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Like a centipede waiting for the other shoe to drop in [The Economy] thread

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Posts

  • monikermoniker Registered User regular
    Hedgethorn wrote: »
    jothki wrote: »
    Isn't inflation kind of arbitrary, given how much the relative prices for everything can shift around semi-independently? Is there some sort of unbiased mechanism for formally determining it, or are official inflation statistics just whatever the government decides to put into a report?

    The Commerce Dept. has a 100+ page PDF explaining exactly how the Consumer Price Index is measured, giving multiple alternative measures of price inflation for different categories of goods, and a justification of why they aggregate the various categories in the way they do. So yes, it's arbitrary in the sense of "there are a whole lot of different things one might be interested in, and the choice of precisely which goods to focus on in which proportions is going to somewhat be a matter of taste and judgment," but it's not arbitrary in the sense of "being pulled out of their asses and being biased to say whatever Commerce wants it to say."

    Edit, e.g.:
    In the CPI, the urban portion of the United States is divided into 38 geographic areas called index areas, and the set of all goods and services purchased by consumers is divided into 211 categories called item strata. This results in 8,018 (38 × 211) item–area combinations.
    The CPI is calculated in two stages. The first stage is the calculation of basic indexes, which show the average price change of the items within each of the 8,018 CPI item–area
    combinations. For example, the electricity index for the Boston CPI area is a basic index. The weights for the first stage come from the sampling frame for the category in the area. At the second stage, aggregate indexes are produced by averaging across subsets of the 8,018 CPI item–area combinations. The aggregate indexes are the higher level indexes; for example, the all-items index for Boston is an average of all of the area’s 211 basic indexes. Similarly, the aggregate index for electricity is an average of the basic indexes for electricity in each of the 38 index areas. The U.S. city average All-items CPI is an average of all basic indexes. The weights for the second stage are derived from reported expenditures from the Consumer Expenditure Survey (CE).

    It's also the sort of thing that matters more in it's role as a time series than of being a perfect snapshot representation of the economy today. Because even if it may be biased in one way or another, so long as it was similarly biased in the 80's and 00's you can still draw useful comparisons.

    Gnome-InterruptusBlackDragon480DevoutlyApatheticJragghenMoridin889FencingsaxCaptain InertiaHedgethornCouscous
  • MillMill Registered User regular
    Without even looking at what was set to adjust with inflation on the fly, I always understood the gas tax being one of those things that more or less did so by default since it's a percent of what's spent. Where things probably get a bit convoluted is how fuel efficiency and non-gas powered stuff can impact that model. The less fuel being used, the less revenue you get from the gas tax. This is actually where the idea on taxing hybrid and electric vehicles comes from because they do use the roads, but technically don't pay their fair share for the usage. Also public transit can change things up.

    Anyways, last I checked, millennials haven't exactly been keen about the whole shitty driving thing. So it's probably a combination of more vehicles that use less gas and people finding ways to drive less, that might have gotten the US Chamber of Commerce worried.

    Shadowhope
  • DoodmannDoodmann Registered User regular
    I would by a truckla, only because it's the closest anyone has come to making an El Camino in like 30 years.

    Whippy wrote: »
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  • ButtersButters A glass of some milks Registered User regular
    edited September 10
    Mill wrote: »
    Without even looking at what was set to adjust with inflation on the fly, I always understood the gas tax being one of those things that more or less did so by default since it's a percent of what's spent. Where things probably get a bit convoluted is how fuel efficiency and non-gas powered stuff can impact that model. The less fuel being used, the less revenue you get from the gas tax. This is actually where the idea on taxing hybrid and electric vehicles comes from because they do use the roads, but technically don't pay their fair share for the usage. Also public transit can change things up.

    Anyways, last I checked, millennials haven't exactly been keen about the whole shitty driving thing. So it's probably a combination of more vehicles that use less gas and people finding ways to drive less, that might have gotten the US Chamber of Commerce worried.

    I wonder if Ford's decision to transition to a truck only company in the US plays a factor as well. If their plan works they'll be more profitable (because the margin on luxury pickups is insane) but they'll still manufacture less vehicles overall and that's not good for their suppliers.

