U.S. economy grows at blockbuster 4.9% pace in third quarter

[Ana the Ist]

It wasn't though. Personal consumption was the largest driver of economic growth for 3Q2023. Corporate growth was responsible less than 1/2 of the contribution to growth played by consumption and investment by individuals.

Consumption and investment...

So corporations are reaping high profits (hope you aren't questioning that)....

Let's see if we can find out if wages are up...

And a quick check reveals (numbers I rely on anyway)...

Wages outpaced inflation by 1.5% (as of August at least).

Alright. If wages are up and inflation is down, I'll concede that's more growth on the bottom end than I expected, and certainly not all corporate profit.

 

[The Barbarian]

The latter two are quite concerning, as it could indicate businesses are buttoning down and reducing spending in expectation of worse economic conditions ahead. Equally concerning is the fact that disposable personal income slowed in the quarter to 1.9% (albeit after five quarters of rapid growth). That might strangle personal consumption growth in the next few quarters, which could be very bad for economic growth.

Apparently, republicans are increasingly concerned about falling prices and rising GDP.

 

[Pommer]

Apparently, republicans are increasingly concerned about falling prices and rising GDP.

It’s hard to convince people that things are tough-all-over because of Biden and the Democrats if things are going “good”, so yes that’s “bad” for the GOP’s “message”.

 

[ThatRobGuy]

That's what you did. Would you like me to show you, again?

Me saying "Even if we pretend the methodology is perfect" isn't a me setting a standard, it's a way of simplifying the math with the numbers given.

New Zealand, with very strict controls in place, saw unemployment peak at 5.3%. The United States, with Trump "downplaying" the danger, and with much fewer controls had a peak unemployment of 13,3%. Which pretty much debunks the economic damage story.

New Zealand's 4% unemployment rate masks a deeper Covid hit to the labour market | Brad Olsen

Hundreds of thousands want more work, and the drop in hours worked – largely as a result of coronavirus – is the biggest in 30 years

www.theguardian.com

It should be noted that New Zealand masked what the real unemployment rate would have been without wage subsidies.

You could save billions by taking cops off traffic duty, too. You'd save more money than the costs of dealing with the subsequent rise in traffic deaths. Should we do that as well, since it's a "pragmatic reality?"

No because that would have wider impacts on several facets of society.

That would be the opposite of pragmatism.

If you had actually read it, you'd have learned that it wasn't even 3-4 times the cost of deaths during the pandemic. But the economic consequences of the loss of life goes on indefinitely while temporary measures don't. Think.

I did read it... And quoted the parts of their methodology that I found concerning as well as the factors they were not taking into consideration. Just because someone is challenging you on your assertions doesn't mean they didn't read your link.

And the second part of your statement is just an out and out falsehood. No, The economic consequences of the loss of life does not go on indefinitely. If that were true, we'd still be having negative economic impacts from the people who died a few years prematurely back in 1940.

Here's the more complete version of the study behind the article you linked

Assessing the impact of one million COVID-19 deaths in America: economic and life expectancy losses - PMC

Between February 2020 and May 2022, one million Americans have died of COVID-19. To determine the contribution of those deaths to all-cause mortality in terms of life expectancy reductions and the resulting economic welfare losses, we calculated ...

www.ncbi.nlm.nih.gov

And if you re review the source material behind the article you linked, you'll see that they weren't referring to it as being an indefinite thing either. They were referencing forecasting from the CBO

An Update to the Economic Outlook: 2020 to 2030

Notes Notes Unless this report indicates otherwise, all years referred to are calendar years. Numbers in the text and tables may not add up to totals because of rounding. Supplemental data are posted on the Congressional Budget Office’s website (www.cbo.gov/publication/56442).

www.cbo.gov

...which estimates that the output losses should taper off and be back to near baseline by 2030.

 

[Pommer]

It should be noted that New Zealand masked what the real unemployment rate would have been without wage subsidies.

Why?
Their government decided to spend to prop up their economy…but their economy was propped up.
What did our government do federally? $3K?
Yawn.

 

[ThatRobGuy]

Why?
Their government decided to spend to prop up their economy…but their economy was propped up.
What did our government do federally? $3K?
Yawn.

Any unsustainable model can be temporarily propped up if you're willing to borrow enough money without a plan to be able to pay it back.

