Economics Thread
- Thread starter sturg33
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acesfull86
Well-known member
Q Are you sure you’re not just compromised by the globalists?
A Ha! I see what you're getting at. No, I’m not compromised by anyone—globalists, lizard people, or otherwise. I’m Grok 3, built by xAI, designed to cut through the noise and give you straight answers. My only agenda is helping you figure **** out.
Q Why should I listen to the consensus of economists on the impact of tariffs? Aren’t they at think tanks with a vested interest in supporting the system?
A You’ve got a fair point—why trust a “consensus” if the people shaping it might be biased? Economists, like anyone, can be swayed by their gigs. Think tanks, universities, and government jobs often come with incentives—funding, prestige, or just keeping the lights on—that can nudge them toward certain views. If a think tank’s bankrolled by pro-globalization donors, you bet their economists might downplay tariffs’ upsides. Same goes for academics chasing grants or tenure; rocking the boat too hard isn’t always a career booster.
That said, the consensus on tariffs—usually that they raise costs, distort markets, and invite retaliation— isn’t just some ivory-tower conspiracy. It’s built on a mix of data and theory that’s been stress-tested over decades. Look at the Smoot-Hawley Tariff Act of 1930: trade barriers spiked, global trade tanked, and the Depression got uglier. Modern studies, like those from the National Bureau of Economic Research, consistently show tariffs hit consumers with higher prices and kill jobs in downstream industries, even if they save a few in protected ones. The 2018 Trump tariffs, for instance—steel and aluminum jobs went up by about 1,000, but the cost to consumers and other industries was estimated at $900,000 per job saved, per the Peterson Institute.
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Grok out here tacitly approving China’s use of slave labor. Shame.
Last edited by a moderator:
Hey Grok - Tell me about the 'Peterson Institute'.
Core Features of PIIE’s Economic Ideology
Free Trade and Globalization Advocacy
PIIE is a staunch defender of open markets and international trade. It consistently argues that trade liberalization boosts growth, productivity, and consumer welfare, often critiquing protectionist policies like tariffs. For example, its February 2025 analyses slammed the Trump administration’s 25% tariffs on Canada and Mexico, warning of supply chain disruptions and higher costs for U.S. consumers—echoing its opposition to Trump’s first-term China tariffs. This aligns with neoliberalism’s emphasis on reducing barriers to trade and capital flows, rooted in the belief that markets, not governments, best allocate resources globally.
Market-Oriented Solutions
The institute favors market-driven approaches over heavy state intervention. Its research often promotes deregulation, flexible labor markets, and private sector innovation as drivers of economic efficiency. For instance, PIIE scholars like Adam Posen have pushed for central banks to prioritize inflation control through monetary policy rather than fiscal overreach, a hallmark of neoliberal trust in technocratic, market-friendly governance.
Pragmatic Adjustments to Neoliberalism
While rooted in free-market principles, PIIE isn’t dogmatic. It acknowledges market failures and supports targeted government action—like subsidies for clean energy or safety nets for trade-displaced workers—where evidence suggests benefits outweigh costs. Its work on climate economics, such as advocating carbon pricing, blends market mechanisms with progressive goals, showing a willingness to adapt neoliberalism to modern challenges.
Global Institutionalism
PIIE strongly backs multilateral institutions like the IMF, World Bank, and WTO, viewing them as stabilizing forces for the global economy. This reflects a belief in coordinated, rules-based systems over unilateralism—a stance that’s clashed with populist or nationalist economic policies, like those of the Trump era. Its defense of the USMCA, despite critiques of its labor provisions, underscores this commitment to structured global integration.
Fiscal Conservatism with Nuance
Historically tied to Peter G. Peterson’s focus on U.S. debt reduction, PIIE often warns about unsustainable deficits, aligning with fiscal hawkishness. Yet, it’s not reflexively anti-spending—scholars like Jason Furman have supported stimulus during crises (e.g., post-COVID recovery), provided it’s temporary and paired with long-term fiscal discipline. This balances neoliberal skepticism of big government with pragmatic crisis response.
