Peter Thiel’s weak defense of Trump

Peter Thiel is an extremely smart man.  Thus I was quite disappointed to see him defend Trump in such an unpersuasive manner.  He argues that while Trump has flaws, he got the big issues right.  In fact, Thiel is almost completely wrong on these points:

1.  Thiel argues that the elites have been pushing free trade and that this has been a disastrous policy, devastating to workers in manufacturing.  As I’ve pointed out here many times, this argument is nonsense, and it’s not even debatable.

Start with the fact that job losses in manufacturing are mostly due to automation. Second, job losses in import competing industries are partly offset by gains in exporting industries.  But what about our current account deficit?  That is not caused by free trade policies; it’s caused by a saving/investment imbalance.  The good news is that jobs lost in the tradable goods sector are gained back in the investment sector.  There is no net loss in jobs from trade.

“OK, Mr. Smarty pants, then why do we have so much unemployment?”  Actually our unemployment rate is 5%, barely half the rate in the eurozone, which runs a massive CA surplus.

Suppose you put a gun to my head and forced me to defend Thiel’s claim.  What would be my argument?  I’d say that both trade and automation lead to a move away form the sorts of jobs that unskilled men are good at, and that these trends may reduce the male LFPR.  But what a strange argument for Thiel to make!  The arguments against free trade and automation are identical.  Is this Silicon Valley entrepreneur actually opposed to creative destruction?  The rise of manufacturing destroyed millions of jobs in farming.  Farmers were devastated, with many being forced to go out of business.  In retrospect, should we regret that transformation? Is it a bad thing that our steel and auto companies can now produce the same output with far fewer workers?  Exactly what is Thiel claiming?

But it gets worse.  The free trade opponents always tend to use misleading data. They try to estimate all the jobs lost to trade, but in policy terms they never actually criticize trade, just free trade agreements.  But those agreements probably only account for a tiny fraction of the jobs lost to trade, and trade is only a small fraction of the job losses from automation.  Either they should have the courage of their convictions and oppose all trade (which would devastate Hollywood, Boeing, high tech, America’s farmers, and many other groups), or they should say they favor the pre-NAFTA trade rules.  But those rules still would have allowed most of those low-skilled jobs to go overseas.  Even before NAFTA, tariffs were pretty low. So which is it, Mr. Thiel?

Thiel’s comments on trade merely pander to the prejudices of angry, poorly informed blue-collar workers.  They do not offer any solutions.

2.  Then Thiel talks about how Clinton’s reckless policies led to a high-tech bubble that led to a crash in 2000 that devastated the US.  This is simply false.  America suffered no devastating crash in 2000, and the recession of 2001 was one of the mildest in all of American history (unemployment peaked at 6.3%).  And it followed the longest expansion in America’s history.  Criticizing the 1990s shows a basic ignorance of America’s past, as it would be difficult to find a better decade in all of America’s history.  If Thiel has one, I’d like to know what it is.

BTW, these comments from Thiel are all in defense of Trump, who knows nothing at all about economics, and has proposed no coherent economic model.  But it’s worth noting that Trump has said that the 1990s were great and that Clinton did a great job with the economy.  So the guy he says got the “big issues” right, totally disagrees with Thiel on this big issue.  Trump has offered no cohesive plan to prevent bubbles.

3.  Then Thiel talks about how a massive real estate bubble under Bush so devastated the economy that it is still stagnating 10 years latter.  But this is nonsense on stilts.  First of all, as Kevin Erdmann has so ably demonstrated, what’s distinctive about real estate was not a high level of construction during the boom (it was only slightly above average) but rather the extremely low levels since 2008.  If anything, America’s built far too few housing units over the past 10 years, which is why rents are so high.  Whatever is holding back our economy’s growth; it is certainly not an excess of housing units.

And what makes Thiel think that Trump would oppose building booms?  His entire life has been devoted to building stuff, often boondoggles that later went into bankruptcy.  He likes to say he’s a “debt guy”.  He did not predict the housing crash; indeed he offered bullish predictions in 2006. This is the guy who would have prevented the housing bubble?  Seriously? I mean even if you disagree with Kevin’s view on the bubble, how can you possible claim that Trump is the right guy on this “big issue”?