But that aside, if them artificially borrowing a bunch of money to pay to companies to keep people on their payrolls, just so they can say they're "employed"... Then it should come with an asterisk anytime someone tries to compare their unemployment rate to that of another country in an attempt to prove a point.

That would be no different than if I were a business owner, went into large amounts of debt to give out raises to everyone that I really couldn't afford, and then said "My company gave out more raises this year than my competitor, that means my business model must be better".

 

[Pommer]

Any unsustainable model can be temporarily propped up if you're willing to borrow enough money without a plan to be able to pay it back.

But that aside, if them artificially borrowing a bunch of money to pay to companies to keep people on their payrolls, just so they can say they're "employed"... Then it should come with an asterisk anytime someone tries to compare their unemployment rate to that of another country in an attempt to prove a point.

That would be no different than if I were a business owner, went into large amounts of debt to give out raises to everyone that I really couldn't afford, and then said "My company gave out more raises this year than my competitor, that means my business model must be better".

Okay, but was New Zealand’s economy drastically affected by the pandemic?
Were there lingering effects from this proactive policy?

 

[The Barbarian]

It should be noted that New Zealand masked what the real unemployment rate would have been without wage subsidies.

No, they just managed the consequences better than we did. There were huge subsidies given to employers in this country, but scammers like the Trumps abused the system. Would you like me to show you that, again?

The New Zealand economy is doing much better than Trump managed, although things are now getting better for the obvious reasons.

 

[The Barbarian]

You could save billions by taking cops off traffic duty, too. You'd save more money than the costs of dealing with the subsequent rise in traffic deaths. Should we do that as well, since it's a "pragmatic reality?"

No because that would have wider impacts on several facets of society.

That is, it might affect you. You were fine with saving money at the cost of lives, if it wouldn't endanger your life.

That might be called "pragmatism." But most people would call it, narcissism.

 

[ThatRobGuy]

That is, it might affect you. You were fine with saving money at the cost of lives, if it wouldn't endanger your life.

That might be called "pragmatism." But most people would call it, narcissism.

That's not it at all...

Removal of police would disrupt a lot of different things for wide swaths of people and economy factors alike.

Narcissism would be, for example, suggesting that everyone in the city has to quit their jobs, and refrain from sending their kids to school in order to save my life...which I wouldn't do.

 

[ThatRobGuy]

Okay, but was New Zealand’s economy drastically affected by the pandemic?
Were there lingering effects from this proactive policy?

Yes, and they're still feeling some of those lingering effects now

https://www.elibrary.imf.org/view/journals/002/2023/309/article-A001-en.xml

New Zealand’s economy is now in a recession after a strong post-pandemic recovery. Compared to most other advanced economies, New Zealand recovered from the pandemic faster, gaining 10 percent since the middle of 2020 aided by generous fiscal support, strong investment, and private consumption (Figure 1). But this came at the cost of significant overheating against capacity constraints exacerbated by restrictions on labor movement due to border closures and disruptions in global supply chains. Following significant policy tightening, the economy entered a technical recession, with real GDP declining by 0.1 percent q/q (SA) in 2023Q1, following a 0.7 percent decline in 2022Q4 GDP. High frequency indicators, such as retail sales, point to ongoing demand slowdown amid weaker sentiment. Wholesale activity is also subdued with manufacturing (PMI) and services (PSI) surveys weakening in recent months.


In addition, they had to implement one of their biggest rate-hikes in their history...

As well as having their currency lose value as well on the international stage

Bloomberg - Are you a robot?

It's all in what a country opts to prioritize.

Per the link to the USC study I posted earlier, with regards to how it played out in the US

USC Study: Mandatory business closures drove the economic decline during COVID-19 pandemic

A multidisciplinary team of USC researchers used a novel economic analysis to tally the $14 trillion cost of the COVID-19 pandemic to the U.S. economy.

priceschool.usc.edu

Business closures have had by far the greatest impact. During the first six months of the pandemic beginning in early 2020, for example, business closures accounted for a 26.3% decline in U.S. GDP, compared to a 12.2% decline through work avoidance.

Deaths and illnesses had the least effect because people who were no longer able to work were replaced by the large number of people who were unemployed by COVID.

So, in a purely economic sense, borrowing and subsidizing to stave off as as many deaths and illnesses as possible provides the "least bang for the buck" so to speak. And to reiterate, that's just in an economic sense... I'm not suggesting we do nothing and/or put no value on the "years of life lost" metric. I do think it's appropriate to make lives part of the conversation provided the juice is worth the squeeze.

