Trump Policy

[tw]

Originally Posted by Luce

That was a very interesting read.

Article, unfortunately, completely ignores the only thing that creates growth. Innovation. What we do today is obsolete technology in ten years - if growth exists.

1970s demonstrated the problem. We spent massive sums on things such as Vietnam and cost controls in the latter 1960s. Where were resulting products from all that work four and ten years later? Did not happen. So no growth occurred. To keep people employed, interest rates were kept low - so that companies could keep making profits on obsolete technologies. The world's third largest economic power (American owned overseas industries) were sold to maintain profits and claim growth on spread sheets - that did not exist.

That was a short term solution. We did not innovate like America once did in the 1950s and 1960s. So those low interest rates and selling assets created increased cash flows that grew massively while actual production did not. Spread sheets said everything was good when, in reality, the American economy was diminishing.

What resulted: too much money chasing too few products and productive activity. Stagflation resulted. Under both Nixon and Ford (and Fed chairman Burns), nobody had the balls to address excessive dollars chasing too little value and too few innovative products.

Jimmy Carter finally (actually Paul Volker) did that. So when did massive interest rates (exceeding 20%) finally fix the American economy? Not until Reagan's second term. It takes that long for economic inputs to result in productive (real world) results.

George Jr did same destructive actions. Things such as tax cuts, elimination of Glass-Stegal, and other money games in 2001 resulted in recessions in 2006. Fortunately we were not so stupid as to also invest SS funds in the stock market - as wacko extremist finance people were advocating back then. It could have been much worse.

In this case, an economic morass was created by too little money chasing economic activity - just like the 1929 Great Depression. Companies that could not meet their short term obligations (ie payrolls) would fire employees. We were facing 40% unemployment.

Fortunately we had people who actually understood the problem created by Cheney (George Jr), et al. (Cheney openly said deficits don't matter - a classic business school myth.) Sec of Treasury Paulsen (for George Jr) all but told wacko extremists to go masturbate. He, Bernanke, Geitner, et al understood that the economy needed cash only in specific (productive) locations.

Low interest rates would, unfortunately, enrich bean counters who created this problem. And pay for European vacations for the rich. Cash was directed only where 'motor oil would lubricate bearings'. That was Tarp and Quantitative Easing. That put cash into productive parts of this economy. And did not pay massively for European vacations and McMansions for the rich.

So many Americans are so anti-American (uneducated) as to believe soundbyte lies. The dumbest among us promoted a Tea Party. They had no idea how economics (and the above concepts) work. They were easily brainwashed by lies from Rush Limbaugh and Rick
Santelli (of CNBC - a business school graduate who demonstrated how dumb those people really are).

These solutions started before Obama was elected. First four years of Obama remained depressive - due to the legacy of George Jr. By addressing fundamental economic factors after 2006, the economy finally got back, in 2010, to where it was in 2001. We are still observing today the results of sound economic policies in and after 2010.

Sometimes an economy needs low interest rates to maintain short term economic activity. We recently saw that when leading indicators started showing a recession last year. Excessively low interest rates returned to keep people employed; hoping that it results in more innovation.

Unfortunately The Don's dic licking policies have caused massive damage to aluminum and steel industries, large number of agricultural industries (especially soybeans, apples, dairy, and other commodities), has stifle innovation in industries such as white appliances, railroad industries, and medical drugs. Is now being seen in many construction industries, and has resulted in maybe a 10% reduction of American exports. Worse, many American companies that once employed innovators to make future jobs (ie GM, Honeywell, white appliance manufacturers, General Electric, Sears) are selling assets to claim as profits. GE chalk and plastics, that once pioneered innovative products; it and more were all sold off to claim as profits. Those profits created today will be creating massive economic downturns in the next decade.

How bad have some industries become? Most automotive vehicles in America are manufactured by foreign companies. That was once how America got rich - owned the world's third largest industrial base before 1970.

Future economic disasters are currently being masked by low interest rates.

Remember the Fed's purpose. To maintain stable liquidity in conjunction with what is actually being produced. Fed never creates jobs, new products, new markets, or innovation. Fed can only produce sufficient cash to maintain economic activity, to not create inflation, and to provide short term cash flow (ie one and four years) so that growth can result in profits 10 and 20 years later. So that innovation is not stifled by too much or too little cash.

Fed does with liquidity what electric utilities do for electricity. Each only serve the economy.

To temporarily avert a recession, the Fed recently lowered interest rates to near negative numbers. If a recession gets worse, the Fed has few tools left to maintain economic stability.

Most everything above is little understood by so many only educated by soundbytes.

We know, for example, that tax cuts result in increased economic activity in a next year, no new innovations, and therefore economic downturns more than four years later. You cannot tell that to the uneducated (also called anti-Americans). They are educated by soundbytes from Fox News, Hannity, the Tea Party, and other extremists.

