Hypocritical?

[BFritz21]

During the recession, everyone was blaming Bush and saying that he was at fault for not stopping it and everything else they blamed him for.

Now, I point out that the economy could tank under Biden, and suddenly people are saying the POTUS doesn't have any effect on the economy?

Is that as hypocritical as it seems?

[Benton]

Yes and no.

It depends entirely on what they were criticizing.

If it was a general "it's bush's fault because the president controls everything" then it's hypocritical. It's also incorrect.

If it's (and I fall into this camp) "bush put us on a irresponsible fiscal plummet by large tax cuts while waging two wars" then, no.

Bush didnt cause the recession. Recessions are inevitable. But they can be lessened by federal intervention, mostly through pumping tax dollars back into the economy. The issue we had under Bush, obama and trump is were pumping money into the economy we don't have.

Why don't we have it?

Tax cuts without pork cuts.

[*Nately120*]

Americans - Our country is so great that nothing can stand in your way of being as successful as you want to be as long as you are willing for work for it!

Also Americans - Aww gee, (candidate I didn't vote for) is gonna wreck the economy and bring back the hard times!

[NATI BENGALS]

The economy could tank under Biden for the same reason people blamed Obama. The flaming bag of shit left on the White House front porch by their predecessor.

[Belsnickel]

Wait, are you talking about the recession we are already in?

Edit: my bad, we had growth in Q3.

In all seriousness, though, there are things presidents do that impact the economy, but the president's role in the economy is not as great as many people like to think it is. Even what Benton pointed out, that was also the responsibility of Congress for passing the tax cuts and what not. The economic indicators have been pointing to a looming recession for a while, now.

[BmorePat87]

I’d need to see the conversations you’re having, but it’s complicated.

The Great Recession came after 6 years of Bush policies. It wasn’t just him, but he contributed to it.

Likewise, if we truly fall into a recession in the next few months, covid would be the blame. Biden may be too, as could Trump. Trump’s tax cuts will make any recession worse and handicap our ability to fight it

[Benton]

(12-11-2020, 09:52 PM)Belsnickel Wrote: Wait, are you talking about the recession we are already in?

Edit: my bad, we had growth in Q3.

In all seriousness, though, there are things presidents do that impact the economy, but the president's role in the economy is not as great as many people like to think it is. Even what Benton pointed out, that was also the responsibility of Congress for passing the tax cuts and what not. The economic indicators have been pointing to a looming recession for a while, now.

Eh, that's splitting heirs a bit (misspelling intentional). Bush campaigned for them, Bush has since hung his hat on the cuts being a benefit and lessening the recession, and I don't recall him wanting to veto them because they were irresponsible.

[CJD]

It depends on what policies are passed and what impact they are expected to have on the economy.

If you look at the timeline of the recessions in this country and who is president, it is uncanny how often a recession occurs under a Republican President. And, more times than not, a Democrat comes around to end a recession.

But can this be blamed on them? Or is this just the cycle of the market? It seems as though, with a few exceptions, there's a recession every ~5 to 10 years. Since our presidents tend to go Democrat ->Republican->Democrat->Republican (the only consecutive presidents in the same party since 1945 have been JFK->LBJ and Ronald Reagan->HW Bush [I'm not counting Ford's term because he was never actually elected and only finished out Nixon's term]), you could make an argument that it's just been unfortunate that nearly every recession has occurred with a Republican in the oval office. They fell on the wrong side of the coin, so to speak.

You could also theoretically make an argument that the effects of policy tend to lag behind the policy itself, perhaps even the full length of a presidency, so it is actually the Democrats who cause recessions, but the recession occurs once the Democrat has already safely left office and been replaced with a Republican. It's not a bad theory, but you'd have to actually discuss what policies you believe caused this and I have never heard a cogent and well reasoned argument for this stance regarding any policies supported by Democrats that would cause delayed recessions.

The point is, as with many things in politics, it's a lot more complicated than "the president has the ultimate effect on the economy" or "the president has no effect on the economy."

