Monday, December 14, 2020

We're richer than ever

Every time the stock market reaches new highs, the worrywarts trot out their bubble theories. That is especially true today, since "everyone knows" that central banks all over the world have been pumping money by the kiloton. Surely the stock market this time is inflated, and it wouldn't take much to pop this bubble, right? 

In my 40 years as an investor I have lived though four equity market disasters which were invariably termed popped bubbles by many pundits. The most recent—which began last March—was burst by the Global Pandemic Shutdown. Prior to that we had the onset of the Great Recession in 2008, which left the entire world financially and economically devastated by early 2009. Prior to that we had the bursting of the dot-com bubble in 2001-2002. My first popped bubble came in 1987, when I worked at Leland O'Brien Rubenstein (LOR), which many accused of precipitating the bursting (LOR invented "portfolio insurance"). 

Are we getting close to the next popped bubble? I wish I knew. But I don't think it's obvious or inevitable, at least for awhile. The best I can do is to survey the charts which follow, since they help to put the current situation in perspective. What I think they show is that over the long march of financial history, things just get better and better. The occasional bubbles are painful, but they are eventually overcome, thanks to the engines of free markets, free trade, and the incentives of capitalism. And while monetary policy has never been as "easy" as it is today, other important measures of financial and economic well-being are not out of line with what we have seen in my lifetime.

Despite all the huge ups and downs, the average person today is richer than ever before. And he or she will likely be even richer before too long—it has been ever thus. This is the fundamental case for being a long-term, rational optimist. 

Chart #1

Chart #1 shows the key components of the net worth of U.S. households and non-profit organizations (total assets minus total liabilities). Most of the increase since the Great Recession has been healthy: financial assets have soared, while real estate and debt have increased moderately. This has not been a debt-fueled expansion like we saw in the runup to 2008.

Chart #2

Households' balance sheets have improved dramatically since 2008, as shown in Chart #2, thanks to the fact that financial asset valuations have improved by much more than the increase in debt. Households' leverage (total debt as a percent of total assets) has dropped by almost 38% since 2008, and it has not been this low since late 1983. Without excessive leverage in the system, the system becomes inherently more stable.

Chart #3
 
Our government's net worth has taken a beating, thanks to the federal government borrowing just over $4 trillion this past year. Total federal debt owed to the public now slightly exceeds our GDP for the first time since WW II (see Chart #3). Doesn't this just offset the declining leverage of the household sector? Not exactly.

Chart #4

Federal debt is huge, but that is not as bad as you might think, thanks to the extremely low level of Treasury yields. As Chart #4 shows, the true burden of the federal debt (debt service costs as a percent of GDP, which is equivalent to the debt burden of your household, which is debt service payments as a percent of your annual income) is historically quite low. Federal debt ratios have increased, but the debt burden has decreased; interest costs have fallen even as total debt has increased. Federal debt burdens could become problematical in the future, but only after years of rising interest rates and continued borrowings.

Chart #5

Meanwhile, the real, inflation-adjusted net worth of the private sector (see Chart #5) has been steadily increasing. The nominal and real net worth of the U.S. private sector is at its highest level ever. As the chart also suggests, real net worth tends to increase by about 3.6% on average over time. That is extraordinary. Yes, there have been huge setbacks along the way, but in the end, things continue to improve. This chart also suggests that conditions today are not out of line with historical experience. As least they are not nearly as bad as the period just prior to the Great Recession.

Chart #6

To be fair, the growth of the U.S. population and its workforce accounts for some portion of our increased net worth. Chart #6 addresses that issue. It is the result of dividing the statistics in Chart #5 by the size of the US population. The chart suggests that the average person in the U.S. has a net worth of about $370K, which is about six times our per capita income. To be sure, there are lots of billionaires which are likely distorting these numbers, but what really counts is the aggregate wealth of our country, since that wealth is a function of all the roads, bridges, trucks, stores, houses, factories, corporations, knowledge, computers and personal services that are available to each and every one of us. On this basis also it's clear that things have never been so good. Never before has the average person enjoyed the benefits of such an elaborate infrastructure we have today.

Chart #7

Chart #7 shows the long-term view of the progress of U.S. corporations, as proxied by the S&P 500 index. Here we see that the nominal value of our major corporations has increased by about 7% per year on average. Nominal net worth per capita has increased by almost 6% over the same period. Corporate wealth has likely outpaced individual wealth because globalization has allowed our corporations to expand their market share worldwide. Caveat: take all trend-line projections such as this with a grain of salt; they have a large subjective content. 

