cawacko
Well-known member
So again, by your definition, the Obama years were bad because the Fed kept rates at basically zero from 2009 through 2015.
Fed Day
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Technically from 2008... You know before Obama was President. Check for yourself, it dropped to the low on December 16th, 2008.
The Great Recession was closer to a complete collapse than most people realize. We nearly fell into a liquidity trap, and needed not just low interest rates, but even quantitative easing to avoid deflation.
Deflation is not a problem now, but trump wants quantitive easing to gin up the economy. It causes inflation, which is a good thing to fight deflation, but again, no deflation.
cawacko
Well-known member
In the real world, timing and a lot of factors play a role, which is why I don’t define the economy by where rates are. But going off your definition, Obama’s presidency had near-zero rates for seven years. By that measure the economy was bad that whole time.
Having to keep interest rates low is never a good sign. No one is denying that there were major problems with the economy when Obama came to office. It is called the Great Recession for a reason, and that is because it is comparable to the beginning of the Great Depression. Luckily, better leadership avoided a Great Recession outcome.
It was a different set of problems than the current set of problems. We are back to the drought/flood analogy. When there is a drought, we turn on the spigot, and hope for enough water. When there is a flood, the spigot needs to be kept off.
Obama was handed an economy in a drought, which desperately needed the spigot turned on. trump has an economy in flood, that desperately needs the spigot turned off.
Gaming fed policy instead of working on making the actual economy better eventually runs out of road......this is where we are.
cawacko
Well-known member
I’ve noticed you’ve moved off your own definition, and you still haven’t addressed why the Fed dropped rates 100 bps at the end of Biden’s term if that means the economy was bad.
You were trying to put a partisan spin on rate moves, and now you’re adding nuance only when the definition works against your 'side'.
Odd, we agree. If trump was not such a failure, the Fed could concentrate on lowering inflation the last little bit to get it to target of 2%.
It was 50 basis points, and I disagree with that move. The Fed needs to concentrate on getting inflation to 2%.
The Fed needs to stay independent, and basically nonpartisan. It needs to concentrate on inflation. If inflation was under control, then it would be right to try to help the economy in the short term. If we get inflation under control right now, we will have decades of having the Fed help the economy in the short term.
cawacko
Well-known member
That was my point. Now you are saying it is about inflation targets, not ‘rate cuts = bad economy.’ That is why I called it partisan spin earlier. Rates change for many reasons, so trying to link them directly to a president is misleading.
And they cut 100bps at the end of 2024. 50bps in Sept and 25 each in November and December. Not to belabor the point but based on your previous definition it was a bad economy.
Having to cut rates to fight deflation is a far worse reason than having to cut rates to fight a recession. That means that doing it to fight deflation, like during the Great Recession is a far worse sign for the economy.
You are right. 50 basis points were done when it was too late to do anything for Biden, and 50 more were done when it was definite that it would only help trump.
Anyway, it is clear I was right at the time when I said it was too early to return to a neutral interest rate. Inflation was not vanquished.
cawacko
Well-known member
I notice how you have now dropped your original ‘low rates = bad economy’ definition altogether. You are on firmer ground arguing about inflation targets, but that is exactly my point. Rate moves reflect many factors, not just a partisan story about one president or another.
Well, you are more optimistic than I, which I suppose explains your resistance to accepting the realities of “college” sports
We have all seen what Trump has done to the SCOTUS, even now they are setting all kinds of records with honoring requested emergency filings and issuing decisions with no explanations, I can see the Fed going the exact same route
cawacko
Well-known member
The SCOTUS and the Fed aren’t the same thing. With the Court it’s clear that Republicans want to nominate more conservative justices and Democrats want to nominate more liberal ones.
The Fed doesn’t work that way. Doves and hawks don’t break down neatly along partisan lines, so there isn’t a simple ‘Republicans run the Fed this way, Democrats run it that way’ divide.
As I said, you are more positive than I, I’ve just seen this Administration tear down one institution after another, targeting specifically those that don’t bend the knee, so I wouldn’t say the Fed won’t be next
The US went bankrupt--again--in 2008 and has not recovered. I've been providing you with receipts for years. The fed has to disband before the West is buoyant.
Bankruptcy is when an entity cannot service its outstanding debt. All of America's debt is in US Dollars which are produced by the US Government. That means that the US Government can always service its outstanding debt. It may not chose to, but that is debt fraud, not bankruptcy.
Is "buoyant" the word you want to use there? I am not sure what word you wanted to use instead of buoyant.
The US Government is nowhere near bankrupt. There might be a technical bankruptcy, but that would not be a true bankruptcy, and has not happened yet.
There are other horrible things that could happen, like hyperinflation. None of these horrible things have happened. In fact, just the reverse, things have been very good. But there are non-bankruptcy dangers out there.
So far, the independent Fed has done a great job of navigating the threats. I doubt trump will do a better job, if he is able to capture the powers of the Fed.
In 2008 the US was in the market of soybeans and corn. That's gone now so there's no market to bailout. The privately owned fed banks have hollowed out this country. This will be a good test for the Bank of North Dakota. It's the only state-owned bank in the US.
In 2025, the US is still in the markets of soybeans and corn. I see no end to the US being in that market for the foreseeable future.
trump got China to promise to buy soybeans from us, and then they did not buy them... But of course trump had forgotten the promise by then and moved on.
No, it is not. There was no bailout of the soybean market in 2008. Are you thinking of the mortgage market? That is a different market than soybeans... VERY DIFFERENT.
Interesting you turn to socialism... Government ownership of production.
From the AI web so it only tells part of the story.
John Deere has experienced declining sales in 2025 due to factors including high interest rates, depressed commodity prices, trade uncertainty from tariffs, and a shift towards the used equipment market by farmers. The company has responded to these challenges by strategically reducing production to lower inventory levels and has implemented layoffs at several facilities.
You started out by claiming:
Now you are saying that there is a decline in tractor sales in 2025... Which actually is true, but does not prove that soybean production ended 17 years earlier.