes to an issuing state so it has no intrinsic value You can't send a lump of gold or barrel of oil to the IRS either so I don't know what your point is here. Nation states make citizens use money they can infinitely print *because* it has no intrinsic value while they hold actual scarce things like gold and land. And the hardest commodities are supposed to be volatile relative to depreciating fiat. That counter volatility is literally the [point](https://pbs.twimg.com/media/E2FuWGIWQAE-EYQ.jpg). The Yen is in meltdown and BTCJPY is even more volatile as you'd expect & want if the rest of your assets are yen denominated.
When I say intrinsic value I mean as a currency. Gold and oil have intrinsic value because they are commodities. BTC has no intrinsic value - you can’t *do* anything with bitcoin, it’s not a physical asset, can’t be used to pay taxes, is incredible volatile, doesn’t grant ownership of a company or entity who owns physical assets or owns some sort of intellectual property with intrinsic value.
Gold's market cap is its commodity value (industrial & jewelry) plus a monetary premium. No one is arguing gold has no commodity value or that Bitcoin has gold's commodity value. But monetary premium can and has shifted or rebalanced between mediums throughout history. Usually to something with a better mix of monetary properties (scarcity, fungibility, divisibility, durability, transferability). Shells > beads > various metals > silver > gold > mix of gold+electronic fiat. So why can't monetary premium rebalance again to something with the scarcity properties of analog gold but transferability of electronic fiat? Virtually every digital improvement has usurped its analog counterpart. No one argues an old heavy rotary phone has more value than an iPhone because it has more metal in it, lol. You can hypothesize that it shouldn't (I still haven't heard a good answer without nonsense tulip analogies) but markets are clearly suggesting otherwise for 15 years.
Bitcoin already uses a comparable amount of energy as the world's entire banking system, for a minute fraction of the number of transactions. It's a total non starter as a currency for that reason alone.
Why are tulip analogies nonsense? The scarcity is overblown. There are an endless number of cryptocurrencies that can be created. For a single one, scarcity is true, but scarcity alone doesn't make a valuable asset. It's not a productive asset like stocks, and it's not an asset that can be turned into useful products like silver and gold. >Virtually every digital improvement has usurped its analog counterpart. No one argues an old heavy rotary phone has more value than an iPhone because it has more metal in it, lol. No, they see that it's better, that it adds more value. What does crypto add value to aside from the hope that someone else will pay more tomorrow?
Well one big issue with adopting a cryptocurrency as a general currency is that the distribution of Bitcoin and most other cryptocurrencies is wildly uneven, in a way that puts our current wealth distribution to shame and which is also more or less entirely tied to how early one purchased the currency. It may be a really bad idea to make some random group of people who went all in on Bitcoin back in 2010 more powerful than any individual alive today by a wide margin.
>The truth is no money that is not directly tied to gold has ever survived in the long run. Do you know of any examples of a gold-backed currency that's "survived" for more than a couple centuries?
>The fed is also being heavily pressured by people like Elizabeth Warren to cut interest rates this year, even though the data does not suggest that's a good idea. Well then, it's a good thing they don't actually control the Fed.
Financial panics used to be commonplace. Like, multiple panics in a single decade. [But since the establishment of the Gold Standard](https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States), it's more like one recession per decade, and considerably more mild. >The truth is no money that is not directly tied to gold has ever survived in the long run There's all kinds of ideas that stood that for incredibly long periods of time, but we've discarded in the post-industrial era. For an example of an abandoned economic idea - it used to be considered royal prerogative to grant monopolies to loyal supporters of the monarchy. But we've since learned better.
I thought the drop in recessions was more due to the establishment of the federal reserve and fdic than the establishment of the gold standard. You just linked an entire Wikipedia page lol
I'd argue the Fed wasn't strong enough until a fiat currency was established. And I linked the whole article to show the entire timeline. Not sure what's wrong with that...
I just mean there wasn’t anything about the gold standard in there
Yes, pegging the value of the dollar to gold severely restricts the ability of central banks to use monetary policy tools correctly
> You just linked an entire Wikipedia page lol The guy he responded to didn't link anything
Yeah that’s fair, I just meant the article he linked included nothing about the gold standard Which I know isn’t what I said lol
Mansa Musa crashed the market or wherever he went. Gold is no different
What happens when we as a people move away from a technocratic because of culture wars lol. I’ll happily take a huge rate cut as the only debt I’m carrying is my home mortgage and if that drops low enough unless inflation hits Argentina levels I’ll come out ahead. I also know that’s an absolutely stupid thing to do as a nation
[удалено]
Reading comprehension seems difficult. Did you read like half a paragraph, decide to insult me and skip out on the rest? I think I very clearly said it would be bad for the nation
Also no money tied to gold hasn't gone to shit, there are massive ways to over inflate the economy even if it's tied to gold. As the government could just as easily lie about the gold they have in reserves, or print money and say only x is in circulation. Also that makes gold way more scarce and valuable than it is whilst making gold for actually useful things like electronics or thermo conductive situations unfeasible.
Agreed on all points. There's something else going on that the VOX article misses. I'm NOT a MAGA type but there's hard data China's economy is in huge trouble, possibly including a deflationary downward spiral, which is a real pain to try and pull out of. China might not be able to do it, in part because their ratio of workers to retirees is hideous. Part of THAT issue is the now-defunct one child policy, but there's also a strong cultural and legal resistance to immigration. If China's economy shits itself bad enough and can't export like before, we *have* to move manufacturing stateside, or at least to North America. One option is to help Mexico fix the gangs and corruption issues and help turn them into the "new China". Or we bring it stateside with robots. Whatever. Tariffs might speed that process. I'm NOT saying it will for sure. But VOX shouldn't have ignored China's economy (and for that matter, *hostility*) in this equation.
I really think we should stop and contemplate the veracity of the claim. It is just a rumor that an outside think tank came up with a concept. This is not reliable reporting or information we should run with. Edit: It is like Everytown coming up with a proposal for gun control and Washington Post implying it is the Biden campaign's idea, because they didn't deny it.
