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Thread: USA houshold weath rise - 89.1 trill

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    Default Re: USA houshold weath rise - 89.1 trill

    That is true BUT did you read it ? Actually read it ? All of the gain is because of the rebound in the real estate and stock markets.

    Real wages and median household income remain sluggish.

    The number of people with zero savings i.e. living paycheck to paycheck continues to go UP.

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by Eric Stoner View Post
    That is true BUT did you read it ? Actually read it ? All of the gain is because of the rebound in the real estate and stock markets.

    Real wages and median household income remain sluggish.

    The number of people with zero savings i.e. living paycheck to paycheck continues to go UP.
    This is the result of years of economic policy that has favored the financialization of American business. Prior to the 1990s, banks mostly made business loans and home mortgage loans. In fact a little over half of banks loans were to business start ups or expansions. This lead to the creation of jobs, good paying jobs at that. Now, just 15% of bank loans are to business start ups and expansions and almost no bank loans are for home mortgages. Consequently, the number of new business start ups has fallen sharply. Existing businesses don't expand as much either and when they do, they tend to use other financing means. With start ups falling, new good paying jobs are not being created. Hence, our labor participation rate has fallen and incomes have remained static.

    Z

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by Zofia View Post
    This is the result of years of economic policy that has favored the financialization of American business. Prior to the 1990s, banks mostly made business loans and home mortgage loans. In fact a little over half of banks loans were to business start ups or expansions. This lead to the creation of jobs, good paying jobs at that. Now, just 15% of bank loans are to business start ups and expansions and almost no bank loans are for home mortgages. Consequently, the number of new business start ups has fallen sharply. Existing businesses don't expand as much either and when they do, they tend to use other financing means. With start ups falling, new good paying jobs are not being created. Hence, our labor participation rate has fallen and incomes have remained static.

    Z
    Small biz credit is dead - so the big banks can create "instruments". Everyone wants to be a gambler, no one wants to build.
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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by Eric Stoner View Post
    That is true BUT did you read it ? Actually read it ? All of the gain is because of the rebound in the real estate and stock markets.

    Real wages and median household income remain sluggish.

    The number of people with zero savings i.e. living paycheck to paycheck continues to go UP.
    2015 did see a big increase in median household income along with a big drop in the poverty rate.

    http://money.cnn.com/2016/09/13/news...income-census/

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by eagle2 View Post
    2015 did see a big increase in median household income along with a big drop in the poverty rate.

    http://money.cnn.com/2016/09/13/news...income-census/
    Again, true as far as it goes BUT despite the increase in median income it is still LOWER than it was in 2000 ! And it was only a one year increase. Let's think about this for a moment. Median household income is still lower than it was SIXTEEN years ago. In real terms it means that about 2/3 of the country is doing worse or at best is not doing any better than they were at the turn of the century. That is only looking at incomes. Forget about higher health care costs , higher insurance premiums for all kinds of coverage - not just health , higher energy costs , (I'm sorry , I hate to do this but ) much higher taxes of all kinds especially tolls , fares and other user fees, lower PRIVATE pensions ( if you can still get one ) , wiped out savings etc. etc. and the picture is not happy or pretty.

    It is the prime reason for increased income inequality under Obama. Not just that the super rich have done so well ( they have ) but that the middle class has had it so tough

    I don't want to rehash all the issues we've discussed many , many times because for one thing it inevitably veers toward ... Eeeek !.. "Danger Will Robinson ! " ... politics.
    Suffice to say that the economic facts are what they are ; the numbers are what they are ( well some of the stuff from BLS is demonstrably ... um ... er... creative. ) John Crudele has done an excellent job of dissecting and analyzing the posted official unemployment rate with things like seasonal adjustments ; literal guesses from the Dept. of Labor as to how many new businesses started , how many failed etc. and the actual numbers especially the declining labor participation rate. The plain fact is that the numbers for NEW BUSINESS Formation ( the main driver of the Coolidge prosperity , the post JFK tax cut boom in the 1960's and the Reagan - Clinton prosperity that ran from 1983 to 2000 ) have stunk in the last 15 years. One of the prime reasons why the Obama recovery has been the shallowest in history. New businesses and small businesses USED to be the prime creators of NEW jobs in this country. NOT for more than the last ten years. We've discussed the reasons for these and other shortcomings and deficiencies in our economic performance. No need to rehash it. Likewise the numbers for economic growth have been equally pathetic .
    Last edited by Eric Stoner; 10-07-2016 at 11:38 AM.

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    Default Re: USA houshold weath rise - 89.1 trill

    There are still a lot of positives in the economy for most people. Overall, taxes are probably lower for most people since Bush cut taxes. Interest rates are very low, which makes houses and cars more affordable. Also, people can refinance their homes and lower their payments. Energy costs are probably lower for most people, since domestic oil and natural gas production has increased significantly over the past 10 years. Anyone who's been investing in the stock market over the past 5 - 6 years has done well. There have been a number of successful startups over the past 15 years that employ many people. Facebook, Uber, and Airbnb to name a few. Tesla is the first successful American auto startup in probably 80 years.

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    Default Re: USA houshold weath rise - 89.1 trill

    Twer it only true. What you have done is cherry pick a few positives for SOME people but the overall picture is lousy.

    You conveniently forget Obama's tax increases ; numerous state and local tax increases ( N.J. just raised it's gas tax going from the second lowest to the seventh highest in the U.S. ) etc.

    Yes, those invested in the stock market and real estate have done well. We're not talking about them. We are talking about Median Family Income which is still well below what it was in 2000 ! 16 years ago ! We are talking about average real wages which have just recently seen any increase and which are still well below where they were in 2000. We are talking about the labor participation rate which is horribly low. We are talking about youth unemployment , unemployment among the low skilled etc.