Chart #8

Chart #8 shows the nominal value of global equities, which, since 2004, has increased by almost 8% per year and now stands at a lofty, all-time high of $100 trillion, according to Bloomberg. (Note that this calculation is based on actively traded primary securities, which means that ETFs and ADRs are excluded in order to avoid double-counting.)

Chart #9

Chart #9 compares the market cap of US and Non-US equities. US equity valuations have improved by far more than non-US equities since the Great Recession, but non-US equities have slightly outperformed for the whole period. 


61 comments:

ebg investor said...

Scott, thank you for the update! It is encouraging. There is a small typo after Chart#6, where you mention Chart#5 instead.

Scott Grannis said...

ebg: Actually, it's not a typo. The data in Chart #6 is the result of dividing the data in Chart #5 by the population, in order to get per capita real net worth. But please continue to search out typos, since it's impossible for me to catch them all!

WealthMony said...

I'm beating Benji to the point: "Another great post by Scott Grannis." I knew there was some reason I am very optimistic about the future economic health of the US. Kudos to capitalism and democracy. Let us keep it so.

Benjamin Cole said...

All I can say is this: If the stock market rallies in 2020, when will it not rally?

In 2020 we had a global pandemic and recession, aggravated by some of the worst government of our lifetimes, in such cities as Portland, Los Angeles, Seattle, Chicago, and New York. Riots.

National governments everywhere borrowed heavily.

President Trump's actual policies may have been ok, but his personality was dubious at best (that's being polite) and helped bring in the feckless Biden Camp, wherein globalist sympathies with Beijing will again rule.

And we had a rally on Wall Street.

WealthMony did beat me to the punch.

Frozen in the North said...

Dear Scott,

To equate the health of the stock market with the health of the economy is somewhat disingenuous. Only 6% of Americans have any direct stake in the stock market (yes pension funds are certainly one way to invest, but the nature of the stake is different). while you are correct that the stock market is near an all-time high, and that it's "good" it is also the policy of the Central Bank to keep money loose so that the stock market soars!

The fact that Trump would hold a Press Conference to announce that the S&P had never been higher tells you something about the mindset of the elected officials -- Another way to look at America's wealth is to look a the GINI index -- things there are not so great.

However, you are right, America has never been wealthier

wkevinw said...

With such dispersion/asymmetry of wealth and income distribution, medians are more interesting stats.

When the bottom half of the income and wealth curve start making up ground, then we will know the economy is doing better.

Actually for the last 2-3 years under Trump, this was getting started. I fear it's over for a while. This means the economic and political strife will continue.

Watch for a city and state bailout bill that everybody, especially the next generations, will pay for.

Yes, as a whole, the country is wealthier than ever.

Scott Grannis said...

Frozen: you're a bit wide of the mark on equity ownership. Gallup consistently finds that 55% have a stake in the stock market. I'd bet it's a lot more than that, since many people are beneficiaries of pension funds and defined benefit plans that don't realize their future retirement is linked to stock and bond returns.

https://news.gallup.com/poll/266807/percentage-americans-owns-stock.aspx

Fred said...

I did my early voting in the Senate runoff today in Dekalb County, Georgia. Didn't take long but I would say it was a pretty good turnout for a runoff. I double checked my paper ballot before I fed it into the Dominion voting machine to make sure my choices were correct. Hopefully it won't flip from Republican to Democrat. We shall see.

Scott Grannis said...

Fred: what is your sense of the mood among Georgians?

JDonley said...

as usual great column, Scott. you were fortunate to have missed the 70's bear market...it wore everyone down day after day. i only owned 3 stocks at that time, but it was still stressful.

Fred said...

My Republican friends are worried that the Dems have distributed a million or more absentee ballots and that some Trump supporters are encouraging Republicans to stay home. We think it’s going to be very close but we hope they’ll pull it out.

Roy said...

https://www.taxpolicycenter.org/taxvox/who-owns-us-stock-foreigners-and-rich-americans


"Virtually all (94 percent) of the wealthiest 10 percent of households owned stocks, while only about a third (31 percent) of the bottom 50 percent owned stock, either directly or indirectly (e.g., through mutual funds)."