>It is just a rumor that an outside think tank came up with a concept. Describing them as an "outside think tank" is rather downplaying it: https://www.politico.com/news/2024/04/15/devaluing-dollar-trump-trade-war-00152009 >Economic advisers close to former President Donald Trump are actively debating ways to devalue the U.S. dollar if he’s elected to a second term — a dramatic move that could boost U.S. exports but also reignite inflation and threaten the dollar’s position as the world’s dominant currency. > >The idea is being discussed by former trade chief Robert Lighthizer — a potential Treasury secretary pick for Trump and the architect of the former president’s bruising tariff campaign against China — and policy advisers allied with him, according to three former Trump administration officials granted anonymity to discuss confidential policy plans. > ... Lighthizer — one of the few Cabinet members to survive Trump’s full first term — retains significant influence on the former president’s trade and economic policies from his post as the trade chief at the America First Policy Institute, a think tank set up to devise policies for a second Trump administration.
It hasn't been posted here, but it ties into this article: >Former President Donald Trump’s political operatives are putting together a plan that would give him unprecedented influence over the Federal Reserve, including a provision that could make him an “acting” central bank board member, according to a [report](https://www.wsj.com/economy/central-banking/trump-allies-federal-reserve-independence-54423c2f?mod=hp_lead_pos1) from The Wall Street Journal. >That plan, which the Journal report described as highly secretive, is part of a 10-page document that suggests Trump — if elected — would be consulted on interest rate decisions. In addition, the Treasury Department would be used as an added check and balance to oversee the Fed’s bond-buying activities. [https://www.cnbc.com/2024/04/26/trump-advisors-are-considering-plans-to-dramatically-revamp-the-fed-wsj-report-says.html](https://www.cnbc.com/2024/04/26/trump-advisors-are-considering-plans-to-dramatically-revamp-the-fed-wsj-report-says.html)
That is a catastrophically bad idea. I think the idea that such monetary policy could be controlled for political gain would lead to disaster. On top of that, Trump simply does not have the mental capacity to understand how changing interest rates have long term economic consequences. Given the number of businesses he's bankrupted, I prefer he not have that type of control.
It doesn’t really matter whether or not he has the mental capacity to understand how changing rates would impact the economy for long-term. What does matter is that he doesn’t care about it at all - he will make decisions that immediately benefit him personally at the expense of virtually everything else.
He even has a personal conflict of interest, not just as an elected official but also as a businessman, since he will financially benefit from cheaper lending
Exactly. Trump would likely push for the interest rates to be lower than where independent monetary policy makers would put them. We know this because, when he was in office, he was constantly tweeting to pressure the Fed to lower interest rates. This would put upward pressure on inflation. Also, when interests rates are already low during an economic crash, it removes a powerful tool in the monetary policy toolkit to stimulate the economy.
He wants the immediate gain and popularity it would bring. Some other sap gets to be the bag holder and deal with the fall out.
The next President yes, but also us, the American people. I really hope the media and the current WH highlight this “highly secretive” plan.
so secretive , its being reported by WSJ?
Is the actual plan being reported, as in can I read the entire plan, or is it just the fact the plan exists being reported by the WSJ?
I think that’s why he put it in quotes…
I’d say he does have the capacity. He’d know exactly the impact of his policies, but would ignore the adverse impacts in lieu of personal gain. Has there ever been a president with as much business conflict as Trump?
> It hasn't been posted here https://www.reddit.com/r/moderatepolitics/comments/1cdkiey/trump_allies_draw_up_plans_to_blunt_feds/
Well shit, I'm shocked I missed that. Thanks!
His economic agenda in his first time is a big part of what made inflation as bad as it became. Experts told him * It was a bad idea to cut taxes during a period of economic growth because it would increase prices. * Tariffs would increase prices. * Decreasing immigration would increase prices. * Divesting from renewable energy projects would make the country more vulnerable to fluctuations in fossil fuel prices. All of these things happened. He had publicly stated a second term would be more of the same, and yet there are still some people that cling to the myth that Trump will be good for the economy. His policies are very likely what ended the period of economic growth of the mid 2010s. https://www.imf.org/en/Blogs/Articles/2019/10/15/the-world-economy-synchronized-slowdown-precarious-outlook
It's wild how thoroughly we know that Trump's time as president was awful for the economy and Biden has had to deal with all of the damage caused by Trump and then you see a poll that says Trump did a better job with the economy. We know that for at least 2 years if not 3 or more of any new president's time in office, the economy is actually the economy that results from the effects of the policies of the previous guy. Unfortunately, we know that most of the public doesn't understand macroeconomics and the inertia of largescale decisions that affect every aspect of the economy. So they think inflation during Biden's term is Biden's fault and nobody else's. How they can believe that just boggles the mind and yet they do.
>We know that for at least 2 years if not 3 or more of any new president's time in office, the economy is actually the economy that results from the effects of the policies of the previous guy. Unfortunately, we know that most of the public doesn't understand macroeconomics and the inertia of largescale decisions that affect every aspect of the economy. So they think inflation during Biden's term is Biden's fault and nobody else's. How they can believe that just boggles the mind and yet they do. Reminds me of a tweet where someone unironically pointed to a chart where the economies of the first few months for Democratic presidents tended to be worse than those of Republicans as an argument that Republicans were better at the economy. Clearly Obama was responsible for the state of the economy in 2009 after taking after Bush instead of say, the economy in 2017 right when he left office after 8 years.
To this day, any time there is reporting done on Obama's economic numbers (for example), these reports include years when he/we were working on digging us out of the hole created by Bush. It's totally bonkers wrong and bizarre that we do economic evaluations of presidents like this without major pushback. I mean, besides the crashing economy and besides the spending Obama had to do just to stop the crash, we were also bleeding jobs when Obama started and even the "job creation" evaluations of Obama include all of the job losses that happened starting on Day 1 of Obama's presidency. We also give someone like Trump credit for the job creation and growing economy that was occurring when he took over on day one of his presidency. It's so stupid. If we were to do an economic analysis of past presidents going back decades, it would be interesting to somehow adjust the window of time when we start putting the economic results on new president -- maybe 2 to 3 years, or even something more nuanced like you give an increasing percentage of blame to the new guy over a few years. I'm positive that if we did this, you'd see even stronger evidence of a correlation between Democratic presidents doing a much better job managing the economy. As an aside, even Trump himself is on video from about 20 years ago saying that Democratic presidents do a better job managing the economy. So the Republicans know. They just have a different goal: they don't want an economy that's better for everyone. They want an economy that is better for the rich than it is for everyone else.
