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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: louel who wrote (125154)	11/22/2016 2:11:09 AM
From: elmatador	Read Replies (2) \| Respond to of 217837

That Eighties show Donald Trump’s attempt at Reaganomics will prove costlier than the original Nov 19th 2016 \| From the print edition FOR the moment, the policy priorities of the Trump administration-in-waiting are a basket of unknowables. Plans to scrap Obamacare or re-deregulate America’s financial sector, though dear to Republican hearts, are easier to champion on the campaign stump than to implement. A step away from globalism—Donald Trump’s most consistent campaign theme—could make for an awkward opening gambit given pockets of Republican resistance to overt protectionism. Tax cuts and infrastructure spending, on the other hand, look like an easy and unifying win for the new administration. And indeed, market moves since Mr Trump’s victory seem to imply an expectation of a Ronald Reaganesque turn in American fiscal policy; government-bond yields have risen, seemingly in expectation of bigger deficits, faster growth and higher inflation. Yet any resemblance that Mr Trump’s plans may bear to Reaganomics is as much a cause for concern as for optimism. The president-elect’s tax proposals are easily the boldest since Reagan’s. Mr Trump’s plan would slash the highest marginal income-tax rates, cut rates of tax on corporate income and on capital gains, and eliminate federal inheritance and gift taxes entirely. According to an analysis by the Tax Policy Centre, a think-tank, the plan would reduce annual federal-tax revenue by about 4% of GDP. In contrast, in the first four years after its implementation the tax reform act of 1981 reduced annual revenue by almost 3% of GDP. At the same time, Mr Trump seems keen on new government spending; his transition-team website refers to $550bn in desired new infrastructure investment. Even if the legislation to emerge from Congress is more moderate, as seems likely, a big dose of tax cuts and new spending appears to be in the offing. Stimulus would have its benefits. Higher inflation would be a welcome change from the spectre of deflation that until recently stalked the rich world. Some economists reckon that running the economy “hot”, to the extent that demand outstrips its productive potential, could nurture growth in America’s economic capacity: by bringing workers on the margins of the labour force back into employment, for example. Yet a Reaganomics rerun would almost certainly do more harm than good. The experience of the 1980s suggests three big causes for concern. The first is financial instability. American interest rates in the 1980s were remarkably high: thanks initially to Paul Volcker’s efforts to bring down inflation, and later on to faster American growth and heavy government borrowing (see chart). High interest rates attracted money from abroad, pushing up the value of the dollar: it rose, on a trade-weighted basis, by roughly 40% from 1980 to 1985. As a result, developing economies, including many in Latin America, found themselves with unpayable dollar-denominated loans. Sovereign-debt woes crippled the affected countries’ economies; meanwhile, debt defaults and restructurings saddled big American banks with large losses, pushing some to the brink of insolvency. Today, most emerging economies hold far less dollar-denominated public debt. Yet vulnerabilities remain. The Federal Reserve has prepared markets for a gradual pace of monetary tightening. Should higher inflation convince the Fed that more interest-rate hikes are needed sooner, many investors in emerging markets could be caught off guard. A bout of chaotic capital flight could threaten shakier banks or induce governments to adopt capital controls. America, which eventually intervened to help manage the Latin American debt crisis, will probably be slower to lend a hand under Mr Trump. Trumped-up trickle-down economics American generosity might be in especially short supply as a result of a second side-effect of Trumpian Reaganomics. As the dollar soared in the early 1980s, America’s current account flipped from a small surplus into sizeable deficit. American firms howled. Efforts early in the 1980s to cajole trading partners into limiting exports gave way to more serious interventions later on. In 1985 James Baker, then treasury secretary, negotiated the Plaza accord with Britain, France, Japan and West Germany to bring down the value of the dollar. And in 1987 Reagan slapped economic sanctions on Japan for its failure to meet the terms of an agreement on trade in semiconductors. Mr Trump, no instinctive free-trader, might face a similar dynamic. Faster growth and higher interest rates might attract foreign capital and place upward pressure on the dollar, which has indeed been rising since the election. That will help exporters to America and hamper a manufacturing revival in the struggling towns that helped Mr Trump win. In fact, the Mexican peso has fallen by about 10% against the dollar since the election, boosting the competitiveness of Mexican firms relative to their American counterparts. Yet Mr Trump will find responding to these shifts to be trickier than did Reagan. Sprawling supply-chains mean that punitive tariffs are less obviously useful to domestic firms than they once were. A battle over exchange rates between America and China could prove far more dangerous, both economically and geopolitically, than Mr Baker’s negotiations. Perhaps most important is a third lesson: that the boost to growth provided by tax cuts and liberalisation need not be spread evenly across the economy. Prescriptions which made sense a generation ago look inappropriate now. Top marginal tax rates are far lower than they were then; further cuts may deliver a smaller boost to growth as a result. Meanwhile, inequality is far higher now than it was in the early 1980s; slashing tax rates on the rich while unravelling recent financial regulation could push economic divisions to unprecedented, politically toxic levels. The global economy could use more fiscal stimulus. A raft of regressive tax cuts from a protectionist-minded American administration is, to put it mildly, a risky way to provide it. Visit our Free exchange economics blog