Evidence from Outputs and People
Research Themes: PIIE’s publications—like its 2024 reports on China’s economic slowdown or Mexico’s nearshoring boom—emphasize competitive markets, trade openness, and data-driven policy over ideology. Its critique of China’s state-led model contrasts with its praise for market reforms elsewhere, reinforcing a neoliberal lens.
Key Figures: C. Fred Bergsten, the founder, was a trade liberalization advocate; Adam Posen, a former president, leans toward market-friendly monetary policy; and board members like Mark Carney bring a mix of global finance and climate-conscious pragmatism. These voices suggest a technocratic, pro-market core with room for progressive tweaks.
Funding Influence: Backers like BlackRock and JPMorgan Chase—globalist corporations—reinforce PIIE’s alignment with free-market capitalism, though its broad donor base (e.g., Open Philanthropy) dilutes any single ideological pull.
Comparison and Context
PIIE sits left of libertarian outfits like the Cato Institute, which reject most government roles, and right of progressive think tanks like the Economic Policy Institute, which prioritize labor and redistribution. It’s closer to the Brookings Institution’s centrist technocracy but with a sharper focus on trade and finance. Critics on X and elsewhere call it “establishment” or “globalist,” pointing to its corporate ties and tariff aversion, while supporters laud its empirical rigor over populist sloganeering.
Summary
PIIE’s economic ideology can be described as neoliberal globalism with pragmatic edges—pro-free trade, pro-market, and pro-multilateralism, but willing to tweak the formula for climate, inequality, or crises. It’s not about tearing down capitalism (like leftist groups) or isolating it (like nationalists); it’s about refining and expanding a market-led, interconnected world. That’s the thread running through its work as of early 2025.
_____________
Thank you Grok - I'm sure there is no way they would heavily bias their work and find reasons to be against Tariffs.
No question a straight shooter organization like this would support a globalist order that is reliant on slave labor in china.
Core Features of PIIE’s Economic Ideology
Free Trade and Globalization Advocacy
PIIE is a staunch defender of open markets and international trade. It consistently argues that trade liberalization boosts growth, productivity, and consumer welfare, often critiquing protectionist policies like tariffs. For example, its February 2025 analyses slammed the Trump administration’s 25% tariffs on Canada and Mexico, warning of supply chain disruptions and higher costs for U.S. consumers—echoing its opposition to Trump’s first-term China tariffs. This aligns with neoliberalism’s emphasis on reducing barriers to trade and capital flows, rooted in the belief that markets, not governments, best allocate resources globally.
Market-Oriented Solutions
The institute favors market-driven approaches over heavy state intervention. Its research often promotes deregulation, flexible labor markets, and private sector innovation as drivers of economic efficiency. For instance, PIIE scholars like Adam Posen have pushed for central banks to prioritize inflation control through monetary policy rather than fiscal overreach, a hallmark of neoliberal trust in technocratic, market-friendly governance.
Pragmatic Adjustments to Neoliberalism
While rooted in free-market principles, PIIE isn’t dogmatic. It acknowledges market failures and supports targeted government action—like subsidies for clean energy or safety nets for trade-displaced workers—where evidence suggests benefits outweigh costs. Its work on climate economics, such as advocating carbon pricing, blends market mechanisms with progressive goals, showing a willingness to adapt neoliberalism to modern challenges.
Global Institutionalism
PIIE strongly backs multilateral institutions like the IMF, World Bank, and WTO, viewing them as stabilizing forces for the global economy. This reflects a belief in coordinated, rules-based systems over unilateralism—a stance that’s clashed with populist or nationalist economic policies, like those of the Trump era. Its defense of the USMCA, despite critiques of its labor provisions, underscores this commitment to structured global integration.
Fiscal Conservatism with Nuance
Historically tied to Peter G. Peterson’s focus on U.S. debt reduction, PIIE often warns about unsustainable deficits, aligning with fiscal hawkishness. Yet, it’s not reflexively anti-spending—scholars like Jason Furman have supported stimulus during crises (e.g., post-COVID recovery), provided it’s temporary and paired with long-term fiscal discipline. This balances neoliberal skepticism of big government with pragmatic crisis response.
