Two good questions
The comment sections of my Trump posts continue to be a cesspool overflowing with alt-right idiocy. One recent commenter suggested that perhaps Soros was funding those KKK groups that support Trump, just to make Trump look bad.
Commenters ask me to get back to macro, but when I do nobody pays attention. My recent post on inflation attracted three comments (excluding my two responses.)
But they were good questions:
What’s the case for Trump not moving the Fed in a more dovish direction, either through persuasion or appointments. That could explain an increase in inflation expectations and preserves monetary offset. (Ant1900)
I responded:
I think the strongest argument goes as follows. The Fed normally aims for 2%, but falls short in recessions. So inflation (post-2007) averages a bit under 2%. Trump’s supply-side reforms will make a recession less likely. So [long term] inflation expectations rise, but remain under 2%.
That might seem a bit ad hoc, and I certainly don’t have any great confidence in this explanation. But it does at least explain why TIPS spreads remain below 2% for both the 5 and 10-year T-bonds. (The 30-year yield will almost always be higher due to tail risk.)
Another comment:
I completely agree that we are more likely to experience continued low inflation rather than some sudden increase. Infrastructure spending won’t do the job of increasing inflation. Japan is an obvious counter example of the effects of monetary offset. Yet the media and some commentators seem to forget this entirely. At the end, one risk we face is that we might end up having a more hawkish Fed that goes too far with the offset, with corresponding economic consequences.
My question: wouldn’t supply-side policies ease price pressures, leading cp to lower inflation and lower bond yields? To me, the observed increase in bond yields remains mysterious. (Fran)
You’d think that supply-side policies would reduce bond yields. After all, they tend to reduce inflation, other things equal, and lower inflation reduces bond yields. In fact, successful supply-side policies actually raise bond yields, at least when the Fed is targeting inflation at 2%. If tax cuts and deregulation boost growth, the Fed will tighten enough to keep inflation at roughly 2%. But even so, RGDP growth will increase. And because NGDP growth is RGDP growth plus inflation (2%), NGDP growth will also increase. And this is why bond yields will rise—they depend more on NGDP growth than inflation. People don’t notice that distinction when both move in the same direction (as in the 1970s, when both were high.) But when NGDP growth slows and inflation rises (as in mid 2008) we see that it is NGDP growth that matters more for interest rates.
Here’s my take on recent market moves, FWIW. A quick knee jerk fall on election night on fear of populist policies. A rally over the next few days as Trump people sent out messages that the worst parts of the populism (expelling 11 million illegals, 45% tariffs, etc.) will be dropped, and tax cuts, infrastructure and deregulation will be promoted. But note that markets have not moved up all that much; the bond yields still suggest slow growth ahead, and TIPS spreads still suggest slightly below 2% inflation. It’s not a game changer, probably . . .
There are actually two ways of interpreting the modest market reaction:
1. Supply-side policies are simply not that effective; they don’t boost growth as much as the advocates claim.
2. The market sees only a very modest probability that Trump will enact major supply-side reforms, either because he doesn’t want to, or because Congress will water it all down.
Long time readers know that I’m a moderate supply-sider. I think talk of boosting trend RGDP growth to 4% or 6% is silly. But I am a supply-sider, and I do think that if the markets were 100% sure we’d dramatically cut taxes on capital (as Trump has proposed) and dramatically deregulated, then markets (and real bond yields) would have risen much more. Thus I think it’s both. Supply-side policies really can be fairly effective, even as they are much less effective than proponents claim, and there really is uncertainty about how much Trump will accomplish. Thus here’s a conditional forecast. If Trump really were to get a strong supply-side agenda enacted, markets would rally even more.
PS. Trump’s proposed fiscal policy is still a populist horror show, which would balloon the national debt. We still don’t know if Trump will back off on that, once his advisers (or Congress) recognize the price tag. So don’t take these comments on the supply-side aspects of Trump’s plan as some sort of endorsement of the overall program. And again, we are still in the speculation stage.
PPS. I hope all those peacenik Trumpistas saw the Bolton for Secretary of State rumors. He probably won’t get the post, but you gotta wonder how his name even came up. The leading name is Giuliani. Maybe somebody told Trump that Bolton is “tough”. Loved Josh Marshall’s reaction:
PPPS. Hey Trumpistas, don’t say I never do anything for you. Here’s an article on the working class that you will actually like, showing how out of touch the elites are. As for you elites, it’s a pretty good article, even if you don’t agree with it.
PPPPS. Well doesn’t this inspire confidence:
President-elect Donald Trump has alienated many of the nation’s most senior national security officials and veteran foreign policy experts, leaving him with an apparent shortage of qualified Republicans willing to serve in his administration.
Trump’s transition team — many of whom are relative political outsiders who apparently didn’t realize that President Barack Obama’s entire West Wing staff would have to be replaced — are reportedly scrambling to fill Trump’s transition team before Inauguration Day.
But at least Trump’s not vindictive towards those who opposed him:
Eliot Cohen, a former State Department officer and Defense Department official who signed the August letter, also said it would not surprise him “in the slightest” if Trump had effectively blacklisted those in the national security community who had spoken out against him.
