Final Proof That Trump’s Appeal Was Never About the Economy

[The Economy is Getting Worse]

The big difference between now and 2017-2020 is real interest rates.  The much higher cost of finance has a big impact on people looking to buy a house as well as those who rely on credit.  That real wages might be higher again than in 2021-2022 does not matter if real interest rates adjust cost of living for those that rely on credit have surged and stayed that way.

Credit card debt at record,  credit card and auto loans delinquency rate at highest since Great Recession

Even adjusted for nominal income, credit card debt is around record highs (and would be at record highs if we added buy now, pay later loans). They should be lower than before due to higher interest rates. This is a sure sign that excess savings are gone.

[emailking]

Took me a bit to figure out you meant his attractiveness to the voters and not one of his many legal appeals to a higher court lol

[Progressive Pessimist]

Trump's appeal is pure emotional demagoguery. He doesn't use thought or require thought and appeals to peoples' most under-evolved parts of their brain.

[○∙◄☻¥tπ[╪AV┼cVê└]

Trump is doing better because he's the de facto nominee and people are mad at Biden for Gaza. And while the economy didn't get worse in the past 4 months, aspects of the economy are still hurting Biden.

[jaichind]

CPI YoY w/o food and energy which is a key metric that the Fed uses came in at 3.9%  This will lower the chances that the Fed will cut rates anytime soon and most likely not this year.  This means real financing costs will stay elevated.

The population that financing cost sensitive are
a) Young people looking to buy a house
b) non-College Blacks
c) non-College Hispanics

This is exactly those groups where Trump is making gains in polls relative to 2020

[jaichind]

https://www.wsj.com/economy/consumers/its-been-30-years-since-food-ate-up-this-much-of-your-income-2e3dd3ed

[Duke 🇺🇸]

CPI YoY w/o food and energy which is a key metric that the Fed uses came in at 3.9%  This will lower the chances that the Fed will cut rates anytime soon and most likely not this year.  This means real financing costs will stay elevated.

The population that financing cost sensitive are
a) Young people looking to buy a house
b) non-College Blacks
c) non-College Hispanics

This is exactly those groups where Trump is making gains in polls relative to 2020

What is Trump's plan to further reduce inflation while also lowering interest rates? You do realize that's impossible to do, right?

[Mr.Bakari-Sellers]

Polls are crap until we vote

[jaichind]

CPI YoY w/o food and energy which is a key metric that the Fed uses came in at 3.9%  This will lower the chances that the Fed will cut rates anytime soon and most likely not this year.  This means real financing costs will stay elevated.

The population that financing cost sensitive are
a) Young people looking to buy a house
b) non-College Blacks
c) non-College Hispanics

This is exactly those groups where Trump is making gains in polls relative to 2020

What is Trump's plan to further reduce inflation while also lowering interest rates? You do realize that's impossible to do, right?

Totally agree.  If Trump wins in 2024 and the status quo prevails his brand of economic management will be destroyed and 2026 will be very bad for GOP.

This is why I prefer a narrow Trump loss but having Trump running strong enough to pull the GOP to a majority in the House and Senate.

The situation where I would want a Trump victory is if there is a rapid economic slowdown in the Fall as a result of issues in the financial sector (due to high interest rates) which triggers the Fed to cut rates in late 2024 and early 2025.   That way Trump takes over with his economic brand which is really about low real interest rates intact.

[Beet]

Total Factor Productivity in the U.S. economy is growing rapidly

For decades, the productivity of American workers seemed stuck. No matter how hard people worked, or how much was invested, productivity, except for a few years, never seemed to move much.

That may be changing. Last year, American productivity improved by 2.7%, and gained steam in the second half with a 4% increase, according to the traditional measurement released by the Labor Department.

That is the type of productivity that the U.S. economy has not experienced since the period between 1995 and 2004, when it averaged 3%.

https://realeconomy.rsmus.com/solow-residual-total-factor-productivity-and-the-u-s-economy/

[The Economy is Getting Worse]

Total Factor Productivity in the U.S. economy is growing rapidly

For decades, the productivity of American workers seemed stuck. No matter how hard people worked, or how much was invested, productivity, except for a few years, never seemed to move much.