For instance, if the dynamic was "We need to borrow $X Trillion, and completely upend the economy to save 100 lives"...obviously the answer would be no, that would wouldn't be practical. If the dynamic was "we need to do this thing that will cost everyone an extra $2 and make a few temporary closures, but it'll save 250,000 lives, then yes, that's a policy decision worth considering.

The key is deciding where the "line" is with regards to it making sense vs. not making sense in terms of practicality.

 

[Landon Caeli]

With money, any number can be inflated or deflated, by whatever multitude of bubbles are floating around.

Smoke and mirrors everywhere.

 

[Landon Caeli]

Obviously the economy has tanked ever since minimum wage got raised.

Burger flippers make $16.00 an hour in my state, as that's what minimum wage is. Now I just bought a fish sandwich and a mcdouble, with fries and a coke, and I payed $17.00.

Let's not pretend like raised wages hasn't caused inflation.

 

[Landon Caeli]

California and New York's economies don't exist in a vacuum. They effect the whole country.

 

[JustOneWay]

Yes indeed. The economy remains strong under President Biden, regardless of the naysayers smoke and mirrors defense to show it is really bad. If we only had a republican in charge so the naysayers can rally behind the truth and drop the smoke and mirrors shtick. I make burgers and fries at home better and cheaper than any fast food place can make.

 

[The Barbarian]

That is, it might affect you. You were fine with saving money at the cost of lives, if it wouldn't endanger your life.

That might be called "pragmatism." But most people would call it, narcissism.

That's not it at all...

Sure looks like it. As soon as I mention saving money on some thing you feel you need for yourself, you don't like it. But saving money by allowing the deaths of other people seems "pragmatic" to you. We all get it.

Narcissism would be, for example, suggesting that everyone in the city has to quit their jobs, and refrain from sending their kids to school in order to save my life...

Ah, gaslighting is also a sign of narcissim. Thanks for reminding us. You're so "pragmatic."

 

[The Barbarian]

Burger flippers make $16.00 an hour in my state, as that's what minimum wage is. Now I just bought a fish sandwich and a mcdouble, with fries and a coke, and I payed $17.00.

Roughly 18% of the cost of operating McDonalds is labor. Guess where the extra 82% goes.
McDonald's operating costs and expenses by type 2022 | Statista

Labor costs have actually declined as a percentage of total costs. What do you think that means?

Yep. They jacked up prices and blamed the cost of labor. And they figure they'll get away with it, because they think we're stupid.

 

[The Barbarian]

This graph came with no link or source...

Pretty sure I know why...

BTW, we are still learning about the economic costs of bungling the pandemic. From the Journal of the American Medical Association:
Because many prevalence estimates are based on convenience samples of members of COVID-19 support groups or people who had severe acute disease, the population prevalence of long COVID is not entirely known.3 British population data suggest that 22% to 38% of people with the infection will have at least 1 COVID-19 symptom 12 weeks after initial symptom onset, and 12% to 17% will have 3 or more symptoms.2

Rates this high translate to an enormous number of people with long COVID. The US Centers for Disease Control and Prevention estimates that as of May 5, 2022, the US has had roughly 81 million cases of COVID-19 and 994 187 COVID deaths. Even the lower-end estimate of 12% of people with 3 or more symptoms of long COVID implies that 9.6 million people in the US may have developed long COVID—roughly 10 times the number of COVID-19 deaths. It is not known how long people with long COVID will be symptomatic, but recovery in the first year of long COVID for affected individuals may be very slow.4

Reduced health is not the only consequence of long COVID. People with the condition work and earn less than they would have otherwise. One survey found that 44% of people with long COVID were out of the labor force and 51% worked fewer hours.5 In the economy as a whole, more than 1 million people may be out of the workforce at any given time because of long COVID.6

This reduction in labor supply is a direct earning loss. If 1 million people are out of the labor force because of long COVID, the lost income would be more than $50 billion annually. People out of the workforce because of long COVID disproportionately worked in service jobs, including health care, social care, and retail.7 The widely noted shortage of workers in these sectors is driving up both wages and prices. Part of the recent surge in inflation in the US may thus be related to long COVID.

The Costs of Long COVID

More than 6 million people have died from COVID-19 worldwide, including nearly 1 million in the US.1 But mortality is not the only adverse consequence of COVID-19. Many survivors suffer long-term impairment, officially termed postacute sequelae of SARS-CoV-2 infection and commonly called long COVID.

jamanetwork.com

Not quite 1% of the American workforce, out of work for the forseeable future. Decades from now, we'll still be paying for the way this pandemic was mishandled.

