Inflation politics - maybe Hankey is right

2,080 Views | 46 Replies | Last: 2 mo ago by DiabloWags
OdontoBear66
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dajo9 said:

OdontoBear66 said:

dajo9 said:

wifeisafurd said:

dajo9 said:

wifeisafurd said:

dajo9 said:

wifeisafurd said:

DiabloWags said:

BearForce2 said:


To each his opinion. Lotsa stuff I disagree with in the Trump & Bush Presidencies, but micro manager Jimmy C. with his double digit inflation & interest rates and the managed idiot of the day-cardboard poster of a President Joey B are right up there on top for worst of all time. Opined!

Janet, say it ain't so


When someone points out a $1.9 Trillion spending bill by Joe Biden, but conveniently IGNORES the $2.2 Trillion CARES ACT signed into law by Donald Trump.

Yawn.

As pointed out in the OP there were several huge spending bills passed with bi-partisan support during a pandemic. I'm not sure there was much choice. The pain of juicing the economy is now seen in inflation. Janet is pointing out anything new (like me). I'm not sure where the Biden Administration is going on BBB, but my sense is that most economists like Yellen and a lot of legislators will oppose another big spending bill.

The problem is most voters don't like pain, nor do politicians. Clinton was willing to impose some form of austerity (or discipline or whatever you want to call it) to bring inflation down, and it brought him a second term. But in the short run the Dems loss Congress. I'm not sure where Biden is going. Maybe you guys know.


Bill Clinton tried to pass a national healthcare program before he lost Congress. Inflation was under 3% in the timeframe you are speaking of. Not sure what you are talking about.


In 1992, Clinton campaigned on the promise of a stimulus package (sound familiar?). But soon after being elected, he met privately with Alan Greenspan, the FED chair, and soon accepted what became known as "the financial markets strategy." It was a strategy of placating financial markets. The stimulus package was sacrificed, taxes were raised, spending was cutall in an effort to avoid inflation, and keep long-term interest rates from rising, and all of which helped the Democrats lose their majority in the House. The deal with Greenspan is well documented.

For six of eight years, Clinton then governed with Republican majorities in Congress. Not surprisingly, there was much continuity between the Clinton and Bush administrations. Both embraced a policy agenda of fiscal austerity, central-bank autonomy, deregulated markets, liberalized capital flows, free trade, and privatization. it was probably the last time deficit hawks ruled the roost or tried to claim they were a fiscal conservative.






We had a jobless recovery during the campaign and job growth accelerated in 1993. The need for stimulus had passed. Clinton passed a tax increase on the wealthy and pushed for national healthcare. Spending grew ~14% his first term and inflation was a non-issue.
Let me start with my biases which is I voted for Clinton and liked him. OTOH, I remember things differently than you state.

You mean he pushed the national HillaryCare that Majority Leader John Mitchell, of the then Democratic majority , declared dead on arrival? Anyone who lived during that period knows he supported his wife's legislation about as much as he wanted to have sex with her (and not someone else).

Clinton definitely passed income tax increases on the high income earners (note not saying wealthy) and increased payroll taxes on high income earners (note not saying wealthy), and he imposed a 4.3 cent per gallon increase in transportation fuel taxes, which was somewhat regressive and unpopular.

I really don't think the numbers reflect a jobless recovery. Employment growth was a respectable 2 million a year. Admittedly real hourly wages continued to stagnate, rising only 2 cents to 7.43 an hour in 1996 from $7.41 in 1992. Nevertheless, with additional taxes and employment, the Federal government receipts increased an average of $90 billion a year while the annual increase in federal spending was constrained to $45 billion. That led to a $183 billion, four-year reduction in the budget deficit to $107 billion in 1996. The reduced deficit kept interest rates down, and during the first four years of his Presidency, real GDP growth average 3.2%, certainly respectable relative to today's economy (the intitial years problem were disappointing coming as it did following just one year of recovery from the 1991 recession, the end of the Cold War and the reduction in consumer price inflation below 3% for the first time (with the single exception of 1986) since 1965. The result was the Republican Party gained 54 seats in the House and 8 seats in the Senate to win control of both the House and the Senate for the first time since 1952.


