Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Rip the Face Off the Bears Rally! - 22nd Dec 24
STOP LOSSES - 22nd Dec 24
Fed Tests Gold Price Upleg - 22nd Dec 24
Stock Market Sentiment Speaks: Why Do We Rely On News - 22nd Dec 24
Never Buy an IPO - 22nd Dec 24
THEY DON'T RING THE BELL AT THE CRPTO MARKET TOP! - 20th Dec 24
CEREBUS IPO NVIDIA KILLER? - 18th Dec 24
Nvidia Stock 5X to 30X - 18th Dec 24
LRCX Stock Split - 18th Dec 24
Stock Market Expected Trend Forecast - 18th Dec 24
Silver’s Evolving Market: Bright Prospects and Lingering Challenges - 18th Dec 24
Extreme Levels of Work-for-Gold Ratio - 18th Dec 24
Tesla $460, Bitcoin $107k, S&P 6080 - The Pump Continues! - 16th Dec 24
Stock Market Risk to the Upside! S&P 7000 Forecast 2025 - 15th Dec 24
Stock Market 2025 Mid Decade Year - 15th Dec 24
Sheffield Christmas Market 2024 Is a Building Site - 15th Dec 24
Got Copper or Gold Miners? Watch Out - 15th Dec 24
Republican vs Democrat Presidents and the Stock Market - 13th Dec 24
Stock Market Up 8 Out of First 9 months - 13th Dec 24
What Does a Strong Sept Mean for the Stock Market? - 13th Dec 24
Is Trump the Most Pro-Stock Market President Ever? - 13th Dec 24
Interest Rates, Unemployment and the SPX - 13th Dec 24
Fed Balance Sheet Continues To Decline - 13th Dec 24
Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks Above $100k - 8th Dec 24
Gold Price Multiple Confirmations - Are You Ready? - 8th Dec 24
Gold Price Monster Upleg Lives - 8th Dec 24
Stock & Crypto Markets Going into December 2024 - 2nd Dec 24
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Presidents Can’t Fix the US Economy

ElectionOracle / US Presidential Election 2016 Oct 24, 2016 - 03:41 PM GMT

By: John_Mauldin

ElectionOracle

BY PATRICK WATSON : Ever wish you could time-travel back to an earlier, simpler era? Many folks do. We differ only in how far back we want to go.

This year’s intense presidential campaign only adds to our nostalgia.

Hillary Clinton supporters long for the 1990s… when Bill was president and the economy was booming. Many Donald Trump voters have an earlier destination in mind… maybe the 1950s, when we had few foreign military entanglements and American industry led the world.


I have bad news for both groups: Those good times aren't coming back.

Post-WWII conditions were ideal for growth

The economic surge that led up to the 1990s was a result of demographic and technological developments we can’t easily repeat.

The US economy boomed after World War II because entire nations had just been flattened. Someone had to rebuild them. The US, having won the war largely undamaged, had capacity to spare.

Our good times continued into the 1960s and 1970s as the Baby Boom generation added millions of talented, educated workers to the labor force. Large numbers of women also began working outside the home, enabling further growth.

Then in the 1980s and 1990s, one invention—the microchip—unlocked technological change that enhanced productivity and connected everyone through the Internet.

Did government policies contribute? Sure. Tax cuts and deregulation helped, but they weren’t the key. Forces far more powerful than politics were the real drivers. That’s why political change now can’t bring back those good times.

The demographic shift is a big problem

As economist Samuel Rines recently said on the Mauldin Economics site, “The good ole days were frankly a nearly perfect storm of economic benefits colliding at once.” The Wall Street Journal ran a similar story, “Why the Economy Doesn’t Roar Anymore.”

Why can’t it happen again?

For one, we won’t have another baby boom unless the Millennials get much busier than they have been so far. And even then, it would be decades before their offspring could make a difference.

It’s possible we will see technological breakthroughs that enhance productivity. But up to this point, technology has done the opposite by reducing aggregate productivity and replacing human workers.

Rines says these headwinds will subside eventually, but it could take a long time. Meanwhile, we may be stuck in a seemingly endless slow-speed zone.

Fed Policy has hurt the average American

Central bank policy certainly hasn’t helped. Their asset purchases and low/negative interest rates served mainly to drive up asset prices… to the benefit of asset owners instead of workers.

Economically, whether the next president is Trump or Clinton matters much less than most of us think. The White House can't override economic reality no matter who sits in the Oval Office. At best, presidents can slow down or speed up trends that are already in motion.

Could we get another perfect storm? We should all hope for one. Without it, we'll stay stuck in traffic, going nowhere fast.

Become the Best-Informed Investor You Know

The world is more interconnected than ever before. Only those investors who understand how current world events are linked can prepare for what’s going to happen. Sign up for Mauldin Economics’ free weekly newsletters for a bird’s-eye view of macroeconomic reality.

John Mauldin Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in