Only thing that makes economic growth are innovations; that happened four and ten years previously.

Anyone can make the spread sheets look good this year. Simply make it a law that all homeowners must tear up and replant their lawns annually. That will increase GDP. And result in recessions more than four years later. Only the uneducated (anti-Americans) will cite increased economic activity (more jobs) and call that good.

Unfortunately that article does not discuss this. We know it is incomplete. Because the only thing that creates increased productivity, new markets, more jobs, wealth, exports, increased productivity, diminishes poverty and welfare, etc is innovation. Spread sheets (ie bean counters) cannot measure innovation and the resulting increased value. Spread sheets only report on what makes a better economy, typically, four to ten years after it happened. That article should have, at least, implied that.

But then none of this can be found or explained in soundbytes. Which explains why it is too complicated for extremists - liberal and conservative.

[henry quirk]

Originally Posted by tw

the only thing that creates increased productivity, new markets, more jobs, wealth, exports, increased productivity, diminishes poverty and welfare, etc is innovation

Exactly right.

[tw]

Originally Posted by henry quirk

Exactly right.

Really? I am surprised.

[henry quirk]

Originally Posted by tw

Really? I am surprised.

I'm libertarian. Innovation is everything. The freedom to innovate, to risk, to transact (and to reap the benefits and bear the failures) is integral to free enterprise.

[Luce]

Originally Posted by tw

Article, unfortunately, completely ignores the only thing that creates growth. Innovation. What we do today is obsolete technology in ten years - if growth exists.

Lots of things spur growth. Certain wars have, fads do, population/demographic changes, etc.

[henry quirk]

Originally Posted by Luce

Lots of things spur growth. Certain wars have, fads do, population/demographic changes, etc.

I could argue war, fads, population changes, etc. spur innovation (in technology, in resource management, etc.) which can lead to growth, but I'm tired today, so I won't.

[tw]

Originally Posted by Luce

Lots of things spur growth. Certain wars have, ...

That is a very popular lie. Again, when does growth finally appear on spread sheets and GDP? More than four years later.

We spent on Vietnam in the late 60s and early 70s. What resulted? A massive recession throughout the 70s and into Reagan's first term. We had to pay bills for that war.

We spent massively on Mission Accomplished in the early 2000s. And so the latter 2000s were a major recession.

Desert Storm was not recessionary. We did not pay for it. Rest of the world did. Japan was the number one contributor. So a serious recession did not happen many years later - according to spread sheets.

Too many confuse employment (activity) and money movement with growth. It only means growth when what results (four and more years later) is something tangible. War means nothing useful exists four plus years later. So economics takes its revenge. Borrowed money must now be paid back while no profit exists from all that work.

A destroyed bridge means plenty of work. To only replace what was lost. Nothing was gained. Europe and Japan finally recovered from WWII after 1970.

WWII meant many Europeans and Japanese were employees of US companies - that prospered from their labors. What happened to those industries? They were sold to pay for Vietnam.

Why did things look prosperous after WWII? The nation had a massive shortage of cars, homes, and consumer goods. So those factories - for almost as much as it cost to build new ones - had to be converted. Machines had to be scrapped and replaced. Entire contents of buildings trashed and converted. Plenty of work to simply do what had not been done for most of ten years. Where was the growth? They were simply undoing and redoing what should have / could have happened ten years earlier.

What happened to all those shipyards? Most were mothballed. Massive convoys of ships sat rusting in the Hudson River (ie 1200 ships), Beaumont TX, and in Puget Sound. James River VA, and Sacramento River CA until most were finally scrapped after 1970. Where was the growth?

Shipyards in Philadelphia were so massive that (if I remember a number) a ship was completed every three days. Show me any American shipyard that does that today. What happened if that was growth?

When we build something only to replace something defective or destroyed, there is no growth - no increased value. Only work and bills that must be paid.

Which takes us back to what business school graduates believe - worship. If we require everyone to replace their front lawn annually, then spread sheets show increased money movement. To bean counters, that is growth - even though nothing has been produced. Even though nothing of value has been created.

Do not confuse business school myths with reality. Business school graduates do not have tools that measure value. Even claimed we could make more jobs and wealth by investing the Social Security fund in the stock market. A money game. Yes, it could have resulted in massive returns annually. And would have eventually resulted in major economic disaster a decade later when the money bubble burst.

Would throwing all that money into the market result in more industries, products, employment, and growth? Of course not. Wall Street already has all the money it needs. It would have only enriched business school and finance people on Wall Street. Massive $multi-million bonuses would have paid for many more European vacations and yachts.

