Worst Economic President in US history

[opebo]

Out of those listed, obviously Clinton.  But seriously all those listed are far above average.

[opebo]

Herbert Hoover -Gold
George W. Bush -Silver
Jimmy Carter -Bronze

Carter did nothing particularly bad economically.   Any ill effects at that time were entirely caused by oil shocks, and in any case the economy of Carter's term was far superior to anything since (though inferior to what had gone before).

[opebo]

You would have to be deranged to think Reagan was the worst.

Of the available choices, LBJ did the most long term damage and was, in my view, the worst.

Haha, you're hilarious.  Here we sit in the middle of a second great depression caused by the neo-liberalism which was initiated by the Reagan Revolution and merely continued by the presidents since, and you claim he wasn't bad.

Instead you blame LBJ who presided over the best economy the US has seen - ever.

[opebo]

For that reason George W Bush ranks highly on the list to me. Everyone of my 250 fellow students who took basic macroeconomics this spring could have told him how stupid it was to unbalance the budget and stimulate the economy with huge tax-cuts during a time of prosperity.             

The tax cuts didn't stimulate the economy - they were only tax cuts for the wealthy.

[opebo]

The tax cuts didn't stimulate the economy - they were only tax cuts for the wealthy.

To be fair, they stimulated a lot of speculative bubbles.

Well stated.  Also indirectly, but perhaps more importantly, the bubbles were stimulated by the 'easy credit' and low interest rates which are a necessary result of a lack of demand precisely caused by right-wing economic policy of low tax rates and inadequate redistribution.

I don't understand what you get out from making a fool of yourself all the time. You should really stick to subjects like buying hookers that you actually know something about. It's frankly a bit embarrassing to discuss economics with you.

(as a little hint this time, who gets their taxes cut is not relevant to my point in this case. But I guess you wouldn't understand, given that you don't know anything about economic policy)

Your post seems to be a personal attack Gustaf.  I know all about your side's idea of economic policy, I just disagree.  Tax cuts for the wealthy, particularly like the one's we had in the early 2000s (from 40ish to 30ish percent) do nothing to stimulate demand, which is the only effective way to stimulate the economy.  As memphis points out above the only thing such cuts could stimulate would be destructive speculative bubbles.

I would say that your supply side claims are rather more embarrassing, since instead of simply saying openly that you support privilege you try to justify it with all sorts of absurd claims.

[opebo]

I'm claiming that (unfinanced, one should maybe add) tax-cuts stimulate the economy. That is a given. Where they go is not of fundamental importance.

And I am claiming that tax cuts for the owners do not stimulate demand.

This is clearly true, given how things turned out.

Clearly true?  We're in a depression caused by lack of demand, you silly Swead.

economics... political ramblings unrelated to the topic at hand.

But that is precisely the point, Gustaf - you imagine that economics is separate from or independent of politics.  This is your error.  Economics, even giving it the most credit, is just the accounting of political power.

[opebo]

Do you think the economy was shrinking during the early Bush years? That demand was collapsing? That is nonsensical.

No, demand was collapsing over these last 18 months.  I was not referring to the early Bush years at all.

I thought everyone knew that the economy over-heated. That is the reason for the current problems. The economy was over-stimulated. That's what created the bubbles in the stock market and in the housing market. People had too much money.

No, obviously not.  The economy was not 'overheated' at all, as evidenced by the low rate of inflation.  People did not have too much money, but rather, credit was being used as the only lever of economic policy.  It was this expansion of credit (a feeble attempt to support demand), which created bubbles, and wish ultimately fell on its face due to a lack of support, in turn, from fiscal policy - redistribution.

Also, you seem to think that money which isn't immediately consumed by its owners disappear. This is not true. Money which is saved is borrowed by other people who use it to consume (or directly invested).

No, in a depression most of this money is idle.  People don't borrow.  The only way that this money can be put to use during a depression is through government borrowing or confiscation (taxation or printing money).

Let's say Fred is an owner and gets a lot of money through a tax-cut. Fred can consume for this money, but let's assume that he doesn't. He may then invest it. Maybe he builds a factory or a house.

You must be logged in to read this quote.

