Perhaps, one measure of a President can be seen in the way he leaves his nation’s economic health to his successor.
If so, let’s use this article from the Financial Times to gauge where Donald and the US will be in four, or gods forbid, eight years. Oh, the writ also brings up some important points about financialization.
The Times writes: “An analysis of economic metrics paints a picture of an economy finding solid footing after the financial crisis. Unemployment stands at a nine-year low, the S&P 500 continues to break records, and home sales hit their highest rate since 2007,” (there are some spiffy charts in the article to check out, don’t miss them).
Unemployment numbers are slippery fish and must be taken with a shot of soy sauce, but the overall downward trend of unemployment is commendable and encouraging, especially considering where we were eight years ago. The stock market is an even more dodgy animal than unemployment and should always be considered with a shot of whiskey or gin, but there’s no doubt that Wall Street has flourished under Obama’s tenure, and in the end, it’s health does translate to a sense of economic security, both individually and nationally. (Incidentally, one of the red flags the incoming president has illicited is his ability to drastically move the market with just a tweet – will the market tire from his shenanigans and learn not to react? or will it continue to swing in concert with Donald’s unhinged short sentences? This particular dynamic and relationship will be important to watch.) As for housing sales, this is good news; it means people are able to get credit again, prices are more affordable, and interest rates are healthier. Excellent.
It’s also good news, as the article points out, that inflation is holding at a fair rate and this motivates the ever mysterious ‘fed’ to raise interest rates. Inflation driven economics is an interesting notion -as opposed to employment driven economics (See G. Epstein’s paper, Financialization, Rentier Interests, and Central Bank Policy). The jury is out as to whether an inflation-policy vs. full-employment policy is better, but Epstein does recognize the convenience of an inflation drive policy for our oligarchy, “…inflation targeting and central bank independence makes the central bank less accountable to the government, and more accountable to financial markets and those who operate them.” It will be important, on the financialization front, to look for the long term affects of inflation driven economic policy. Stay tuned.
There’s a discussion about our national debt in the Times piece. Unsurprisingly – we have had to pay for two wars – our debt level is at the highest its ever been (High consumer and government debt are both symptomatic of the financialization of our economy, by the way.) A Donald presidency will only increase that, the Times says. It’s not rocket science to figure out that, eventually, this debt will become the elephant in the living room.
To finish up, the Times highlights some of the problems Donald will have, despite inheriting a fairly decent economy. “Growth has stagnated in both the developed world and in emerging markets. Manufacturing employment, of course, remains much lower today than it was four decades ago.” Stagnate economic growth is a harbinger of financialization. The reason ‘manufacturing employment’ is low is because corporations focus more on stocks and shares as profit margins instead of products and services. Growth is therefore encouraged at the market level, not at the productivity level, stagnation is a direct result of that.
President Obama has been productive when it comes to reinvigorating an economy mired in one of the two worst financial debacles to strangle this country. He’s left a fairly decent inheritance for any incoming person. Now, let’s see what ‘that person’ will do with such a gift. Serious thanks to President Obama, now, it’s your turn Donald.