To: louel who wrote (125154)	11/22/2016 11:42:29 AM
From: Alex MG	2 Recommendations Recommended By Elroy Jetson gg cox Read Replies (1) \| Respond to of 217837

actually, other than a smattering of right wing hate mongers, Obama will go down as one of out greatest Presidents He was handed a stinking pile of shit from Bush & Co... A stupid War in Iraq and a global financial crisis He saved the American auto industry, instead of what Rmoney wanted to do, let it go bankrupt... what a disaster that would have been. Not just to all the autoworkers but all the suppliers and supply chains. Killed Osama bin Laden, after Bush proclaimed the guy wasn't important Economy back from the great recession. Provided health care to millions of people who didn't have it. Stock market back to new highs after the republican disaster known as "the brush clearer in charge". Very high approval rating from majority of Americans. Only pin-head hate mongers refuse to accept what Obama has been for America and in the face of so much republicon obstructionism Has there ever been a presidency with no real scandals other than Obama? I don't think so. What a great family man he is, and a great family. rollingstone.com He faced an extraordinary challenge, entering the White House as the first African-American president at a time when the economy was in ruins and the culture war was spiraling out of control. His political path forward was a tightrope. A presidency weighed down by corruption, indecisiveness or personal weaknesses would have been a disaster. Imagine the reaction if Barack Obama had been caught in Kennedy- or Clinton-style bedroom scandals, or even if he'd spoken publicly in the style of Carter's “malaise” speech, or suffered a bad come-from-ahead second-term loss à la George H.W. Bush. Any of the above would have led to the door closing on African-American politicians at the national level for a long time, a generation maybe. This burden was every bit as unfair as the one Hillary Clinton just had to shoulder as the first woman to win a major-party presidential nomination. It was crucial not only that he win, but win twice, and convincingly, and on the power of his own charisma and resolve. He also had to manage this while somehow not allowing himself to be rattled by the torrent of abuse he received. Think of the discipline and equanimity it must have taken to not show anger and maintain an air of positivity given the vicious absurdities he had to work through, including the ones emanating from none other than Donald Trump about his birth origin. The birther controversy was racism and profiling elevated to a Wagnerian level: Here was a black man who'd made it all the way to the Oval Office, and a giant portion of the population still considered him to be literally trespassing. That such an idiotic campaign may have launched Trump into the White House to succeed Obama is an incredibly bitter pill, but this story isn't exactly over yet. When Trump takes over he will immediately have to reckon with Obama's example, and this is a historical popularity contest His Orangeness seems doomed to lose. From a personality standpoint, Obama is everything Trump isn't. He's in control of his emotions, thick-skinned, self-aware, ingratiating, strategic and temperamentally (if not politically) consistent. A striking quality of Obama as president is that he did his job without seeming to need to take credit for things all of the time, which kept the political price down on many of his decisions. People rarely make it to the presidency without first acquiring a weakness for embarrassing self-glorifying spectacles like George W. Bush's asinine "Mission Accomplished" flight. When presidents throw parades for themselves after every tiny political win, it only makes the fall from grace hurt that much more when circumstances inevitably cycle back downward. Most of them never learn because most politicians are pathological: 99 percent of them are ruled by drives rather than thoughts. President Bush declares the end of major combat in Iraq in May 2003. J. Scott Applewhite/AP Obama wasn't that way. To use a hokey sports metaphor, he did his job in the manner of an offensive lineman: The less you heard about him, the better he was probably doing. (Obama would appreciate the comparison. He will go down with Dick Nixon and George W. Bush as one the most unhealthily genuine sports fans to occupy the Oval Office). His performance this week testified greatly to this quality. He didn't have a lot to say about the election results, but what few lines he did speak conveyed a lot. This is a characteristic of strong people. Contrast this to Donald Trump, who vomits out great quantities of verbiage, taking so many positions at once that not one of them has much meaning after a while. President-elect Trump will surely talk himself into a jackpot a dozen times before inauguration. Obama hasn't done it, really, since his infamous "guns and religion" speech. Eight years is an awfully long time to go without blinking. Obama's parting message, about how he won Iowa, was a calm admonition to his own party to not give up on those sections of the country where the "demographics" don't suggest success. This was an extraordinary statement to make in the wake of such a massive affirmation of racist and xenophobic attitudes. At one of our lowest moments, the person at the very center of this horrible maelstrom of hate was the one urging us not to give up. Obama's detractors may not hear this message now. But history will. Donald Trump may have won the White House, but he will never be a man like his predecessor, whose personal example will now only shine more brightly with the passage of time. At a time when a lot of Americans feel like they have little to be proud of, we should think about our outgoing president, whose humanity and greatness are probably only just now coming into true focus.