Yes obviously, but the weak link was the borrowing phase - the people who borrowed the money could not pay it because of inadequate incomes, caused by lack of redistribution and excessive inequality.  Eventually they could borrow no more and the system collapsed, followed by this current depression phase where no borrowing occurs 'privately' because 1) lenders are afraid to lend, and 2) borrowers are afraid to borrow.  It makes no sense to borrow now, when State policy is for deflation.

Of course, I so far haven't even touched your ridiculous assertion that the Bush tax-cuts were merely for the rich. They may have benefited the rich in an unfair way, or whatever, but as I recall lots of people recieved tax-cuts, not just rich people. That certainly increased demand.

Extremely insignificant portion of the tax cuts, quite inconsequential.  Think of it this way - if Bush had imbalanced the budget by the same amount, but utilized the money as welfare payments for the lower half of the population instead of tax cuts, there would have obviously been no bubble(s) and no depression.

I think the Bush tax-cuts were B-A-D for the economy.

Yes, I suppose they were somewhat bad, but the real problems were and are far greater, deeper, more pervasive than that scapegoat.

[opebo]

LBJ of course.

Haha, the height of american economic well being, since destroyed by your party.  Good choice.

So, I guess you might save face here by claiming inability to read rather than inability to comprehend economics. When I was talking about the Bush tax-cuts, who took place during the early years of his presidency, you thought I was talking about hypothetical tax-cuts taking place now during the Obama presidency. How that is even possible I have no idea.

No, there was no overheating, and my view of the Bush tax cuts is that they had little if anything to do with any recession.  We're talking past each other, my friend.

What happened was a collapse of demand due to a lack of redistribution, not an 'overheating' causing inflation.  The economy during the Bush years was in fact very poor, and could in no way represent an 'overheating' - for example there was hardly any inflation, and not much growth.

It is my view that 'stimulus' in the sense of government policy which directs economic activity, is absolutely necessary.  Aside from the fact that there is no reason - from the point of view of personal interest - for the vast majority of people to support the political hierarchy known as capitalism, it is also the case that this system fails over and over again due to its inherent instability.

[opebo]

The collapse in demand occurred in 2007/2008, Gustaf.  By the way, why do you use nominal rather than 'real' gdp?

[opebo]

The collapse in demand occurred in 2007/2008, Gustaf.  By the way, why do you use nominal rather than 'real' gdp?

Because nominal GDP reflects the creation of a bubble more accurately, taking inflation into account.

So, you admit then that the collapse of demand did not occur during the early Bush years when the tax-cuts we discuss were actually made, but after that when the bubble created in the early Bush years imploded?

Sounds very much like you do not actually contest anything I've said, but merely foam at the mouth when you hear tax-cuts.

No, I only made the claim, and continue to do so, that the tax cuts had little or no effect on demand.  The bubble was created not in consumption but in asset prices, due to the excessive use of only the interest rate lever of economic policy.  The collapse of this same bubble was caused by a lack of corresponding increase in incomes for the working class (the lower 90%).   In other words a great deal of credit was pushed in an attempt to prop up demand in the face of increasing inequality and falling real incomes for workers, but was insupportable due to this self-same lack of income (lack of redistribution).

The Bush tax cuts had only the most peripheral effect on any of this, if any effect at all.  Only in the sense of a 'negative' effect - as in if that several trillion had, instead of being wasted on the rich, been given to the poor where it would have propped up demand.

[opebo]

But you are making no sense at all! The collapse in demand that you talk off occured after the bubble burst - you identified the time frame yourself as 2007 to 2008. I posted numbers indicating that there was no collapse in demand before the crisis and you admitted to this.

Yes, the collapse in demand occurred in 07-08.  So?  You and I just attribute this to different causes.

Are you so stuck in your dogmatic thinking that you are unable to admit to being wrong? You have admitted to pretty much every factual statement I've made. Why is it so hard for you to admit to that?

Why is it so hard for you to understand that the disagreement here is in our analysis, not about 'facts'.

For instance, it seems as if you like to be in favour of stimulating demand. But you don't like tax-cuts. So you don't want to think that they stimulate demand. You have admitted yourself though that demand for stocks and houses certainly went up.

I am in favor of supporting demand or creating demand, but tax cuts for the privileged to not increase demand. 