"The Fed found that the average household in the richest tenth of US households, by net worth, owned vastly more stock than those in the bottom half. That is, those households that owned stock in the wealthiest 10 percent of households, owned an average $1.7 million of stock while those in the bottom 50 percent owned an average of only about $11,000. "

Frozen in the North said...

Scott

Opinions are like assholes, everyone's got one! What Gallup thinks is irrelevant, the number of Americans who actually have a direct stake in the equity markets is 6%, even if 55% say that a strong stock market is good, it doesn't mean they benefit from such value increase.

Its not hard go on Google and find out "what percentage of americans own shares" Its a 2 minutes task

Scott Grannis said...

Frozen: it's amazing, I did exactly what you said, and DuckDuckGo (I avoid Google at all costs and I recommend you should too) immediately returned the Gallup finding that 55% of the public report owning stocks. There is NO WAY only 6% of the public has a stake in the equity markets! Everyone who has a pension (think teachers and public sector workers especially) has a direct stake in the equity markets. Nearly everyone who saves money in whatever form has a stake in the markets, because markets are driven and absolutely supported by virtually every form of economic activity. If it weren't for markets we would not have the economy we have today. Markets are essential to a modern economy; without them we would return to the stone age.

WealthMony said...

Even more people could have a direct vested interest in financial markets if only congress would make it so that we own our Social Security pool with the right to invest at least 1/2 however we wish, essentially as we do in a 401(k). The bottom 50% may then have something to pass on to their children.

sgt.red.blue.red said...

Now, w the new iPhone iOS, you can set the default browser to FireFox, and I’ve set default search to DuckDuckGo.

sgt.red.blue.red said...

Fraud works.

Tom Nugent said...

I started my career in the stock market in December of 1968. The DJIA was hovering around 900 at the time when a 10 point move was a big deal. As long as you are invested in a broadly diversified portfolio such as an index fund or more than one index fund you should benefit from the historical gains in stocks. Characterizing the stock market as a bubble has a definite short-term perspective while characterizing it as a positive long-term trend is more accurate.

wkevinw said...

"Everyone who has a pension (think teachers and public sector workers especially) has a direct stake in the equity markets. "

Mr. Grannis- I think this is one source of confusion. These people have an indirect stake in the equity markets because they don't think of their pensions much. (that's an interesting story in itself).

One source I found said the 20-80%-iles (mid quintiles) of income averaged 19% of their net worth from ALL sources in the stock market. Assuming it's a non-linear situation, one could estimate that 10-15% of the bottom 80% of folks' wealth is in the stock market.

Just about everybody has some kind of stake in the stock market.

wkevinw said...

This is not your father's stock market.

The airlines are bailed out again, as were the banks. Socialism for the rich is alive and well. Stocks being a discounting mechanism/claim on earnings, cash flow, etc., is very much a secondary consideration nowadays.

The equity markets are part of a financial engineering structure. A very important part of this is government intervention on behalf of (rich) financial investors.

All of the bar and restaurant owners will probably not be bailed out, like the big corporations. (I wonder what the value of ALL of these small businesses would be if the government, who confiscated the value, had to pay for it.)

steve said...

6% stock ownership for all Americans? C'mon, you can't be serious. Has to be over 50%. One thing I've learned in 64 years on this earth; there are haves and have nots and you def want to be a HAVE. You can always give away $ but you can't give away what you don't have.

Buy Low then Sell High said...

Thanks for the tip on DuckDuck Go. 2021 goal to remove as much Google as possible.

randy said...

Agreed on avoiding Google at all costs. In addition to avoiding Chrome.. use DuckDuckGo or StartPage; turn off Google Maps location permissions on your phone and laptop; use Apple Maps or an alternative. Also, unless it's a site that I WANT to access frequently and have store cookies, I always launch a private browser window (or incognito) AND use a VPN. Both on phone and laptop.

Granted, it's a little headache to do all that, and I can't get my wife to conform, so for our household it's probably futile. But it's the right thing to do.

Frozen in the North said...

Scott:

We are both right; 84% of all stocks are owned by the top 10%;


The data in the graph comes from a paper published in November 2017 by New York University professor Edward N. Wolff.

One of the paper’s findings was that "despite the fact that almost half of all households owned stock shares either directly or indirectly through mutual funds, trusts, or various pension accounts, the richest 10 percent of households controlled 84 percent of the total value of these stocks in 2016."