    Butters on
    PSN: idontworkhere582 | CFN: idontworkhere | Steam: lordbutters
  • MillMill Registered User regular
    Butters wrote: »
    Mill wrote: »
    Without even looking at what was set to adjust with inflation on the fly, I always understood the gas tax being one of those things that more or less did so by default since it's a percent of what's spent. Where things probably get a bit convoluted is how fuel efficiency and non-gas powered stuff can impact that model. The less fuel being used, the less revenue you get from the gas tax. This is actually where the idea on taxing hybrid and electric vehicles comes from because they do use the roads, but technically don't pay their fair share for the usage. Also public transit can change things up.

    Anyways, last I checked, millennials haven't exactly been keen about the whole shitty driving thing. So it's probably a combination of more vehicles that use less gas and people finding ways to drive less, that might have gotten the US Chamber of Commerce worried.

    I wonder if Ford's decision to transition to a truck only company in the US plays a factor as well. If their plan works they'll be more profitable (because the margin on luxury pickups is insane) but they'll still manufacture less vehicles overall and that's not good for their suppliers.

    It's possible, but also seems like a dumb approach long term. Namely if they insist on making every larger and more obnoxious vehicles. At some point cities in the US are probably going to start banning the really obnoxious models because they are a fucking hazard in a number of ways. Also if the oligarchs drag the fight against wealth inequality out long enough, there just won't be enough demand to keep ford afloat. Japanese manufactuers probably have the better idea, small cheap and full efficient vehicles. For most people, that still need a vehicles, what you really need is something that can go from one point to another and not have to transport much.

    AimJragghenFeloniousmozGnome-InterruptusL Ron HowardShadowhope
  • RickRudeRickRude Registered User regular
    moniker wrote: »
    RickRude wrote: »
    Is the possible need of an increase of the federal gas tax rate is because of trumps tax breaks on the wealthy or are the two not connected?

    They're unconnected. The Federal gas tax is in a nominal amount $0.184/gallon and has been unchanged since 1993.

    Inflation makes it worth about 27% of what it was under Clinton, a generation ago.

    Thank you! I love you and a couple other forumers for their expertise and fields and value the opinions and facts you give @moniker

    MorganVMrVyngaardmonikerGnome-InterruptusL Ron HowardMill
  • SanderJKSanderJK Crocodylus Pontifex Sinterklasicus Madrid, 3000 ADRegistered User regular
    edited September 10
    Edited: this was for chat

    SanderJK on
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  • FoefallerFoefaller Registered User regular
    edited September 10
    Shorty wrote: »
    the fact that no dollar amount in legislation ever gets pegged to inflation is probably the easiest example of the general megalomania and incompetence of your average congresscritter

    Before a ballot initiative raised it further, Missouri's state minimum wage was automatically raised each year based on the CPI.

    Granted, it started years after the federal was raised to $7.25, so it was still shit, but at least it didn't get shittier due to inflation.

    Foefaller on
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  • chrishallett83chrishallett83 Hi! Registered User regular
    Doodmann wrote: »
    I would by a truckla, only because it's the closest anyone has come to making an El Camino in like 30 years.

    Import a Holden Ute.

    ge5547549213459505029.jpg

    firewaterwordmRahmaniDoodmannTicaldfjamMortal SkyL Ron HowardCommunistCow
  • Metzger MeisterMetzger Meister Registered User regular
    Noice.

    Also, the Subaru Brat was the height of truck-car design and everything since has been a pale imitation.

    DoodmannTicaldfjamchrishallett83L Ron Howard
  • webguy20webguy20 Registered User regular
    Id take a new baja for sure.

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    TicaldfjamL Ron Howard
  • HefflingHeffling No Pic EverRegistered User regular
    I want a Truckla decorated as a vampire so I can have a Truckla named Truckula.

    If a movement doesn't have someone that can sit down opposite those in a position of power and strike a deal, how can that movement achieve success?
    SealAridholMoridin889TNTrooperSyngyneAimFencingsaxOghulknever dieL Ron Howard
  • ButtersButters A glass of some milks Registered User regular
    I'll settle for an electric vehicle worth a damn that doesn't cost $50k or more

    PSN: idontworkhere582 | CFN: idontworkhere | Steam: lordbutters
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  • djmitchelladjmitchella Registered User regular
    Noice.

    Also, the Subaru Brat was the height of truck-car design and everything since has been a pale imitation.

