It is already happening, inflation, get ready for Trump inflation.

[Mac1958]

Evidently he's getting some pushback from the GQP on this tariff crap. Here's hoping.

 

[berg80]

And the stock market jumped because investors are giddy over not having to deal with the Democrat’s boneheaded economic policies.(capital gains increases across the board, unrealized capital gains taxes for the ultra-wealthy, raising the corporate income tax rate, etc.)

The stock market jumped because deregulating the economy means higher profits as companies cut costs related to environmental protection and worker safety, lower taxes causing the deficit to balloon, more mergers in violation of anti-trust law, and the kind of business friendly admin that results in consumers getting screwed.

The bond market is telling a different story. One of higher inflation and greater amounts of deficit spending.

 

[berg80]

Evidently he's getting some pushback from the GQP on this tariff crap. Here's hoping.

No problem. The central thesis on which his entire economic plan for the country is built, the one trump doesn't understand but promised he'd enact over and over, as Emily Litella would say................"never mind."

 

[Mac1958]

No problem. The central thesis on which his entire economic plan for the country is built, the one trump doesn't understand but promised he'd enact over and over, as Emily Litella would say................"never mind."

I'll just keep hoping that even his sycophants -- those with whom he'll be surrounded this time -- will still be lucid enough to not push the country off the cliff due to his ignorance.

 

[Mac1958]

The stock market jumped because deregulating the economy means higher profits as companies cut costs related to environmental protection and worker safety, lower taxes causing the deficit to balloon, more mergers in violation of anti-trust law, and the kind of business friendly admin that results in consumers getting screwed.

The bond market is telling a different story. One of higher inflation and greater amounts of deficit spending.

The market also jumped because it hates uncertainty. It would have jumped for a clear Harris win too, even though she hadn't done anything.

A contested election would have meant a rough market until it was resolved.

 

[berg80]

I'll just keep hoping that even his sycophants -- those with whom he'll be surrounded this time -- will still be lucid enough to not push the country off the cliff due to his ignorance.

He has a history of metaphorically sending those who disagree with him, or dare to tell him he's wrong, to Siberia.

 

[berg80]

The market also jumped because it hates uncertainty. It would have jumped for a clear Harris win too, even though she hadn't done anything.

A contested election would have meant a rough market until it was resolved.

It makes me wonder what trump will demand of CEO's to buy tariff protection.

 

[Mac1958]

It makes me wonder what trump will demand of CEO's to buy tariff protection.

Yeah. All bets are off now, all rules are out the window.

 

[SweetTea]

It makes me wonder what trump will demand of CEO's to buy tariff protection.

I keep asking this question and never get a response. How is it that tariffs will increase prices for consumers but raising corporate taxes wouldn't?

 

[Toddsterpatriot]

The stock market jumped because deregulating the economy means higher profits as companies cut costs related to environmental protection and worker safety, lower taxes causing the deficit to balloon, more mergers in violation of anti-trust law, and the kind of business friendly admin that results in consumers getting screwed.

The bond market is telling a different story. One of higher inflation and greater amounts of deficit spending.

And cutting DEI and green mandates.

 

[Winston]

Great, let's talk about the corporate tax cut coming down the pipe. How did that work out last time?

It worked great.

Now, are you going to explain more about how higher tax rates stimulate new investment?


It is called the Laffer curve, do you really thing the inflection point of that curve is under 25%?


Why would I mind tax rates below the inflection point?

Lets start with the later first. When tax rates are right at the peak of that infamous Laffer curve it means we are collecting the most revenue with the least amount of negative impact on the economy. It is at the most efficient point. As we stray away from that peak, on either side of the curve, the taxes begin to disrupt the economy. The further away from that peak, the greater the disruption. On either side, the tax begins to result in the misallocation of resources.
Which leads to the former. No, the Trump corporate tax cut of 2017 was not good for the economy, not by a long shot. The misallocation of resources can be seen in the increased rent seeking behavior corporations engaged in. The classic example, corporate buybacks.

In 2018 compared with 2017, corporate tax revenues declined to $205 billion from $297 billion, hypothetically increasing the financial capacity of U.S.-based corporations to do as much as $92 billion more in buybacks in 2018 without taking on debt. Given that from 2017 to 2018 stock buybacks by S&P 500 companies increased by $287 billion (from $519 billion to $806 billion), the reality is that, through the corporate tax cuts, the federal government essentially funded $92 billion in buybacks by issuing debt and printing money to replace the lost corporate tax revenues.