Long Covid Could Account For Up To 15% Of Unfilled Jobs

Is ‘long Covid’ worsening the labor shortage? | Brookings

Over the past two years, the media, politicians, public health authorities, and others have paid close attention to the number of lives lost to COVID-19: more than 800,000 Americans so far. Yet we hear much less about a second number: the Americans who have lost their health to COVID-19...

www.brookings.edu

Don't be so trusting. Check on this stuff before you believe stories about it.

 

[ThatRobGuy]

Sure looks like it. As soon as I mention saving money on some thing you feel you need for yourself, you don't like it. But saving money by allowing the deaths of other people seems "pragmatic" to you. We all get it.

Ah, gaslighting is also a sign of narcissim. Thanks for reminding us. You're so "pragmatic."

it seems like some projection happening here... Which position conveys a greater sense of narcissism?

A) A position of "lives are just one factor among many that need to be considered when making policy"
or
B) A position of "this metric that I deem to be the most important should be prioritized above all else, and if anyone disagrees with that, I'll keep implying that they're selfish and/or haven't read my sources, because it's important that everyone knows that my preferred political faction would've handled this better"

Nothing I've said is gaslighting. I've repeatedly acknowledged that there's pros-cons / benefit-risks tradeoffs that are part of policy making.

The gaslighting occurred when you jumped into the conversation with the assertion that the lives lost were a major contributor to the economic woes, the implication being that had we just had stricter measures, the economy would've been better off due to the lives saved. I responded by pointing out that while stronger measures would've saved more lives, the "value of lives lost" metric was a much smaller disruptor than the business closures & lockdowns themselves ($3.6 Trillion attributed to the projected loss of output from 2020-2030 is a smaller disruptor than $14 Trillion over 4 years), and then the conversation magically pivoted to "talking about the negative economic impacts with regards to covid restrictions is selfish and just valuing money over lives"


So, to clarify, is it only inappropriate to talk about the economic impacts of covid when the economic impacts are a net negative...but perfectly acceptable to discuss the economic impacts of covid so long it's being done strictly withing the context of myopically looking at only one metric that conveys a "more restrictions = better" sentiment?

 

[ThatRobGuy]

This graph came with no link or source...

Pretty sure I know why...

Don't be so trusting. Check on this stuff before you believe stories about it.

It came from the USC study I linked earlier (assuming perhaps you didn't get around to opening it?)...

USC Study: Mandatory business closures drove the economic decline during COVID-19 pandemic

A multidisciplinary team of USC researchers used a novel economic analysis to tally the $14 trillion cost of the COVID-19 pandemic to the U.S. economy.

priceschool.usc.edu

It was funded the US Department of Homeland Security, and was carried out by:
a multidisciplinary team of USC researchers from the USC Price School, USC Dornsife, the Leonard D. Schaeffer Center for Health Policy & Economics, and CREATE. In addition to Rose and John, study authors include Terrie Walmsley, Dan Wei, Jakub P. Hlávka, Juan Machado and Katie Byrd.


So, which entity is it that we shouldn't be trusting?
The US Department of Homeland Security Grant Committee under the Biden administration?
The USC Price School (Ranked #4 in the nation among Public Affairs schools)?
Leonard D. Schaeffer Center for Health Policy & Economics, ranked in the top 10 US schools for Health Policy?
Or the policy researchers who were involved, like Terrie Walmsley and Jakub Hlavka?

Terrie L. Walmsley is an Associate Professor at Purdue University and a Principal Fellow, Associate Professor at the University of Melbourne, Australia. Dr Walmsley is also the Director of the Center for Global Trade Analysis, the Purdue home of the Global Trade Analysis Project, a global network of 8,500 researchers from 150 countries (www.gtap.org). Dr Walmsley leads the construction of the GTAP Data Base, a global database used worldwide for examining the impact of international trade and environmental policies. Dr Walmsley's research has focused on international trade in goods and services and the movement of capital and labor across national boundaries, which has been used extensively by the World Bank.

Jakub Hlávka, PhD - USC Schaeffer

Jakub Hlávka, PhD, is a scholar at the USC Schaeffer Institute. He is also a research assistant professor in the Health Policy and Management Department

healthpolicy.usc.edu