I'm not an economist, so I only have my opinion based on what I've seen and what I've read other people say but, as far as I can tell, tax cuts tend to have a negative impact on the economy in the long term, especially if they are unequally favored towards corporations and wealthy people (as putting more money into their pockets doesn't tend to go back into the economy the way giving poor and middle class people tax cuts does). Trickle Down Economics doesn't work and actively hinders the economy, essentially.

I also think deregulation has a negative impact on the economy over time, as corporations and banks (and some people, though their individual impact is negligible comparatively) find and exploit loopholes that have been opened to benefit personally at the expense of others (see: the 2008 recession).

Big tax cuts and deregulation have, generally, been the backbone of Republican presidential platforms so would it be fair to point towards those presidencies if their policies cause a recession? I personally think it would be fair.

If there are things that Democrats do that actively lead to recession, then I'm open to hearing them. But the fact is the economy does better under Democrats rather than Republicans. This may just be a small sample size issue, or it may be indicative of policy but either way, historical trends would suggest that we will likely not see the recession expand under Biden.

Especially given the circumstances we're in, with the vaccine coming out right when Biden takes office, he will almost definitely benefit from massive improvements in unemployment, GDP, job growth and other economic measurements. They won't be because of anything he really did, but it'll definitely look like he did something (20+ years from now, people are just going to look at the trend rather than the circumstances when discussing this exact topic, after all).

[fredtoast]

(12-14-2020, 10:57 AM)Crazyjdawg Wrote: I also think deregulation has a negative impact on the economy over time, as corporations and banks (and some people, though their individual impact is negligible comparatively) find and exploit loopholes that have been opened to benefit personally at the expense of others (see: the 2008 recession).

Big tax cuts and deregulation have, generally, been the backbone of Republican presidential platforms so would it be fair to point towards those presidencies if their policies cause a recession? I personally think it would be fair.

Deregulation was the main cause of the economic crisis of 2008 yet less than a decade later rubes on thr right ere falling for the same "Regulations hurt the economy" BS.

The reason we had to spend billions of taxpayer dollars to bail out investment bankers after the housing bubble burst (SOIALISM!!!) was the lack of regulation on credit default swaps.  They were basically insurance, but firms like Lehman Brothers were allowed to sale them with out enough capital to back them up.  When they could not pay to cover the losses the result would have been the collapse of major corporate 401K funds as well as private IRAs all across the country.  So to keep honest small investors from losing all of their retirement savings the government bailed out Wall Street

[Goalpost]

(12-14-2020, 01:35 PM)fredtoast Wrote: The reason we had to spend billions of taxpayer dollars to bail out investment bankers after the housing bubble burst (SOIALISM!!!) was the lack of regulation on credit default swaps.  They were basically insurance, but firms like Lehman Brothers were allowed to sale them with out enough capital to back them up.  When they could not pay to cover the losses the result would have been the collapse of major corporate 401K funds as well as private IRAs all across the country.  So to keep honest small investors from losing all of their retirement savings the government bailed out Wall Street

My understanding of why institutions were selling these loans amidst themselves was because Fannie and Freddie was in on this also providing leadership and providing security in it. Turns out Fannie and Freddie were a house of cards also.

[fredtoast]

(12-14-2020, 01:56 PM)Goalpost Wrote: My understanding of why institutions were selling these loans amidst themselves was because Fannie and Freddie was in on this also providing leadership and providing security in it. Turns out Fannie and Freddie were a house of cards also.

Credit Default swaps are just insurance against stocks dropping in price.

Many 401K funds are limited to investing in only AAA or other very high rated stocks, but these safest stocks don't generate as much return.  So companies like Lehman Brothers started selling credit default swaps which were insurance to cover losses against lower rated stocks.  Retirement fund managers started buying lower rated stocks to get higher returns but they also paid for credit default swaps that would cover their asses if the stocks dropped too much.  So when all these mortgage backed securities started crashing the fund managers asked Lehman Brothers to cover their losses and there were no funds available. 

Basically lack of market regulation let investment backs sell insurance with no capital to back up the policies.

"Regulations" don't just materialize out of thin air.  They are usually promulgated for a reason to address a specific problem.  But when Republicans start talking about "cutting regulations" the rubes don't even ask "Which regulations?"  they just support "cutting regulations" no matter what they are or what problem they were designed to prevent.