“If its true, I’ll wear it as a badge of honor, though,” Cohen told Business Insider on Monday. “And you can quote me on that.”
Cohen wrote last week that rather than move to Canada, Americans dismayed by a Trump administration should maintain “constant vigilance” over the US’s free institutions and “say yes” if they’re asked to work for him.
But by Tuesday morning, he’d changed his mind.
“After exchange [with] Trump transition team, changed my recommendation: Stay away,” Cohen tweeted. “They’re angry, arrogant, screaming ‘you LOST!’ Will be ugly.”
The Trump transition team didn’t respond to a request for comment on this story.
Lovely. Of course none of this matters; Trump will be advised on strategy by his alt-right, self described “Leninist”, who wants to “destroy” the establishment. What could go wrong? Who needs experts? “They got us into this mess.” China did fine during 1966-76 with the experts sent to the countryside to feed pigs.
And how about this:
Retired neurosurgeon Ben Carson, a former 2016 Republican presidential candidate who is an adviser to President-elect Donald Trump, has opted against accepting a Cabinet position in the Trump administration, his spokesman said on Tuesday.
Carson, a popular writer and speaker in conservative circles, has been a close adviser to Trump and is a vice chairman of Trump’s transition team.
He has been mentioned as a possible secretary of health and human services or education.
“Don’t worry, Trump will be surrounded by experts.”
Tags:
15. November 2016 at 10:30
Hi Scott, this is OT and I don’t know if you read comments but years ago I found you wrote an interesting article about the “driftless area” in IA/MN/WI being an ace for Obama. I saw the “flipped” counties for this election and wouldn’t you know the driftless area densely flipped to Trump after voting Obama twice!
http://www.usatoday.com/pages/interactives/2016-trump-flipped-counties/
15. November 2016 at 10:32
Also, sorry, I didn’t read that you do in fact read the comments. Apologies, was just looking all over to a place to email/tweet about a seemingly unique insight you had in 2012
15. November 2016 at 10:48
Cohen didn’t say if he’s revised his recommendation on moving to Canada.
—-
?
15. November 2016 at 10:52
What was that phrase I kept hearing from the RW media about Obama?… Oh yeah, “on the job training”
15. November 2016 at 10:53
I know in the past you said you ignore private bank credit. I am trying to understand the Monetary Offset mechanisms that you refer to. Is it an increase in rates by the CB – is there a different mechanism? If short rates go up, then that may be stimulative via the interest income channel, and expand fiscal deficits. Is it meant to contract private credit and offset that way? In Japan private credit has been on a secular decline since about 1995 (see chart below).
In the case of Trump, fiscal stimulus with the existing credit growth in the US, may see different results absent offset. Would the offset have to contract private credit.
For the moment I am ignoring the balance of trade, which may come into play as well.
https://fred.stlouisfed.org/graph/fredgraph.png?g=bM2x
15. November 2016 at 11:23
I think you go too far against the Alt-right. They make meaningful contributions though I would admit they let it slide into racism. They’ve done a lot to promote Men’s Rights push back against SJW. I think a lot of their thoughts on race are correct for the pre-civilization would and a lot of our psychologic instincts are rooted in that part of evolution even if it doesn’t work for the modern world.
They seem like a movement that is willing to look at things honestly like yourself even if they don’t know where to put the brakes on.
15. November 2016 at 11:53
You’re suggesting that claiming that a Jewish victim of the holocaust, who lost much of his family and was lucky to escape with his life, would fund antisemitic groups is ridiculous?
15. November 2016 at 12:00
Tom Brown,
You keep making it sound like nuevo fascists are unfair.
15. November 2016 at 12:00
On inflation expectations and TIPS –
I thought TIPS were supposed to protect an investor (me) from rising inflation expectations. Apparently not – TIPS are getting smashed along with all other bonds.
Does anyone know why ?
15. November 2016 at 12:47
Macro question-
If the GOP’s tax policy goes through more or less as it exists, there probably would be some greatly beneficial supply-side effects. Let’s suppose, for the sake of argument: 1) The sticker-rate corporate tax is reduced to somewhere around 25% with enough deductions scrapped that the effective rate is relatively unchanged 2) The corp tax system goes 100% territorial, with no tax on repatriating overseas profits and 3) analogous sticker-rate / effective-rate changes are made to individual income taxes.
I would think the following would ensue:
A) A 2-4 year period of above-trend growth (say, 4.0-4.5% RGDP, 3.0-3.5 per capita) resulting from removal of deadweight loss / badly allocated capital from present arrangements, with a possible additional boost from increased labor force participation
B) A meaningful increase in the equity valuation of American co’s reflecting the removal of the discount on foreign holdings/cash and the overall improved tax climate
C) a one-time boost to US total income / investment as accumulated overseas profits are repatriated, either in the form of returned capital (buybacks/divs) or domestic corporate investment
D) B+C resulting in a period of above-trend demand growth, being a double-whammy of income and wealth increases
Do you think that’s a reasonable set of expectations? I agree that the idea of having 4% trend RGDP growth is fanciful given the growth trends of productivity and labor force size, but given the massive distortions incentivized by current tax policy, I think it’s entirely reasonable to expect that removing them could juice growth above trend for several years.