'Demand' in economics is normally used to describe consumers ability to acquire goods and services that they desire.  While it is not inaccurate to call the desire and ability of the owning class to buy shares of the means of production ('stocks') a sort of 'demand', it is confusing, as most economists do seem to separate the two phenomena.   Compare, for example, the Carter years - there was a very strong and healthy demand for consumer products, such as for example cars, while there was little 'demand' for stocks.  This is a much better situation than the Bush years, which provided a bidding up of asset prices but very inadequate demand for final products and services.  These are typical examples of the divergence in practice between good Keyensian economics and bad supply side economics, and the main difference is that worker wages were much higher relatively speaking, for various reasons, during the Carter years. 

In fairness, the poor specific macroeconomic policies implemented since Reagan are not the only reason for the collapse.  "Free-trade" has also been a destructive influence on demand, and a deflationary influence overall.  Of course this is another aspect of foolish right wing economics.  (this is not so say that closing the domestic market to slave-made goods is the only way to prevent this damage - there may be other ways to replace working class incomes as well; but the point is, nothing was done).

As for the demand for housing, this was fueled by the excessively low interest rates mandated by supply-side economics - without the proper support of final consumer demand created by redistribution, government is left with only the one policy lever.  This works for a while, but is finally unsuccessful as it creates insupportable debt.  Workers cannot pay back loans if they are not allowed to keep enough of their production to cover the payments.

[opebo]

Funny that this opposition to exploting slave-labour comes from someone who goes to Thailand to buy cheap hookers, explicitly because things are too expensive in the US. I guess you don't want to endure yourself what you want to force upon others.

When the game is as it is, one plays it as it is, Gustaf.  Individual action is meaningless.  What I suggest is that political actions of the working class are foolish, and that they should strive to vote for a system that is less blatantly abusive to them.  Given that they are to consumed by hubris to do this, then of course I will attempt to make the best of the bad situation.

It is also funny how you love inflation, yet always complain about how expensive everything has become in America. But logic does indeed not seem to be your strong suite.

Speaking of logic, you are not using it, Gustaf.  If one complains about something being too expensive, it is always relative to income. 

Now, since I've actually taken macroeconomics I know that the output-gap, the measure of general economic performance, is affected by several different things. One is private consumption, one is public consumption and one is private investment. There are other aspects as well, but those are the most important ones.

Thank you, insipid.  Everyone here has 'taken economics'.  I did so in the 1980s.  But feel free to be proud of your achievement, if you like.

I already described to you how investment=savings and how this does in fact stimulate demand. You then answered that this is not true when we're in the middle of a depression. That is correct but obviously not what I was referring to. During the boom years of the Bush presidency the problem was precisely that people did borrow too much and spent like mad. That created the bubble.

Yes, they borrowed too much - because interests rates were too low.  Why?  Because of inadequate fiscal redistribution.  I have stated this many times.  Can't you read my posts?

You also seem to think that only "owners" own stocks and houses. A lot of people bought houses during the boom years, but maybe you missed that aspect.

Well, by definition only owners own, but you are correct that working class people do 'buy' houses, sometimes.  But the excessive bidding-up of house-prices relative to incomes was the result of a) excessively low interests rates caused by a lack of redistribution (fiscal stimulus), and b) inadequate wages, also caused by a lack of redistribution.  Bubbles are to be expected when right-wing economics are applies.

Anyway, houses is something people buy. There is demand for houses. If demand for houses goes up, demand has been stimulated. The desire to buy a house is certainly not increasing supply, even you must see that surely?

The dispute between us, Gustaf, is the source of this stimulation - if it were in fact the result of a government expenditure, a cash redistribution, or union/government mandated wage increases, then obviously it would be completely sustainable.  But it was merely credit growth necessitated by poor right-wing economic management.  Lacking the essential component of demand-support - redistribution - they tried to make due with simply lowering interest rates and making more and more credit available to a working class that they were simultaneously impoverishing with declining real wages.  Obviously this led to a 'bust', as it always does - such as the 20s/30s. 

Where we differ is that you fail to see that this credit bubble and bust is a clear discrediting of right-wing supply side economics, and a clear proof of the superiority of redistributionist Keynesianism.

[opebo]

2. Eh. You seem to think that increasing wages won't lead to an increase in prices. That is a somewhat strange opinion to hold.