Why Stock Buybacks Are Dangerous for the Economy

Even as the United States continues to experience its longest economic expansion since World War II, concern is growing that soaring corporate debt will make the economy susceptible to a contraction that could get out of control. The root cause of this concern is the trillions of dollars that...

hbr.org

I know, you are a big fan of stock buybacks. But stock buybacks are primarily a means of manipulating stock prices in order to inflate executive compensation and reward investment bankers and hedge fund managers. In reality, a stock buyback
is an open admission by the company that they cannot find any acceptable capital investments and are therefore giving the money back to the shareholders. Here, you go invest it.

Now how can that be? You claim the corporate tax cut increases capital investment, instead, stock buybacks exploded immediately afterwards. And the thing is, when companies use their cash reserves to buyback stocks, when things turn south, they are less able to react. Make no mistake about it, the corporate tax cut laid the foundation for the very supply chains we had during Covid and the inflationary pressures following the recovery.

 

[SmokeALib]

Economists warn Trump’s policies will trigger inflation

US president-elect won on claims he could rid of high prices yet many analysts think he will do the opposite

www.ft.com

I have been pretty busy since election day, but today I stayed home and did some research.

I posted a couple of threads during the presidential race indicating that Trump's proposals were highly inflationary, but I didn't think it would start this quickly. Let's look at some of his priorities and how they will impact inflation. Let us start with making the Trump taxcuts permanent.

That proposal alone adds one trillion dollars a year to the deficit. Just to let you know, the deficit for the 2024 budget was projected at 1.8 trillion. That is more than a fifty percent increase, think that might be inflationary? Does anyone think there will be a one trillion dollar reduction in spending? Seriously?

Outside of cutting SNAP benefits, eliminating free lunch programs for millions of indigent children, eliminating aid to Ukraine, and eliminating the Department of Education, I don't see any real proposals to cut spending. And the later, well it is going to end up costing all of us through higher property and sales taxes.

Listening to Trump on the campaign trail, well he leads you to believe that the entire budget of the Department of Education is spent on the salaries of bureaucrats. That is just not the case. The federal government accounts for over ten percent of the funding of public schools, and in low-income and rural areas it is much higher. If that is eliminated it will have to be replaced, at least to some degree. That means you are going to pay for it through higher local and state taxes.

Then there are tariffs. I mean you are living in a fantasy world if you believe what Trump says, those foreign countries will pay the cost. It just doesn't work that way, it is basic Macroeconomics. Sure, it might motivate more people to "buy American", but then again, why should we need tariffs for that? What happened to patriotism? Walmart famously tried the concept, posting American made signs beside merchandise made in America. That went over like a turd in a punchbowl and was quickly eliminated. Nobody really cared, they wanted cheap. Well, those tariffs will take "cheap" off the table.

Then there is that mass deportation. Sounds good. Russia and Germany sure bud liked the idea before and during WWII. But that comes at a cost, and it severely cuts the labor force. And sorry, some jobs Americans are not going to do no matter how much they get paid. I mean around here there is a huge immigrant labor force working the fields. They drive Hummers and F-250's, obviously they are making good money. You are looking at food shortages for everything from tomatoes to leaf lettuce. That is going to drive prices up.

But anyways, like I said, it has already started. This morning the first thing I thought of was the rating agencies. I was like, damn, they need to make a statement. Warn of a downgrade if Trump's initiatives are carried out. Well damn, they have.

https://www.reuters.com/markets/us/us-fiscal-health-risks-increase-after-trump-election-says-moodys-2024-11-08/

And mortgage rates, yep, done deal.

Mortgage rates surge higher on Trump victory, causing housing stocks to fall

Lennar, D.R. Horton and PulteGroup were all down Wednesday. Retailers Home Depot and Lowe’s were also lower.

www.nbcnewyork.com

I wish, I wish, I wish I were a fish. You got it Mr. Limpet, and it ain't going to be pretty.

Better run! Lol!!!

 

[Winston]

I keep asking this question and never get a response. How is it that tariffs will increase prices for consumers but raising corporate taxes wouldn't?

Sorry, I have a life. The answer is simple. Foreign countries are not going to cut their prices to offset the tariffs. And yes, some companies will attempt to absorb some of the cost, but most companies will simply pass it on to the consumers. Furthermore, the cost of labor will increase if companies expand production. They will need more workers.

On the other hand, the majority of the burden of an increased corporate tax rate is borne by the shareholders and the company. They want to be price competitive, and that only increases as the corporate tax increases. Like I have explained, corporate tax cuts encourage collusion and market consolidation. I mean the gorilla in the room is this, where were the price cuts resulting from the corporate tax cut? Did the corporations pass those savings on to consumers? Then how did we get this inflation? Did it increase capital investment, did it increase production, did it increase employment. Hell no, not even a little bit.