4.  The next “big issue” is America’s involvement in Middle Eastern wars.  Here I have a tiny bit of sympathy for Thiel’s argument.  Nonetheless, he massively overstates his case, and there is no evidence that Trump would be any good on this issue.  Thiel claims that we spent $4.6 trillion on these wars, and they cost 2 million lives.  But Trump says the military is spending too little, he wants even more military waste.  And as far as the 2 million lives lost (a figure that seems high to me), we have no idea how many would have been lost with a counterfactual continuation of previous policy.  Recall that under previous policy, Saddam invaded not one but two of his neighbors, causing massive lost of life.  He killed large numbers of his own citizens, sometimes using poison gas.  Bill Clinton’s sanctions were estimated to kill many thousands of Iraqis every single year.  Syria and Libya show that dictatorships in that region are quite capable of falling into murderous civil wars without a US invasion of their country.  Iraq has the same sort of ethnic splits as Syria.  Believe me, Saddam’s regime was going to end in a bloody mess, regardless of what we did.

Don’t bother commenting against my views of the Iraq war—I agree that our 2003 invasion was a huge mistake.  My point about counterfactuals relates to my next point—what would Trump do?  We know that he has a highly aggressive personality.  He often says he likes “fighting”, and not just metaphorically.  We know he’s very vindictive, indeed he admits this.  He expressed surprise that America has a (unofficial) policy against first use of nukes.  He’s pro-torture, indeed much worse torture than waterboarding, and he wants to assassinate the family members of terrorists. He’s on record saying that Obama is weak and that he–Trump–would crush ISIS.  He supported the Iraq War.  He idolizes Putin, a militarily aggressive figure.  Does this seem like a George McGovern dove?  Does Mr. Thiel believe that Trump would somehow crush ISIS without using our military?  Trump does say that he’s much smarter than the generals when it comes to fighting ISIS. (Does Thiel believe this?) OK, but then why doesn’t he tell the voters his plan? During the 1968 election, Nixon mentioned a “secret plan” to end the Vietnam War. How’d that secret plan work out?  The 5 wars that Mr. Thiel refers to are basically all aimed at ISIS/Al Qaeda or their allies.  What’s Trump’s plan to destroy these groups, without using our military?

Trump is not right on the “big issues”, he’s totally wrong.  And he’s incompetent. And his advisors are incompetent.  AFAIK, one week before the election he still has not released a tax reform proposal.  Where is it?  The previous proposal had to be withdrawn because his incompetent advisers came up with a plan that raised taxes on millions of working class Americans.  You can’t make this stuff up–the level of sheer incompetence is simply mind-boggling. Why isn’t the press calling him on this?

I always say that politics takes 30 points of a person’s IQ, including me.  Given where Thiel must have started from, I’d say 60 points in his case.  If that’s all that Trump’s smartest defender can point to, then I can sleep soundly know that my hostility to Trump is completely justified.

PS. I am well aware that Trump claims that he predicted the housing crash, just as he claims he opposed the Iraq war.  In fact, he did not predict the housing crash, just the opposite.  The guy lies almost every time he opens his mouth.  He’s the sleaziest person ever to run for President, in all of American history.


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94 Responses to “Peter Thiel’s weak defense of Trump”

  1. Gravatar of Effem Effem
    1. November 2016 at 08:19

    I think “free trade” has become a euphemism for globalization. It’s hard to deny that globalization has been a large force behind the stagnation of the middle class, especially relative to the top 10%. You may argue that globalization is inevitable, but there should be a coherent set of policies to address the resulting inequality…culture can only change so quickly without massive political consequences. Inequality is especially dangerous when there is a very visible sub-set of the top 1% who have been aided or protected by a system prone to influence (e.g., bank bailouts).

    The largest blind-spot I see by economists is ignoring political consequences. Yes, it’s entirely possible the most value-producing system produces record inequality. It’s also highly possible that ends up destroying the entire system. Has happened time-and-again throughout history.