That may be changing. Last year, American productivity improved by 2.7%, and gained steam in the second half with a 4% increase, according to the traditional measurement released by the Labor Department.

That is the type of productivity that the U.S. economy has not experienced since the period between 1995 and 2004, when it averaged 3%.

https://realeconomy.rsmus.com/solow-residual-total-factor-productivity-and-the-u-s-economy/

It's more from supply chains normalizing than anything else (compensating for the drop in 2022), and they are getting worse again with the Red Sea crisis.

[jaichind]

https://www.bloomberg.com/news/articles/2024-03-08/biden-bets-fed-will-cut-rates-as-he-pledges-housing-help

"Biden Predicts Federal Reserve Will Cut Interest Rates"

“Mortgage rates will come down as well, and the Fed acknowledges that,” Biden said Thursday.

Biden finally accepts that what is burning him on the economy is not after inflation wages which are trending up but elevated financing costs in a world where many are used to very low financing costs.  In that sense, the USA outperforming in terms of economic growth in 2023 is working against Biden which merely delays the Fed reduction of Fed funds rates.

[Iowa+3]

Real weekly earnings went from 362 pre-pandemic to 371 now, which is only about a 2.5% gain in 4 years. That is probably more than offset by higher interest and credit card payments. Remember that people buy a lot of things on credit, so inflation doesn't capture the full story of what people are actually paying. House purchases are still the lowest in 30 years and completely unaffordable. Banks are on the brink of failure.

Finally someone bright posting. A recession is coming. Biden will print and lower interest rates to try to save himself in November, but that's not going to prevent the recession from coming. It will only stave it off.

Things are finally starting to break as the government has to roll over it's public debt from an effective rate of basically zero to 5%.

The interest rate hikes and inverted yield curve need more time to break something (as it always does) and cause a recession. Commercial real estate seems to be the problem at the moment, with more regional banks about to fail.

We are also down nearly 2 million full-time jobs since June.

Debt is just killing people right now. If you have a mortgage, or are up for renewal, or are a renter, you are not experiencing any increase in wages. Your purchasing power has gone down, and now joblessness is starting to increase.

[Iowa+3]

CPI YoY w/o food and energy which is a key metric that the Fed uses came in at 3.9%  This will lower the chances that the Fed will cut rates anytime soon and most likely not this year.  This means real financing costs will stay elevated.

The population that financing cost sensitive are
a) Young people looking to buy a house
b) non-College Blacks
c) non-College Hispanics

This is exactly those groups where Trump is making gains in polls relative to 2020

What is Trump's plan to further reduce inflation while also lowering interest rates? You do realize that's impossible to do, right?

Just like it's impossible to have high inflation rates, high interest rates and an economic recession a la Bidenomics?

It's possible to have low inflation and low interest rates, and decent economic growth. If you cut government spending, you can reallocate those funds to private investment. This doesn't increase the money supply and at the same time produces economic growth as business costs will drop.

We had that in 2016. it's not rocket science. We are in a naturally deflationary environment.

[Iowa+3]

https://www.bloomberg.com/news/articles/2024-03-08/biden-bets-fed-will-cut-rates-as-he-pledges-housing-help

"Biden Predicts Federal Reserve Will Cut Interest Rates"

“Mortgage rates will come down as well, and the Fed acknowledges that,” Biden said Thursday.

Biden finally accepts that what is burning him on the economy is not after inflation wages which are trending up but elevated financing costs in a world where many are used to very low financing costs.  In that sense, the USA outperforming in terms of economic growth in 2023 is working against Biden which merely delays the Fed reduction of Fed funds rates.

[jaichind]

https://www.fa-mag.com/news/pandemic-homeowners-are-the-new-envied--and-hated---elite-77267.html

"Pandemic Homeowners Are The New Envied (and Hated?) Elite'

The divide is clear when describing the state of family finances in 2024. Household balance sheets, in aggregate, are arguably in the best shape ever. At the same time, borrowers are getting squeezed as high interest rates make servicing new debt more challenging. This sets up a difficult balancing act for the Federal Reserve as it contemplates policy changes.