    I'll grant you Facebook , Uber and Airbnb but Tesla is definitely an unfinished story. BUT the rate of new start-ups compared to the three periods I cited is still abysmal.
    Corporate investment is lousy.
    Economic growth sucks. This has been the worst post-recession recovery ever. In past recoveries the deeper the recession the bigger the bounce back. Not this time.

    And now , in addition to everything else , energy costs are going up. Possibly as much as 30 % and unlike last winter which was relatively mild forecasters are predicting that this winter will be cold and long.
    Last edited by Eric Stoner; 10-14-2016 at 07:25 AM.

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by Eric Stoner View Post
    Twer it only true. What you have done is cherry pick a few positives for SOME people but the overall picture is lousy.
    No, the overall picture is good. Unemployment is down to 5 percent. Approximately 14 million jobs have been created in the past six years. Income has increased significantly year over year. The price of gas is down. Stocks are up. By practically every measurement, the overall picture is good.

    Quote Originally Posted by Eric Stoner View Post
    You conveniently forget Obama's tax increases ; numerous state and local tax increases ( N.J. just raised it's gas tax going from the second lowest to the seventh highest in the U.S. ) etc.
    Obama only increased taxes on incomes greater than $400,000. Most Americans weren't affected.

    Quote Originally Posted by Eric Stoner View Post
    Yes, those invested in the stock market and real estate have done well. We're not talking about them. We are talking about Median Family Income which is still well below what it was in 2000 ! 16 years ago ! We are talking about average real wages which have just recently seen any increase and which are still well below where they were in 2000. We are talking about the labor participation rate which is horribly low. We are talking about youth unemployment , unemployment among the low skilled etc.
    The majority of households own stocks and/or real estate, at least for themselves. Median income isn't well below what it was in 2000. It's about $1,000 off. Median income peaked in 1999 at $57,909, when we were nearing the end of the biggest peacetime economic expansion in history. Median income has increased significantly since bottoming out in 2012. If current trends continue, we will surpass 1999 in the next 2 - 3 years. See the chart on the page below:

    https://fred.stlouisfed.org/series/MEHOINUSA672N

    Youth unemployment is about half of what it was in 2010 when it was close to 20 percent. It's now approximately 10 percent. Youth unemployment is close to the lowest level it's been in the past forty years.

    From:
    http://www.tradingeconomics.com/unit...mployment-rate


    Quote Originally Posted by Eric Stoner View Post
    I'll grant you Facebook , Uber and Airbnb but Tesla is definitely an unfinished story. BUT the rate of new start-ups compared to the three periods I cited is still abysmal.
    Tesla is outselling Mercedes, BMW, Audi, And Porsche In the US
    http://gas2.org/2016/02/15/tesla-mod...porsche-in-us/

    and is the biggest selling luxury car in Europe.
    http://www.forbes.com/sites/neilwint.../#3151b7a23c94

    Quote Originally Posted by Eric Stoner View Post
    Corporate investment is lousy.
    Economic growth sucks. This has been the worst post-recession recovery ever. In past recoveries the deeper the recession the bigger the bounce back. Not this time.
    No it hasn't. The recovery from the Great Depression took 10 years and a world war to bring the economy back to where it was before the depression. If the federal government and federal reserve didn't take extraordinary measures, the same thing could have happened with the most recent financial crisis.

    You're oversimplifying things by comparing this recession to other recessions. More wealth was lost during this recession than probably at any other time since the Great Depression. In previous recessions, we started out with higher interest rates, so the Fed had a lot more options to stimulate the economy. In the 1981 recession, interest rates were at 18 - 19 percent. All the Fed had to do to bring us out of recession was to lower interest rates once inflation was under control.

    Quote Originally Posted by Eric Stoner View Post
    And now , in addition to everything else , energy costs are going up. Possibly as much as 30 % and unlike last winter which was relatively mild forecasters are predicting that this winter will be cold and long.
    The cost of natural gas has been stable, and is much lower now than it was in the recent past.
    From:
    http://www.tradingeconomics.com/commodity/natural-gas



    In addition, wind and solar are becoming much more widely used, which will result in the price of gas, oil, coal, etc. having less effect on the cost of energy.

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    Default Re: USA houshold weath rise - 89.1 trill

    No it is most certainly NOT ! OFFICIAL unemployment is down. So is the labor participation rate ; so is economic growth ( most economists are coming around to the view that we are effectively in a recession even though current conditions do not meet the classical definition i.e. negative growth for two consecutive quarters ). Gas is down from it's peak but it has been creeping up in price all year. Stocks are up. Thanks mostly to the Fed. Corporate profits which ought to be driving stock prices are sluggish at best.

    Yes they were too affected by Obama's tax increases. The employees of those people did not get raises. Their benefits were cut back. This is the unreported part of our corporate tax rate which btw, Obama wants to reduce. Not by much but at least he recognizes that it is too high. And you didn't say a word about state and local taxes which have steadily gone up as the states and cities struggle to keep from going broke.

    According to the latest Census figures middle class incomes for the first half of 2016 went DOWN. Again.

    Then why isn't Tesla profitable yet ? Why do I almost never see a Tesla on the road while I see plenty of Mercedes , BMW's , Audis and Porshes ? Admittedly I do not drive in California or D.C.. Almost never go there. All I said was that the story wasn't over. It is certainly possible that Tesla will end up being a rip roaring success. We will see.

    But we are NOT back to where we were. Certainly the middle class is doing a LOT worse than they were pre-recession. Prior to the recession of 2007-9 the worst recession we had post W.W. II was the Carter - Reagan recession of 1980-2. And prior to that we had about a decade of stagflation. After the village idiot Arthur Burns and then the equally useless Miller we finally got Volcker at the Fed who raised interest rates AND slowed the growth in the money supply. We had a strong dollar , relative spending restraint and ( are you sitting down ? ) Reagan's tax cuts which led not just to a post recession boom but roughly two decades of prosperity under Reagan , Bush The Smarter and Clinton. Just look at the economic growth rates under Reagan ( as high as 7 % ) Bush The Brighter and Clinton and compare them to the pathetic growth rates under Obama.

