Thanks Eric. Although this is shocking and scary, everyone, especially political and business leaders need to read this. I hope this article is read by people everywhere so that we can understand the enormity of this problem.
Taxing the wealthy is actually a really good political platform right now. A majority of Americans support raising taxes for the wealthiest, as well as closing loopholes.
I wonder if you factor in new tech. For instance, the Clarity Act fight with Banks. Of course, banks want to save their commissions. But if Crypto can enable higher yields for savers, do you think that makes a difference in increasing domestic capital formation?
Also, as revealed by Lutnick in the All In interview, the trade deals are not FDI but financing instruments. So its basically Americans borrowing from foreign governments to invest in America. Think that also improves domestic capital formation substantially.
Here's a discussion of why the growth rate dropped and did NOT rebound quickly, after the Great Recession.
"Unlike normal recessions, there was no quick economic rebound following the Great Recession due to the housing wealth effect. The 2000s housing bust turned the 2000s recession into the Great Recession. GDP per capita didn’t rebound as usual and GDP ran 12% below trend for years."
Agreed John…and it wouldn’t have been as bad if they hadn’t marked all homes to market. Fortunately, they changed the rules back to how they he been for decades prior to Basel II rules. Brian Wesbury has commented extensively on mark to market and Buffet said doing so threw
Thanks Eric. Although this is shocking and scary, everyone, especially political and business leaders need to read this. I hope this article is read by people everywhere so that we can understand the enormity of this problem.
I appreciate that. Hopefully it crosses the desk of a few people that matter.
Excellent piece.
Thanks, Tim!
Eric, what about the impact of the legalization of stock buybacks on net investments by corporations?
Yes. That it part of what I meant in this section:
“Rational actors respond by shortening investment horizons, maximizing liquidity, and favoring financial engineering over real engineering.”
Taxing the wealthy is actually a really good political platform right now. A majority of Americans support raising taxes for the wealthiest, as well as closing loopholes.
I wonder if you factor in new tech. For instance, the Clarity Act fight with Banks. Of course, banks want to save their commissions. But if Crypto can enable higher yields for savers, do you think that makes a difference in increasing domestic capital formation?
Also, as revealed by Lutnick in the All In interview, the trade deals are not FDI but financing instruments. So its basically Americans borrowing from foreign governments to invest in America. Think that also improves domestic capital formation substantially.
Here's a discussion of why the growth rate dropped and did NOT rebound quickly, after the Great Recession.
"Unlike normal recessions, there was no quick economic rebound following the Great Recession due to the housing wealth effect. The 2000s housing bust turned the 2000s recession into the Great Recession. GDP per capita didn’t rebound as usual and GDP ran 12% below trend for years."
https://realestatedecoded.com/secret-66-the-housing-wealth-effect-is-a-double-edged-lopsided-sword/
Agreed John…and it wouldn’t have been as bad if they hadn’t marked all homes to market. Fortunately, they changed the rules back to how they he been for decades prior to Basel II rules. Brian Wesbury has commented extensively on mark to market and Buffet said doing so threw
gasoline on the fire.
Spot on.