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Originally Posted by wufwugy
That is correct. If we see NK restart their previous norms of nuclear and icbm testing and if we see negotiations with SK, Japan, and US move backwards over a long period of time, then things will be back to where they were before Trump.
Like I already said at the time, the bar for him was fairly low and just that his meetings with Kim didn't immediately start a nuclear showdown was a positive. Sure, things may have stabilized a bit, but not something I would necessarily rate as a great success.
Originally Posted by wufwugy
As the CNN article says, the caliphate is gone.
So success in the sense that Gulf War I and II were successes? I hope round 4 isn't right around the corner.
Originally Posted by wufwugy
Effects of policy can be seen over very short terms (theoretically they are often immediate). To be completely fair I compare from after the 2012 election to now.
The economy should always feel the same day to day, week to week, year to year -- all regardless of the real strength of the economy. This is an essential description of central banks' role. This sameness characterizes mostly both 2nd term Obama and 1st term Trump time periods, with probably Trump being slightly better but not that noticeably.
The economy feels about the same now as it did before Trump, as it should. The following nominal GDP graph shows what I'm talking about :
You may ask: if things feel the same doesn't that mean they are the same? The answer is only over the short term. Over the long term, it matters what about the feeling is real and what is inflation. Here I've broken down the nominal economy into its two components: inflation and real growth. As you can see, it matters where they are, but overall they're supposed to be managed such that they about the same.
But that's not the whole story. Notice how under Obama's 2nd term the federal funds rate (which drives the real interest rate) is subdued under Obama yet begins regular and frequent increases under Trump. This shows that the real economy is significantly stronger than the real GDP metric suggests.
Economists have two main ways of understanding what the behavior of the interest rate means, yet even though they are quite different they both suggest Obama's economy was less good than Trump's.
What's not in debate among economists and what is taught at every level of an economics education is decreasing the interest rate has an expansive impact on growth, and an increasing interest rate has a contracting impact on growth. As you can see this means that because the interest rate under Trump is increasing significantly more than it did under Obama, that it is probable that Trump's growth would be higher (by a lot) if he had Obama's interest rates.
Does that make sense? I haven't talked econ in a long ass time. Thanks for the prompt! :thumbsup
Thanks for the explanation. GDP and inflation I think I sort of understand, and effective federal funds rate seems to be indirectly set by the FED, by buying and selling government bonds. So that was dropped to (near) zero after the 2008 crisis, and has been rising since 2015, when I guess the FED had deemed the US is out of the gutter? I guess it's notable that was during Obama's time.
Here's some other indicators I found on wikipedia of Obama's last 2 years and Trumps first 2:
So there has been improvements in unemployment rates, wages and poverty rates, but at the same time increases in budget deficit and the trade deficit. From my economic layman's perspective it's hard to see this as an unequivocal success, and even if it can be labeled as that, how can we know for sure this is all because of Trump's policies, and not just part of the global economy's upward cycle?
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