If we suppose all that to happen (yes, admittedly, suppositions piled atop suppositions), how would the Fed respond to the resulting economic data? “Removal of deadweight loss” would appear in macro data first and foremost as productivity growth, boosting observed productivity above trend rate by perhaps as much as a full percentage point. Does the Fed have an analytical framework for handling expected multi-year spurts of productivity growth that don’t reflect a change in long-term trend, that instead represent more of a step-change in level? Would they be alarmed by “unsustainable” apparent GDP/AG growth rates and tighten policy to counteract it?
15. November 2016 at 12:55
I wonder why the Dollar is strengthening?
15. November 2016 at 13:14
Adam, I did a post on that just a few days ago—scroll back and you’ll find it.
Matt, It’s tighter money that will proved the offset. That often involves in increase in short term rates, but not always.
Sean, There are some intellectuals in the alt-right like Sailor, Moldbug, etc. Steve Bannon and Breitbart are not in that group. When I talk about Alt-right I’m referring to the crazies. Bannon is one of them.
JimP. There is still the risk of higher real rates. But good question, maybe worth a post.
Plucky, You can make a better argument for a few years of catch-up 4% than the idea that it would become the new trend. I agree. But even that’s a stretch my view. Maybe a couple years of 2% to 3% instead of 1% to 2%. BTW, human welfare could be improved in a way not necessarily picked up in GDP data if we got rid of the tax preparation industry.
There are many other good tax reform ideas floating around. Unifying tax rates on debt and equity. Ending the marriage penalty. Ending the AMT. Ending estate taxes.
Bill, Stronger RGDP growth expectations, and higher real interest rates.
15. November 2016 at 13:30
“I wonder why the Dollar is strengthening?”
That’s a good question. It’s also a good question why 10-year yields went up slowly over a few days after the election, instead of suddenly jumping. Same with the TIPS spreads staying under 2%.
On a fundamentals level, these markets seem to have impossible arbitrage opportunities. There are probably too many practical issues to allow real-world traders to capitalize on them. LTCM tried to arbitrage slight differences in these markets. Even when LTCM was bailed out, the long-term portfolio did not actually do very well.
I looked at German 10-year bond yields and they have gone up 10 basis points versus 30 basis points for US Treasuries. So it doesn’t really make much sense that the dollar would also strengthen against the Euro. But we’re also talking about fractions of a percent here, which could only be arbitraged over years. Depending on the cost of funds, traders may not be able to arbitrage such differences.
15. November 2016 at 13:37
he comment sections of my Trump posts continue to be a cesspool overflowing with alt-right idiocy.
The only person who comments here who might merit the descriptor is E. Harding, and he did not participate in the commentary to your most recent nonsense thread.
15. November 2016 at 14:19
I’ve read about this in the WSJ also. So lets summarize: Trump is lacking experts by the hundreds. He lacks the brain but he got the power. You got the brains regarding monetary policy but you lack the power.
I know your approach: You try to establish your view as the new consensus in macro and then you hope that the FED will adopt it. But is this really how progress works, especially in politics? This seems pretty unrealistic to me. And even if it works one day, years or even decades will have been lost. Do we really have time for only this approach?
I read that Mercatus is very proud that they convinced George W. Bush during his reign to reduce government regulation. Around 14 out of the 23 rules on Bush’s hitlist might have come from Mercatus.
My point is obvious: Why not trying to get as close to Trump as possible and convince him (or his close advisors) of market monetarism? Trump’s influence on Congress and the FED is definitely there. I read that already in February he will have to decide if Yellen can stay or not.
You need at least try to reach him before he does something stupid. Where’s the downside of trying this? There’s no downside, there’s only upside, huge upside.
And don’t tell me this approach is unrealistic. It’s more realistic than convincing all the other macro economists in time. This will never work out. It’s also way more realistic than an ignorant TV show host becoming the next President of the US. And we all now how this turned out.
15. November 2016 at 14:24
Wider interest rate spreads imply exchange rate moves. With US yields rising more the dollar should be stronger.
15. November 2016 at 14:24
Eliot Cohen, a former State Department officer and Defense Department official who signed the August letter, also said it would not surprise him “in the slightest” if Trump had effectively blacklisted those in the national security community who had spoken out against him.
He’s supposed to hire people who trashed him? And we’re supposed to trust the account of one Elliot Cohen, who trashed him and then wasn’t offered a job?
15. November 2016 at 14:26
What was that phrase I kept hearing from the RW media about Obama?… Oh yeah, “on the job training”
One of them spent more than four decades running a business with 22,000 employees and enormous quanta of physical plant. The other one ran the Chicago Annenberg Challenge into the ground.
15. November 2016 at 14:41
In ten years conservatives will walk around shrugging and saying that Trump was really a liberal and liberals are to blame for Trump and his policies. Just like they do with Bush.
Pretty sure we will get the same old crap from Congress. Tax cuts for the rich and benefits cuts for the poor and stagnation for the middle class some more. What do you think that will do for NGDP growth?
15. November 2016 at 15:14
Its not like boosting productivity is just something you decide to do. You can have as your goal ‘supply side reform’, but if your business expertise is crafting ‘heads I win, tails you lose’ deals, chances are you don’t know how to create real value for anyone but yourself. I think the market reaction is wisely considering that regardless how much Trump might want to improve the supply side, the only thing he knows how to do for sure is to make him and his friends rich (S-corp pass through at 15% anyone?)