    You can't run cars , trucks , buses, trains and planes on wind or solar.
    Natural gas is low in price thanks mostly to fracking.

    Frankly I am surprised at you. If you want to say that the super-rich have done well I'm the first to agree with you. But for you or anyone else to pretend that the middle class is doing well , that they are not struggling seems to come from an alternate reality.

    The economic growth numbers and the income numbers are what they are. Is it all Obama's fault ? Of course not. Even though he has publicly stated that he'd accept LOWER Federal revenues from higher capital gain tax rates to promote "fairness". Go back to the Charles Gibson interview .And he is the one who appointed Janet Yellen who seems determined to challenge Arthur Burns' place as the worst Fed Chairman in history.

    His friends are doing fine. So is the average Wall Streeter. Goldman Sachs was able to pay Hillary $225,000 to spout meaningless blather.
    Whoa - before you jump on me please cite one thing she said that was new, innovative or particularly insightful. Just one.

    My point is simple. The top 1% has done very well but the middle class has not. Unlike the 1920's and 1960's and 1983 through 2000 when ALL income groups , rich, poor and middle class saw their wealth and incomes increase..
    Last edited by Eric Stoner; 10-17-2016 at 08:15 AM.

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by Eric Stoner View Post
    No it is most certainly NOT ! OFFICIAL unemployment is down. So is the labor participation rate ; so is economic growth ( most economists are coming around to the view that we are effectively in a recession even though current conditions do not meet the classical definition i.e. negative growth for two consecutive quarters ). Gas is down from it's peak but it has been creeping up in price all year. Stocks are up. Thanks mostly to the Fed. Corporate profits which ought to be driving stock prices are sluggish at best.
    Do you have any examples of economists stating that we're currently in a recession? I haven't heard any say that.

    Quote Originally Posted by Eric Stoner View Post
    Yes they were too affected by Obama's tax increases. The employees of those people did not get raises. Their benefits were cut back. This is the unreported part of our corporate tax rate which btw, Obama wants to reduce. Not by much but at least he recognizes that it is too high. And you didn't say a word about state and local taxes which have steadily gone up as the states and cities struggle to keep from going broke.
    The tax increase went into effect in 2013. In 2014 and 2015, median income rose significantly so some people are getting raises.

    I don't have the tax figures for every state. Some states did raise taxes and others didn't. Some states cut taxes. I know Kansas and Louisiana did.


    Quote Originally Posted by Eric Stoner View Post
    Then why isn't Tesla profitable yet ? Why do I almost never see a Tesla on the road while I see plenty of Mercedes , BMW's , Audis and Porshes ? Admittedly I do not drive in California or D.C.. Almost never go there. All I said was that the story wasn't over. It is certainly possible that Tesla will end up being a rip roaring success. We will see.
    Tesla does earn a profit on the vehicles they sell, but they're investing more than they earn on the Model 3, so their net revenue is negative.

    From:
    http://www.fool.com/investing/2016/0...-gross-pr.aspx

    Tesla Motors (NASDAQ:TSLA) wasn't profitable in the second quarter of 2016. The Silicon Valley carmaker posted a net loss of $293 million, or $2.09 per share, as it continues to spend big on development of its upcoming Model 3 sedan.

    Still, Tesla posted a gross profit of almost $275 million. That's not the same thing as a net profit, or even the operating profits most other automakers use to gauge the health of their businesses, but it still tells us some things about the state of Tesla's business that are worth knowing.


    Quote Originally Posted by Eric Stoner View Post
    But we are NOT back to where we were. Certainly the middle class is doing a LOT worse than they were pre-recession. Prior to the recession of 2007-9 the worst recession we had post W.W. II was the Carter - Reagan recession of 1980-2. And prior to that we had about a decade of stagflation. After the village idiot Arthur Burns and then the equally useless Miller we finally got Volcker at the Fed who raised interest rates AND slowed the growth in the money supply. We had a strong dollar , relative spending restraint and ( are you sitting down ? ) Reagan's tax cuts which led not just to a post recession boom but roughly two decades of prosperity under Reagan , Bush The Smarter and Clinton. Just look at the economic growth rates under Reagan ( as high as 7 % ) Bush The Brighter and Clinton and compare them to the pathetic growth rates under Obama.
    IMO, GDP growth isn't a good indicator of how well the economy is doing. GDP growth is going to be higher when you have more people entering the work force and lower when you have fewer people entering. When Reagan was President, the work force increased significantly as a result of the large number of baby boomers entering the work force along with a significant increase in the number of women working. Under Jimmy Carter, GDP growth was almost as high as it was when Reagan was President, but because of the large number of Americans entering the work force, Jimmy Carter left office with an unemployment rate greater than seven percent. Under President Obama, many baby boomers are leaving the work force. The first baby-boomers turned 65 in 2011.

    Median income also decreased significantly from 1989 - 1993, and did not reach 1989 levels until 1996.
    https://fred.stlouisfed.org/series/MEHOINUSA672N



    Quote Originally Posted by Eric Stoner View Post
    You can't run cars , trucks , buses, trains and planes on wind or solar.
    Natural gas is low in price thanks mostly to fracking.
    You can run electric cars , trucks , buses, and trains on solar power indirectly. If you use solar power for generating electricity, you can use that generated power to charge batteries used by electric cars , trucks , and buses, and the power lines used by electric trains.

    Quote Originally Posted by Eric Stoner View Post
    Frankly I am surprised at you. If you want to say that the super-rich have done well I'm the first to agree with you. But for you or anyone else to pretend that the middle class is doing well , that they are not struggling seems to come from an alternate reality.
    How do you know how well middle class families are doing? According to this poll, only 42 percent of Americans think the economy is good, but two-thirds say their own households are faring well.
    http://www.usnews.com/news/business/...s-than-economy

    Quote Originally Posted by Eric Stoner View Post

    The economic growth numbers and the income numbers are what they are. Is it all Obama's fault ? Of course not. Even though he has publicly stated that he'd accept LOWER Federal revenues from higher capital gain tax rates to promote "fairness". Go back to the Charles Gibson interview .And he is the one who appointed Janet Yellen who seems determined to challenge Arthur Burns' place as the worst Fed Chairman in history.

