When the excess return on long-term vs short-term loans inverts, and becomes negative, investors take notice and begin to fear a recession. That metric is nearly zero now after recently being above 1%.
Bill Maher complained in a recent podcast that he was being accused of hoping for a market crash. In fact, he argued, what he had said was that he hoped that a recession would bring the electorate to their senses and rid themselves of Narcissus I.
http://thehill.com/homenews/media/391625-bill-maher-bring-on-the-recession-if-it-means-getting-rid-of-trump
As I was listening not to his original plea, but his defense, I was curious about a number of things he said in his rant, beginning with his statement that we would survive a recession, but not survive much more of Narcissus I. He then went on to say that every Republican President since Hoover had presided over a recession, many more than one. I think he said there had been 42 recessions in total under Republican presidents. I’ve checked two things out:
1. Is it true that recessions are more likely under Republican leadership? The answer appears to be a resounding affirmative:
https://www.snopes.com/fact-check/republicans-1928-control/
https://www.bloomberg.com/news/articles/2016-12-21/republican-presidents-and-recessions-a-pattern-trump-would-like-to-break
https://www.usatoday.com/story/money/markets/2016/11/20/trumps-turn-republican-presidents-rule-recessions/93976832/
https://www.statista.com/statistics/238600/gdp-per-capita-growth-by-us-president-from-hoover-to-obama/
Any way you slice it, folks are worse off always under a Republican president than under a democratic president. The only president that makes it even close was the growth under Gerald Ford, the least republican of all republican presidents.
2. Do recessions benefit anybody? The answer is, again, a resounding affirmative:
https://www.economicshelp.org/blog/280/recession/does-anyone-benefit-from-a-recession/
https://www.nytimes.com/roomfordebate/2012/10/18/shrink-inequality-to-grow-the-economy/when-economic-growth-benefits-only-a-few
http://theweek.com/articles/460179/charts-how-rich-won-great-recession
https://www.theguardian.com/business/2016/jul/06/one-percent-2008-recession-recovery-income
Any way you slice it, the rich inevitably profit from recessions. This cannot be accidental, can it?
Saturday, June 30, 2018
The Emperor's New Clothes
It strikes me at the moment that the nation is very much in the position of the kingdom in Hans Christian Anderson’s 1835 tale, “The Emperor’s New Clothes” who admire the king’s royal trappings, despite that fact that the weavers who created them had duped the king by undressing him, while flattering him with their sycophantic blather.
We fail completely to identify Narcissus’s nakedness, I think, for two reasons. Most importantly, there is no signal; everything he does is astonishingly horrific, so there is nothing on which to focus. Of course, it is also because of two hundred plus years during which we were taught American exceptionalism.
And this despite broadly-based and robust evidence:
He has created an immigration crisis at a time when illegal immigration is at an all-time low, thanks primarily to Barrack Obama. He has sowed fear of violent crime at a time in history when it is at an all-time low. He wishes to erect a barrier of tariffs that will inevitably cause a deep recession. He angers all world leaders except for the totalitarian dictators whom he both admires and apes. He pummels the department of justice and persuades justice Kennedy to retire in order to install a bullet proof SCOTUS that will exonerate him for colluding with the Russians to steal the presidency. He is a massively criminal racist who defrauds and stiffs his creditors. He lies about virtually everything, national and personal. He confirms in daily tweets that he is at once the most vain and the most deluded individual on the planet.
Indeed, Anderson’s tale is so subtly constructed and relevant, and Narcissus is a dangerous buffoon who so resembles the Emperor in his story in every particular, that I despair for the child in the crowd, too young to understand the desirability of keeping up the pretense, who will blurt out that Narcissus is wearing nothing at all, so that the cry can assumed and amplified by others?
We fail completely to identify Narcissus’s nakedness, I think, for two reasons. Most importantly, there is no signal; everything he does is astonishingly horrific, so there is nothing on which to focus. Of course, it is also because of two hundred plus years during which we were taught American exceptionalism.
And this despite broadly-based and robust evidence:
He has created an immigration crisis at a time when illegal immigration is at an all-time low, thanks primarily to Barrack Obama. He has sowed fear of violent crime at a time in history when it is at an all-time low. He wishes to erect a barrier of tariffs that will inevitably cause a deep recession. He angers all world leaders except for the totalitarian dictators whom he both admires and apes. He pummels the department of justice and persuades justice Kennedy to retire in order to install a bullet proof SCOTUS that will exonerate him for colluding with the Russians to steal the presidency. He is a massively criminal racist who defrauds and stiffs his creditors. He lies about virtually everything, national and personal. He confirms in daily tweets that he is at once the most vain and the most deluded individual on the planet.
Indeed, Anderson’s tale is so subtly constructed and relevant, and Narcissus is a dangerous buffoon who so resembles the Emperor in his story in every particular, that I despair for the child in the crowd, too young to understand the desirability of keeping up the pretense, who will blurt out that Narcissus is wearing nothing at all, so that the cry can assumed and amplified by others?
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