For example, broadly slashing regulations might work. There are enough bad regulations that trying to surgically cut the bad ones may be unnecessary. But then you also have to navigate the political process. There’s a good chance that slashing regulations, once watered down by Congress, will amount to keeping all the regulations the most powerful vested interests want, which is almost by definition the ones that most need to go.
15. November 2016 at 15:43
“Commenters ask me to get back to macro, but when I do nobody pays attention.” If you want comments (though you disparage them as excrement) keep posting about Trump. If you want to spread insight not readily available elsewhere, focus on macro. (Of course, as you say, it’s your blog.)
15. November 2016 at 15:48
Trump (and the GOP Congress) seem headed for big deficits, ala Reagan, Bush and Bush jr.
The surprise is?
The question: With QE, can deficits be liquidated or monetized to positive result?
15. November 2016 at 17:24
I agree with Christian List. Get a book on persuasion. Arrange a meeting with Scott Adams. Write open letters to the Trump team. Use the word yyyuge. Wonder aloud whether they are bold enough to implement your plan. Think big.
15. November 2016 at 17:29
http://www.cnn.com/election/results/exit-polls/wisconsin/president
http://www.cnn.com/election/results/exit-polls/minnesota/president
Take a look at the under-24 numbers.
The Clintons are the decrepit movement of the past. We are the bright new movement of the future.
“China did fine during 1966-76 with the experts sent to the countryside to feed pigs.”
-According to Bairoch, relative to other similar countries, yes.
“Hey Trumpistas, don’t say I never do anything for you. Here’s an article on the working class that you will actually like, showing how out of touch the elites are.”
-Only covers half the story. Just look at this:
https://en.wikipedia.org/wiki/Mitchell_County,_Iowa
Bigger swing to Trump than to Reagan in 1980. Nobody has yet explained this to my satisfaction.
Good thing Paul is blocking Bolton.
15. November 2016 at 18:25
More on Carson:
http://www.cnn.com/2016/11/15/politics/ben-carson-declines-cabinet-position-donald-trump/index.html
‘”He’s never run an agency and it’s a lot to ask. He’s a neophyte and that’s not his strength,” Williams said, despite the fact that Carson vied for the Republican nomination to be the next president of the United States.’
“Dr. Carson feels he has no government experience, he’s never run a federal agency. The last thing he would want to do was take a position that could cripple the presidency.”
Yes, a guy with no government experience could certainly cripple the Presidency. Maybe Carson should have thought of that before endorsing Trump.
15. November 2016 at 18:39
“Commenters ask me to get back to macro, but when I do nobody pays attention.”
Posts that are unassailable generate little commentary.
I think Scott is an intellectual economist who got a little taste of reality TV and can’t let go…
😉 😉
15. November 2016 at 18:44
Good article about the WWC. It is more about class than about money, Trump may be rich and born rich, but clearly is a member of the working class and the fact that we belittles the professional class and bullies them is part of this popularity. He is one of them.
This article says that most WWC have never met a rich person, but that they resent the professional class because they are their bosses. This may be true in some cases, but what I think is increasingly the case is that there is very little interaction between the professional class and the working class at all. As an engineer, I have worked many times with working class folks and other than for a brief period when I was a brash kid right out of college, never felt any resentment…quite the contrary.
15. November 2016 at 19:09
Scott,
My take on these very predictable market reactions.
1. Reduction in tax rates on capital is almost certain.
2. This will result in silly RGDP growth (4% to 6%). (I’m sure you’ll disagree, and I’m guessing it will be a couple of years before you realize you’re wrong and another year or two after that before you’ll concede you’re wrong.)
3. The Fed has almost no control of the mix between inflation and real growth. For any given rate of NGDP growth, both inflation and RGDP growth are determined almost entirely by expected future supply/demand balance and by the past paths of inflation and real growth.
4. IMHO there has been a systemic drop in inflationary pressures. You need super silly RGDP growth rates to have much impact on inflation. Thus not much change in TIPS.
5. Nominal interest rates are determined almost entirely by expected nominal growth. Thus the higher rates we’re seeing on bonds.
6. S&P and Dow are not necessarily perfect indicators of overall economic activity. There is a lot going on within and between the companies that make up the S&P. Some sectors are down and some up double or triple the overall S&P gains. Also the S&P only includes listed companies. Also Trump’s industrial policy is going to impact various sectors differently. Tariffs, infrastructure, etc. Also if he pursues a populist anti-rentier policy (not sure Congress would go along), it could be quite negative for S&P listed companies.
7. Be interesting to see what Trump does on Fed appointments. Will you take the position of Fed Chair if he offers it to you?
Ben Carson… are you serious. The guy is physician not a health/medical care executive. Is a burger flipper qualified to be the CEO of McDonalds? Almost as bad as letting the Governor of Kansas run health care.
Cohen…. adolescent brat who’s whining because he didn’t get a job offer.
15. November 2016 at 20:14
‘When I talk about Alt-right I’m referring to the crazies. Bannon is one of them.’