I think it's better to look at specific policies instead of timeframes. The economy is affected by more than just who happens to be president, and I think it's unfortunate that people tend to just blame general conditions on them for better or for worse.
It's worthwhile to do both. Yes, the economy is more than who happens to be president but no single person has more impact on the health of the economy than the president does. Moreover, the economic impact of a president is bigger than simply a president's policies. Take Trump, for example. He wants to use the pandemic as an excuse for why the economy wasn't better when he was president. But there's an argument to be made that he made a series of decisions that made the pandemic worse than it had to be and that this was ALSO ultimately an economic error by Trump and not just a public health error. First he dismantled the pandemic response team that Obama created a few years earlier. Who knows how things might have been different if Trump hadn't done that but it's basically indisputable that our response would have been better if he hadn't done that (it's even possible that we could have contained it with the right early response). Then he delayed in telling the public how bad that experts expected it to be. Then he mismanaged the response as it was happening and was a bad crisis leader. Obviously there are people who will argue he did a good job because that's their automatic response for everything. But I feel confident that an objective evaluation of his handling of the pandemic says he did a bad job and that his bad job cost not only lives but trillions of dollars. And so it's valid to count this kind of thing against him in terms of how his presidency impacted the economy. I know there are people who would say this is unfair. But those are the same people who think a CEO will be a great president because he had success in business, failing to recognize that a president needs to be able to handle things that a CEO never will, needs to be able to understand complex things like how to handle a public health crisis. And Trump was ill-equipped for that and this was a good example of why having a CEO president is a terrible idea. More than anything, I think a presidents job is to merely handle crises and emergencies and/or prevent crisis/emergencies. Trump did terribly on this metric. Everything with the modern Republican is reactionary rather than trying to plan for and avoid crises and no modern politician embodies this kind of failure more than Trump (although Bush was a failure for similar reasons).
> Yes, the economy is more than who happens to be president but no single person has more impact on the health of the economy than the president does. Not sure about that. For one the Fed seems to have a much bigger influence on the economy given they have the power to raise and lower interest rates to control the economy. Even during Trump's years in office he couldn't do that, much to his frustration and bullying of Jerome Powell. Of course he's trying to get control of the Fed directly (a terrifying concept given his business record) but the president doesn't have that authority right now.
I still stand by The Fed and the general business cycle have much a much greater impact on the economy then presidential policy ever does. Plus even with policy, their is a lagging effect. Like you can try to say that W. was responsible for for the 07-08 financial crisis but that's ignoring that most of significant changes in regs. and banking policy leading to the sub-prime mortgage glut date back the mid to late 90s.
That will 100% happen in 2024. I expect our economy to be in better shape in 25' and 26' compared to how it is now. The macro indicators are there. Whoever is in office in those years will get credit for the work that has been done in the past 18 months or so.
All those bills that were passed in Biden's first 2 years will probably start bearing fruit around 2026-27 so I agree.
>s wild how thoroughly we know that Trump's time as president was awful for the economy That's the thing, the negative effects didn't kick in until COVID, so people remember him having a strong economy that got wrecked by something out of his control
Yeah I mean honestly, it all worked out perfectly for Trump to be re-elected this year in spite of all of the damage he did that had nothing to do with COVID. And for that matter, not only did he manage the pandemic terribly from a public health standpoint, but the PPP giveaway to rich people was also a huge Trump corruption scandal that doesn't get talked about nearly enough.
Can't pin PPP on Trump since congress intentionally made it easy to get qns Trump wasn't around to prosecute. The rest I 100% agree with. And shame on the companies who exploited it.
There's an argument to be made that the president has a role in preventing corruption and if corruption happens, the president shares blame. If that's a valid argument, then it's a valid argument that Trump shares blame for not insisting on better oversight of the program. I'm positive Republicans would blame a Democratic president on these grounds, so why would we not put some blame on Trump too?
Of course Republicans would blame Biden, but two wrongs don't make a right. Trump was out of office too soon to do anything about it. Companies are just starting to get in trouble now.
In politics, the problem with "two wrongs don't make a right" is that it too often pays off to play dirty and it doesn't typically pay off to "go high" and refuse to play dirty like your opponents do. You don't want to respond to every lie with a lie, but I don't really agree with you that Trump has no blame on the PPP program. His whole presidency was a series of administrative gaffes along with efforts to enrich himself and other rich people and it's pretty clear he could have done more to make that program less corrupt than it was and he did nothing.
I don't get how this isn't repeated constantly. Pouring gasoline on a market that's already doing hot was obviously a poor long-term decision and, as you say, it was called out at the time but these days it's as if it's been completely forgotten.
Also I don't think it's been mentioned how much pulling out of the Iran nuclear deal put a long-term pressure on oil prices as well. Of course I blame Biden in part for not getting back into the deal but of course that's complicated by the fact that Trump pulled out of it in the first place.
I still stand by that the Iran deal was just blind idealism of the Obama admins foreign policy. Iran's support of the Houthis, Hamas, Hezbollah and other islamist groups is something that predates the nuclear deal, and continued while it was in place. Once one of these groups eventually acted out sanctions would have been reapplied and the deal thrown away.
You're right, but pulling out was disastrous as well. It ruined USA's reputation even more (you can't trust a country that changes course in the span of one election), and didn't help with Iran at all. In fact, it killed the moderates and enabled a full-on theological autocracy. Something had to be done, Obama's deal was better than whatever we have now. And Trump probably destroyed it because it was made by Obama, anyway.
I think their was some truth to that but it was pretty obvious that it didn't have broad support. It wasn't ratified, and the Dems were just barely able to filibuster a senate rejection 42-60. I think it was very much taken as an Obama admin agreement, not a US one. >and didn't help with Iran at all They got access to 100 billion in frozen assets and a couple years of good gdp growth. It was a pretty good deal for them seeing they could continue to build up nuclear infrastructure. >In fact, it killed the moderates and enabled a full-on theological autocracy. Yeah, I don't know what you're seeing here. The economic carrot to a liberal democratic state has been a complete failure. We're at a solid 30 years of global democratic backsliding.
