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There is something I really like in this Ygeslias article. Whatever is causing more partisan politics it’s not the economy. We’ve done well the past few years.
https://www.slowboring.com/p/how-obama-and-trump-and-biden-beat
Macroeconomic management has been actually really good the last 15 years. Someone can argue we could have had a few million more people employed between 2010-1016, but that’s like 2% of gdp. Trump did close that gap and I’m not sure if he was brilliant or lucky but he yelled at the Fed for being too hawkish.
I like how he led with the shale Revolution. I’ve been saying this for years. Tech gets all the fan fare but if Tech was the Jordan of the economy American energy independence over this time frame was the Scottie Pippen in creating wealth for America. I think part of the reason it doesn’t get the fanfare is because it doesn’t create 12 figure networth people. Its a constant costs business versus moat building business. Of course if the businesses are not as profitable then the surplus value went to consumers in the form of lower energy costs versus companies having high margins. Also likely led to America not needing to write giant checks to the Saudis which meant our trade deficit could fund other things and those depend more on price leading to the strong dollar. People working in constant-costs businesses (farming, manufacturing, energy) tend to vote red; people working in wide moat with ability to extract economic rents or winner take all markets tend to vote blue. Someday I should write a long article on this because I have not seen anyone write about it. But the split in voting patterns makes a lot of sense based on the economics of their business. It would even make sense to have different tax regimes for these businesses but would be impossibly hard to execute. As a driver of political views it seems as powerful as male-female splits which seems a lot more talked about.
I think maga and the left like to cite American wealth not making it to the middle class etc. But honestly this much wealth creation can’t just be consumed by the 1% it pretty much has to flow to others. Perhaps, the middle class isn’t doing as well as we want them to be doing but the counter factual (Europe) would be poorer than what we got.
The GDP numbers are more pronounced because we calculate things in currencies and the cited figures were when the dollar was weak. The gap has definitely shifted in favor of the US but I do think this overstates the change.
The Tea Party seems underrated to me. They put a halt to more government spending. Less fiscal policy meant the fed could keep rates lower which basically crowded-in private investment in tech and shale and a host of things with cheap money. The current situation is the opposite of this where we increased federal spending from about 20.5% last decade to 24% now. And that’s caused a massive change in rates to get inflation close to target.
Culture Wars seem to have little to do with economic mismanagement by either side. I think the right is correct that the fall of small towns is bad but I think that largely came from economic forces (like productivity) gains that couldn’t be prevented. And there small towns have also been hurt by the people (probably like myself) who would be logical local elites moving away.
As much as national divorce or something always sound appealing it’s just going to make us all poorer. To break up economic integration would make our economy much more like Europe. We would run into something like Brussels that is ineffective at macro management and lose the economy of scale.
Worth noting that whether or not you think Europe has fallen behind largely depends if you accept nominal or PPP as the basis for your GDP accounting. By PPP, Europe and the US are largely neck-and-neck.
https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locations=EU-US
There are also other, non-economic metrics, that determine quality of life such as far lower crime/homelessness/drug epidemics and more vacation days. That's why we don't see a surge of European migrants to the US. QoL is largely similar between the two countries, but Americans prize money and work whereas Europeans prefer leisure.
The US is above most of Europe in median disposable income by PPP, which seems like a far better measure than GDP if you're talking PPP figures.
True, but that measurement still doesn't adjust for working hours. Americans work far longer hours than e.g. Germans, Danes, Dutch etc. Once you adjust for both PPP and working hours, the distance between Germanic Europe and America isn't nearly as radical as is often claimed. Also worth noting that Europeans are taxed at higher rates, hence lower disposable income but this means higher education is largely free from out of pocket expenses, healthcare far cheaper etc. It can be debated whether this is ultimately a better social choice, but certainly by some outcomes (e.g. life expectancy) it isn't clear that the US has the better system.
It's different for Southern Europe (stagnation for 20+ years) and EU Eastern Europe (spent half a century behind imposed communism).
So now we're onto "Americans are richer because they work harder"? But... it appears Germans work about 34.6 hours per week compared to Americans 38.7. According to the tables linked, Americans made $46,600 to Germans $32,100. If the Germans worked as much as Americans and were paid accordingly, they'd be up to $35,900. So it doesn't look like working hours are going to help much. For the household numbers in those tables, in-kind social benefits are accounted for.
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Yeah, that's kind of a standard narrative from the left (not just the far left) and has been for a long time. Balance of immigration says otherwise. Sometimes you'll hear the same sort of thing from (well-off) immigrants in the tech field, so far I haven't been quite rude enough to say "Well, then why are you here?" directly.
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