What evidence is this based on? Surely not the say so of Mother Jones.
I don’t know a thing about Bannon other than that he’s a Harvard MBA, former naval officer and Goldman Sachs guy. Not exactly the profile of a crazy–unless owning a piece of ‘Seinfeld’ makes him that.
15. November 2016 at 21:21
“The comment sections of my Trump posts continue to be a cesspool overflowing with alt-right idiocy. One recent commenter suggested that perhaps Soros was funding those KKK groups that support Trump, just to make Trump look bad.”
The information revealed by wikileaks and other alternative, mainstream media sources, has proven that Soros is a primary funder of the country-wide riots/protests against the election results.
Yes, there is a cesspool of comments from the alt-right. But you Sumner are hip deep in the propagation of disgusting cesspool rhetoric that you pretend is not left wing bigotry and hatred.
The idiocy in your political posts is overflowing with pathetic left wing ad hominem mantras of the usual phrases of “…phobias”. Islamists and blacks committing violent, lethal hate crimes against whites, gays and women because they are white, gay or female? There is a deplorable, inexcusable silence and evasion from this sorry excuse for a blog. But when a loser alt-right acolyte jokes about something that makes your sensitive virtue signaling persona have a conniption? Oh it is the end of the world.
If you were honest and if you had integrity, you would have put Hillary Clinton’s involvement with bribery from countries that throw gay people off of buildings, the murder of dissidents like Seth Rich who leaked the emails, the involvement in child pornography and child trafficking, and the many people who were murdered far daring to bring justice to the globalist criminal cabal, at the top of the list of concerns of civilization. You are nothing but a propagandist for either status quo elite.
16. November 2016 at 00:36
Scott,
You said “Commenters ask me to get back to macro, but when I do nobody pays attention.”
Something to keep in mind: I read many of your posts, but I often comment on the political posts because I know more (or I think I know more) about the topic. Also, I disagree more often on the political posts, therefore I comment more (this is related to the first point).
16. November 2016 at 03:50
there is very little interaction between the professional class and the working class at all.
There is interaction, but wage-earners are conceptualized as pairs of hands, not people with a perspective, a techna, and interests to which to give voice. You see this on college campuses, where the faculty are superficially friendly to the staff (some of the time), but never have any kind of social interaction with them even at the depth of lunch at a local diner. An examination of the properties of Sumner’s exchanges with most of his commenters is also instructive. IMO, lawyers tend to be more alive to the human reality of those around them than physicians, who in turn rank well above professors.
16. November 2016 at 05:56
Yes, I agree with Anand. I usually agree with the econ posts, so don’t comment as frequently.
16. November 2016 at 06:01
Anybody heard from Mike Godwin lately?
https://www.washingtonpost.com/blogs/compost/wp/2016/11/15/give-steve-bannon-a-chance-its-not-like-hes-literally-joseph-goebbels/?utm_term=.da0aa7b7847a
————-quote————–
Listen, what proof do you have that this dead lizard wrapped in the Confederate flag will not make an excellent chief strategist and senior counselor to the president of the United States?
I, for one, believe that everyone deserves a chance.
You’re not wrong that this appears to be a pig’s head slowly rotting on a stake, grotesque insinuations pouring from its mouth as flies buzz around it in the island heat, but I would need to learn more about it, honestly. I’m no expert.
You say that this man just painted a swastika on a church but — couldn’t it be a plus sign? We don’t know. Some people are better at drawing plus signs than others. I wouldn’t read anything into it. Maybe he just loves churches.
—————endquote—————-
In the WAPO!
16. November 2016 at 06:22
Christian, You said:
“And don’t tell me this approach is unrealistic.”
OK, it’s sheer fantasy.
Art, You said:
“He’s supposed to hire people who trashed him?”
That’s what Lincoln would do. But then we both know that Trump’s no Lincoln.
Bush called Reagan’s ideas “voodoo economics” and then Reagan picked Bush as his VP.
But then we both know that Trump is no Reagan.
Character matters, and Trump is totally lacking in character.
mpowell, Any prediction that we’ll get supply side reform is based on the assumption that Trump’s too dumb to get involved, and he’ll farm all this out to Pence and Ryan. I have no idea if that’s what will happen, but if it is going to happen, that’s what it would take.
Harding, You said:
“According to Bairoch, relative to other similar countries, yes.”
Similar countries are South Korea, North Korea, Vietnam, Taiwan, Hong Kong and Singapore. And no, they did not do well, except relative to Vietnam, which was at war.
engineer, I’ve interacted a lot with working class guys, but I agree that most professionals do not. (And even I do so less often since I started blogging)
dtoh, Why don’t the markets agree with you about the 4% to 6% growth we are going to be seeing? An yes, like the bond market I’m very confident you will be proved wrong.
You asked:
“Be interesting to see what Trump does on Fed appointments. Will you take the position of Fed Chair if he offers it to you?”
Of course it would never happen, and I’d have to reluctantly turn it down if it was offered. If I were offered the job “advisor on monetary policy to the Fed chair” I might take it. (Again it would never be offered—but that’s the sort of job I’d me better (or at least less bad) at.)
