US Politics Mega-thread - Page 2321

On May 22 2020 09:48 LegalLord wrote:

Ideally we'd be in a position where there wouldn't be two decades worth of really dangerous and self-destructive fiscal and monetary policy to unwind on the eve of a once in a lifetime economic shock, but yet here we are.

I do very much understand the motivation behind wanting to use some gigantic amount of government spending in order to soften the blow of an economic downturn. And at first glance, it definitely looks sensible to just bail out the banks, preventing a financial crisis that will bring everything else to a halt. A large-scale failure of banks was, after all, a staple of the Great Depression, so preventing that would seem to make sense in preventing a significant credit crisis a la 2008 from spiraling into a full-on depression. That seemed to be the world's answer to the so-called "great recession" 12 years ago.

By now, though, it should be clear how that game played out through the course of the Obama administration and the first few years of the Trump administration. The national debt rose to such highs that a new generation of policymakers had to make up convoluted leaps of logic to prove to themselves that debt doesn't actually matter (because otherwise they would have to admit just how much was racked up in the name of stimulus). The various financial institutions were propped up in such a way that the best-connected ones made a fortune, the most reckless off-loaded their bad debt onto the government or other bagholders, and no fundamental change in the circumstances leading to the actual financial crisis were ever remedied. The non-wealthy of the nation were largely left with an overall diminished economy and fewer high-quality jobs because there wasn't much more to go around after the wealthy and well-connected took their share of the government cheese. And none of this should be a surprise anymore - who, after all, is best positioned to take advantage of a gigantic amount of stimulus that is distributed in a decidedly top-down manner? The folks... at the top.

Look at the $2T stimulus we have now, for example. $500B thrown at providing one month's expenses and a few months of unemployment in a fashion that's pretty nice for the poorest. $500B thrown at the actual virus. And the rest on businesses and corporations. Of course, beyond the initial trillion given to businesses, it turns out that we can just multiply the corporate welfare by 10 and have the Fed hand out $4.5 trillion in extremely cheap loans to big businesses and financial institutions. "Short term" in principle, but there's no doubt it'll just keep getting rolled over until the end of time because to actually have the Fed unwind their giant holding of loans would cause a meltdown in a market that has masked an unspeakable amount of dysfunction in endless borrowing.

None of the things above are very different from what the Obama-era stimulus did. Bail out the financial institutions, have the Fed print money every time there's even a whiff of economic pullback, and keep a diseased system going with a dangerous mix of money-print and new debt. Worth noting that Trump pumped the economy with even more free money in trying to improve the numbers of "the economy" (via giant corporate tax cuts and aggressively pressuring the Fed to use its tools to prop up the stock market), but nevertheless it was only a matter of time before we'd be right back to the exact same situation that was buried in 2008 with a lot of stimulus money. It's easy to notionally end an economic crisis by pumping more money ($800 billion loss on mortgages? No problem, pump another trillion into the mortgage banks!), but in a decade you just end up in the exact same situation with far less leverage to be able to do anything about it.

While the fact can be hidden for quite a while, the economy isn't going to fundamentally work if the average citizen is doing very poorly. You can only play finance games for so long before the lack of a strong backbone to that economy makes it all fail. Perhaps a good sign of that is that the general word on the current economy has been that a lot of things are going poorly, but the reason it's been moving along allegedly smoothly is because of the strength of consumerism (supported with large debt loads, of course). Well, I doubt there's going to be an awful lot of that once the economy "turns back on" at the end of this crisis, so hooray for more economic fallout.

All that to say, you're not really going to "stop the Great Depression 2.0" by taking the lazy bank-and-corporation bailout approach while failing to reduce the gigantic mass of zombie businesses and doing nothing to address the eroding fundamentals of the economy. You're just going to buy yourself 12 years and make a "Greater Depression 2.1" in the process. Unwinding a mess of bad, economically dangerous businesses is going to be very painful during the downturn, but failing to do so just means you've delayed and exacerbated the crisis for some number of years.

And when we're going on 40 million unemployed people, the government has probably shot their wad propping up a lot of corporations that can't be saved, in order to head off an economic depression that can't be stopped. What a great bailout.

On May 22 2020 10:56 GreenHorizons wrote:
Are you basing your position that LL is wrong about the economics of your "slow transition" approach making things worse in any particular economic concepts/theories or intuition?