    I beg to differ:

    1969Minipickup_01_700.jpg

    DoodmannBullheadCommunistCow
  • AridholAridhol Daddliest Catch Registered User regular
    I'm just gonna put it out there but those are all awful looking. The Truckla especially.

    Congrats you chopped the roof off a model 3.

    Kayne Red RobeJebus314TryCatcherEinzel
  • I ZimbraI Zimbra Registered User regular
    Noice.

    Also, the Subaru Brat was the height of truck-car design and everything since has been a pale imitation.

    More cars need rear-facing jumpseats.

    Extreaminatus
  • monikermoniker Registered User regular
    President Trump escalated his attacks on the Federal Reserve on Wednesday, demanding that it slash interest rates to zero “or less” so that the federal government can refinance the public debt that has ballooned during his administration

    https://www.washingtonpost.com/business/2019/09/11/trump-says-boneheads-fed-should-cut-interest-rates-zero-or-even-set-negative-rates/

    The Fed's rate setting meeting is next week. Not sure if this will impact how willing they are to cut rates versus not in order to show political independence from his bloviating.


    Also...trucks are a thing that exist as a means of conveyance, I guess.

    ShadowhopeElldren
  • Knight_Knight_ Dead Dead Dead Registered User regular
    trump wants the rates low so he can refinance his personal debt. it would save him an insane amount of money.

    it's impossible to find the article because this current thing has buried it entirely, but odds are that's his primary reason for this constant griping about interest rates, more than any perceived weakness on the economy.

    aeNqQM9.jpg
    DoodmannshrykeBlackDragon480Gnome-InterruptusTicaldfjamthatassemblyguyFencingsaxOghulkbrynhrtmnBullheadchrishallett83ElldrenRickRudeCantideCommunistCow
  • monikermoniker Registered User regular
    Knight_ wrote: »
    trump wants the rates low so he can refinance his personal debt. it would save him an insane amount of money.

    it's impossible to find the article because this current thing has buried it entirely, but odds are that's his primary reason for this constant griping about interest rates, more than any perceived weakness on the economy.

    It's probably both. He wants Chair Powell to act like Chair Burns under Nixon (which, along with oil shocks, caused stagflation). The thing is, Powell doesn't want to be that, and I could see him holding rates next week out of a desire to appear independent/ spite regardless of the macro outlook.

    BlackDragon480Fencingsax
  • EncEnc A Fool with Compassion The Land of Flowers (and Dragons)Registered User regular
    edited September 11
    Noice.

    Also, the Subaru Brat was the height of truck-car design and everything since has been a pale imitation.

    I beg to differ:

    1969Minipickup_01_700.jpg

    I would drive the hell out of this car. Assuming I would fit inside.

    Enc on
    BlackDragon480djmitchellaDoodmannLovelyBullheadSkeith
  • CouscousCouscous Registered User regular
    How the heck does refinancing the public debt even work outside of what the Fed just does normally?

  • AthenorAthenor Battle Hardened Optimist The Skies of HiigaraRegistered User regular
    How does the heck does slashing rates to less than 0 work? Isn't that just paying the banks?

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  • MorganVMorganV Registered User regular
    Couscous wrote: »
    How the heck does refinancing the public debt even work outside of what the Fed just does normally?

    I think the reference is to Trump refinancing HIS OWN debt. He's known to owe multiple banks (and "banks") a crapload of money.

    It's all in service of grift.

    Knight_Gnome-InterruptusthatassemblyguyFencingsaxchrishallett83Moridin889ElldrenRickRude
  • I ZimbraI Zimbra Registered User regular
    MorganV wrote: »
    Couscous wrote: »
    How the heck does refinancing the public debt even work outside of what the Fed just does normally?

    I think the reference is to Trump refinancing HIS OWN debt. He's known to owe multiple banks (and "banks") a crapload of money.

    It's all in service of grift.

    The public reason, at least, is refinancing the national debt, which is technically a thing that you can do but doesn't result in any real savings.

    The real reason is probably some combination of goosing the economy before the elections and refinancing his own debt.

    monikerButtersjmcdonaldCommander ZoomSmrtnikFencingsaxElldrenRickRude
  • DevoutlyApatheticDevoutlyApathetic Registered User regular
    Athenor wrote: »
    How does the heck does slashing rates to less than 0 work? Isn't that just paying the banks?