Spread sheets may or may not be reporting growth. Only thing that matters is tangible items. We created massive economic growth in the ponzi scheme that created sub-prime loans, CDL, SIVs, and other financial instruments - only on spread sheets. Spread sheets confuse money movement with value. And when that ponzi scheme collapsed, so did a major amount of cash (ie 40%) on all spread sheets. Things of value did not disappear. What only disappeared were the myths and lies openly promoted by finance and business people - using spread sheets.

What of value was created? Why did that ponzi scheme, for example, not result in one new bridge or tunnel into Manhattan in almost 50 years? Manhattan desperately needs more tunnels and could easily use some more bridges. When was the last one built? George Washington bridge in 1931. Then doubled in size in 1962. What of value has been built since then? NYC desperately needs train tunnels - which were killed off because it they cost money.

What do Europeans note when they arrive in Kennedy International? As one bluntly stated, infrastructure (roads, subways) in many third world countries is in better shape. More victims of myths called growth. Not to be confused with something completely different - that is actual growth - something tangible - a creation of value.

[Luce]

Originally Posted by tw

That is a very popular lie. Again, when does growth finally appear on spread sheets and GDP? More than four years later.

We spent on Vietnam in the late 60s and early 70s. What resulted? A massive recession throughout the 70s and into Reagan's first term. We had to pay bills for that war.

We spent massively on Mission Accomplished in the early 2000s. And so the latter 2000s were a major recession.

Desert Storm was not recessionary. We did not pay for it. Rest of the world did. Japan was the number one contributor. So a serious recession did not happen many years later - according to spread sheets.

Too many confuse employment (activity) and money movement with growth. It only means growth when what results (four and more years later) is something tangible. War means nothing useful exists four plus years later. So economics takes its revenge. Borrowed money must now be paid back while no profit exists from all that work.

A destroyed bridge means plenty of work. To only replace what was lost. Nothing was gained. Europe and Japan finally recovered from WWII after 1970.

WWII meant many Europeans and Japanese were employees of US companies - that prospered from their labors. What happened to those industries? They were sold to pay for Vietnam.

So what you're saying is that there was no growth in the 40s and 50s?

[tw]

Originally Posted by Luce

So what you're saying is that there was no growth in the 40s and 50s?

Perspective. If viewing from the late 1940 to 1950s, then growth existed. However that growth was only restoring what was lost in 1938 to 1945. Restoration continued until 1970.

How do business school graduates make money by doing harm? They see work this year as a profit this year. They do not see work done four years ago as resulting in growth years from now. As a result, companies like GM, Acme, Sears/Kmart, and Enron claimed profits why actually destroying growth. Their perspective was microscopic - only quarterly and annually.

In the case of General Electric, Sears and GM, they have been doing this destruction of growth by downsizing to claim profits. Then calling that growth. Anyone can measure those companies, on retail shelves from 30 years ago, to see negative growth. So why were they claiming so many profits? Top management was reaping massive bonuses, using spread sheets that claimed growth, that did not exist.

An irony not understood if using soundbytes. Growth exists when each company does same with less people every year. Then an economy is creating more jobs. Soundbyte logic says that means less jobs. And soundbyte logic is wrong. Again, perspective. A nation creates more jobs (and growth) when every industry does same or more using less employees. (Another example of why innovation is so critical to growth.)

[xoxoxoBruce]

I guess the hundreds of thousands of homes, thousands of department stores and the Interstate Highway System building don't count.

[tw]

Originally Posted by xoxoxoBruce

I guess the hundreds of thousands of homes, thousands of department stores and the Interstate Highway System building don't count.

Interstate Highway system was built after 1952 and mostly ended by the 1980s. Yes we do build some things since the housing stock must grow with population. However many are not addressing a shortage of affordable housing (some claim a percentage increase in homeless) because house construction is maintained in a McMansion sector of the economy. Affordable housing has not kept up.

In a boom created by money games (early 2000), there was a masssive construction in commercial properties. That misguided effort means vacancy rates on commerical property (especially malls) has increased significantly. In what is suppose to be a growing economy, commercial vacancy rates are increasing.

Most all work is directed at economic maintenance (ie roads, groceries) and replacement. Of all that work, 2% might do actual growth - if economic numbers are actually measuring tangible accomplishments. A healthy economy does better than 2%. 2% is paltry.

In Clinton's time, growth increased to eventually exceed 4%. George Jr's period saw less growth. And most of that was invented in finance games. Eventually resulting in negative growth.

Obama's positive grow rates finally got the economy back around 2011 to where is was in 2001. Unfortunately even with a healthy 4% growth, where are those interstate highway projects, new bridges and tunnels, high speed rail, new airports, or even increasing exports? It pays for wars that accomplish nothing but promote wacko extremists (ie Cheney, Rumsfeld, etc).

