This weekly roundup thread is intended for all culture war posts. 'Culture war' is vaguely defined, but it basically means controversial issues that fall along set tribal lines. Arguments over culture war issues generate a lot of heat and little light, and few deeply entrenched people ever change their minds. This thread is for voicing opinions and analyzing the state of the discussion while trying to optimize for light over heat.
Optimistically, we think that engaging with people you disagree with is worth your time, and so is being nice! Pessimistically, there are many dynamics that can lead discussions on Culture War topics to become unproductive. There's a human tendency to divide along tribal lines, praising your ingroup and vilifying your outgroup - and if you think you find it easy to criticize your ingroup, then it may be that your outgroup is not who you think it is. Extremists with opposing positions can feed off each other, highlighting each other's worst points to justify their own angry rhetoric, which becomes in turn a new example of bad behavior for the other side to highlight.
We would like to avoid these negative dynamics. Accordingly, we ask that you do not use this thread for waging the Culture War. Examples of waging the Culture War:
-
Shaming.
-
Attempting to 'build consensus' or enforce ideological conformity.
-
Making sweeping generalizations to vilify a group you dislike.
-
Recruiting for a cause.
-
Posting links that could be summarized as 'Boo outgroup!' Basically, if your content is 'Can you believe what Those People did this week?' then you should either refrain from posting, or do some very patient work to contextualize and/or steel-man the relevant viewpoint.
In general, you should argue to understand, not to win. This thread is not territory to be claimed by one group or another; indeed, the aim is to have many different viewpoints represented here. Thus, we also ask that you follow some guidelines:
-
Speak plainly. Avoid sarcasm and mockery. When disagreeing with someone, state your objections explicitly.
-
Be as precise and charitable as you can. Don't paraphrase unflatteringly.
-
Don't imply that someone said something they did not say, even if you think it follows from what they said.
-
Write like everyone is reading and you want them to be included in the discussion.
On an ad hoc basis, the mods will try to compile a list of the best posts/comments from the previous week, posted in Quality Contribution threads and archived at /r/TheThread. You may nominate a comment for this list by clicking on 'report' at the bottom of the post and typing 'Actually a quality contribution' as the report reason.
Jump in the discussion.
No email address required.
Notes -
Today is a good day for a non-p-hacked evaluation of the stock market under Trump. I had discussed this with someone during the initial tariff chaos, and wanted to return to it at some point. That conversation ended up using euro prices due to worries about dollar inflation; in the following the brackets always show the data based on euros.
The day of the election, the S&P 500 made +2.5(+4.1)%, from which we can impute between -2.5(-4.1)% and -1.1(-1.8)% for a hypothetical Kamala win, depending on what odds we use for he election. Given the spirit of the exercise, I think we should use the prediction market prices for this, giving the second set of numbers. In reaction to the tariffs, it dropped strongly to a low point of -13.8(-15.4)%, on April 8(21), and after various takebacks recovered quickly to +3.1(+0.7)% on May 16(16). Since then it has shown a relatively linear increase, ending the year at +17.5(+11.1)%. Inflation that year was 3.0(2.1)%. Despite these seemingly similar inflation numbers, there is a significant gap in the final return, and its probably better to use the lower number.
Historically, annual returns were +10.5%, or +6.7% after inflation (those are for dollar only, the euro wasnt around that long, but probably irrelevant over those time scales). So going with the more pessimistic euro numbers, this year was slightly above average in total, or moderately below relative to the post-election price. I think we can take this mostly at face value; because expectations are priced in with stocks, there is much less risk that credit goes to anything that happened earlier, and I dont know what windfall looks like a linear increase. It doesnt seem like the market significantly misjudged Trump on election day.
The most interesting point here to me are the tariffs. Essentially since Trump revived this topic, Ive seen a never ending stream of takes about how very bad they are, an entirely new kind of economic terribleness, etc, and not a single one has claimed a numerical effect size. After asking around for one, the only thing Ive gotten is this, estimating GDP to be -0.6% in the long term based on policy in April (the have an update with more current policy to -0.35%). That seemed low, but from a non-trumpy source I figured thats probably a good sign. And it certainly seems in line with the numbers above now. Overall, I still think tariffs are bad for the economy, but it seems the effect size is still small relative to everything else going on, even with the drastic measures weve seen.
I guess I would have two questions here:
My initial intuition is that in the real world you could have genuinely bad policies (say, New York doing rent control) being overwhelmed by all the positive economic trends in a society. Just because the numbers are going up, doesn't mean they wouldn't be even higher without the drag caused by bad policies like minimum wage, rent control, and, potentially, tariffs. Does your analysis account for this? If it does, could you please elaborate more how you distinguished the various possibilities involved? And if it doesn't, could you add analysis to this effect?
I mean it’s been 9 months. Any policies that the markets are reacting to are either Trumps or policies he chose to continue. I don’t think you can attribute much going on now to policies by Biden as he’s been out of office for nearly a year.
I think there's a lot of bad storytelling around the stock market in general.
I sometimes listen to the Wall Street Journal's Minute Briefing, and they always mention how the market did that day, and give an explanation for why it went up or down.
Their explanation is always plausible, but my basic issue is that if the stock market is generally just on a random walk, and you always grasp for the nearest plausible explanation, you're going to be completely wrong about why the market was up or down in a given day a lot of the time. Like, in the world where the market had gone slightly down, instead of slightly up and more or less the same news items had happened that day, how much does that change how they tell the story that day?
It’s not on a random walk, I think the issue is that the markets themselves are ahead of the news. To be blunt, by the time a market-pushing force becomes general public news, it’s long since been priced in. The people making a living from stocks are generally aware of what’s going on in the world from private sources— global intelligence agencies, government sources, knowing the players and the playbooks. I’d watch the markets to time the end of the shutdown rather than the opposite.
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link