  2. Gravatar of PG PG
    1. November 2016 at 08:37

    1. IIRC, Thiel didn’t really focus his attack on free trade agreements. His point was that the people in the middle of the US have been left behind, regardless of the cause.

    2. In my view, Thiel argued that the result of the 2000 _tech_ bubble crash was particularly harmful to the tech community. Consider the counterfactual where the tech boom continued at a sustainable pace through 2000. Perhaps GDP would have _grown_ much more. So, even though the recession was mild in absolute terms, taking the lost tech growth into account makes it potentially catastrophic. Maybe we could be making stuff, instead of sending the graduates of elite colleges into consulting and finance.

    3. Housing was built in the wrong places for the wrong people. Of course we need more housing in San Francisco and NYC. But housing in coastal elite cities is not a substitute good for housing in subprime areas to subprime borrowers.

    4. Do you really think that Trump is more likely to go to war than HRC, who’s bought and paid for by the military-industrial complex, not to mention foreign powers? I think it’s far more likely that Trump will actually try to do what we should have been doing all along: assassinate ISIS leadership with the help of Russia and anyone else who wants to come along. Not start unpublicized ground wars in multiple countries with questionable motives and unclear or idiotic exit strategies.

  3. Gravatar of Scott Freelander Scott Freelander
    1. November 2016 at 08:41

    Effem,

    You bring up a good point. There is a big conspiracy theory, or many theories, at the heart of some of this resistance to free trade. Globalization is seen as a means to create a “new world order” with a single government, perhaps the UN, and that will seek to enslave the masses to the evil Jewish bankers behind it all. This is that crazy Alex Jones stuff, and the fact that Trump and some of his surrogates appear on his show is very telling.

  4. Gravatar of E. Harding E. Harding
    1. November 2016 at 08:49

    Sumner, you are right here on trade and the 1990s economy.

    “Nonetheless, he massively overstates his case, and there is no evidence that Trump would be any good on this issue.”

    -Literally no major-party primary candidate other than Trump had a big emphasis on this.

    “But Trump says the military is spending too little, he wants even more military waste.”

    -Trump’s point is that the U.S. should have a high stock of military equipment, not a high flow of it.

    “Recall that under previous policy, Saddam invaded not one but two of his neighbors, causing massive lost of life. He killed large numbers of his own citizens, sometimes using poison gas.”

    -Who helped facilitate that?

    “He supported the Iraq War.”

    -Yeah; man, Trump was totally equivalent to Jeff Goldberg in the strength of his advocacy. Oh, wait, he wasn’t.

    “Syria and Libya show that dictatorships in that region are quite capable of falling into murderous civil wars without a US invasion of their country. ”

    -You’re smarter than this, Sumner.

    “How’d that secret plan work out?”

    -Pretty well, actually.

    You point out Trump is bad. Guess what? So are all men. Is Trump worse than Obama, Clinton, Kasich, Bush? Absolutely not.

  5. Gravatar of Scott Freelander Scott Freelander
    1. November 2016 at 08:51

    Scott,

    I’ll take some issue with your characterization of the relative stability of Iraq and the middle east in your counter-factual. Remember that we had no fly zones covering about 60% of Iraq before the invasion, with Iraq very securely contained. We also had tight sanctions, though enforcement had become somewhat of a problem. I see no reason to believe there would have been anything like the instability in Iraq under Hussein that there’s been since. The Iraqi army under him was far better than the one that ran from ISIS 2 years ago. Hussein was trying to bluff his hostile neighbors about WMD, and hoping we’d be smart enough to realize it.

    Also, let’s not underestimate the spillover of the instability we caused in Iraq to neighboring countries. It helped fan the populist flames of hatred against governments in the region not seen as adversarial enough to the US, and of course, the roots of ISIS started in Iraq. It’s not at all clear to me that Syrian resistance to Assad would have been as strong without the extremists crossing the border from Iraq.

    I do believe that the primary cause of instability in many countries in the region is a lack of economic development, not unrelated to massive corruption at the top. I just think maybe you underweight the severity of the problems our invasion caused.