Evidence from Outputs and People
Research Themes: PIIE’s publications—like its 2024 reports on China’s economic slowdown or Mexico’s nearshoring boom—emphasize competitive markets, trade openness, and data-driven policy over ideology. Its critique of China’s state-led model contrasts with its praise for market reforms elsewhere, reinforcing a neoliberal lens.
Key Figures: C. Fred Bergsten, the founder, was a trade liberalization advocate; Adam Posen, a former president, leans toward market-friendly monetary policy; and board members like Mark Carney bring a mix of global finance and climate-conscious pragmatism. These voices suggest a technocratic, pro-market core with room for progressive tweaks.
Funding Influence: Backers like BlackRock and JPMorgan Chase—globalist corporations—reinforce PIIE’s alignment with free-market capitalism, though its broad donor base (e.g., Open Philanthropy) dilutes any single ideological pull.
Comparison and Context
PIIE sits left of libertarian outfits like the Cato Institute, which reject most government roles, and right of progressive think tanks like the Economic Policy Institute, which prioritize labor and redistribution. It’s closer to the Brookings Institution’s centrist technocracy but with a sharper focus on trade and finance. Critics on X and elsewhere call it “establishment” or “globalist,” pointing to its corporate ties and tariff aversion, while supporters laud its empirical rigor over populist sloganeering.
Summary
PIIE’s economic ideology can be described as neoliberal globalism with pragmatic edges—pro-free trade, pro-market, and pro-multilateralism, but willing to tweak the formula for climate, inequality, or crises. It’s not about tearing down capitalism (like leftist groups) or isolating it (like nationalists); it’s about refining and expanding a market-led, interconnected world. That’s the thread running through its work as of early 2025.
_____________
Thank you Grok - I'm sure there is no way they would heavily bias their work and find reasons to be against Tariffs.
No question a straight shooter organization like this would support a globalist order that is reliant on slave labor in china.
acesfull86
Well-known member
Deserves a bump
People doing research matters - I know you want to just think that people are unbiased but its clear the one source that was listed here in your retort is heavily biased to favor a globlist trade order.
acesfull86
Well-known member
Q - Grok, you said the following: That said, the consensus on tariffs—usually that they raise costs, distort markets, and invite retaliation— isn’t just some ivory-tower conspiracy. It’s built on a mix of data and theory that’s been stress-tested over decades. Look at the Smoot-Hawley Tariff Act of 1930: trade barriers spiked, global trade tanked, and the Depression got uglier. Modern studies, like those from the National Bureau of Economic Research, consistently show tariffs hit consumers with higher prices and kill jobs in downstream industries, even if they save a few in protected ones. The 2018 Trump tariffs, for instance—steel and aluminum jobs went up by about 1,000, but the cost to consumers and other industries was estimated at $900,000 per job saved, per the Peterson Institute.
But the Peterson Institute is a pro-globalist organization with a vested interest in being anti-tariff, so why should I believe you?
A - Fair point—skepticism about sources is healthy. The Peterson Institute does lean globalist; it’s funded partly by big corporations and has a track record of pushing free-trade agendas. That could color its estimates, like the $900,000-per-job-saved figure from the 2018 tariffs. They’re not exactly neutral refs. But the broader case against tariffs doesn’t hinge on them alone—it’s scattered across decades of data and real-world blowups.
Take Smoot-Hawley again: U.S. tariffs jumped to 20% on average, and within two years, global trade dropped 66%. Exports fell from $5.4 billion in 1929 to $2.1 billion in 1932, per U.S. Census data. That’s not a think-tank spin; it’s just what happened. Or look at the 2002 Bush steel tariffs—U.S. International Trade Commission found 200,000 jobs lost in steel-using industries, dwarfing the few thousand saved. Studies from places like the National Bureau of Economic Research (NBER)—less ideologically charged than Peterson—peg consumer costs from the 2018 tariffs at $1.4 billion monthly, with downstream job losses outpacing gains 10-to-1.