    His friends are doing fine. So is the average Wall Streeter. Goldman Sachs was able to pay Hillary $225,000 to spout meaningless blather.
    Whoa - before you jump on me please cite one thing she said that was new, innovative or particularly insightful. Just one.

    My point is simple. The top 1% has done very well but the middle class has not. Unlike the 1920's and 1960's and 1983 through 2000 when ALL income groups , rich, poor and middle class saw their wealth and incomes increase..
    Citing Hillary Clinton may be violating the ban on political discussion.

    I'm sure if you look hard enough, you could find some middle class households that are not doing well, and some that are doing very well, but I don't think you can make a generalization about the entire middle class.

    The Fed's top priority is generally to keep inflation low, and under Janet Yellen, inflation has been close to zero, so how can compare her to Authur Burns?
    Last edited by eagle2; 10-17-2016 at 05:46 PM.

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    Default Re: USA houshold weath rise - 89.1 trill

    I made it clear that according to the classic definition we are not in a recession. We have not had two consecutive quarters of negative economic growth. But we have had several quarters when growth was close to zero. And not one where growth was at least 3 %. If you've been paying attention you would have noted that the Labor Dept. continually revises it's positive numbers like new job creation down while similar adjustments are made to the economic growth numbers.
    Arthur Laffer has been saying for over a year that we are effectively in recession. He btw endorsed Clinton twice and privately advised Clinton to cut taxes as he did in his second term.
    So does Steve Moore.
    And even Paul Krugman during several of his all too infrequent lucid intervals has noted the lousy economic numbers He's repeatedly advocated borrowing a couple trillion dollars at the low current rates and spending it on infrastructure
    They and many others have decried the sluggish economic growth ; the drop-outs from the work-force; ( There was yet another article on that in y-day's N.Y. Times. ) underemployment ; the pathetic labor participation rate and most of all the lack of increase in REAL ( i.e. adjusted for inflation ) wages. That has been a major bugaboo for Krugman , Larry Summers and many other economists both Keynesian and classical i.e. free market.

    Obama's tax increase went into effect AFTER Bush The Dumber's tax cuts expired.
    California has significantly raised taxes and so have most states. By taxes I also include things like tolls and user fees. Gone over a bridge or used a tunnel recently ?

    All I said about Tesla was that the final results are not yet in. Which you have effectively conceded. We will see.

    If you don't want to use GDP then how are you going to measure economic growth ? An expanding economy ought to be measured how ? Per capita GDP ? How about REAL wages ? New job creation ? Average hours worked ? New business formation ? Business expansion and investment ? By ALL of those metrics, compared to the periods I have repeatedly cited , this economy sucks. We have not had a single year , not one , of economic growth of at least 3 % since Bush The Dumber was President. That is one reason why our deficits are so big. In contrast we had shrinking deficits ( both in REAL terms and as a % of GDP) under Reagan and under Clinton we went into actual surplus.
    How ? Why ? A growing economy means more people working paying more taxes and buying more things. It means both C and S corporations are hiring more people and paying them more money and paying higher dividends. Higher salaries and higher dividends mean higher revenues. How about Real Disposable Personal Income ? Last year it only increased 1.8% which compared to past years was dismal.

    Please do not try to compare the economic numbers under Carter to those under Reagan. Not unless you are a fan of double digit inflation , interest rates pushing 20 % not to mention modest economic growth numbers. All you have to do is compare Clinton's second term 1997-2000 to Carter's to see the difference in economic performance. What happened under Clinton ? Oh that's right. He cut capital gains taxes and business taxes especially those for smaller S-corporations. And inter alia new job creation went way up.

    The Baby Boom started in 1946 and ran through 1964. There were plenty of Baby Boomers entering the workforce under Carter ( i.e. those born between 1959 and 1962 ). Under the Reagan recovery there were plenty of jobs for them. One point often missed by all economists , Keynesians and free marketeers alike is that the decade of stagflation helped create a large pent up demand for cars , houses , large appliances , vacations etc. Multiple recessions ( 1969 -70 ; 1974-5 ; 1980 -2 ) , inflation and high interest rates in the 1970's caused many people to postpone major purchases. A robust and broad-based recovery , low inflation and low interest rates under Reagan encouraged a wave of consumer spending not seen since ... are you sitting down ? ... the post JFK Tax Cut 1960's.

    Rather than opinion polls I prefer to rely on ACTUAL economic numbers. That being said it is not surprising that many families think they are doing better compared to the Recession of 2007-9.

    I did not post a word about current events involving Hillary. I was merely pointing out that the good folks at Goldman Sachs were doing so well that they could afford to pay $225,000 to sit and listen to her say nothing of any real importance or meaning. It was much more a commentary on Goldman than Hillary. I didn't post one word about her shrill voice and weird fashion sense. I wouldn't pay a nickel to listen to her. Or Bush The Dumber. Or Bill. Or Trump. Or Warren Buffet or Bill Gates for that matter. Well, maybe if they served a lunch and I had an hour to kill lol.

    I think Yellen is guilty of the same sort of "political " monetary manipulation that Arthur Burns did in the 1970's. Interest rates have been too low for too long which is why the stock market is over-priced and over-invested. There HAS been some inflation but most of the increases were swallowed up by lower energy costs. More importantly banks are not the only lenders today. There is a LOT of private lending that effectively goes around Fed policy.
    My big problem with Yellen is that there are no rules or standards that the Fed follows. Not that anyone can see. Had there been the Fed would have raised rates about two years ago.