This line by Wolff presents a key contrast that Khanna’s post glosses over: While about half of households own stocks in one way or another, the richest Americans hold the lion’s share of the value.

Khanna uses a bar graph that highlights the imbalance in the value of stock holdings, but his headline claim is about the reach of stock ownership throughout the population. Those are two different things.

So what does the data show on the reach of stock ownership? It’s a bit wider than Khanna suggests.

Fred said...

Very large turnout in heavily democratic counties of Fulton and DeKalb unlike in past runoff elections. Request for ballots 2/3 Democrat to 1/3 Republican. Ossoff is hitting Perdue hard about “failure” of Republicans to pass COVID relief and it may just be working. Hopefully there will be a surge of Republican voters on Election Day but you may want to think about a short term sell off in January if the worst comes to pass (I think the markets are too confident Republicans will hold the Senate).

Adam said...

A view from EU.
Socialism i.e. redistribution, kills activity. Healthy people after 65 (retiree) consume portion of their children future wealth doing zero effort. Having "free" state health insurance makes people doing zero effort to work out. Does not matter, if 5% or 50% of US citizens owns stocks. What matters is wright system that enforces creativity and selfimprovement.
Thanks to that I can read for free on macro here.
I can buy for 500 USD a year an equity research of high quality, etc. US opens the gates of the human potential in a big way.

Jim said...

When the balance sheet of the Federal Reserve goes from 800 billion to 8 trillion it is worrisome. Coupled that that with the help of other central banks, it is a central bank bubble.

The Cliff Claven of Finance said...

Not trying to get everyone here angry but ...

"We're richer than ever"

was also true at the:

1929 market peak,
2000 market peak, and
2007 market peak

In fact, it,s true in almost all years, so doesn't mean much.

There's very low correlation between stock market levels and consumer spending.

Adam said...

Scott,
Plse update us on CPI. It goes under the radars.
As Brian Wesbury pointed out,
"During the six months ending in May, the Consumer Price Index fell 1.6% at an annual rate. In the six months since May, the CPI has risen at a 4% annualized rate. Twice as fast as the Fed’s target of 2%.
Thanks.

Carnelutti said...

Where is all that money? No at private debt, no at companies debt, no in cash, no deposits at banks? no real state bubble, no gold price bubble, no commodities bubble, no at oil prices? Only stockmarket are continue grows. So where is all that money, just printed?. Thanks from Spain. Happy Crhistmas!!

pgrommit said...

We're gonna need to keep getting richer.
https://twitter.com/carlquintanilla/status/1339277971966857224

Scott Grannis said...

Adam, re CPI update: I’ve been regularly posting on the evolution of the CPI. The bottom line is that 1) it’s best to focus on the CPI ex-energy, since energy prices are by far the most volatile of all prices. That measure of the CPI has been rising at a fairly constant pace of 2% per year well over a decade, with no signs of diverging from that. Consumer price inflation is running 2%, period.

Scott Grannis said...

Cliff, re richer than ever happens all the time. That is precisely my point. The march of history involves progress and improving living standards. There are occasional setbacks, but they are only temporary. Buy and hold investment strategies will inevitably pay off, if you are willing to put up with the volatility and the angst that accompanies period sell offs.

Roy said...

For Trump 600 is not enough. He wants 2000.

If he would have stayed as POTUS, after that 2000, there would be another, then another, then another... whatever it takes for people to like him and have the stock market going up. The hell with future inflation or devaluation.


He is not fiscally conservative and never has been. The Tax cuts were ONLY because it benefited him and his friends; it had nothing to do with long term economic concepts.

He obviously couldn't care less about the constitution.

The best thing that could happen to the nation is if he stays around, starts a new party and all the corrupt and religious extremists leave the GOP with him.

ebg investor said...

Merry Christmas and Happy New Year to everyone in this group. Thank you Scott for your kind sharing of your wisdom and a time you are spending to run the blog.

Packers Movers Chennai said...
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WealthMony said...

Roy is a Democrat. His recommendation would assure Democrats in the White House for as far as the eye can see. Your suggestion that corporate tax cuts were only for the benefit of DT, and not future corporate profits is absurd. Are you scoffing at the narrowing of the income gap under Trump? Are you ridiculing improvements in productivity growth? Are you really saying that everything he did was only for his benefit? Sure, he has an outsized ego, but that does not mean he cannot care about his country and other people. Who are these "corrupt and religious extremists" who will leave the GOP to support Trump's new party? What is it that makes them corrupt? Do you consider yourself above corruption? By what standard? What, pray tell, is your definition of corruption?

randy said...