Now, you could argue the flip side: tariffs might juice strategic industries or bargaining power. The 2018 tariffs did nudge some steel production back home—capacity utilization hit 80% by 2019, per the American Iron and Steel Institute. But the retaliation—China slapping $3 billion in tariffs on U.S. goods, Canada and the EU piling on—bit into agriculture and manufacturing. Soybean exports tanked 20% in 2019, per USDA numbers.
Point is, the anti-tariff stance isn’t just Peterson’s pet theory. It’s a pattern: costs spread wide, benefits narrow, and tit-for-tat escalation. You don’t have to buy the globalist line to see the math. Dig into the raw data—trade stats, job reports, price indexes—and it’s hard to dodge the mess tariffs tend to make.
But the Peterson Institute is a pro-globalist organization with a vested interest in being anti-tariff, so why should I believe you?
A - Fair point—skepticism about sources is healthy. The Peterson Institute does lean globalist; it’s funded partly by big corporations and has a track record of pushing free-trade agendas. That could color its estimates, like the $900,000-per-job-saved figure from the 2018 tariffs. They’re not exactly neutral refs. But the broader case against tariffs doesn’t hinge on them alone—it’s scattered across decades of data and real-world blowups.
Take Smoot-Hawley again: U.S. tariffs jumped to 20% on average, and within two years, global trade dropped 66%. Exports fell from $5.4 billion in 1929 to $2.1 billion in 1932, per U.S. Census data. That’s not a think-tank spin; it’s just what happened. Or look at the 2002 Bush steel tariffs—U.S. International Trade Commission found 200,000 jobs lost in steel-using industries, dwarfing the few thousand saved. Studies from places like the National Bureau of Economic Research (NBER)—less ideologically charged than Peterson—peg consumer costs from the 2018 tariffs at $1.4 billion monthly, with downstream job losses outpacing gains 10-to-1.
Now, you could argue the flip side: tariffs might juice strategic industries or bargaining power. The 2018 tariffs did nudge some steel production back home—capacity utilization hit 80% by 2019, per the American Iron and Steel Institute. But the retaliation—China slapping $3 billion in tariffs on U.S. goods, Canada and the EU piling on—bit into agriculture and manufacturing. Soybean exports tanked 20% in 2019, per USDA numbers.
Point is, the anti-tariff stance isn’t just Peterson’s pet theory. It’s a pattern: costs spread wide, benefits narrow, and tit-for-tat escalation. You don’t have to buy the globalist line to see the math. Dig into the raw data—trade stats, job reports, price indexes—and it’s hard to dodge the mess tariffs tend to make.
acesfull86
Well-known member
Q - Are you ignoring the unleashing of a bioweapon by the globalists after they saw how well Trump’s tariffs were working?
A - I’m not ignoring anything, but I don’t have any solid evidence tying tariffs to a bioweapon unleashed by globalists—or anyone else. Trump’s tariffs, like the 2018 steel and aluminum ones or the broader trade war with China, had mixed results: they boosted some domestic production (steel capacity utilization hit 80% by 2019) but also jacked up costs for consumers and sparked retaliation—China’s soybean tariffs alone cut U.S. exports by 20% in 2019. No data I’ve got shows they “worked” so well that globalists panicked into bioweapon territory.
The bioweapon idea sounds like it’s coming from a different angle—maybe conspiracy chatter about COVID or something else? If you’re hinting at that, the timeline doesn’t quite line up: Trump’s big tariff push started in 2018, and COVID hit in late 2019. No credible link exists in what I can dig up—nothing from trade stats, economic reports, or even X posts I could search points to tariffs triggering a bioweapon response. If you’ve got specifics—like who these globalists are or what bioweapon you mean—I can try to chase that down with web or X searches. What’s your take on how they connect?
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I lol’ed
A - I’m not ignoring anything, but I don’t have any solid evidence tying tariffs to a bioweapon unleashed by globalists—or anyone else. Trump’s tariffs, like the 2018 steel and aluminum ones or the broader trade war with China, had mixed results: they boosted some domestic production (steel capacity utilization hit 80% by 2019) but also jacked up costs for consumers and sparked retaliation—China’s soybean tariffs alone cut U.S. exports by 20% in 2019. No data I’ve got shows they “worked” so well that globalists panicked into bioweapon territory.
