Wednesday, December 13, 2017

An analysis of the economy

A funny thing happened on Inauguration Day, and the exact same economic conditions that had existed throughout 2016 — steady but nonspectacular job growth, low unemployment, sluggish but real wage growth, record stock market valuations — changed political valences.

Suddenly, performance Trump labeled disastrous under Obama was spectacular under Trump.

In some ways, even more oddly, while in 2016 pundits saw Trump's political success as a sign that real economic conditions were worse than the statistics in, say, 2017, pundits marvel that Trump could be so unpopular despite the strong economy.

A more useful exercise, I think, is to consider the international context:

  • The American stock market is up a lot in 2017, but the German and Japanese markets are up by more.
  • The S&P 500 is at an all-time record, but so are markets in the United Kingdom, Canada, South Korea, Taiwan, and elsewhere.
  • The US unemployment rate is the lowest in more than 17 years, but Japan's is the lowest in more than 20 years. The UK and Germany are the lowest since the 1970s.

A particularly telling sign about all of this is that while America's GDP growth has come in above expectations this year, so has eurozone GDP growth — and in fact, the eurozone has grown more rapidly than the United States. Japan is growing more slowly than we are (which is what happens when your working-age population is shrinking), but their GDP numbers are also beating expectations this year.

Read more
https://www.vox.com/policy-and-politics/2017/12/11/16763314/trump-fixed-the-economy

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