    The OP cited an increase in household wealth. The link clearly showed that the increase was based almost entirely on higher real estate values and a higher stock market. Most real estate sales today do NOT result in Federal revenues. State and local transfer and filing taxes YES.
    But most real estate sale proceeds are rolled over into another real estate purchase thus protecting the gain from Federal capital gains taxes.
    Same thing for rolled over sales in an IRA or a 401K and reinvested dividends held and kept in those vehicles are NOT taxed. My point is the noted increase in paper wealth has NOT resulted from increased economic activity. Not in the way that the building of new factories or expansion of old ones creates. Or to a lesser extent, investment in infrastructure. Which I have long been in favor of - to the point of advocating an increase ( Alert The Media ! ) in the Federal fuel tax and a modest surcharge of say $2 per head on airline tickets so long as every penny goes to maintaining, renovating and repairing existing infrastructure.
    Last edited by Eric Stoner; 10-19-2016 at 10:36 AM.

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    Default Re: USA houshold weath rise - 89.1 trill

    I consider the unemployment rate and inflation rate to be better indicators of how the economy is doing than gdp growth. Low unemployment and inflation with low gdp growth are better than high unemployment and high inflation with high gdp growth.

    I'm not comparing the economic numbers of Carter and Reagan. I'm pointing out that high GDP growth doesn't always mean the economy is doing well. Jimmy Carter averaged over 3 percent GDP growth, but left office with unemployment over seven percent and inflation over 10 percent. I think most people would agree the economy is doing better now than it was in 1980, even though GDP growth has been averaging around 2 percent.

    When Bill Clinton cut taxes in 1997, we were already in the middle of an economic boom. From 1993 - 1996, unemployment fell from 7.3 percent to 5.3 percent. In 1996, gdp growth hit 6 or 7 percent. There is no reason to believe the economic expansion wouldn't have continued without the tax cuts.

    The actual numbers show unemployment at 5 percent and income increases in 2014 and 2015, which show the economy is doing well, which is probably why two thirds of households say they're doing well.
    The stock market has gone way up because the economy has been doing well. Inflation is low and the unemployment rate has dropped from 9 to 5 percent. The stock market generally does well when unemployment goes down. The below chart shows the S & P 500 index along with the unemployment rate. The red line is the unemployment rate. Notice how when the unemployment rate goes down, the stock market goes up and when unemployment goes up, the stock market goes down.



    I think your criticism of Janet Yellen and the Fed is based more on the fact that you don't like their policies rather than that their policies haven't been successful. Unemployment is low and so is inflation. Of course you can say that you're right and Yellen and the Fed are wrong, but if we look at some of your past posts, the Fed turned out to be right. Here are some of your posts from 2010:

    Quote Originally Posted by Eric Stoner View Post
    There are a LOT of reasons why 2011 is going to be a VERY unhappy year. We are going to have anasty bout of inflation for a number of reasons. Food and energy prices are just part of the picture."Helicopter Ben" Bernancke and the idiocy at the Fed is another big part of it.
    Quote Originally Posted by Eric Stoner View Post
    Says who ? What about all these articles and reports I've been reading that 9 to 10% unemployment will be the new "normal" over the next decade. It WILL be if we continue to repeat Japan's errors and promote a Lost Decade of stagnation.
    Unemployment is at 5 percent now.
    Quote Originally Posted by Eric Stoner View Post
    As to the inflationary effects of current fiscal and monetary policy, we have explained to you over and over again that inflation takes years to develop. However, you obviously are ignoring current commodity prices. Oil is over $80 a barrel; gold , copper and other metals are climbing as are agricultural commodities. It takes time for those higher prices to affect wholesale and retail prices; some of which we are already seeing as Melonie has pointed out. For instance, I used less natural gas this billing period than the same time last year and paid MORE. Why ? Natural gas prices have been going UP !
    Years have gone by, and inflation is still low. Oil is around $50 a barrel.
    Quote Originally Posted by Eric Stoner View Post
    I've said to you repeatedly that if we somehow manage to dodge a serious inflationary hangover from Bernanke's overflowing monetary punch bowl that it will be a historical first. Conceptually it is POSSIBLE but inter alia you'd need serious OVERPRODUCTION of goods and services to avoid the classic: too much money chasing too few goods and services. WHAT are YOU basing that on ? Other than wishful thinking ? Have you looked at the industrial numbers lately ? Seen signs of a boom in production, have you ? Industrial orders are DOWN ! For two months in a row.
    There hasn't been a serious inflationary hangover.
    Last edited by eagle2; 10-19-2016 at 07:58 PM.

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    Default Re: USA houshold weath rise - 89.1 trill

    You are correct about the unemployment RATE but I and others have raised serious questions about how that rate is being measured. For instance it is a fact that someone who works 1 hour of one day per month is counted as "employed " by the BLS. That means that a lot of people getting very little work are not counted as unemployed. Worse yet the unemployment rate is being measured against a shrinking pool of "workers" because the Labor Participation Rate keeps going DOWN.

    I may be wrong but you seem to expect that you can gauge an economy's health using "snapshots". In other words if GDP is high in a given month or year but so is inflation and/or unemployment then the economy is not doing well ; according to you. But historically new employment lags behind economic growth. Likewise unemployment lags behind declining economic growth. The perfect latest example being our latest recession. First growth went down ; then the stock market and then unemployment rose. Likewise with the Reagan recovery growth increased , so did the stock market then unemployment started tumbling from around 10 % to roughly 4 to 5 % for almost two decades i.e. through 2000.

    I don't know what would have happened without Clinton's tax cuts. All I know is what did happen. Roughly four years of an economy in excellent health including low unemployment ; low inflation and budget surpluses . You can pooh pooh the cause and effect as much as you like. We had similar type conditions under Coolidge ; under Johnson and under Reagan. All periods of economic growth , low unemployment , low inflation ; relatively balanced budgets ( Coolidge cut federal spending to the bone and both Johnson and Reagan had much higher Defense spending as a % of GDP than Clinton did ) and a strong dollar.