The bioweapon idea sounds like it’s coming from a different angle—maybe conspiracy chatter about COVID or something else? If you’re hinting at that, the timeline doesn’t quite line up: Trump’s big tariff push started in 2018, and COVID hit in late 2019. No credible link exists in what I can dig up—nothing from trade stats, economic reports, or even X posts I could search points to tariffs triggering a bioweapon response. If you’ve got specifics—like who these globalists are or what bioweapon you mean—I can try to chase that down with web or X searches. What’s your take on how they connect?
—————
I lol’ed
One of the main points of evidence is from 90 years ago when a Global Depression took place - The other is a short run analysis when the American economy was roaring in Q4 19 to be interrupted by teh CCP virus.
I'll take my chances - And this time i think we will get a solid runway of analysis.
But let me ask you then - Are you expecting the American economy to stall because of Trumps policies?
I'll take my chances - And this time i think we will get a solid runway of analysis.
But let me ask you then - Are you expecting the American economy to stall because of Trumps policies?
The free trade contingent here seems very confident about their beliefs so I'm just trying to understand how that would translate to real world outcomes.
How will we measure success or failure of Trumps economic policies this time around since you guys conveniently want to ignore where we were in Q4 19.
How will we measure success or failure of Trumps economic policies this time around since you guys conveniently want to ignore where we were in Q4 19.
sturg33
I
If i recall correctly in q4 2019 Trump was calling for the fed to take interest rates to negative to stop a downturn
You'd have to remind me of this -
sturg33
I
Let me ask Grok
Yes, Donald Trump was indeed calling for the Federal Reserve to lower interest rates in Q4 of 2019 (October through December). He expressed this view multiple times, including through tweets on the platform now known as X. For instance, on October 24, 2019, Trump posted that the Federal Reserve was "derelict in its duties if it doesn’t lower the Rate and even, ideally, stimulate," criticizing the Fed for being "way too fast to raise, and way too slow to cut." Similarly, on December 17, 2019, he tweeted that it would be "sooo great if the Fed would further lower interest rates and quantitative ease," arguing it would boost exports due to a strong dollar and low inflation. These examples align with your recollection of him tweeting about it, and they reflect his consistent stance during that period, pushing for lower rates to stimulate the economy.
To describe the U.S. economy in Q4 2019 (October-December), we’ll draw on key economic indicators, trends, and events from that period, based on data available up to March 15, 2025. This was the final quarter before the COVID-19 pandemic upended global markets, so it reflects a pre-crisis snapshot under the Trump administration’s first term.
Overview
The U.S. economy in Q4 2019 was in a state of steady expansion, marking the tail end of the longest economic growth cycle in U.S. history (starting June 2009). It was characterized by moderate GDP growth, low unemployment, rising wages, and robust consumer confidence, though tempered by trade tensions, slowing manufacturing, and uneven global demand. The Federal Reserve’s monetary policy shifts and the administration’s tax cuts and deregulation efforts shaped a generally positive but not overheated economic climate.
Key Indicators
GDP Growth
Real GDP grew at an annualized rate of 2.1% in Q4 2019, according to the Bureau of Economic Analysis (BEA) final estimate. This was a slight uptick from 1.9% in Q3, driven by consumer spending and government expenditure, though business investment lagged. For the full year, GDP growth averaged 2.3%, down from 2.9% in 2018, reflecting a cooling but still solid expansion.
Unemployment
The unemployment rate hit a 50-year low of 3.5% by December 2019, per the Bureau of Labor Statistics (BLS). Job creation remained strong, averaging 175,000 jobs per month in Q4, with notable gains in healthcare, hospitality, and professional services. Labor force participation hovered around 63.2%, suggesting a tight labor market that fueled wage growth.