The economic experience differs vastly in the years after 2020 and is mostly about net owners of housing and capital one the one hand and net borrowers on the other hand.  Higher interest rates plays a critical role in this divergence and how the economy is viewed.

[The Economy is Getting Worse]

Real weekly earnings went from 362 pre-pandemic to 371 now, which is only about a 2.5% gain in 4 years. That is probably more than offset by higher interest and credit card payments. Remember that people buy a lot of things on credit, so inflation doesn't capture the full story of what people are actually paying. House purchases are still the lowest in 30 years and completely unaffordable. Banks are on the brink of failure.

Finally someone bright posting. A recession is coming. Biden will print and lower interest rates to try to save himself in November, but that's not going to prevent the recession from coming. It will only stave it off.

Things are finally starting to break as the government has to roll over it's public debt from an effective rate of basically zero to 5%.

The interest rate hikes and inverted yield curve need more time to break something (as it always does) and cause a recession. Commercial real estate seems to be the problem at the moment, with more regional banks about to fail.

We are also down nearly 2 million full-time jobs since June.

Debt is just killing people right now. If you have a mortgage, or are up for renewal, or are a renter, you are not experiencing any increase in wages. Your purchasing power has gone down, and now joblessness is starting to increase.

A recession is coming before November even if the Fed cuts rates (in fact, the household survey, ISM, and Jolts suggests that one has already started). Even if rates fall from 5.25 to 4.5, that is still way higher than the zero most businesses are used to and they have to refinance a lot of the debt third year.

[The Economy is Getting Worse]

https://www.fa-mag.com/news/pandemic-homeowners-are-the-new-envied--and-hated---elite-77267.html

"Pandemic Homeowners Are The New Envied (and Hated?) Elite'

The divide is clear when describing the state of family finances in 2024. Household balance sheets, in aggregate, are arguably in the best shape ever. At the same time, borrowers are getting squeezed as high interest rates make servicing new debt more challenging. This sets up a difficult balancing act for the Federal Reserve as it contemplates policy changes.

The economic experience differs vastly in the years after 2020 and is mostly about net owners of housing and capital one the one hand and net borrowers on the other hand.  Higher interest rates plays a critical role in this divergence and how the economy is viewed.

High interest rates are causing a divergence between the statistics and how the economy is viewed, but the real problem between now and the election is the rapidly deteriorating labor market. Household employment has fallen for 3 straight months, and hiring rates are down to 2014 levels.

[cg41386]

A recession is coming before November even if the Fed cuts rates (in fact, the household survey, ISM, and Jolts suggests that one has already started). Even if rates fall from 5.25 to 4.5, that is still way higher than the zero most businesses are used to and they have to refinance a lot of the debt third year.

LOL

Finally someone bright posting. A recession is coming.

No, it's not.

[Atlas Has Shrugged]

It was always about the Great Replacement Theory, and its adherents fearing the loss of an America of their youth, with an overwhelmingly white, Christian majority where most people dutifully went to church on Sundays, and a culture that reflected that.  

Dude, most Trump supporters are boomers. They dropped acid, smoked dope, saw Jimi Hendrix and The Doors live, and experienced free love in their time. It has nothing to do with this cliche Christofascist Leave It To Beaver type 50s utopia you guys keep bringing up as the narrative.

[Ferguson97]

It was always about the Great Replacement Theory, and its adherents fearing the loss of an America of their youth, with an overwhelmingly white, Christian majority where most people dutifully went to church on Sundays, and a culture that reflected that.  

Dude, most Trump supporters are boomers. They dropped acid, smoked dope, saw Jimi Hendrix and The Doors live, and experienced free love in their time. It has nothing to do with this cliche Christofascist Leave It To Beaver type 50s utopia you guys keep bringing up as the narrative.

The hippie movement was an extremely small minority.