    As for Ms. Yellen and her policies we will see. We can already see several negative effects from her policies although I grant you that serious inflation is not one of them. Yet. And that constitutes a historical anomaly that it would take a Milton Friedman or Niall Ferguson to fully and completely explain. I do not have a Ph.D in monetary economics. As I noted back in 2010 it has been a historical first afaik. The best I can do is say that almost all of that easy money has NOT floated down to the middle class in either higher wages or in broadly higher prices. When food prices went up energy prices went down. A lot of things like I-pads and I-phones went down in price. All that money from the Fed has been glommed by the big banks who in turn have used most of it to buy bonds including but not limited to Federal debt which has financed deficits that are now running at $ 500 billion a year. Lower wages plus relatively stable prices generally equal low inflation. I have repeatedly noted that there has not been a broad based increase in incomes regardless of what polls are currently saying.

    I do know however that historically , sooner or later the piper has to be paid and that interest rates well below what the market would otherwise set and lots of easy money that is NOT flowing down to consumers and small businesses results in a bursting bubble with or without a bout of high inflation. I also know that one thing that has helped keep the lid on ( as I previously noted ) is lower energy costs BUT that the prices of oil and natural gas have been creeping up. Oil has gone from $29 a barrel to over $50 in less than a year. More importantly inflation is only one factor to be concerned with. Much more important is the lack of lending by banks. We have discussed numerous times how Fed policy makes it easy and desirable for them to borrow cheap from the Fed and then invest rather than lend.

    What I said in 2010 was based on what was happening then. It is 2016 now and the economic picture is somewhat better in some ways and worse in others. I have cited numerous statistics that you refuse to go near like Labor Participation Rate ; workforce drop-outs who don't get counted in employment , unemployment or labor force statistics ; stagnant increases in business investment ; stagnant increases in the rate of new business formations and most of all the fact that Real Median Income has NOT recovered all the ground it lost since 2008 and that Real Net Disposable Income has not grown faster than the rate of inflation since 2000. That is A reason why the number of people living paycheck to paycheck has gone up since 2000.
    Last edited by Eric Stoner; 10-21-2016 at 06:50 AM.

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    Default Re: USA houshold weath rise - 89.1 trill

    In addition to the unemployment rate going down, the percentage of workers working part-time also went down from 20 to 18 percent.



    The biggest reason for the labor participation rate going down is because the number of people retiring has increased. Only a very small percentage left the workforce because they couldn't find work.

    From:
    http://www.factcheck.org/2016/01/oba...y-2016-update/

    Survey data published by the Bureau of Labor Statistics in December show that those outside the labor force in 2014 said their reasons for not working were retirement (44 percent), illness or disability (19 percent), school attendance (18 percent) or home responsibilities (15 percent). Only 3 percent said they couldn’t find a job, or gave some other reason.



    It's true we don't know what would have happened if taxes weren't cut in 1997, but we do know that in the three years before the tax cuts, we were having strong growth and unemployment decreased significantly without taxes being cut.

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    Default Re: USA houshold weath rise - 89.1 trill

    Starting in 1964 we had growth rates of 5.8 , 6.5 ( 1965 ) and 6.6% ( 1966 ) as unemployment fell from 5% to 3.8 and inflation ranged from a low of 1% in '64 to 3.5% in 1966.
    Fearing budget deficits Johnson took the steam out of the JFK Tax Cuts (that he had passed after JFK's death) with an income tax surcharge. He had the Vietnam War and a Great Society to pay for.
    We then had the Nixon years culminating in the 1974-5 recession with growth tumbling to 0.2 % with unemployment at 8.2% and inflation peaking at 12.3% in 1974. Btw that was one year after Nixon took us off the gold standard completely.
    Carter's one really good year ( he had a couple others that were O.K. ) was 1978 with growth of 5.6% ; 6 % unemployment and 9 % inflation. In fairness to Carter these were the days of the now ( imho ) discredited Phillip's Curve where most economists ( Samuleson , Heller, Galbraith et al ) said that there was an inherent and unbreakable connection between inflation and unemployment i.e. higher employment automatically meant higher inflation and to lower inflation one had to accept a slowing economy and higher unemployment.
    Carter's last two years gave us inflation of 13.3 % in '79 and 12.5% in 1980. Growth was 3.2 % in 1979 and -0.2 in 1980 with 7.2 unemployment.
    We then had to weather a severe recession during Reagan's first two years with '82 being the worst ( negative growth of 1.9 % , unemployment of 10.8 % but with inflation down to 3.8% ).
    Reagan's tax cuts kicked in as the Fed eased and the dollar strengthened and we got growth of 4.6% in 1983 peaking at 7.3 % in 1984 while unemployment dropped to 7.3 % while inflation stayed below 4 %.
    During Clinton's FIRST term we had growth of 2.7% to a high of 4% . Remember we were bouncing back from the short and mild Bush The Brighter Recession. Even though Clinton raised taxes ( on EVERYBODY ! ) the new rates were still well below what they had been under every President since Hoover and all the carve-outs that had been eliminated by the Bradley Tax Reform Bill of 1986 stayed out.They have been creeping back in ever since.
    During his SECOND term after he cut taxes we got growth AVERAGING 4.4% while unemployment dropped to a post W.W. II record low of 3.9 % while inflation averaged 2.3 %. Whether you like it or not we went from doing fairly well to doing GREAT after Clinton cut taxes. And the effects of NAFTA and other free trade policies kicked in. Remember low food prices and gasoline selling under $1 a gallon ?
    Under Obama we have not seen economic growth any higher than 2.6% although OFFICIAL unemployment has dropped to 5 % with inflation of 0.7 %.
    However , unlike the post tax cut periods I have cited we have had increasing income inequality ( the "haves" became the "have mores " ) and declining Real Average Net Disposable Income. As you have noted we have had an explosion of the number of people on Disability. And Food Stamps. And college grads living at home with their parents and Net Hours Worked has just started to go back up after YEARS of decline under Obama. And we have had record numbers of people leave the labor force where they are not counted as either working or unemployed.
    We do have a relatively strong dollar but that is mostly because the Euro and British Pound are so weak. Not to mention the currencies of Canada (it's worth is DOWN from over a dollar to about 77 cents today ), Brazil, Russia and most other countries. Well the Swiss Franc is still nice and strong. Even though they officially ended their 40% gold rule in 2000 they still print money as though they still did.