Patrick, Bannon is the guy in charge of Brietbart. He’s the one who remade it after Breitbart died. It’s his project. How can you say we shouldn’t judge him on that basis?
Suppose Trump picked Drudge as his advisor, would you be OK with that?
16. November 2016 at 07:21
@ssumner
-It appears Bairoch was looking at countries like India, Burma, the Philippines, Pakistan, etc., as well. Though you’re probably right that the countries you picked are more analogous to China.
https://books.google.com/books?id=JAWBMOqwkJkC&printsec=frontcover&dq=inauthor:%22Paul+Bairoch%22&hl=en&sa=X&ved=0ahUKEwjBk83Ixq3QAhUq9YMKHZqZAMQQ6AEIKjAC#v=onepage&q=%22it%20remained%20slightly%20faster%22&f=false
16. November 2016 at 07:22
Everyone, All you people who say the complaints about Breitbart are just the whining of left wing reporters, consider this from the National Review:
In March 2012, Bannon — an investment banker-turned-conservative documentarian — became chairman of Breitbart News. Up to that time, the website had been mischievous but not malicious, reflecting the personality of its founder Andrew Breitbart (a personality that has been subject to gross left-wing revisionism since his death). But under Bannon’s leadership, Breitbart News’s impishness became something else. When it was not promoting Pravda-esque lies during the campaign season — for example, reporting as “100% vindicated” Trump’s claim that “thousands” of people in New Jersey celebrated the September 11 attacks — the site built up its viewer base by catering to the alt-right, a small but vocal fringe of white supremacists, anti-Semites, and Internet trolls. In May, Weekly Standard editor Bill Kristol was labeled a “Renegade Jew.” In September, an article about Trump’s “birther” press conference was accompanied by a picture of Harambe, the gorilla shot dead at the Cincinnati Zoo earlier this year. This summer, Bannon cheerfully informed Mother Jones that Breitbart News had become “the platform for the alt-Right.” (And if you, like Newt Gingrich, believe that the alt-right does not exist, please consult my Twitter feed.)
The Left, with its endless accusations of “racism” and “xenophobia” and the like, has blurred the line between genuine racists and the millions of Americans who voted for Donald Trump because of a desire for greater social solidarity and cultural consensus. It is not “racist” to want to strengthen the bonds uniting citizens to their country. The problem is not whether Bannon himself subscribes to a noxious strain of political nuttery; it’s that his de facto endorsement of it enables it to spread and to claim legitimacy.
But the alt-right is not a “fabrication” of the media. The alt-right is a hodgepodge of philosophies that, at their heart, reject the fundamental principle that “all men are created equal, endowed by their creator with certain unalienable rights.” The alt-right embraces an ethno-nationalism that has its counterparts in the worst of the European far-right: Golden Dawn in Greece, or Hungary’s Jobbik. (It’s no coincidence that Bannon spent time this summer praising “the women of the Le Pen family” on London radio, referring to the head of France’s National Front and her niece, a FN member of the French Parliament.) And while this by no means excuses smashing shop windows to protest a legitimate election result, as rioters spent the weekend doing in the Pacific Northwest, it’s also the case that not every Trump detractor is as devoid of cerebral matter as Lena Dunham. If ethnic and religious minorities are worried, it’s in part because Donald Trump and his intimates have spent the last several months winking at one of the ugliest political movements in America’s recent history.
Furthermore, as some on the left have been more attuned to than their conservative counterparts, the problem is not whether Bannon himself subscribes to a noxious strain of political nuttery; it’s that his de facto endorsement of it enables it to spread and to claim legitimacy, and that what is now a vicious fringe could, over time, become mainstream. The U.S. is not going to see pogroms or “internment camps” spring up in January. But countries require bonds of trust among citizens — including those citizens elected to be leaders. The Left gnawed at those bonds with its thoughtless commitment to cosmopolitan virtues. But the Right threatens to sever them entirely if it continues to court the proponents of ethno-nationalism, or trade in their rhetoric.
Read more at: http://www.nationalreview.com/article/442189/steve-bannon-trump-administration-alt-right-breitbart-chief-strategist?utm_source=Sailthru&utm_medium=email&utm_campaign=Daily%20Trending%20Email%20Reoccurring-%20Monday%20to%20Thursday%202016-11-15&utm_term=NR5PM%20Actives
16. November 2016 at 07:26
Sumner, the National Review is badly factually challenged. Don’t bother quoting it at us.
16. November 2016 at 07:42
Create your own reality is back!
16. November 2016 at 08:00
That’s what Lincoln would do. But then we both know that Trump’s no Lincoln.
Bush called Reagan’s ideas “voodoo economics” and then Reagan picked Bush as his VP.
Evidently the distinction between competition between peers (who have a network of patrons who could be useful to the surviving contestant) and being the subject of gratuitous denunciation by an academic eludes you. Unless Eliot Cohen takes himself way too seriously, he has to know that no one was waiting with baited breath for him to weigh in on any of the Republican presidential candidates. Either Cohen believed what he said or he didn’t. If he cannot execute Trump’s foreign policy, why hire him? If he feels compelled to strike poses contra Trump, why should Trump bother with him? He has no crucial skill set. He’s an IR professor at a school with more cachet than most who has had a position in the State Department with no defined responsibilities (HRC dumped her puppydog Cheryl Mills in the job). Kissinger he ain’t.