 

[Winston]

People don't go to work to keep prices low. Are you for mandates to keep workers working longer?

No, but Trump is, know anything about his plans for overtime?

 

[Rawley]

I keep asking this question and never get a response. How is it that tariffs will increase prices for consumers but raising corporate taxes wouldn't?

Shhhhh.

 

[initforme]

No, but Trump is, know anything about his plans for overtime?

Hopefully increase overtime wages to 2x rather than 1.5 which seems very unfair to the worker.

 

[Toddsterpatriot]

Lets start with the later first. When tax rates are right at the peak of that infamous Laffer curve it means we are collecting the most revenue with the least amount of negative impact on the economy. It is at the most efficient point. As we stray away from that peak, on either side of the curve, the taxes begin to disrupt the economy. The further away from that peak, the greater the disruption. On either side, the tax begins to result in the misallocation of resources.
Which leads to the former. No, the Trump corporate tax cut of 2017 was not good for the economy, not by a long shot. The misallocation of resources can be seen in the increased rent seeking behavior corporations engaged in. The classic example, corporate buybacks.

In 2018 compared with 2017, corporate tax revenues declined to $205 billion from $297 billion, hypothetically increasing the financial capacity of U.S.-based corporations to do as much as $92 billion more in buybacks in 2018 without taking on debt. Given that from 2017 to 2018 stock buybacks by S&P 500 companies increased by $287 billion (from $519 billion to $806 billion), the reality is that, through the corporate tax cuts, the federal government essentially funded $92 billion in buybacks by issuing debt and printing money to replace the lost corporate tax revenues.

Why Stock Buybacks Are Dangerous for the Economy

Even as the United States continues to experience its longest economic expansion since World War II, concern is growing that soaring corporate debt will make the economy susceptible to a contraction that could get out of control. The root cause of this concern is the trillions of dollars that...

hbr.org

I know, you are a big fan of stock buybacks. But stock buybacks are primarily a means of manipulating stock prices in order to inflate executive compensation and reward investment bankers and hedge fund managers. In reality, a stock buyback
is an open admission by the company that they cannot find any acceptable capital investments and are therefore giving the money back to the shareholders. Here, you go invest it.

Now how can that be? You claim the corporate tax cut increases capital investment, instead, stock buybacks exploded immediately afterwards. And the thing is, when companies use their cash reserves to buyback stocks, when things turn south, they are less able to react. Make no mistake about it, the corporate tax cut laid the foundation for the very supply chains we had during Covid and the inflationary pressures following the recovery.

Lets start with the later first. When tax rates are right at the peak of that infamous Laffer curve it means we are collecting the most revenue with the least amount of negative impact on the economy. It is at the most efficient point.

Most efficient what?

As we stray away from that peak, on either side of the curve, the taxes begin to disrupt the economy.

Where does the Laffer Curve mention "taxes disrupt the economy"?

But stock buybacks are primarily a means of manipulating stock prices in order to inflate executive compensation and reward investment bankers and hedge fund managers.

If Clinton hadn't made cash compensation over $1 million non-deductible, that might be less of an issue, right?
Let's reverse that. Does that sound good to you?

In reality, a stock buyback is an open admission by the company that they cannot find any acceptable capital
investments and are therefore giving the money back to the shareholders.

There are worse things to do with money than giving it back to the owners.
It's preferable to using it to build wasteful conglomerates.
Or building giant corporate HQs (cough..Bear Stearns..cough)
Now how can that be? You claim the corporate tax cut increases capital investment

Well, if you can show that more capital investment occurs at an 80% rate than at a 20% rate, I might change my tune.

 

[Winston]

Perhaps the dumbest post of the season. To think you stayed home to "research this" and write that piece of shit.

Damn you stupid shit, both Fitch and Moody's have warned of a possible downgrade of the Federal government's financial condition. Do you know what that would do to the cost of financing our debt?

Now, come up with at least something that resembles a rebuttal or get the hell out of my thread.

 

[Winston]

You wasted a day off.

Again, post something that at least resembles a rebuttal or get out of my thread.

 

[Winston]

The market also jumped because it hates uncertainty. It would have jumped for a clear Harris win too, even though she hadn't done anything.

A contested election would have meant a rough market until it was resolved.

The stock market jumped because it is pricing in an expected additional corporate tax cut, period. That cut would make every dollar in profit worth a bit more and thereby increasing the value of the capitalization of earnings, albeit, they haven't priced in the increase in interest rates, which lowers the future value of those earnings. Again, short term calls, long term puts.