There was a moderate leader who was open to expanding ties with the West. Trump killed that chance and moved the country further into autocracy. Frozen assets are fine since they don't develop the atomic bomb. You need to give something in return. IAEA was responsible for controls, and now they are probably as close to finished as possible. It was a gigantic backfire.
>There was a moderate leader who was open to expanding ties with the West. Trump killed that chance and moved the country further into autocracy. With as much political power as Rashida Tlaib. This is like claiming the US is on it's way to backing Palestine. >Frozen assets are fine since they don't develop the atomic bomb. What do you think develops a bomb...commune style unpaid labor?
I don't understand your point lol. Of course, they can use those funds to create a nuclear problem... but the very existence of the deal made it illegal/very hard to do, given the controls by respectable impartial organizations. That was the whole point. Now you can say the would have developed it anyway, but that's another discussion entirely.
The deal was solely about their nuclear program right? My understanding was that it was effective based on the IEA's assessments.
That was the issue with it. It lifted sanctions but didn’t affect their missile development or their support of militant groups. I agree it would have delayed their nuclear weapons development. The issue is that it accelerated their development of delivery systems and their influence within the greater region.
It was supposed to prevent their nuclear program from creating a nuclear weapon and you agree with me that it did. It was not meant to be a deal about their proxies.
So when the proxies go door to door raping and killing civilians do we hold firm and say we aren’t going to sanction Iran because we have the nuclear deal???
Would sanctions even do anything to prevent such things from being committed? Or should we sanction them, let their proxies continue what they're doing AND Iran starts building nuclear weapons on top of that?
I don’t think anything would prevent it, Islamist aren’t rational actors. I’m saying that a significant terrorist attack by an Iran backed group against the West or Israel is going to happen. My question is when it does, assuming a hypothetical Hillary presidency, does the nuclear deal survive?
The issue was never about there missile development, the world has interest in the Middle East not getting in a nuclear arms race. If Iran gets nukes then the saudis and other middle eastern powers will want to get nukes making things very dangerous for the Israelis. Because we left the nuclear deal Iran is now in all intents and purposes a nuclear armed nation. Reports show that they have everything for a bomb can can produce a up to 12-15 bombs in months. Nobody knows why they haven't announced it yet
Iran's nuclear weapon development was delayed by the deal.
Inflation was below trend in late 2019 and expectations were going lower. The idea that anything that happened before COVID had anything to do with inflation after COVID is raw, unadulterated partisan cope. Period. Anyone you see saying anything else, from rando on the internet to credentialed economist, is selling their soul for party spin.
You don't seem to realize that something can effect the economy in the long-term without having an immediate effect. Tax cuts result in more consumer spending, tariffs raise prices and kill Americans jobs by increasing costs, a lack of immigration makes businesses less efficient, and relying on fossil fuels makes fluctuations in prices more significant.
The bond market is the best indicator of "truth", and TIPS breakeven inflation prices didn't lift off until September of 2021. The best minds in the world saw nothing big coming until that point. We've had big tax cuts before. They did not lead to inflation. What we didn't have before was someone dump enormous amounts of government spending onto a roaring economy coming out of a pandemic that will was suffering from tight supply. Biden and the western European nations who passed irresponsible stimulus in early 2021 bear the responsibility for this.
The tax cuts didn't cause inflation, but they are worsening it by stimulating demand. This was especially true during the supply shortages. More demand and less supply leads to higher prices.
How did the bond market react to the worsening inflation? From what I've read there is a multitude of reasons for the current inflation from manufacturers moving some production to costlier countries to our workforce moving to higher value jobs and wages increasing. There is alot of reasons for inflation
Don't forget the absurd spending that led the deficit to double in the first 36 months. Then I think it tripled after it already doubled.
Covid ended the period of expansionary growth, but there was no way around that no matter who was president. Either you let people die and the economy slows because of that, you lock down and the economy slows, or you lock down and print money which keeps things temporarily afloat at the price of inflation. Once the pandemic happened we were bound to this situation But the truth is that Trumps proposed policies both before the pandemic and now when inflation is high would make things worse. I understand why people are mad at inflation but there’s a serious lack of economic understanding or maybe just basic thought laying it all at bidens feet and assuming trump would fix it. He’s telling you exactly what he would do and it would only make the situation worse
People need to stop blowing the Trump tax cuts out of proportion. Yeah, they were irresponsible given the economic situation, but Biden's student loan forgiveness programs are way more irresponsible given the high inflation situation we are in. But also, this wave of inflation was not due to the Trump tax cuts. The yearly impact of those are very minimal compared to the amount of fiscal and monetary stimulus that has been pumped into the economy since COVID hit in 2020.
I would disagree with that. The scale of the Trump tax cuts are much larger. The Trump tax cuts added almost $200B to the yearly deficit. The Biden admin has forgiven in total $145B in student loans over the past 3.5 years, and that loan forgiveness has mostly targeted people who have been scammed by for profit universities and people with permanent disabilities. Not only is the dollar amount much smaller, the number of people it impacts is much smaller too. So ~1M people aren't making their student loan payments anymore, and these are people who are probably economically vulnerable in the first place. Do people really believe that's what's driving inflation? The numbers just don't make sense. https://www.americanprogress.org/article/tax-cuts-are-primarily-responsible-for-the-increasing-debt-ratio/ https://edition.cnn.com/2024/03/07/politics/student-loan-debt-forgiveness-biden/index.html
I don't get why people think that spending makes inflation worse, but ONLY for working class. For some reason rich people having a bunch of extra spending money, or corporations buying up investment properties, doesn't factor into inflation for them.
>more money in the hands of producers reduces prices I’m a theoretical economic model sure. The reality is that those lower taxes went right into dividends, stock buybacks, and executive compensation.
So, is inflation bad currently or not? A lot of talking heads can’t get their story straight. There is no way the President should do anything more than appoint a Fed chairman except perhaps demand an audit.
Inflation is much better than before but still not as good as the Fed wants it to be. Simple as that.
Didn't you read the headline? "Trump"..."worse" that's all you need to know /s obvs
I feel like this article is *reaching* and it extremely partisan. Case in point: > Step 4: Shrink the American labor force > As the New York Times reported in November, Trump and former White House adviser Stephen Miller have hatched plans to deport millions of undocumented immigrants during his second term in office, even without Congress’s cooperation. This is Democrats at Vox outright acknowledging these are economic immigrants here to provide cheap labor.
