We can no longer deny how dysfunctional the US economy truly is.

[Yavin4]

Progressives know full well how completely dysfunctional the US economy has become in the past 40 years. Our economy is more like a developing world's economy than it is to a developed economy. The thing is, we have enough wealth and just enough of a functioning economy to hide our flaws.

The fault for this lies squarely on Republicans. When in power, Republicans run up massive deficits/debts and leave the economy in recessions or near depressions. Both Clinton and Obama had to expend a lot of political capital just to right the ship, and once the ship is in place. Poof! All political capital is lost, and they're facing a do-nothing congress.

The fact that the stock market is doing well and has nearly recovered all of its losses while the rest of the economy is heading into a depression is more evidence of the dysfunction. Everyone is going to say, "well, the markets are forward looking", but "forward looking to what"? The global economy has not been this unsettled since WWII. If we get another spike, we may have yet another lockdown.

No, the markets are reflection of interest rates, not some "forward looking" bullshit. The Fed will pump money into banks which will ensure that the markets remain high through lowering the cost of borrowing by their largest customers. IOW, the wealthy and big corporate America can borrow money at little or no cost if needed.

[guillaumeb]

1. The genius of the GOP idea people is making people think that they are doing well,

even as most workers are, at best, keeping slightly ahead of their bills.

[unblock]

2. ehhhhh, sort of.

it's certainly true that in general, interest rates have a powerful effect on stock prices.

however, the expression economists use in describing lowering interest rates in the circumstances like the present crisis is "pushing on a string". it's hard to stimulate the economy with lower borrowing costs when no one wants to borrow, and no one has any good use for borrowed money.

very few businesses are expanding under the circumstances, so there's little borrowing for that. there's some refinancing activity going on, so yes, borrowing helps for that, but that only works for companies that borrowed at higher interest rates and have solid enough credit today that they'll weather the storm and be able to pay at lower interest rates. rates are down, but spreads have widened due to increased credit risk, so it's not a huge gain for most companies. in fact, overall borrowing costs are worse for most companies at the moment.

but a bit of refinancing doesn't hugely affect a big company's stock price.


what matters most at the moment, is the assessment of how long the economy will be slowed down by covid-19 and the defensive measures. if there were to be a real vaccine announced tomorrow (fantasy, i know), the market would boom by thousands of points. but if there were clear guidance that the economy would be hindered through at least the end of 2021, then the market would tank by a similar amount.

most of the usual considerations are small relative to this assessment as it has a huge impact on corporate profitability. of course, how much more money governments will pour into the economy also matters.

[Yavin4]

14. The low interest rates are not about stimulating the economy or business expansion

The low rates represent a wealth transfer from savers to investors. People who save their money are getting nothing in return. Meanwhile, large corporations and banks have almost unlimited, interest-free money at their disposal to do whatever they want to with it.

[concreteblue]

3. Fault?

"The fault for this lies squarely on Republicans"
NO.
Republicans have done what Republicans do. Anyone who expected anything else has, at best, not been paying attention.
Democrats, elected ones at least, know this. Democrats have failed to limit the ability of the Republicans to do what they do.
And that is ONLY the fault of Democrats.

[TexasTowelie]

5. I think I need to wash the socks.

[ZZenith]

7. Take out the trash while you're at it, wouldja?

[TexasTowelie]

10. You seriously want me to multiturd?

Oops, I meant multitask.

[ZZenith]

11. Ha!

You do enough around here - put your feet up a spell.

[Bernardo de La Paz]

13. Democrats impeached tRump. Republicans nominated, voted, enabled & protected him. Get it straight.nt

[Hortensis]

6. That's like saying a ship whose crew refuses to

steer it is not seaworthy. It’s not the ship. If you want to look for someone to blame, blame every single person who contributed to electing the Republicans.

And leaders who insisted the Democrats were no alternative to Republicans are really bad also, in character and judgment less unfit for office only in comparison with Republican leaders.

So don’t for a moment imagine it would be better if some dissident group somehow pulled their own massive left-wing stupid and put them in charge.

To have good government we have to elect good people, not ruthless incompetents who will say anything to get power. Or as a default”victory” try to keep Democrats from getting it.

[spanone]

8. The Dow is down over 5,000 points from it's high just months ago....it has not 'nearly recovered all

it's losses'

[Victor_c3]

9. I agree

However, my take on the stock market is that it hasn’t sunk much because traders are overly hopeful that this crisis will resolve quickly and that everything will return to back to the way it was just as quickly as the crisis started.

With the Great Depression, there was the big crash and then the slow downward march of the stock market. It wasn’t until about three years after the crash that the stock market hit bottom.

Give it some time, there hasn’t been much in the way of corporate bankruptcies yet.

[ooky]

12. They have done it with lies about their record, our record, and lies about wedge issues

that distract from their policy positions. Policy that no one would vote for unless they were afraid of something untrue, for example, having their guns taken away and being enslaved by socialists trying to change their way of life.

The genius is in how they have used fear to make so many actually believe these things are a threat to them and cause them to vote against their self interests and behave like sheep. It's pretty incredible that when the masses are falling further and further in the hole that the 'Thugs have managed to remain in power.

[ProfessorGAC]

15. No Argument, But...

...the markets have not regained the losses. Dow is still down 5,100 from high, and went down a bit today.
Based upon profit growth curves, consumption increases and the like, the market was overvalued by 17-20%.
It appears that the initial plunge was a combination of panic & an overdue correction.
But, assuming this range is where it really belongs, the year over year growth is lower, substantially, than the last 5 years of BHO.
So much winning!