16. November 2016 at 08:04
Suppose Trump picked Drudge as his advisor, would you be OK with that?
Because Drudge’s skill set begins and ends with putting his site together (with its handsome 1996 graphic design). Bannon’s an educated man who has worked in several industries.
16. November 2016 at 08:09
It’s true that I don’t come here nearly as much any more due to the blog basically becoming a troll factory for both sides.
I love Lars’ tweet above. It’s depressing that neither Milton’s economics nor traditional conservativism have a base of support large enough in this country to make a difference anymore. I feel like a member of Albert Jay Nock’s Remnant.
16. November 2016 at 08:09
If ethnic and religious minorities are worried, it’s in part because Donald Trump and his intimates have spent the last several months winking at one of the ugliest political movements in America’s recent history.
No one is worried. The American Renaissance crowd is demographically inconsequential. They know it and Trump’s people indubitably know it. They’re of interest to partisan Democrats because contemplating them and talking about them feeds the amour-propre of a certain sort of bourgeois dolt and provides an excuse for their essentially poisonous and clueless view of their own society. It isn’t derived from any significance which adheres to Jared Taylor. The man’s just a hobbyist.
16. November 2016 at 08:51
Scott,
I think the markets agree with me perfectly. Why do you think otherwise?
16. November 2016 at 08:53
Regarding 4 to 6% growth.
16. November 2016 at 09:34
“Commenters ask me to get back to macro, but when I do nobody pays attention. My recent post on inflation attracted three comments (excluding my two responses.)”
Am still paying attention. Keep up the great blogging.
Modi just demonetized 85% of India’s banknotes, ie most of its base money. How will this affect the economy? Inflation? NGDP?
16. November 2016 at 14:42
I’m sorry, what KKK groups are you talking about?
The only ones I see in the streets throwing racial hatred and attacking people in the streets for their opinions and their skin color…are Leftists.
Don’t let the narrative die.
16. November 2016 at 15:26
Say what you will, on credibly promising to be irresponsible, Trump is in a class of his own. At some point, people (and markets) are going to catch on to that.
16. November 2016 at 19:52
‘Patrick, Bannon is the guy in charge of Brietbart. He’s the one who remade it after Breitbart died. It’s his project. How can you say we shouldn’t judge him on that basis?’
You’re judging him on, as far as I can tell, three headlines which Bannon almost most certainly did not write. Someone on another thread pointed out that the content of those three articles is logical and supported with facts.
But I asked for PRIMARY source material, not what somebody else claims Bannon believes. Especially not some snot nosed lefty journal like Mother Jones (and, it appears, WAPO now).
‘Suppose Trump picked Drudge as his advisor, would you be OK with that?’
Drudge is a Harvard MBA? A naval officer?
16. November 2016 at 20:09
Actually, the closest thing I’ve seen to Bannon in his own words is this from the WAPO;
https://www.washingtonpost.com/politics/how-bannon-flattered-and-coaxed-trump-on-policies-key-to-the-alt-right/2016/11/15/53c66362-ab69-11e6-a31b-4b6397e625d0_story.html
And it makes him seem pretty reasonable. Several times he’s characterized as nudging Trump into more moderate positions. Say;
————–quote————–
In another conversation, from February, Trump began with an attack on Sen. Ted Cruz (Tex.), his GOP primary rival, saying, “I’ve never seen any human being lie like he lies.”
Bannon, who had also praised Cruz in the past, interrupted.
“Mr. Mr. Mr. Trump . . . You’ve been in New York real estate, and global real estate, and the gaming industry, and with politicians. You can’t say, reasonably, that Ted Cruz is the biggest liar you’ve ever seen,” Bannon said.
“He’s the biggest liar,” Trump said. “Okay, let’s get on to another subject. I don’t want to make you uncomfortable.”
A few minutes later, however, Bannon circled back again. “These personal attacks. It’s turning people off,” he said. “On this Ted Cruz situation: You’ve dealt with the toughest hombres in the world. You can’t expect us to believe that Ted Cruz is the biggest liar you’ve ever met. It doesn’t stand to reason.”
Trump moderated. A little bit.
“He’s right up there, let me tell you,” he said.
————–endquote—————
17. November 2016 at 03:27
At some point, people (and markets) are going to catch on to that.
I love how many self-proclaimed Never Trumpers became prophets and Gloom and Doom bugs. At first they assured us Trump will stay in the GOP primaries for 2 weeks max. Then they assured us he will never win the primaries. Then they said he will abort the Presidential race. Then they predicted he will never win against Hillary. Now they are saying he will survive January at best, some give him a few months more, some say it will last one year and so on and so on. They are acting like Jehovah’s Witnesses and all those gold bugs and all the other bubble prophets and apocalyptic cultists.
Sure, Trump might fail at some point in his life like we all do. I bet when Trump dies of old age in 20 to 30 years the false prophets will stand at his grave and say: “Ha, I told you so!”
Yeah, you sure did.
17. November 2016 at 03:35
OK, it’s sheer fantasy.
That’s exactly what you guys need. More imagination, more persuasion, more confidence, more courage, more thinking big.