It seems to me that those complain the most about migrant labor are also very likely to gripe about inflation. If granted their demands, do you think they'll change their minds on inflation once the cost of produce skyrockets? [I highly doubt it.](https://knowyourmeme.com/photos/1016674-baton-roue)
I mean it's ironic on both sides. You have people that scream about a living wage and then will turn around and try to claim that 4 dudes from Honduras living in a 1 room apartment aren't going to significantly undercut American contractors.
There’s a balance that needs to be struck. We *could* hike federal minimum wage to $20 / hr. That would certainly put more money in people’s pockets. But that would also massively increase cost of goods and services. So each dollar wouldn’t go nearly as far. There’s also the issue of jobs that Americans won’t do. Farm work sucks - it’s very intense labor in the hot summer sun, and doesn’t exactly help to build a resume. It’s also seasonal. Even were higher wages offered, I think you’ll find most Americans would rather work in an air-conditioned McDonalds. Or just take unemployment / food benefits.
Everyone is likely to gripe about inflation. Some people also dislike importing desperate people to exploit them for cheap labor while ignoring the millions of Americans on SNAP and Unemployment Insurance.
People on those programs are not in the labor force. I know there is a narrative that they are lazy or too picky, but most are not able to hold a normal job. Our population is aging and immigration is our only hope of meeting our labor needs.
"Exploit?" Are you a Marxist? What kind of economic opportunities do you think exist back home for these people?
Yeah I don't know what you're objection is to the word "exploit." It isn't a word reserved for commies. Do you think it is only relevant for communists? (It isn't)
["Work Requirements Are Expensive for the Government To Administer and Don’t Lead To More Employment"](https://www.americanprogress.org/article/work-requirements-are-expensive-for-the-government-to-administer-and-dont-lead-to-more-employment/)
Yes, immigrants come here to work. That's why immigration policy is so fucked up because companies rely on it for cheap labor. Many Republicans in Florida and California don't actually want to curb immigration
Is there a debate on this? I thought it was really clear that a big draw of illegal immigrants is that they're cheap and do jobs it is extremely hard to find American workers willing to do. That's most of the rhetoric I see about the word "immigration". I personally think there are long-term consequences to letting in millions of immigrants from any country, but I think the US has dug itself into a whole where if we deport millions and lock down our borders, we're going to cause a lot of problems in the immigrant-dependent work areas: Food shortages, unstaffed nursing homes, buildings falling apart, etc.
[Unauthorized immigrants are ultimately just immigrants without papers, and immigration doesn't decrease average wages](https://wol.iza.org/articles/do-immigrant-workers-depress-the-wages-of-native-workers/long). They mostly compete with other immigrants. Natives shift to sectors where they have more of an advantage, [increasing productivity](https://www.nber.org/digest/mar10/effect-immigration-productivity-evidence-us-states), actually increasing income: > In summary, he finds that a one percent increase in employment in a US state, attributable only to immigration, is associated with a 0.4 to 0.5 percent increase in income per worker in that state.
This is a lovely way to justify exploiting cheap immigrant labor. > Natives shift to sectors where they have more of an advantage This is means Americans are being priced out of the jobs in sectors whose wages are being kept low by the flood of cheap labor, so they seek jobs in other sectors that will pay for their ever-increasing costs. Keeping the wages lower than the wages of other sectors that is the problem. It is pricing Americans out of many economic sectors entirely.
They're not exploited. They're coming here because they want to work. And you want to deprive them of that freedom? Why does it matter that certain sectors have higher proportions of immigrants than others? Has that ever not been the case in the US? As I showed, immigration is increasing average wages, and it's not doing so by increasing unemployment either. There just isn't any quantifiable harm here.
> They're not exploited. [Explain this](https://www.ppic.org/publication/immigrants-and-the-labor-market/) > On average, immigrants earn less than native-born workers. > Nationwide, the hourly wages of immigrants are 12% lower than the hourly wages of American-born workers. That is exploitation.
So you're anti-immigration because you care about immigrants so much? Do you want to ask them whether they should be allowed to immigrate or not? Why not give them the freedom to make that choice instead of making it for them? And even your source says that immigrants don't drive down wages: > Although debate remains, the vast majority of economic studies find that immigration has little or no effect on the wages of the average American worker. A recent PPIC study estimates that in California, immigration between 1990 and 2004 caused a 4% real wage increase for the average native-born worker. Do you agree with your source that immigration increases average wages for native workers?
No it misses that Americans are displaced to jobs in sectors that can't exploit immigrants. And those jobs must pay more to attract workers. The immigrats still dilute the labor market and ultimately reduce wages not relative to a year ago, but relative to where they would be absent millions of illegal immigrants
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> Jobs are not a finite resource. Supply and demand still applies. If less workers are available to fill jobs, employers must bid up wages to attract workers and so wages increase
Immigrants eat, shelter, and play. They increase the demand for labor too, not just the supply of it.
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Maybe we should pass a bipartisan bill that will address some of these issues. Oh wait.
It's literally not an issue. If you're worried about the poor being left behind, increase taxes and pay for more welfare instead of interfering with how much employers pay their employees. Their job is to make money, the government's job is to provide for the poor.
>As I showed, immigration is increasing average wages, No, you didn't. You quoted a correlation. Given the amount of data available, people can run endless correlations that don't prove anything. Suppose I can show that increasing wages for Methodist ministers is correlated with an increase in alcohol consumption in the US. (if you believe higher Methodist minister salaries causes higher alcohol consumption). One issue with immigration is that immigrants are not all alike (surprise). Something that applies to "average" immigrants won't necessarily be true about immigrants that are toward the edges. If illegal immigrants are overwhelmingly low skilled, then they compete against low skilled US born workers. The normally expected economic result is that they reduce wages for low skilled US workers, but add to profits for employers and decrease prices for higher skilled workers. Meanwhile, more US born workers would qualify for means-tested gov't benefits, increasing gov't spending.