On May 22 2020 11:17 GreenHorizons wrote:


They've put up $6,000,000,000,000 (turns out none is to get safe drinking water in Flint that's still too expensive) in a couple months to delay it so far, so it can get a lot worse very quickly. I don't know when you think "the end of the pandemic" is coming or what those links have to do with your argument or my question?

On May 22 2020 11:46 GreenHorizons wrote:


I see how your argument is based in intuition, but not what economic principles, concepts, or theory you're basing the idea that feeding more money to wall street to slow the collapse does much more than make everything worse and harder to unwind as LL argued.

EW YORK (CNNMoney.com) -- Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson both acknowledged problems in the U.S. economy Thursday, but both said they believe the nation will avoid falling into recession.
The two made their comments at a hearing before the Senate Banking Committee about the economy. Their testimony comes in the wake of troubling economic readings that have raised recession fears on Wall Street.
But while Paulson and Bernanke repeatedly insisted they expect the economy to avoid shifting into reverse - thanks in part to a series of interest rate cuts by the Fed and a $170 billion economic stimulus package signed by President Bush Wednesday - they conceded the economy faces additional headwinds.
Bernanke and Paulson both said the outlook for the economy is noticeably worse than it was as recently as a few months ago, and both expect cuts in official growth forecasts from the administration and the Fed in upcoming months.

On May 22 2020 11:14 LegalLord wrote:
On mobile, so to answer the question in brief.

Focusing the recovery on the “vulnerable mass population” is absolutely the right idea, yes. Some sympathy for key industries unfairly impacted could be justifiable, but “we have to save Wall Street to protect Main Street” is a crock of shit. An example of the former could be the current airline bailout, although from a personal (rather than economic) perspective, I would prefer to see them burn. On all of that, I doubt we’re far apart.

I will just add that there’s never a “good time” to unwind decades worth of failures of economic policy. Not in 2008, as people are “losing their houses en masse.” Not in the next 6 years, as the economy is finally getting back on its feet. Not in the past 6 years, as there’s finally at least some modest signs of the economy getting better. And of course, not in the middle of the deadliest pandemic in a century.

When is a good time to crash the global economy to unwind the disaster it has buried under the surface?

On May 22 2020 11:56 ZerOCoolSC2 wrote:

I didn't catch this. Apologies.

I don't know when a good time is. I have no clue if it's better in six months or in eighteen months. I'd have to wait until after this election cycle is over to see who is in power where and what policies are being bandied about. But if Biden is courting Bernie supporters with updated and more progressive policies, then that is a move in the right direction that the social welfare of the vulnerable may be around the corner. I don't want to give a definitive answer because I simply don't know.

On May 22 2020 18:20 Gorsameth wrote:
A former head of military intelligence having undisclosed contacts with foreign governments when he is required to report them is very much a 'national security' predication.

Seriously ill Covid-19 patients who were treated with hydroxychloroquine and chloroquine were more likely to die or develop dangerous heart arrhythmias, according to a large observational study published Friday in the medical journal The Lancet.

Researchers analyzed data from more than 96,000 patients with confirmed Covid-19 from 671 hospitals. All were hospitalized from late December to mid-April, and had died or been discharged by April 21.

Just below 15,000 patients were treated with the antimalarial drugs hydroxychloroquine or chloroquine, or one of those drugs combined with an antibiotic.

All four of those treatments were linked with a higher risk of dying in the hospital. About 1 in 11 patients in the control group died in the hospital. About 1 in 6 patients treated with chloroquine or hydroxychloroquine alone died in the hospital. About 1 in 5 treated with chloroquine and an antibiotic died and almost 1 in 4 treated with hydroxychloroquine and an antibiotic died.

Researchers also found that serious cardiac arrhythmias were more common among patients receiving any of the four treatments. The largest increase was among the group treated with hydroxychloroquine and an antibiotic; 8% of those patients developed a heart arrhythmia, compared with 0.3% of patients in the control group.

“Previous small-scale studies have failed to identify robust evidence of a benefit and larger, randomised controlled trials are not yet completed,” study co-author Dr. Frank Ruschitzka, director of the Heart Center at University Hospital Zurich, said in a statement. “However, we now know from our study that the chance that these medications improve outcomes in COVID-19 is quite low.”
Some context: The drug, hydroxychloroquine, has been around for decades but was thrust into the spotlight this spring when Trump began mentioning its name dozens of times during coronavirus briefings. While it had not been approved for this use, and still hasn't, he urged Americans to "try it."