    Btw , Reagan, both Bush's and especially Clinton all showed the Phillip's Curve to be a fraud and bad economic theory as all four were able to give us economic growth with low unemployment and low inflation. Especially Clinton during his second term.

    Rather than banter back and forth with you any further I leave it to the readers of this thread to judge for themselves.
    Last edited by Eric Stoner; 10-24-2016 at 11:05 AM.

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    Default Re: USA houshold weath rise - 89.1 trill

    Eric Stoner I tend to agree with you. On paper a few numbers may look good but from what I've seen with countless situations in person things aren't looking that great at the moment. I understand that anecdotal evidence is flawed, but all I have to is look at skyrocketing apartment rent to know something's not right. I don't want to stray to far off topic but I know that my bills are fast increasing while my wages have stayed the same the last 5 years. I seriously need to get back to dancing but I digress. I also agree with you that just because the unemployment rate is low doesn't mean that much. A minimum wage worker who can't pay bills counts as employed.

    "However , unlike the post tax cut periods I have cited we have had increasing income inequality ( the "haves" became the "have mores " ) and declining Real Average Net Disposable Income. As you have noted we have had an explosion of the number of people on Disability. And Food Stamps. And college grads living at home with their parents and Net Hours Worked has just started to go back up after YEARS of decline under Obama. And we have had record numbers of people leave the labor force where they are not counted as either working or unemployed."

    All of this!!!! Plus College degrees aren't worth what they used to be but that's a whole other topic...
    Last edited by RyanXO; 10-21-2016 at 11:07 AM.

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    Default Re: USA houshold weath rise - 89.1 trill

    The unemployment rate is totally manipulated I read..they are counting part time as fully employed and only the people getting unemployment are being counted as unemployed..a huge number of jobless people just don't qualify. So I wonder what it really is?? Meh. Thank god for sex work!

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by We had a rabbit like you View Post
    The unemployment rate is totally manipulated I read..they are counting part time as fully employed and only the people getting unemployment are being counted as unemployed..a huge number of jobless people just don't qualify. So I wonder what it really is?? Meh. Thank god for sex work!
    According to their own website, () they only count people who have ACTIVELY looked for work in the past four weeks as being unemployed.

    So all the homeless people you see are NOT COUNTED as being unemployed since they haven't looked for work in the past four weeks.

    All the people that are not working, on some kind of benefit, and HAVEN'T actively looked for work in the past four weeks is NOT COUNTED as being unemployed.

    And as previous posters have mentioned, part time employed people (that have NO benefits) count the SAME as full time employed people with full benefits.

    But the raw data truth is that in a country with about 350 MILLION total people, there are over NINETY MILLION that are of working age, (not retirement age) that are not working.

    Combine that with the fact that more than HALF Americans have less than a grand in savings (), it's hard to say the economy is doing anything other than absolutely shitty.

    Moral of the story?

    Make and save as much $$$ as you can!

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by gw View Post
    And as previous posters have mentioned, part time employed people (that have NO benefits) count the SAME as full time employed people with full benefits.
    Many people working part time want to work part time. Some employers provide part-time workers with benefits. Starbucks provides benefits to employees who work 20 or more hours a week. Some part time workers get benefits through their spouse or parents.

    Quote Originally Posted by gw View Post
    But the raw data truth is that in a country with about 350 MILLION total people, there are over NINETY MILLION that are of working age, (not retirement age) that are not working.
    No, the 90 million figure includes retirees. It is the total number of all non-working Americans over age 16.

    From:
    http://www.politifact.com/truth-o-me...ople-out-work/

    According to the Bureau of Labor Statistics, the federal government’s official collector of employment data, either 92 million or 93 million members of the civilian, non-institutionalized population who were age 16 and over were not in the labor force in July 2015. (There are slight differences in the figure if you use seasonally adjusted numbers as opposed to non-seasonally adjusted numbers.)

    But what does this number actually mean?

    For one, it includes lots of people who likely aren’t looking for work. It includes every American of retirement age -- 65 and older. It includes every high-school student at least 16 years of age. It includes every college and many graduate or professional-school students. It includes every person who has a disability that makes it impossible for them to work. It includes parents who are choosing to stay home to take care of their kids. It includes every adult who’s gone back to school full-time. It even includes trust-fund kids who are living off investments.

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by eagle2 View Post
    Many people working part time want to work part time. Some employers provide part-time workers with benefits. Starbucks provides benefits to employees who work 20 or more hours a week. Some part time workers get benefits through their spouse or parents.



    No, the 90 million figure includes retirees. It is the total number of all non-working Americans over age 16.

    From:
    http://www.politifact.com/truth-o-me...ople-out-work/

    According to the Bureau of Labor Statistics, the federal government’s official collector of employment data, either 92 million or 93 million members of the civilian, non-institutionalized population who were age 16 and over were not in the labor force in July 2015. (There are slight differences in the figure if you use seasonally adjusted numbers as opposed to non-seasonally adjusted numbers.)

    But what does this number actually mean?

    For one, it includes lots of people who likely aren’t looking for work. It includes every American of retirement age -- 65 and older. It includes every high-school student at least 16 years of age. It includes every college and many graduate or professional-school students. It includes every person who has a disability that makes it impossible for them to work. It includes parents who are choosing to stay home to take care of their kids. It includes every adult who’s gone back to school full-time. It even includes trust-fund kids who are living off investments.
    Whoa ! We are all entitled to our opinions but NOT our own facts. The Labor Participation Pool is made up of all those of working age who are NOT infirm or disabled ; NOT in the military and NOT in prison who are employed ( full or part-time ) or actively looking for work.