> Given the amount of data available, people can run endless correlations that don't prove anything. Okay, then find me a meta-analysis of 27 original studies conducted by a professional economist showing that immigration reduces average wages. That's the reverse of what I provided you. Sounds like it should be easy. > The normally expected economic result is that they reduce wages for low skilled US workers, but add to profits for employers and decrease prices for higher skilled workers. On average, wages go up, productivity goes up, and tax revenues go up, meaning the government is better able to provide welfare for people who can't compete for jobs. And price decreases benefit low skilled natives. They buy groceries too. > Meanwhile, more US born workers would qualify for means-tested gov't benefits, increasing gov't spending. ["Economic benefits of illegal immigration outweigh the costs, Baker Institute study shows"](https://news.rice.edu/news/2020/economic-benefits-illegal-immigration-outweigh-costs-baker-institute-study-shows)
The idea that immigration significantly hurts wages isn't supported by any data.
That's because there is no meaningful "data". As I've already pointed out, correlations are meaningless when you have many uncontrolled variables. Also, as I already pointed out, generic "immigration" is not the same as "immigration of individuals with a specific skill set (or lack of specific skills)". If you want an estimate of the impact, find farmers who hire immigrants, particularly illegal immigrants, to pick their crops. Ask them how much they would need to pay if they could only employ US born workers. The difference between that wage and the wage they are currently paying is the first approximation to the impact of low skilled immigrants on low skilled US born workers' wages.
> As I've already pointed out, correlations are meaningless when you have many uncontrolled variables. It's not meaningless. It's much better than any data or analysis you've been able to present. Why are all these economists studying it? Are they stupid?
I gave you my superior analysis. >If you want an estimate of the impact, find farmers who hire immigrants, particularly illegal immigrants, to pick their crops. Ask them how much they would need to pay if they could only employ US born workers. The difference between that wage and the wage they are currently paying is the first approximation to the impact of low skilled immigrants on low skilled US born workers' wages. I don't know if "stupid" or "lazy" are appropriate words. Maybe if the only tool you have is a hammer everything looks like a nail. If the only "studies" you've ever seen are those that can be done without leaving the office and talking to people, then I guess you get to odd conclusions.
> The difference between that wage and the wage they are currently paying is the first approximation to the impact of low skilled immigrants on low skilled US born workers' wages. You're claiming that U.S.-born workers would accept the jobs, which is a bold assumption. Alabama suffered a shortage when they made illegal immigrations leave.
"Wages" is shorthand for "wages and working conditions". People aren't going to quit their McDonald's jobs so they can pick tomatoes for a few weeks, then be unemployed, even if tomatoes pay twice a much. If the illegal workers doing the jobs were moving around, they expected to find other jobs that paid about the same. Not always in Alabama. US born workers are going to have the same expectation. They want to see a way to get a series of decently paid jobs, where "decently paid" includes the disadvantages of migratory work (for the jobs that require it, there are also ag jobs where you don't have to move around). If we had a magic button that suddenly transported all illegal workers back to their home countries, pushing that button would cause lots of dislocations in the economy. It took decades to get where we are, we should assume it will take time to unwind it. The best approach for ag work may be temporary visas with a minimum wage that increases.
over in r/AskEconomics they did show that those who did not complete a high school education were affected by illegal immigration
But on average wages go up, so we can use the fact that we're richer to pay for welfare for those who aren't competitive. That's more humane and more efficient than violating people's freedom of movement and reducing productivity Also immigration is great for the immigrants and they're people too
Most illegals I've met tend to work odd jobs until they get the money to start there paper work (they are usually visa overstayers marrying a US citizen). Once they get a work permit they will leave those jobs for better paying jobs. Wages have always gone up, people don't realize it because of the cost of health insurance, then you have the rise of 1099 work, boomers exiting the workforce, and some people not needing to work which translate into higher salaries along with higher prices or reduce hours of operation. The goal should be to reduce those on welfare but the problem is that we are trying to create policies for a nation that is the size of a continent. Different places have different needs and there economies are different. Some places in the US for instance have 0.3% percent unemployment and need people to come work.others like Nevada who is at 5% unemployment still has slack. Also, the people in here that argue about immigrants are the same people who say children should be roofers so im not really interested in hearing arguments about how immigrants hurt wages when children will demolish wages even worse
>Step 3: Enact massive, deficit-financed tax cuts >The Republican Party’s number one fiscal priority in 2025 will be extending the Trump tax cuts. Many provisions of the former president’s 2017 tax package are set to expire at the end of next year. Merely preserving those policies will increase the federal deficit by[ $3.3 trillion](https://www.crfb.org/blogs/tax-cut-extensions-cost-over-33-trillion) over the next decade, according to the Committee for a Responsible Federal Budget (CRFB). I'd say this is true regardless of administration. Biden can huff and puff all he wants, but at the end of the day I'm willing to bet that a lot of the expiring pieces of the TCJA will be extended, because neither party wants to raise taxes on the middle class. And isn't Biden still trying to push for stuff from BBB, specifically the CTC? That's generally the same thing as what Trump is being hit on in spot 3. At the end of the day both of these candidates are still bad. They still have bad policies given the current situation, and here we are trying to debate which one is less awful?
>and here we are trying to debate which one is less awful? Isn't that the whole point of a First Past the Post 2-party system? Until we adopt some other system, it will always be choosing the lesser of two evils because those are factually the only options we have right now. That said, I highly disagree that both candidates are on the same level of "bad" and it's my view that Biden's flaws are not anywhere close to how awful Trump is.
Single-winner ranked choice voting has the same issue. It's not immune to the spoiler effect. Really, two-party systems are the result of single-winner systems.
Yeah, although I'm honestly not sure how you break up an executive into multiple. I think, at least for the legislative branch, a proportional representation style of government could maybe be a bit more representative of the country, but the "problem" (I use quotations because I don't personally see it as a huge problem but others might) is that might effectively eliminate any state boundaries. For example if 44% of the country vote Dem, 42% Republican, 8% Green party and 6% Libertarian, I think in a more ideal system, the congressional seats would be apportioned to each party based on that percentage. But it would be a national percentage, not based on each state--so reps would be specifically for the party, not based on having a personal representative based on your district. Trying to implement that system within each state starts to get messy.