Wages and Inflation
Average hourly earnings rose by 2.9% year-over-year in December 2019, outpacing inflation, which sat at 2.3% (Consumer Price Index, CPI). Core inflation (excluding food and energy) was 2.3% as well, aligning with the Fed’s 2% target. This gave workers modest real wage gains, boosting purchasing power without triggering runaway price pressures.
Consumer Spending and Confidence
Consumer spending, the economy’s backbone (about 70% of GDP), grew by 1.8% in Q4, supported by low unemployment and holiday shopping. The Conference Board’s Consumer Confidence Index averaged around 126, near multi-year highs, reflecting optimism despite trade uncertainty. Retail sales jumped 0.3% in December, capping a strong quarter.
Manufacturing and Trade
Manufacturing was a weak spot, with the ISM Manufacturing Index dipping below 50 (indicating contraction) at 47.2 in December, the lowest since June 2009. This stemmed from the U.S.-China trade war, with tariffs disrupting supply chains and exports. Total U.S. exports fell 1.3% for the year, and the trade deficit widened to $616.8 billion. However, the Phase One trade deal with China, signed in January 2020, was being negotiated in Q4, offering hope of stabilization.
Stock Market and Investment
The S&P 500 climbed 8.5% in Q4, closing at 3,230.78 on December 31, 2019—a record high—driven by trade deal optimism and Fed rate cuts. Business fixed investment, however, contracted by 1.5%, as firms held back amid tariff uncertainty and slowing global growth.
Monetary Policy
The Federal Reserve cut rates three times in 2019 (July, September, October), bringing the federal funds rate to a range of 1.5-1.75% by Q4. This shift from tightening to easing supported growth and calmed markets after 2018’s volatility, though Fed Chair Jerome Powell called it a “mid-cycle adjustment,” not a recession signal.
Broader Context
Policy Influence: The 2017 Tax Cuts and Jobs Act (TCJA) continued to buoy corporate profits and consumer spending, though its growth boost was waning by 2019. Deregulation in energy and finance also propped up certain sectors.
Global Environment: Global GDP growth slowed to 2.9% (IMF data), with Europe and China weakening, pressuring U.S. exports. Yet, the U.S. outperformed peers, avoiding the slowdowns seen in Germany or Japan.
Pre-Pandemic Calm: Q4 2019 showed no major signs of the impending COVID-19 crisis. Early reports of a virus in Wuhan emerged in December, but economic impacts were nil until 2020.
Description
The U.S. economy in Q4 2019 was robust yet uneven, enjoying low unemployment, solid consumer-led growth, and a buoyant stock market, but shadowed by manufacturing softness and trade frictions. It was a mature expansion—over a decade old—running on the fumes of tax cuts, Fed easing, and consumer resilience, with GDP growth settling into a sustainable 2% range. Strengths like 3.5% unemployment and 2.9% wage gains painted a picture of a tight, worker-friendly labor market, while weaknesses in manufacturing and investment hinted at vulnerabilities tied to global uncertainty. In hindsight, it was a peak before the plunge, a Goldilocks moment—neither too hot nor too cold—unaware of the seismic shock looming in 2020.
That’s the U.S. economy in Q4 2019: a steady giant with a few cracks, riding high but not invincible.
Overview
The U.S. economy in Q4 2019 was in a state of steady expansion, marking the tail end of the longest economic growth cycle in U.S. history (starting June 2009). It was characterized by moderate GDP growth, low unemployment, rising wages, and robust consumer confidence, though tempered by trade tensions, slowing manufacturing, and uneven global demand. The Federal Reserve’s monetary policy shifts and the administration’s tax cuts and deregulation efforts shaped a generally positive but not overheated economic climate.
Key Indicators
GDP Growth
Real GDP grew at an annualized rate of 2.1% in Q4 2019, according to the Bureau of Economic Analysis (BEA) final estimate. This was a slight uptick from 1.9% in Q3, driven by consumer spending and government expenditure, though business investment lagged. For the full year, GDP growth averaged 2.3%, down from 2.9% in 2018, reflecting a cooling but still solid expansion.