    Compared to 1999 which was peak year for labor participation the rate of young people ( 18 -24 ) working is dramatically lower today than then. One theory is that a lot of them were pushed out of "burger flipper " and other low skilled jobs by older workers and the undocumented. The labor participation rate for 25 -54 year olds has gone DOWN every year since 1999. So has the rate for workers under 25. However the rate for those 65 and older has gone up every year since 2008.

    From 2008 to 2014 ( the last year that official stats are available from the Census ) the population of the U.S. went up by roughly 12 million people. However the civilian labor force only increased by 1.1 million people. That means that births and immigrants less deaths totaled 12 million but there were only 1.1 million new workers counted in the Labor Participation Rate. That is less than one new person working to support more than 10 new people in the population.

    The "official " Unemployment RATE is based on the PAYROLL survey. To be counted as "unemployed " you are collecting unemployment AND are actively looking for work.
    If you are working part-time you are NOT counted as unemployed. If your benefits ran out and you stopped looking for work you are NOT counted as unemployed. If you were on somebody's payroll for one hour of one day during the reporting cycle you are counted as "Employed ".

    All of the above is why I suggested looking at Average Hours Worked which until recently had been effectively flat ever since Obama took office. Yes , there have been a couple small upward blips but NOT anything resembling an upward trend. Average Hours Worked measures ALL the hours worked divided by the number of people actually working AT THAT TIME. In Sept. 2016 it was 34.4. In 2007 it was 34.6. It dropped dramatically and hit a low in 2009 ; went back up and has held steady and stagnant at its current rate for the last five years.
    Last edited by Eric Stoner; 10-25-2016 at 08:22 AM.

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by Eric Stoner View Post
    Whoa ! We are all entitled to our opinions but NOT our own facts. The Labor Participation Pool is made up of all those of working age who are NOT infirm or disabled ; NOT in the military and NOT in prison who are employed ( full or part-time ) or actively looking for work.
    And what I said is a fact. The figure of 93 million Americans not working includes all Americans 16 years old and older, not just the labor participation pool. Please read the article I linked to.

    http://www.politifact.com/truth-o-me...ople-out-work/

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by Eric Stoner View Post
    From 2008 to 2014 ( the last year that official stats are available from the Census ) the population of the U.S. went up by roughly 12 million people. However the civilian labor force only increased by 1.1 million people. That means that births and immigrants less deaths totaled 12 million but there were only 1.1 million new workers counted in the Labor Participation Rate. That is less than one new person working to support more than 10 new people in the population.
    You're confusing the labor participation rate with the number of people working. There have been 8 or 9 million jobs created since 2008. The labor participation rate has increased by 1.1 million. The number of people working has increased by 8 or 9 million. That is why the unemployment rate has dropped from 9 percent to 5 percent.

    Quote Originally Posted by Eric Stoner View Post
    All of the above is why I suggested looking at Average Hours Worked which until recently had been effectively flat ever since Obama took office. Yes , there have been a couple small upward blips but NOT anything resembling an upward trend. Average Hours Worked measures ALL the hours worked divided by the number of people actually working AT THAT TIME. In Sept. 2016 it was 34.4. In 2007 it was 34.6. It dropped dramatically and hit a low in 2009 ; went back up and has held steady and stagnant at its current rate for the last five years.
    The average hours worked per week bottomed out at 33.7 in 2009 and over the past 2 years has been fluctuating between 34.4 and 34.6, about the same as it was before the economic crisis and recession, so it's about normal. It's 34.4, which is exactly where it was 10 years ago.

    These are the facts:

    Since 2009, unemployment has fallen from 9 percent to 5 percent

    There have been 8 or 9 million jobs created since 2008, and 15 million since the economy bottomed out in 2009.

    Inflation has ranged from 0 - 3 percent since 2008.

    Since 2013, median household income has increased from $51,939 to $55,775

    Average hours worked per week is 34.4, which is close to the historical average in the years before the recession.

    All of these indicators show the economy is doing well. That is the basis for my view that the economy is doing well. I just don't think you are willing to acknowledge this, since you disagree with the policies of the Fed, even though the economy is doing far better than what you predicted in 2010.

    My views aren't out of the ordinary. Two-thirds of Americans say their own households are faring well.

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    Default Re: USA houshold weath rise - 89.1 trill

    Quote Originally Posted by eagle2 View Post
    These are the facts:

    Since 2009, unemployment has fallen from 9 percent to 5 percent
    As mentioned by previous posters, this figure is highly questionable.

    Other data suggest it's not so low.

    MW-ER055_U6RATE_20160708122659_MG.png

    There have been 8 or 9 million jobs created since 2008, and 15 million since the economy bottomed out in 2009.
    Yes, but what kinds of jobs?

    breadwinner1-480x299.png

    breadcircus-480x299.png

    Inflation has ranged from 0 - 3 percent since 2008.
    Depends on how you measure it. If you use the same method to measure it from 1980, it's 8-10%.

    Education is more expensive, health care is more expensive, rent is WAY more expensive,

    Since 2013, median household income has increased from $51,939 to $55,775
    Most people don't make "median" income.

    Most people have been flat (using real dollars, even using the fake inflation number.

    440c34f52d3d1d344a1cca6b755557ae.png


    All of these indicators show the economy is doing well.
    How about these indicators?

    20160301_obama_1.jpg

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    Default Re: USA houshold weath rise - 89.1 trill

    What a badass thread! Three key numbers to consider: Small business credit, total income of bottom 90% divided by number of people in those households adjusted for inflation, net disposable monthly household income for bottom 90% adjusted for inflation. These numbers are how it "feels".
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