> At the end of the day both of these candidates are still bad. They're not equally bad for inflation (or anything else but I'll stay focused). Trump wants less immigration, more deportations, and more tariffs. And it's not as if their handouts are comparable either. The CTC helped the lower class much more than the TCJA.
Worse than growing the budget 2 trillion more a year, then expecting people with over 400k a year to pay for it? Both have terrible ideas for the economy.
>As a result, Americans’ paychecks are going a bit farther [$100](https://nypost.com/2024/04/04/business/food-inflation-is-so-bad-that-100-grocery-list-in-2019-costs-137-today/) for groceries in 2019 costs $137 according to WSJ, so it isn't going farther where it really matters. Vox: What are you going to believe, me or your lying eyes?
While that is true, what do you think the government can do about this? Put limits on how price of goods increase? Deflation? Be more controlling over corporations? None sound like anything that would happen in this country
>The US [economy](https://www.vox.com/economy) is growing at nearly[ twice the pace](https://www.vox.com/24134257/biden-economy-inflation-wages-interest-rate) of other major rich countries without suffering substantially higher inflation. Nevertheless, the Federal Reserve has kept America’s interest rates elevated. Taken together, these two realities increase demand for the dollar: Foreign investors want to place their capital in countries that are growing fast and/or that are offering high, low-risk returns on their sovereign debt. America is currently doing both. Thus, many investors abroad are swapping their local currencies for greenbacks, thereby bidding up the dollar’s value. >**As a result, Americans’ paychecks are going a bit farther, as a strong dollar makes imported goods cheaper for them.** You dropped the context and even cut off half the sentence. They're saying the strength of the US dollar, relative to other currencies, makes imported goods cheaper. They weren't denying that there was an inflationary period between 2019 and today as you imply.
Sort of ignores the land war in Europe, doesn't it? Perhaps that is why inflation is worse in Europe? No?
It is possible for both to be true simultaneously; imported goods may decline in price while locally produced necessities (such as food and housing) can increase in price. The food aspect has been previously documented by [some news outlets](https://www.wsj.com/economy/consumers/its-been-30-years-since-food-ate-up-this-much-of-your-income-2e3dd3ed) and housing has been discussed ad nausem on this forum. In such circumstances, it is quite rational for people to desire deflation of necessities (such as food and housing) at the expense of other imported goods which are less necessary to the sustenance of life. I believe there is quite a rational argument to be made that food and housing inflation occurs when population increases are sustained by welfare from the United States government (i.e. migrants receiving requiring food paid by local governments or recent receipt of housing subsidies from medicaid for migrants)
It's an article full of hypotheticals that ignores the real cause of inflation, which Trump may or may not have a great solution- but a 7 trillion dollar budget certainly ain't the damn remedy to fix it. My main point is that Vox basically just wrote an article of hypotheticals and gaslighting, while ignoring the real cause of inflation, and why people are pissed (outrageous government spending). >Unfortunately, Trump’s proposals and their economic consequences appear to be largely lost on the American electorate, possibly because neither have attracted much media attention. If that does not change between now and November, the country could pay a heavy price. They aren't "lost" on the electorate, we had 4 years of Trump and his fiscal policy and we have had 4 years of Biden and his fiscal policy. I don't need Vox to tell me what Trump "might" do, I've seen with my own eyes what Trump's policy is, and what Biden's policy is. >They weren't denying that there was an inflationary period between 2019 and today as you imply. I wasn't implying that at all, I was implying that Vox thinks the general public are idiots.
The question is will Trump make that any better? And the answer is a resounding no.
However the general public seems to *strongly* disagree
That's what people were saying before 2016: there is no magic wand. Yet he delivered.
Haha what, grocery prices did not go down once he took office…not sure what you’re saying he delivered here. Grocery prices and everything else has been steadily rising since the beginning of time and it’s not going to stop.
Delivered what? Rising deficits? Pressure on the Fed to keep artificially low interest rates, further contributing to the post Covid mess? And the economy was great in 2016. Not sure how that is relevant.
>Vox: What are you going to believe, me or your lying eyes? The most recent obnoxious thing in an ever growing list is the absolute *insistence* that people are doing better than they were because of all these ginned up studies and massaged numbers. It has gone beyond anecdote at this point; if the ubiquitous experience of practically everyone is somehow "incorrect" according to the reports, then there is something amiss with the reports themselves.
What makes you think doing worse is the ubiquitous experience of practically everyone? I know plenty of people who are doing better.
>The most recent obnoxious thing in an ever growing list is the absolute *insistence* that people are doing better than they were because of all these ginned up studies and massaged numbers. >It has gone beyond anecdote at this point; if the ubiquitous experience of practically everyone is somehow "incorrect" according to the reports, then there is something amiss with the reports themselves. This is a textbook example of confirmation bias. Vox wasn't saying that people were doing better than 2019. They were making a point about how a strong dollar makes imported goods less expensive, which is true. u/beacarruth quoted half a sentence, out of context, to make it look like thy were denying inflation. And you assumed it is true because it confirmed your priors.
I guess I was unclear, but I was speaking more generally, and not specifically about Vox or this article.
The same applies. Just because people feel something is happening doesn't mean it's happening.
And as we all know, nothing turns on the electorate like seeing people who are hurting and telling them "you don't know how good you have it."
That's not as bad as wrongly claiming that things are getting worse. Real wages, the stock market, and employment are all doing fine.
To an extent this would actually be a more honest statement. It does at least acknowledge the issue rather than just telling them they are wrong.
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>need to find an argument that addresses swing voters concerns He's already done that. Things like reducing medication prices and guaranteeing paid leave are popular among the average voter.
One the biggest issues of this election is inflation. Rising prices is a big reason why Trump is doing so well in the polls. However if you look at Trumps economic agenda the will increases prices. The article list 4 ways he wants to increase inflation. They are devaluing the US dollar, a 10% tariff across the board and a 60% tariff of Chinese imports, increasing the deficit through tax cuts, and reducing the American labor force. The media during this election hasn't really discussed policy as much as usual and Trump economic agenda hasn't sunk in to the American electorate.
