David Brooks has an interesting discussion today about the resurgence in the US economy -- an American Renaissance. He also discusses Germany + Japan.
While I agree with his take, there are some stunning omissions.
nytimes.com/2021/06/17/opi…
While I agree with his take, there are some stunning omissions.
nytimes.com/2021/06/17/opi…
"West Germany and Japan endured widespread devastation during World War II, yet in the years after the war both countries experienced miraculous economic growth"
US shipped 1/6 of our food supply to Europe + Japan.
Can you discuss post-war era NOT discuss the MARSHALL PLAN?
US shipped 1/6 of our food supply to Europe + Japan.
Can you discuss post-war era NOT discuss the MARSHALL PLAN?
Foreign aid to Western Europe from the United States was $13 billion (or $114 billion in 2020 dollars)
Another $5.9 billion went to Asian countries, almost half of which went to Japan ($2.44 billion), South Korea ($894 million)
Another $5.9 billion went to Asian countries, almost half of which went to Japan ($2.44 billion), South Korea ($894 million)
But the biggest omission on @nytdavidbrooks discussion on the US economic revival is the CARES Act.
Guess how many times the $2.2 Trillion CARES Act I was discussed? or the $900B CARES II? Or the $1.9T III ?
Zero.
Guess how many times the $2.2 Trillion CARES Act I was discussed? or the $900B CARES II? Or the $1.9T III ?
Zero.
Over the course of a single year, the U.S. passed and spent over $5 trillion dollars. in monetary stimulus.
If you were discussing a recovery, wouldn't that be worth mentioning?
Apparently, the U.S. Renaissance happened like magic - a private sector miracle!
If you were discussing a recovery, wouldn't that be worth mentioning?
Apparently, the U.S. Renaissance happened like magic - a private sector miracle!
THis is not hindsight bias -- More than a year ago we were discussing why a recovery would require the US to GO BIG
https://twitter.com/ritholtz/status/1255816586914652160
$5T in a $20T economy certainly qualifies as going big -- although I would go even bigger with a massive infrastructure rebuild and a huge R&D investment.
The US is undergoing a terrific "Reset" post-pandemic. Lots of changes that were creeping along suddenly accelerated.
Welcome to 2025
ritholtz.com/2021/06/the-gr…
Welcome to 2025
ritholtz.com/2021/06/the-gr…
So while I agree with the conclusions Brooks reaches, it is astonishing, even shocking anyone can discuss this without referencing the utterly massive fiscal stimulus by the government.
You can get away with that when bloviating about general nonsense.
You CANNOT get away with that for very long when managing money / writing about investing. The feedback loop is too fast, the nonsense gets dispelled relatively quickly.
You CANNOT get away with that for very long when managing money / writing about investing. The feedback loop is too fast, the nonsense gets dispelled relatively quickly.
This is why I keep telling you that politics and investing does not mix.
Politics is all about appealing to emotions;
Investing is about keeping those emotions in check.
ritholtz.com/politics-inves…
Politics is all about appealing to emotions;
Investing is about keeping those emotions in check.
ritholtz.com/politics-inves…
I am a free markets private sector kind of guy, but I am also reality-based.
If you want to discuss the economic recovery, but leave out the impact of all that Fiscal Stimulus on top of >decade of extreme monetary stimulus, you are not being very intellectually honest
If you want to discuss the economic recovery, but leave out the impact of all that Fiscal Stimulus on top of >decade of extreme monetary stimulus, you are not being very intellectually honest
You can either embrace reality + deal with it
or ignore reality and play make-believe.
or ignore reality and play make-believe.
https://twitter.com/RayDalio/status/1349766055896481794
Ideologues have a belief system, and that is much more important to them than inconvenient truths and pesky facts.
When confronted with facts that challenge the belief system, they simply ignore them.
This is the basis of Cognitive Dissonance
When confronted with facts that challenge the belief system, they simply ignore them.
This is the basis of Cognitive Dissonance
The private sector (and front line workers) did a terrific job keeping people fed via brilliant deft pivots to delivery + logistics; they accelerated the end of the pandemic by creating a vaccine which has allowed life to begin to return to normal.
Discussing the economic recovery while omitting the government's role in it is very weird.
"Aside from that Mrs. Lincoln, how was the play?"
"Aside from that Mrs. Lincoln, how was the play?"
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