This past year, American exports have even decreased by 10%. Who is doing an increasing amount of GDP in America? Foreign manufacturers. We are building less. Many American industries are surrendering to or are being purchased by foreign manufacturers - who do what America once dominated: innovation. Even the world's best (innovative) light bulbs are predominately designed and manufactured overseas.

Developed just in one place were lasers, fiber optics, computer voice and digital music, satellite communication, digital information theory, computer software innovations, PCM, cell phones, transistors, radio astronomy, statistical process control, photoelectric cells, the big bang, cryptography (based in information theory), MOSFET transistor (currently the world standard), OFDM (now an international standard in and makes possible today's mobile phones and TVs), charge coupled devices (that makes all current cameras possible), the ESS phone system, fiber optic ocean cables, and TDMA / CDMA communications. All but the last occurred before 1970.

Bell Labs were only one of so many venues where innovation at these levels were routine. All those things are now standard technologies throughout the world. Where are so many innovations since then? Without the greater California region, America would be a second class nation. We no longer see so many innovations - the only thing that creates growth. Even the Bell Labs are no longer owned by Americans. Finland now owns it.

We once did all that, built homes, built an interstate highway system, built bridges and tunnels, and built all commercial properties we needed back then. What remains from that list? Homes. We even have too many commercial properties and no longer built highways, railroads, or bridges to even meet current demands.

What are future world leaders working on? Quantum computing, quantum physics and mechanics, solar and wind based energy innovations, terahertz based devices, genetically manufactured crops and drugs, artificial intelligence, robotics (replacing humans with machines), and energy consuming devices that consume massively less energy. America, that was once a leader in every one is only a leader in a few. Even superior automotive, wind and solar energy, GM technology, and quantum physics has left America. America has not been able to put a man in space for almost 20 years (now that George Jr administration destroyed that American technology by pushing a bogus Constellation, Ares, and Orion). Superior ships are built in S Korea, Japan, Norway, and other nations. American designers of skyscrapers do most work overseas. Even Intel, for the first time ever, is now run by a bean counter (the CFO) who knows nothing about microprocessors. Another precursor to something bad coming.

So what are people working on? America has more military than the next largest six nations combined. And what do wacko extremists want? More military. IOW more wars and more waste. Talent and abilities exist. But are wasted (misdirected) on unproductive activities - ie Mission Accomplished war, bogus man space projects, and protecting obsolete technologies such as GM cars, stifled innovation in the drug industry, and corporate downsizing to enrich dying companies (ie General Electric, Sears, white appliance industry, and now I fear Boeing).

That explains so much infrastructure that was not even maintained - so as to claim growth on spread sheets.

In Philadelphia, maintenance on Veteran's Stadium was ignored. 30 years later, it was so bad that it had to be ripped down and replaced. So that is growth only because money was saved and costs controlled on the existing structure? That is growth only when spread sheets play fast and loose using money games - ie no maintenance.

[Luce]

Originally Posted by tw

Perspective. If viewing from the late 1940 to 1950s, then growth existed. However that growth was only restoring what was lost in 1938 to 1945. Restoration continued until 1970.

How much was lost inside the USA?

[tw]

Originally Posted by Luce

How much was lost inside the USA?

Much less than in Europe and Japan. But still lots of work in America produced nothing that advanced society. That is the problem with war. Nothing useful is created. Plenty of destruction (massive negative growth) exists especially on the front lines (ie Europe and Japan).

GE has had no significant growth for most of the past 30 years. So the spread sheets are finally reporting it. US had a tremendous loss of growth during and due to Vietnam. Again, spread sheets only reported that many years later. The point is that economics can be easily subverted. Many assume economic activity is automatically growth. Provided are examples of economic activity resulting in no growth or even negative growth.

Trump got rich by simply doing nothing productive. By simply dumping losses (quite successfully) on others. Those four Atlantic City casinos are a perfect example. Growth means something tangible results. Those casinos are examples of no growth.

Productive work done today really only appears as profits four or ten years later. Fundamental research today (that creates growth) is reported by profits maybe 20 years later.

RCA created a blue light LED in the 1960s But could not make it work sufficiently to become marketable. Hiroshi Amano created the first successful blue light LED (that makes white LEDs possible) in 1989. When did an LED bulb become a new standard? After 2010? It takes that long for fundamental research (what makes growth) to result in profits. Another example of how spread sheets really only report what happened many years or decades later.

Economic activity (ie larger cash flows) is not always growth. Plenty of work done in America during WWII and Vietnam. Which resulted in no (or negative) growth.

1950s saw lots of work because negative growth during the war had to be created by positive growth. Ie a massive housing boom.