Scott,

Thank you for the blog, all your insight, and all the fine contributors. Very generous with your time and patience. Happy Holidays!

Fred said...

Scott,

Happy Holidays to you all the regulars on this blog. It’s always fun to engage in healthy debate on these complex issues. I’m hoping our senators win in the runoff which looks too close to call. I do take solace in your economic analysis that no matter what, the US economy will always find a way to overcome bad policy and continue its upward trajectory. After all, most of the liberals in Washington and Wall Street want to be rich.

Tom Mc said...

Happy new year to all. Thanks very much to Scott and all the readers. I’m grateful for this insightful, free content.

Scott - I have to echo Frozen’s position here but come at it slightly differently. Your allocating the growth in financial assets to the ‘average’ person because 55% of the population have some equity ownership. What is the allocation of shares based on income stratification? My guess is that even though 55% have some equity ownership, the % of the ‘average’ persons total wealth in shares is low compared to the higher income bands and therefore the ‘average’ person benefits far less what you purport in your analysis.

My guess is the average person is far from celebrating their new found riches and most likely hanging on by a tread to a low paying job.

Can you humour us and use a measure of median? Do you have an efficient way to do so?

Tom Mc said...

I’ve just read Frozen’s follow on comment about 84% of equity ownership is with the top 10% which seems logical.

Scott - Can you re-cut your data to show median or suggest some alternatives to give a more correct view on your ‘average’ citizen?

The Cliff Claven of Finance said...

Here is some information about which Americans own stocks. Stocks in pension funds are not included because the pension not pay more if stocks they invested in do well, and vice versa. So a pension fund is NOT stock ownership:

"Only 52.6% of Families Own Stock

When you look at the entire population of the United States, less than 53% of families own stock. They can own it through a taxable brokerage account or a retirement account, but only 52.6% own any stock whatsoever.

This is an increase from 2016, when only 51.9% of families had stock holdings.

The telling statistics is how this changes based on your percentile of usual income (Table 7 of the SCF spreadsheet):

Of the top 10% of income earners, 92.3% own stock (vs 94.7% in 2016).
Of the 80-89.9% percentile of income, 86.3% own stock (vs 83.3% in 2016).
Of the 60-79.9% percentile of income, 71.0% own stock (vs 73.6% in 2016).
Of the 40-59.9% percentile of income, 55.8% own stock (vs 51.8% in 2016).
Of the 20-39.9% percentile of income, 34.2% own stock (vs 32.5% in 2016).
Of the bottom 19.9% percentile of income, just 14.5% own stock (vs 11.6% in 2016).


As for the median value of those holdings? For all families, the median is $40,000. (down from $42,500 in 2016)

The breakdown is:


Of the top 10% of income earners,
the median value is $425,200 (up $38,700 vs. 2016)

Of the 80-89.9% percentile of income,
the median value is $87,200 (up $800 vs. 2016)

Of the 60-79.9% percentile of income,
the median value is $33,800 (down $700 vs. 2016)

Of the 40-59.9% percentile of income,
the median value is $15,000 (down $1,000 vs. 2016)

Of the 20-39.9% percentile of income,
the median value is $8,700 (down $1,900 vs. 2016)

Of the bottom 19.9% percentile of income,
the median value is $6,900 (up $500 vs. 2016)"

Source:
https://wallethacks.com/stock-ownership-in-america/

randy said...

Cliff, thank you for taking the time to provide those statistics. Of course it's difficult to know the accuracy of any statistics, but lacking any other evidence, we can take it for what it's worth.

More collective wealth is better than less, all things considered. The wealth of those well off supports those less well off without a doubt. Somewhat in much maligned trickle down. But more importantly in the collective wealth needed to support all the social services. I don't understand how those that hate capitalism think money will be there to support their progressive programs without capitalism.

But I might argue the question for most Americans isn't great wealth. It's day to day security, and some path for not starving in retirement. Addressing health care and housing costs would go a long way to addressing the things that keep most Americans awake at night. Even modestly well off are at risk of catastrophic health event that can bankrupt them. High housing costs and property taxes too. For a bonus issue, reform college education such that the cost / benefit is in line, and students learn something useful.

I don't see policy makers on either side that see it that way though.

randy said...