And how did Clinton respond:

1) He signed a reduction in the capital gains tax rate to 20% from 28%.
2) He signed massive welfare reform which substantially reduced spending
3) He pushed through NAFTA
4) He pushed and won an increase in the death tax exemption to $1 million from $600,000, and established Roth IRAs and increased the limits for deductible IRAs
5) He reduced federal spending below 3%

By raising income taxes and reducing capital gains and reducing speeding he kept inflation below 2.4% in his second term, and he created a boom economy. Between the end of 1996 and the end of 2000rowth accelerated a full percentage point to 4.2% a year, which is outstanding. Revenue growth accelerated an astounding 59%, increasing on average $143 billion a year. Combined with continued restraint on government spending, that produced a $198 billion budget surplus in 2000. And oh yes, wages went up. And then Al Gore ran away from Clinton's record.


You are deflecting by shifting away from the time period we are talking about, which is the first two years of the Clinton Presidency. In his 2nd term he definitely acted to the likings of the conservatives and helped cause a stock market bubble through capital gains tax cuts and helped cause the financial collapse of the following decade through financial deregulation.

But in the beginning, Clinton campaigned on national healthcare. In January 1993 he established a cabinet level task force on it. In September 1993 he delivered a major speech to a joint session of Congress specifically on healthcare. In November 1993 the legislation was introduced and the fight was on. Nearly a year later, in September 1994, John Mitchell declared it dead.

Also, job growth was 450k in 1992 and 2.5 million in 1993. The term "jobless recovery" was literally created by economist Nick Perna to describe the recovery from the 1991 recession.
You are correct, and had his last 6 years gone like the first two who knows what would have happened. But in 1993-94 Hillary's Bill happened and was shot down causing a tremendous backlash in Congress, and likewise and change in strategy by Bill. Thank goodness for the former and enjoyed the latter. Bill was a good one much like JK for economically based Repubs.

Now we have a toss up for the worst ever between Jimmy C. and Joey B. I guess I better qualify that with the behavior of the Trumpeter being the worst, but not his Presidency.


Bush II and Trump are easily the worst of the Presidents mentioned.
DiabloWags
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Trump couldnt even get the GDP over 3.0% during his 4 years of deficit spending.

2017: 2.3% GDP
2018: 2.9%
2019: 2.3%
2020: -3.4%

And his Trade War with China was an epic fail.

China never even met the import requirements of the Phase 1 agreement.
The Art of the Deal.

NVBear78
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"We're not seeing it in the polls"…. https://www.cnn.com/2022/05/13/opinions/inflation-katie-porter-democrats-hemmer/index.html
BearForce2
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Inflation presented by fake news and an illegitimate government.
DiabloWags
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BearForce2 said:

Inflation presented by fake news and an illegitimate government.

You and Sleepy Joe have something in common.
You both have no idea where inflation comes from.

M2 (M2SL) | FRED | St. Louis Fed (stlouisfed.org)
BearForce2
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DiabloWags said:

BearForce2 said:

Inflation presented by fake news and an illegitimate government.

You and Sleepy Joe have something in common.
You both have no idea where inflation comes from.

M2 (M2SL) | FRED | St. Louis Fed (stlouisfed.org)



Neither do you or your girl Yellen.
dajo9
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I'm starting to understand the corporate media's hysteria over inflation better now. The poors were getting a bigger piece of the pie and pushing up prices.
DiabloWags
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Inflation has killed those wage gains.
Dems could use an Econ. 1 lesson.

dajo9
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DiabloWags said:

Inflation has killed those wage gains.
Dems could use an Econ. 1 lesson.




Those are inflation adjusted wage gains
BearForce2
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Biden Told Kimmel 'We Have the Fastest-Growing Economy in the World,' Another Obviously False Statement from the Cognitively-Declining President

https://www.thegatewaypundit.com/2022/06/biden-told-kimmell-fastest-growing-economy-world-another-obviously-false-statement-cognitively-declining-president/

"Look, here's where we are," said Biden. "We have the fastest-growing economy in the world." "The world. The world."
BearForce2
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DiabloWags said:

wifeisafurd said:

But in the short run the Dems loss Congress. I'm not sure where Biden is going. Maybe you guys know.


He's toast.
Thanks to Jerome Powell.



If you said the government didn't warn you, you'd be correct.
DiabloWags
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Never mind that the economists from the San Francisco Federal Reserve claim that fiscal support measures such as the CARES Act of 2020 and the American Rescue Plan (ARP) Act of 2021 raised inflation about 3 percentage points by the end of 2021.

Core inflation, which strips out the more volatile measurements of food and energy, started 2021 below 2% on an annual basis and ended the year above 5%, the highest rate in decades. By comparison, inflation among countries in the Organization for Economic Cooperation and Development countries rose at a more gradual pace.


Federal Reserve Bank of San Francisco | Why Is U.S. Inflation Higher than in Other Countries? (frbsf.org)
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