Otherwise market monetarism will never be established. At least not in the next 10-20 years. What do you think will happen after Trump? There’s no serious established candidate like Hillary on the Left anymore – only knuckleheads like Warren and Sanders.
Didn’t Reagan want to abolish the FED at first? People are always acting like he was this great guy with the big plan. But he wasn’t. He had a lot of wrong ideas and he needed A LOT OF serious persuasion as well.
17. November 2016 at 09:30
The “What So Many People Don’t Get About the U.S. Working Class” article you linked to jibes with my experience talking to blue collar workers. They work at hard jobs that they do not like and so do not like welfare for non-workers. Their ideas on trade are make-work and give us welfare that does not look like welfare. The tariffs that they want are equal to a very poorly targeted hourly wage subsidy, but they can tell themselves that it is not welfare.
17. November 2016 at 11:07
Dtoh, If the markets suddenly expected 5% growth instead of 1.5%, they’d be going totally insane. Bond yields would soar. So no, the markets think you are wildly off base, as do I.
JP, Hard to say. I have not followed the case closely. Are the notes being replaced with new ones–leaving the base unchanged?
Patrick, You said:
“You’re judging him on, as far as I can tell, three headlines”
No I’m not, I’m judging him on the Breitbart articles that I’ve seen. I never even read those three. It was someone else who mentioned them.
As far as the stuff you quoted, he also made anti-Asian comments in the same article. You didn’t mention those. He’s a white nationalist.
17. November 2016 at 11:55
@Floccina
The tariffs that they want
Where in the text can you read that they want tariffs? That reminds me of ssumner who liked to imply that those guys want exactly their old jobs back, like in the steel industry for example. This can be all true or not, and it might sound plausible, but so far I never saw hard data on it.
17. November 2016 at 19:51
‘No I’m not, I’m judging him on the Breitbart articles that I’ve seen.’
Could you point me to the articles you’ve read on Breibart.
‘As far as the stuff you quoted, he also made anti-Asian comments in the same article. You didn’t mention those. He’s a white nationalist.’
I must not have read it as carefully as you. Could you point me to the ‘anti-Asian comments’ Bannon made.
17. November 2016 at 20:09
So, let’s see what Bannon had to say, in his own words about Asians;
https://www.buzzfeed.com/lesterfeder/this-is-how-steve-bannon-sees-the-entire-world?utm_term=.xl1a31Lz3#.lvR2zYyPz
————-quote————-
The central thing that binds that all together is a center-right populist movement of really the middle class, the working men and women in the world who are just tired of being dictated to by what we call the party of Davos. A group of kind of — we’re not conspiracy-theory guys, but there’s certainly — and I could see this when I worked at Goldman Sachs — there are people in New York that feel closer to people in London and in Berlin than they do to people in Kansas and in Colorado, and they have more of this elite mentality that they’re going to dictate to everybody how the world’s going to be run.
I will tell you that the working men and women of Europe and Asia and the United States and Latin America don’t believe that. They believe they know what’s best for how they will comport their lives. They think they know best about how to raise their families and how to educate their families. So I think you’re seeing a global reaction to centralized government, whether that government is in Beijing or that government is in Washington, DC, or that government is in Brussels. So we are the platform for the voice of that.
—————endquote—————
So, in the above he includes Asian men and women in his happy band of working class types who he trusts to run their own lives. That sounds more the opposite of a ‘white nationalist’.
And;
‘And that center-right revolt is really a global revolt. I think you’re going to see it in Latin America, I think you’re going to see it in Asia, I think you’ve already seen it in India. Modi’s great victory was very much based on these Reaganesque principles, so I think this is a global revolt, and we are very fortunate and proud to be the news site that is reporting that throughout the world.’
Again, he includes Asians (and specifically Indians) as his brothers in believing in Reaganesque principles. Says Breitbart is reporting for them, along with Europeans and Latin Americans.
And;
‘You’re seeing a global reaction to centralized government, whether that government is in Beijing or that government is in Washington, DC, or that government is in Brussels. So we are the platform for the voice of that.’
Another inclusion of Asians there.
Well, I’m sure you have a bunch of examples of Bannon being two-faced on this. I’m eager to see them.
18. November 2016 at 06:27
@scott Did you expect bond yields to rise after Trump’s election. I think you had stated that it was impossible to draw any conclusions regarding his future actions from his policy pronouncements. The markets thought otherwise. So at least I’m directionally correct. Whether I’m right on magnitude remains to be seen, but I’ll bet you a nickel I’m right. 🙂
The only caveats are a) that the tax cuts on capital are minor (unlikely … I think we’ll see 15% and an elimination of estate taxes), and b) the Fed will maintain their record of incompetence by tightening too early.
20. November 2016 at 15:00
Patrick, I quote Bannon in a more recent post.
dtoh, You’ve already said the tax cuts will happen, and that growth will rise to 4% to 6%. So a failure of the tax cuts to happen doesn’t bail you out. You did not say “if”. Ditto for Trump. He said all these things will happen. Not will happen if he can get stuff through Congress. If he fails then he will have no excuses, nor will his fans.
As for high bond yields being the test, is Jimmy Carter your all time favorite President?
🙂