Andrew Yang is at least genuine.

Ataraxia said...

10 year rising some lately will it stick?

randy said...

The US Capitol is over-run... and the Russell 2000 is up 4% in the same day. That's resilience.

steve said...

Market going up on good and bad news. That's bad news. Sometime in 2021, I'm expecting a serious drawdown. Won't be because of Biden but he'll take the hit no doubt.

On a political note, we have reached a nadir thanks to our illustrious leader.

randy said...

Yeah, I didn't do a very good job at sarcasm when noting the market was up. There seems to be a lot wrong with the disconnect between the market and the world. Pundits remark "the market looks past the noise..." blah, blah. There is more than that.

Fred said...

A horrible day yesterday for America. We lost the Senate due to Trump's refusal to accept the results of the election. His mixed message to the rural voters in Georgia dampened enthusiasm and turnout in the rural counties where we needed massive turnout to offset the numbers in the metro counties. Perdue "won" the November election by 100,000 votes but underperformed in the hinterlands on Tuesday's runoff. Why would these folks vote when they were told their Governor and Secretary of State were criminals who rigged the November election to give Georgia to Biden? Now the Democrats will give the markets all the stimulus it desires until inflation brings us back to the '70s and valuations collapse. Will history repeat itself and usher in a new era of Reagan like conservatism or will we have nationwide Californication and
collapse?

steve said...

Things are never as bad or as good as they seem so America will recover-sans Chief A#$H(*le. The Republican party? It will take years if not decades to recover and you can forget about winning another national election. I know I have been completely disenfranchised and it will take a transformational candidate for me to vote GOP again. What boggles my mind is how so many could be so biddable as to think Trump thought of anything but himself.

randy said...

Such an awful outcome. Now half the country feels completely justified in demonizing the ENTIRE other half, even though almost all of the demonized half is just as horrified about what happened. The Biden and Harris immediately frame it as more evidence of inherent racism as the core of Republican party. Untold number of purple voters will understandably reject conservatives for years to come. The tech giants and democrat politicians working in unison to muzzle ALL conservative social media. Like the over-reaction to 9/11, this will only further polarize and marginalize making further violence even more likely. So much for Biden's "time for healing and unity".

One man, in just a few weeks, has f**ked up the country beyond what was imaginable. I'm trying to think of the right literary character analogy. Something from Cormack McCarthy... the Judge in Blood Meridian or Chigurh in No Country for Old Men.

randy said...

The Judge from Blood Meridian: And the answer, said the judge. If God meant to interfere in the degeneracy of mankind would he not have done so by now? Wolves cull themselves, man. What other creature could? And is the race of man not more predacious yet? The way of the world is to bloom and to flower and die but in the affairs of men there is no waning and the noon of his expression signals the onset of night. His spirit is exhausted at the peak of its achievement. His meridian is at once his darkening and the evening of his day. He loves games? Let him play for stakes. This you see here, these ruins wondered at by tribes of savages, do you not think that this will be again? Aye. And again. With other people, with other sons.
The judge looked about him. He was sat before the fire naked save for his breeches and his hands rested palm down upon his knees. His eyes were empty slots. None among the company harbored any notion as to what this attitude implied, yet so like an icon was he in his sitting that they grew cautious and spoke with circumspection among themselves as if they would not waken something that had better been left sleeping.

Flying Robot said...

Randy, 126 Republican members of Congress voted to disenfranchise the 81M voters who elected Biden. That happened AFTER the riot in the people's house. It was done with ZERO evidence. The biggest idiots are always the loudest in their claims of fraud, and their 'evidence' falls apart at the slightest examination. 63 out of 64 legal cases lost, and the sole win had no impact on the vote, and represented common behavior across many states that lean red, including Texas.

You all have been supporting racist and bigoted behaviors as it only got worse.

McCain was a hero. Romney has my respect.

The 126 can all go to hell where they belong.

randy said...

Robot: Much of what you wrote has merit. But I reject (without malice) the premise that I or anyone else here support racist and bigoted positions. That's not from a position of argument. Rather it is a position of not engaging in the false narrative that anyone that doesn't support the progressive cause, or is a conservative, is racist. I'm with you on the 126. So are 90% plus of republican voters. That another 10% +/- support the 126 in no way tells one anything that makes progressives less scary themselves.

Flying Robot said...