    No. The banks that borrow money from the federal reserve would end up paying the federal reserve back less than they borrowed.

    Normal: I'll lend you 1.00, you'll pay me back 1.01 at the end.
    Negative: I'll lend you 1.00, you pay me back .99 at the end.

    It's kinda crazy and not a great sign really.

    monikerMorganVEncGnome-InterruptusElldrenRickRude
  • RiusRius Registered User regular
    Athenor wrote: »
    How does the heck does slashing rates to less than 0 work? Isn't that just paying the banks?

    No. The banks that borrow money from the federal reserve would end up paying the federal reserve back less than they borrowed.

    Normal: I'll lend you 1.00, you'll pay me back 1.01 at the end.
    Negative: I'll lend you 1.00, you pay me back .99 at the end.

    It's kinda crazy and not a great sign really.

    Well if this happens, how can I turn myself into a bank? I'll take some free money

    kime38thDoemRahmaniMoridin889ElldrenRickRudeCantide
  • BrainleechBrainleech Registered User regular
    Butters wrote: »
    I'll settle for an electric vehicle worth a damn that doesn't cost $50k or more

    Well it is my plan to get a 70's car and make it electric all I need is the body and frame

    chrishallett83
  • GoumindongGoumindong Registered User regular
    Rius wrote: »
    Athenor wrote: »
    How does the heck does slashing rates to less than 0 work? Isn't that just paying the banks?

    No. The banks that borrow money from the federal reserve would end up paying the federal reserve back less than they borrowed.

    Normal: I'll lend you 1.00, you'll pay me back 1.01 at the end.
    Negative: I'll lend you 1.00, you pay me back .99 at the end.

    It's kinda crazy and not a great sign really.

    Well if this happens, how can I turn myself into a bank? I'll take some free money

    You cannot borrow from the funds counter except if you need money to cover a shortage in your reserve though as the purpose is to encourage banks to lend by effectively loosening the constraints of their reserve requirements.

    wbBv3fj.png
  • [Expletive deleted][Expletive deleted] The mediocre doctor NorwayRegistered User regular
    Sub-zero central bank interest rates for some countries was floated by serious economists during the financial crisis.

    So it's not totally ridiculous on its face, but since Trump suggested it I'm going to assume it's completely inappropriate in the current situation.

    Sic transit gloria mundi.
  • GoumindongGoumindong Registered User regular
    The reason for negative rates was because we had hit the zero nominal bound and had no space for traditional monetary policy.

    Of we hit negative rates before a recession were fucked.

    wbBv3fj.png
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  • daveNYCdaveNYC Why universe hate Waspinator? Registered User regular
    Goumindong wrote: »
    The reason for negative rates was because we had hit the zero nominal bound and had no space for traditional monetary policy.

    Of we hit negative rates before a recession were fucked.

    Probably, but proper fiscal stimulus could probably get us through. Which means that if a recession hits while we still have Republicans controlling any part of the legislative process we're fucked.

    Shut up, Mr. Burton! You were not brought upon this world to get it!
  • schussschuss Registered User regular
    daveNYC wrote: »
    Goumindong wrote: »
    The reason for negative rates was because we had hit the zero nominal bound and had no space for traditional monetary policy.

    Of we hit negative rates before a recession were fucked.

    Probably, but proper fiscal stimulus could probably get us through. Which means that if a recession hits while we still have Republicans controlling any part of the legislative process we're fucked.

    Well, the problem is that fiscal is a pure deficit lever, whereas rates don't cost the government money. Also, to pay for something like a stimulus you'll have to tax at some point, which will counteract the stimulus effect

  • daveNYCdaveNYC Why universe hate Waspinator? Registered User regular
    schuss wrote: »
    daveNYC wrote: »
    Goumindong wrote: »
    The reason for negative rates was because we had hit the zero nominal bound and had no space for traditional monetary policy.

    Of we hit negative rates before a recession were fucked.

    Probably, but proper fiscal stimulus could probably get us through. Which means that if a recession hits while we still have Republicans controlling any part of the legislative process we're fucked.

