Economics

Who has more effect on economics (you or the President)? How does the world fit in?
James E. White
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Economics

Unread post by James E. White »

You, you, you, and you are much more responsible for the US economy than any President can be. Get over it. It's 330 million vs. 1, you win. If you are not spending money (within reason) other people are not profiting from your tight fists. If you're worth more at work and aren't agitating for a pay raise (or seeking more gainful employment elsewhere) then how you fare vs. others is heavily tied to you, you, you, and you, not the President.

Granted, the balance of power at work is not always such that you can either complain and get a raise or leave a current job. I know. My last employer grants some (reasonable but not overwhelming) benefits to employees that retire after working for them for 15 years and 25 years. It is always a choice as to whether, at say 12 years or 20 years, to abandon the time invested in those extra retirement benefits and get employment elsewhere. My choice was to complete at least the 15 years and I knew what salary I needed to induce me to abandon ship. I never got an offer at that level but that doesn't mean I wasn't making the effort to send out resume's and ask around.

Also granted that a President can have, mostly through (sometimes false) reassurances because that's what you, you, you, and you want to hear, some economic success. But the lengths of such effects are still dependent on you. And there is the Federal Reserve Board (Fed) made up of fallible humans that are intentionally as isolated as practical from daily "politics" but no matter what they do it is still you, you, you, and you that govern the lag time between their changes and the economy. Correction swings that don't asymptoticly hit 0 are a natural phenomenon just as are the swooping murmurations of starlings (and equivalents of other creatures). Without the Fed though the swings would be much wilder and more frequent as they were before the Fed. Why, because banks and business would drive interest rates from wildly aggressive to once-burned overly cautious as new bank and business leadership changed.

Short story: In a college class on statistics, I don't remember what year, each student had to take some (economic?) phenomenon, plug the data for it and several possible causal or related events and see how they tracked together. Because I worked at the University of Illinois Library Photographic Services I could readily get photocopy count data for some 10 or 20 years. Getting government statistical spending data for the general budget, National Science Foundation (NSF), and some others was readily available in published sources. Plugging in all the data and looking at the curves it was spectacularly obvious that photocopy counts lagged and tracked NSF funding levels by a consistent 18 months.

That same kind of lag time undoubtedly applies to YOUR behavior. Did you spend the COVID-19 "stimulus" money the instant you got it? Sure, some people had to, but most didn't. We could afford to wait until the main force of the pandemic was abating then resume more normal shopping/spending habits. That (and COVID-19 caused supply chain shortages) spectacularly pushed inflation to 9% in the Presidential administration after the government's stimulus largess.
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