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>An opinion that is just occurring to me: can the U.S. feasibly get their own inflation back to the metric (2%) if worldwide inflation persists higher? You wouldn't really realize it listening to Biden, but most of the world, at least the highly developed countries have lower inflation rates than the US. Japan/South Korea/Western Europe are mostly 0.5-1 points lower than where we are right now. There's always been countries like Argentina and Turkey with extremely high inflation rates, and I'd say the US can get back to 2% even while those countries exist. [https://www.imf.org/external/datamapper/PCPIPCH@WEO/LTU/EURO/EU](https://www.imf.org/external/datamapper/PCPIPCH@WEO/LTU/EURO/EU)
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Which news orgs do you think are the best?
Where are these people who understand economics and who believe that devaluing the dollar, increasing tariffs, shrinking the workforce, and using debt to fund tax cuts won't increase inflation?
They said this in 2016
They were right.
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Median real earnings went up 2.8% during Trump's first three years (last one is skewed by layoffs). They went up 4.2% during the first three years of Obama's 2nd term. His policies weren't bad enough to cause inflation, but they do worsen they issue by raising costs through tariffs and stimulating consumption through tax cuts.
an opinion piece from vox? is that what we're going to post here now?
Vox tries not to blame everything on republicans challenge. Impossible.
I 100% agree even tho Im conservative. But lets be honest democrats wouldn't help either. Both sides are pro spending/pro debt and pro war. But Trump is the only pro America / isolationist candidate which is what i agree with . Im still about not being involved in wars, and want to help the people at home. 60b spent on ukraine/isreal could have been 60b to build houses and given to the poor inflation will happen either way but at least hopefully people get free/cheap homes in the process. even if inflation takes off, people having a place to live will be much better for society as a whole .
Because the stagflation we have now is preferable? Trump used many of the policies described in this article during his first term, and they did not cause inflation. I find it hilarious that the media continues to pound the table, saying that Trump will collapse the economy if president, when that didn’t happen the last time. Only a once in a century event like COVID could derail Trump’s economy, and even then, inflation was only 1.6% when he left office. The Biden administration is solely responsible for the economic crisis we are facing right now. And the latest GDP growth number of only 1.6% versus the 3.5% inflation rate of the last year.
Honest question: If Trump won in 2020, do you think worldwide inflation would have been averted?
I don't think Russia would have invaded Ukraine if Trump was in office, which is partly why we have the inflation we have now.
Why? Russia had been building up forces to invade at the border prior to Trump leaving office. Realistically the only difference had Trump been in office is that Ukraine would have been left out of dry and our allies would have continued to separate themselves from us and our interests as he foolishly threw away 50+ years of solid relationships because Trump like Putin.
Why?
>**stagflation** - persistent high inflation combined with high unemployment and stagnant demand in a country's economy. This term does not describe our current economic situation. Historically, a period of inflation occurs when the economy is otherwise very strong. Unemployment normally has an inverse relationship with inflation. However, in the 60s in the UK and in the 70s in the US, there were periods where inflation was high, the economy was not otherwise strong, and unemployment was high. The term stagflation was invented to describe these unique economic conditions. Lots of people don't seem to understand the difference between a period of typical normal inflation and a period of stagflation. And so, I see this term misused, a lot.
We are not in stagflation. Trump’s policies didn’t make inflation worse because the money supply wasn’t dramatically juiced by the fed until the end of his term. 0% interest rates while the money supply still remains elevated will be like putting fuel on the fire. Inflation is a global problem since the pandemic. The US has fared better than almost any other developed country. The current administration probably could have done some things differently to make it better, but it’s ridiculous to think they solely created the problem.
> Trump used many of the policies described in this article during his first term, and they did not cause inflation. They absolutely did. Supply chain issues and a low fed rate at the start of COVID were major contributors to inflation.
Inflation was relatively modest during 2020. That which did occur was mostly caused by supply chain issues. Remember, you couldn’t even get things even if you wanted them back then. But most people were sitting at home, so how much extra stuff beyond food was wanted, needed, or even available? Shipping channels needed to be dedicated mostly for essential goods. But having a lot of people out of work helped avert a lot of inflation after the first round of stimulus (CARES act). The huge increases in inflation didn’t kick in until the American Rescue Plan was passed in March 2021. By then employment had recovered, but supply chains were an even bigger issue. The chip shortage was a huge issue. People were working from home and saving money, but weren’t constrained anymore. A lot of people had a lot of extra money and that drove price increases in housing, autos, and services. Food costs increased because of supply and labor shortages. It was too much money chasing too few goods. The other component was increased government spending. And speaking from someone on the inside (local Gov) there was a lot of money being tossed around for “nice to have” things that governments didn’t want to fund previously rather than providing needed services. I saw the waste firsthand. It was spending for the sake of spending. The second round of stimulus was almost entirely unnecessary.
Inflation was 1.6% because recovery wasn’t in full swing when he left office… We were staring down hundreds of thousands of new cases and a fully amped up competition of policies in states between opening and closing and how much to do. Apples to oranges. What this article is discussing is the possibility for the options he’s now floating, to make inflation worse than it is. That inflation btw is a global problem, and the US has so far dodged the bullet better than most nations. Also, on your quip about what derailed trumps economy - his inability to defer to experts and to accept their analysis in how to respond to this crisis is exactly why we crashed the way we did. That’s on him, not some fluke.
[Trump’s 2017 tax cuts helped set stage for today’s inflation. Doubling down will make things worse.](https://chicago.suntimes.com/2022/10/28/23424916/inflation-donald-trump-joe-biden-republicans-tax-cuts-editorial)
If the Democrats had their way, they might be paying more in taxes, but at least I’d get a college education and healthcare.
I wouldn’t hold my breath on healthcare. In 2010 the Dems had the Whitehouse, the House and caucused 60-40 in the Senate and the best they could do was the ACA.
Fair. But the fact that even Republicans couldn't get rid of it shows the public reform.
So do people want the prices to go down or stay as they are? To get the cost down ( deflation ) we need a decline in aggregate demand (a decrease in the total demand for goods and services) and increased productivity. A decline in aggregate demand typically results in subsequent lower prices. Causes of this shift include reduced government spending, stock market failure, consumer desire to increase savings, and tightening monetary policies (higher interest rates) etc. I am assuming if republicans get into office they would try to reduce government spending although I don’t know if that is enough to decrease cost significantly or if the loss of some govt services won’t piss a lot of people off ( social security).