Randy, I'm an ex-Republican. Voted for Reagan and Bush Sr. The irony of that is my positions really haven't changed much over the years, but I sound more and more left-wing. Many left-wing tropes are mistaken as well and I don't buy the narrative that all conservatives are racist either - but at some point, when the political party you choose not only supports racist/bigoted policies, but also full-throatedly endorses white supremacist groups... well you're burying your head in the sand if you keep supporting them and then claim to not be racist. The word is complicit, and anyone who still supports Trump or his fanciful narratives has to consider whether they have crossed the Rubicon, in more ways than one.

As for progressive policies being scary... the exact same thing is true of conservative policies. Both tend to be warped by ideology. I'm convinced that many progressive ideas would be very beneficial to the US if properly structured around market economics.

Far worse is that the 10% figure you quote is so wrong. According to today's Quinnipiac Poll (link below) 73% of Republicans believe that Trump is protecting Democracy. Only 20% believe he is in the wrong. To be fair, I've seen other polls that put that closer to 58%/42%, but either way you are outnumbered. Kudos to you for being in the right regarding sedition, but now you have to wonder if you belong in the same party as the 73%(58%?), eh? As much as a third of the country, and 3/4 of the Republican Party, is erroneously supporting a man who doesn't understand or care about the constitution, and would clearly wipe it all away given the chance.

https://www.usatoday.com/story/news/politics/2021/01/11/president-trumps-job-approval-rating-plummets-after-mob-attack/6626054002/

Flying Robot said...

This link has a lot of good Net Worth information (by age-range, median and mean). Afaik it won't provide any detail on stock ownership.
https://dqydj.com/average-median-top-net-worth-percentiles-by-age/

steve said...

It is troubling that a significant % of those who voted for Trump think that the Dem's response is draconian. NOTHING short of permanent removal from politics is too draconian. And consider this; if Trump is not impeached, not only can he run again, he gets all the perks ex-presidents get and he deserves none. NOT that I think impeachment has a prayer given the hurdle of 67 senators needing to convict.

Getting back to the meat and potatoes of this blog, it will be fascinating to watch the fallout of the senate now being 50/50 (thank you Donald). Taxes MUST rise-and they should given the amount the feds have spent.

randy said...

My view is there is no functioning party to choose from now. Most of politics is performative, cynical and corrupt. For money and for power. If power is measured by the economic advantage - the real power belongs to those able to bend policy to their advantage - primarily large corporations. And they are happy to play along with the social passions of the media as it takes the spotlight off their rent seeking.

Progressives are slightly scarier to me because - well - the Republicans basically don't govern much. Progressives are magnificent at capturing empathy. But they also sell the lie that the federal government can and should be responsible for every misfortune or social standing. Eliz Warrens "I've got a plan". It's part lie, part lacking humility and introspection to proclaim they can solve complex social / economic issues with this or that policy. Its easier to see how these efforts almost *always* make things worse - far worse. But no progressives really care as long as they can show performative empathy and say they are doing SOMETHING.

What BLM is doing the the black community is sad.

Douglas said...

I am a lefty observer of this blog and a classmate of Scott's at Pomona College. We actually became friends years later on a class email list. I was very sorry when he left because then we lost his contrary voice and the list became an echo chamber. Contrary voices are important. Even though there is little he and I agree about in the political sphere (and from my point of view economics is just politics with numbers) that does not keep us from being friends. I have written and then deleted several posts lately because I felt like I would be an interloper, but now that is all ridiculous because of the peril Donald Trump has brought to us. But I am not really going to talk about it, I am going to direct you to this opinion piece: https://www.wsj.com/articles/bring-the-insurrectionists-to-justice-11610065179

I consider myself a patriot. For four years we have been in the grip of a man who, with his minions and henchmen, has brought this country past the brink of disaster. I am far to the left of Biden and I wish I had more confidence in him, but he's what we've got. Read Noonan's article. She says it better than I could from a solid conservative's point of view.

Glenn said...

The die is cast. Calamity comes from where you never expect. Covid! The next will be likewise. Belshazzar was the most powerful king in his day. His reign ended overnight. The Soviet Union disentegrated within weeks. Being a democracy doesn't exempt you from bad choices and actions.

Christophe said...

I heard an interesting idea recently.

Maybe 30% of republicans break away to “traditional republicans”, Biden can now pass certain reforms more center-right (not need the ~30% far left)... perfect solution to get the country going again in a semi bi-partisan manner?