Not really. You seem to think that increasing profits can be accomplished without an inflationary effect.   Look at it this way, Gustaf - our economy is enormously slack over the last 30 years.  We have not passed on much if any of productivity increases to workers.  We could afford to redistribute a tremendous amount before the balance would tip from deflation to inflation.

3. "Everyone here has taken economis" I worry about your grasp of reality sometimes, I really do. Besides, if you have studied the subject it certainly doesn't show.

Christ man, everyone takes a few economics courses in college.. its standard.

4. So, let me get this straight: you think stimulating demand for houses is supply-side economics. I suggest you re-take that economics course to see if you can understand it this time, because it doesn't really seem to have worked for you back in the 80s.

Yes, as it is stimulated through interest rate reductions, which are the one policy lever allowed government under supply-side economics.

Such credit-based stimulation is, while perhaps not part of the rantings of supply-siders, an inevitable result of their poor policy.  The type of attentions to the supply-side which these crackpots espouse, coupled with their refusal of proper fiscal redistribution, leads to a disastrous dearth of demand.  For a while the only institution standing (the central bank) attempts to paper over or mask this mess, but in the end it leads to a bust.  It has always been thus.  Keynes offered us the perfect way out, but they oppose him purely on grounds of 'principle' (aka spite).

[opebo]

1. Do you deny that the US has had inflation, not deflation for the last, I don't know, century or so?

It is very hard to say with any degree of confidence, Gustaf, as all such figures are quite politicized.  But given the relative benignity of a few percent inflation compared to the disaster that even a little deflation represents, I'd rather err in favor of the former..

2. The wage-share of GDP has remained more or less constans for the last 50 years or so. http://en.wikipedia.org/wiki/File:AdjustedWageShareUSAFRGJapan.PNG

Those figures are meaningless.   Labeling an income 'wages' is done arbitrarily by the payer, so we cannot know what is the actual position behind it.  For example my parents pay themselves 'wages' out of their companies, in addition to 'taking profits', but they do no 'work', but rather are owners.  Also you figures say nothing whatever about the increasing inequality within the 'wage income' designation.  Finally, the share of the economy represented by wages should be going up as productivity increases.

And, of course, in a longer perspective you alway claim that the Carter days were the glory days. I guess it depends on data interpretation. Real weekly wages did indeed peak during Carter's presidency. At the start of it. In fact, the two largest annual decreases in the data in real weekly wages occurred during the two last years of the Carter presidency, 1979 and 1980. So if your argument is that Carter killed wages I guess that may have some support.

In any case, the main point is that the Keynesian past - overall - was better than the supply-side present, for workers.  Ups and downs over particular quarters are probably not going to be as reliable a way to evaluate this as whole years or even decades.

As you can see the median income-earner has the same real wage now as in 1973.

Yes!  This is precisely the point - the real wage should have gone up enormously since 1973 due to increases in productivity.  That it did not is testimony to the political power of the owners, who usurped the entire gain.

And, before you try anything, let me remind you that the owners are only those who don't work. As you've stated yourself repeatedly, high-income earners like doctors or CEOs are just as opressed tools of their masters as anyone else.

And yet they also have a capital-based advantage over their class inferiors, Gustaf.

[opebo]

3. Whether the real wage "should" have gone up or not is a subjective political idea of yours that I have no interest in.

Dude, whatever the real wage did was a political choice, not something that 'just happened'. 

4. You still seem to fail to realize that the unchanging share of GDP made up by wages means that owners did not capture all the gain. You also conveniently ignored the point on equality that I made.

Why should workers accept the same measly share of GDP?  Isn't progress a reasonable goal?

5. Since you are a rather sad little man, with probably the most miserable existence of anyone on here, unloved even by your own parents, I'm going to let you go now. My heart just isn't in it anymore. If it is really so important to you to pretend that you know economics, fine, carry on. I doubt these delusions of grandeur are healthy, but I'm not your shrink.

Gustaf, what motivates your desire to make these personal attacks?  It seems you must be an awfully bored, sad little swede.  Just because you hold all those typical spoon-fed right-wing economic delusions doesn't motivate me to attack you.   You might in fact be a very nice, pale, flaxen haired youth with good intentions, even though you seem otherwise.