Unemployment
The unemployment rate hit a 50-year low of 3.5% by December 2019, per the Bureau of Labor Statistics (BLS). Job creation remained strong, averaging 175,000 jobs per month in Q4, with notable gains in healthcare, hospitality, and professional services. Labor force participation hovered around 63.2%, suggesting a tight labor market that fueled wage growth.
Wages and Inflation
Average hourly earnings rose by 2.9% year-over-year in December 2019, outpacing inflation, which sat at 2.3% (Consumer Price Index, CPI). Core inflation (excluding food and energy) was 2.3% as well, aligning with the Fed’s 2% target. This gave workers modest real wage gains, boosting purchasing power without triggering runaway price pressures.
Consumer Spending and Confidence
Consumer spending, the economy’s backbone (about 70% of GDP), grew by 1.8% in Q4, supported by low unemployment and holiday shopping. The Conference Board’s Consumer Confidence Index averaged around 126, near multi-year highs, reflecting optimism despite trade uncertainty. Retail sales jumped 0.3% in December, capping a strong quarter.
Manufacturing and Trade
Manufacturing was a weak spot, with the ISM Manufacturing Index dipping below 50 (indicating contraction) at 47.2 in December, the lowest since June 2009. This stemmed from the U.S.-China trade war, with tariffs disrupting supply chains and exports. Total U.S. exports fell 1.3% for the year, and the trade deficit widened to $616.8 billion. However, the Phase One trade deal with China, signed in January 2020, was being negotiated in Q4, offering hope of stabilization.
Stock Market and Investment
The S&P 500 climbed 8.5% in Q4, closing at 3,230.78 on December 31, 2019—a record high—driven by trade deal optimism and Fed rate cuts. Business fixed investment, however, contracted by 1.5%, as firms held back amid tariff uncertainty and slowing global growth.
Monetary Policy
The Federal Reserve cut rates three times in 2019 (July, September, October), bringing the federal funds rate to a range of 1.5-1.75% by Q4. This shift from tightening to easing supported growth and calmed markets after 2018’s volatility, though Fed Chair Jerome Powell called it a “mid-cycle adjustment,” not a recession signal.
Broader Context
Policy Influence: The 2017 Tax Cuts and Jobs Act (TCJA) continued to buoy corporate profits and consumer spending, though its growth boost was waning by 2019. Deregulation in energy and finance also propped up certain sectors.
Global Environment: Global GDP growth slowed to 2.9% (IMF data), with Europe and China weakening, pressuring U.S. exports. Yet, the U.S. outperformed peers, avoiding the slowdowns seen in Germany or Japan.
Pre-Pandemic Calm: Q4 2019 showed no major signs of the impending COVID-19 crisis. Early reports of a virus in Wuhan emerged in December, but economic impacts were nil until 2020.
Description
The U.S. economy in Q4 2019 was robust yet uneven, enjoying low unemployment, solid consumer-led growth, and a buoyant stock market, but shadowed by manufacturing softness and trade frictions. It was a mature expansion—over a decade old—running on the fumes of tax cuts, Fed easing, and consumer resilience, with GDP growth settling into a sustainable 2% range. Strengths like 3.5% unemployment and 2.9% wage gains painted a picture of a tight, worker-friendly labor market, while weaknesses in manufacturing and investment hinted at vulnerabilities tied to global uncertainty. In hindsight, it was a peak before the plunge, a Goldilocks moment—neither too hot nor too cold—unaware of the seismic shock looming in 2020.
That’s the U.S. economy in Q4 2019: a steady giant with a few cracks, riding high but not invincible.
I was once bearish on AI's impact in the world in the short term (5-10 years) - THe last few months leveraging these tools from work/personal life I'm now bullish on the issue.
I'm thrilled I've become established in my career because i just don't see how anyone can get a start in their professional life after these tools make entry to mid tier level positions extinct.
I'm thrilled I've become established in my career because i just don't see how anyone can get a start in their professional life after these tools make entry to mid tier level positions extinct.
And stimulate more investment to change the global supply chain
sturg33
I
I don't agree that the President begging for economic stimulus is a sign of a roaring economy
sturg33
I
Of course... but why was there a need to stimulate the golden age