    Well, the problem is that fiscal is a pure deficit lever, whereas rates don't cost the government money. Also, to pay for something like a stimulus you'll have to tax at some point, which will counteract the stimulus effect

    It will counteract a portion of the stimulus due to properly targeted stimulus efforts having a very high multiplier. The worst spending multiplier was 1.36 compared to the best tax multiplier of 1.29, never mind the Bush tax cut extension rolling in at .29.
    In congressional testimony given in July 2008, Mark Zandi, chief economist for Moody's Economy.com, provided estimates of the one-year multiplier effect for several fiscal policy options. The multipliers showed that any form of increased government spending would have more of a multiplier effect than any form of tax cuts. The most effective policy, a temporary increase in food stamps, had an estimated multiplier of 1.73. The lowest multiplier for a spending increase was general aid to state governments, 1.36. Among tax cuts, multipliers ranged from 1.29 for a payroll tax holiday down to 0.27 for accelerated depreciation. Making the Bush tax cuts permanent had the second-lowest multiplier, 0.29. Refundable lump-sum tax rebates, the policy used in the Economic Stimulus Act of 2008, had the second-largest multiplier for a tax cut, 1.26.

    Shut up, Mr. Burton! You were not brought upon this world to get it!
    FencingsaxElldren
  • TarantioTarantio Registered User regular
    Those multipliers aren't guaranteed for all magnitudes of tax and stimulus, though.

    The returns would diminish as you try to scale it up.

    There will also be higher interest payments (because of greatly increased debt) compared to last time, and with fed rates already cut to the bone, it looks like the next recession will be bad.

  • Captain InertiaCaptain Inertia Registered User regular
    edited September 12
    Goumindong wrote: »
    The reason for negative rates was because we had hit the zero nominal bound and had no space for traditional monetary policy.

    Of we hit negative rates before a recession were fucked.

    I haven’t seen much tightening of credit anyways. The headwind holding most regional banks from lending isn’t retrenchment, it’s that Chase is taking a huge portion of all new consumer deposits lately, which is the cheapest and most prized funding fuel for loans.

    And Chase’s banking model is to lend out $0.55 for every $1 in deposits, vs. $0.85 to every $1 for regionals (that’s what “fortress balance sheet” means to That Bank Up NorthChase)

    Captain Inertia on
  • schussschuss Registered User regular
    So do you think it's likely the least efficient tax cuts will be repealed with a stimulus, I say unlikely

  • EncEnc A Fool with Compassion The Land of Flowers (and Dragons)Registered User regular
    edited September 12
    Oops, wrong thread.

    Enc on
  • daveNYCdaveNYC Why universe hate Waspinator? Registered User regular
    schuss wrote: »
    So do you think it's likely the least efficient tax cuts will be repealed with a stimulus, I say unlikely

    Hells, I'm iffy on the Senate being willing to increase taxes even if we somehow had 10% real GDP growth. Nuking the Bush tax cuts and then plowing that money directly into a heap of government funding into virtually any sort of program would be a stimulus bill I'd support, but it just isn't going to happen.

    Shut up, Mr. Burton! You were not brought upon this world to get it!
    Gnome-InterruptusmonikerjmcdonaldMoridin889FencingsaxRickRudeCantide
  • nexuscrawlernexuscrawler Registered User regular
    Thats why the always push tax cuts even if only through reconciliation

    they're always permanent no one wants to be the ones who raised taxes

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  • CouscousCouscous Registered User regular
    What if we solved the homeless problem with concentration camps?

    https://www.washingtonpost.com/business/2019/09/12/trump-officials-tour-unused-faa-facility-california-search-place-relocate-homeless-people/
    A team of Trump administration officials toured a California facility once used by the Federal Aviation Administration this week as they searched for a potential site to relocate homeless people, according to three government officials who spoke on the condition of anonymity to discuss the private tour.

    President Trump has directed aides to launch a major crackdown on homelessness in California, spurring an effort across multiple government agencies to determine how to deal with sprawling tent camps on the streets of Los Angeles and other cities, officials said.
    The Washington Post reported Tuesday that the administration is considering razing tent camps, creating new temporary facilities or refurbishing government facilities as part of Trump’s directive on homelessness. The changes would attempt to give the federal government a larger role in supervising housing and health care for residents.
    Senior administration officials said that forcing people into new facilities was not under consideration, with one official telling The Washington Post: “We’re not rounding people up or anything yet. You guys in the media get too ahead of yourselves.”

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