  6. Gravatar of E. Harding E. Harding
    1. November 2016 at 08:59

    “It’s not at all clear to me that Syrian resistance to Assad would have been as strong without the extremists crossing the border from Iraq.”

    -Turkey’s just as relevant here.

  7. Gravatar of MikeDC MikeDC
    1. November 2016 at 09:03

    The smartest “defense” of Trump not to evaluate his policies, but to consider likely outcomes.

    Social norms aren’t changed by law but by collective realization. We don’t pass laws to suddenly decide stuff like “hey, it’s not OK treat different people (be they different based on gender, race, sexuality, etc) like crap”. We pass laws after a critical mass of people decide it’s not ok.

    The question is, which candidate forces more people to conclude being a jerk (to women… but to everyone else too) is not ok.

    To make that more explicit, Trump is a terrible example. If he’s elected, everyone will spend the next four years being embarrassed. The sort of “casual” misogynistic comments and actions he’s taken over the course of his lifetime will be subjected to deserved and ceaseless scrutiny. At the end, there will be progress in the sense that it will be patently socially unacceptable to be that kind of a jerk.

    On the other hand, I’m concerned that rewarding Clinton would actually push society away from drawing some of those conclusions that people need to draw. Electing someone who’s best known as the wife of a former president, and who in some ways made a career of “standing by her man” while he was committing crimes against women strikes me as not a very good message for women. Electing the family of past Presidents also sets off lots of “banana republic” flags for me, but that’s neither here nor there.

    In terms of where the “societal discussion is going, I think the treatment Bill Cosby gets is appropriate. I mean, he should probably be in jail but his professional life is over and nobody’s going to defend him. Bill Clinton, on the other hand, gets to be in the White House?

    While you could say the same about putting Trump in the White House, my point is that I expect the reactions to Trump and Clinton to be largely different. Maybe I’m wrong, but I expect that if Trump wins, he continues to get heavy scrutiny. We get a four year lesson of just what unacceptable behavior looks like. If Clinton wins, though, I think a lot of people in the media and politics go quiet. The scrutiny won’t be there, and it will be dismissed as largely partisan.

  8. Gravatar of Mark Thomson Mark Thomson
    1. November 2016 at 09:11

    Your link to “defend Trump” is messed up – the domain name is duplicated.

  9. Gravatar of Lawrence D’Anna Lawrence D'Anna
    1. November 2016 at 09:30

    You know the libertarian political compass, where you’ve got economic left and right on one axis, and social freedom vs social control on the other axis, and they’re orthogonal.

    Picture instead the following: X axis is “real politics”. left vs. right. The anchors are the Democratic and Republican Party. Y axis is “internet politics”. It’s social justice versus free speech. The anchors are GamerGate and Gawker media. The X and Y axis are not orthogonal, they’re maybe at a 30 degree angle. Theil cares about the Y axis a lot, and if you project candidates from real politics onto the Y axis, Trump is furthest to the “right”.

    Trump puts the McCarthyists and social justice warriors into fits of rage. That’s why Theil likes him.

    I’ll admit I liked that aspect of him too. But real government is actually important and internet politics is mostly stupid drama. And Trump is an immoral, vacuous demagogic conman. HRC is the lesser evil.

  10. Gravatar of ssumner ssumner
    1. November 2016 at 09:35

    Everyone, Stop talking about magic wands and get real. Otherwise I see no reason to keep answering comments.

    Effem, You said:

    “It’s hard to deny that globalization has been a large force behind the stagnation of the middle class, especially relative to the top 10%.”

    No, it’s easy to deny, because it’s false. To the extent there is a problem here, it’s more likely due to automation. And the middle class is not stagnating, living standards are far higher than when I was young.

    You said:

    “You may argue that globalization is inevitable, but there should be a coherent set of policies to address the resulting inequality…culture can only change so quickly without massive political consequences.”

    Trump isn’t proposing any. I am.

    You said; “The largest blind-spot I see by economists is ignoring political consequences.”

    I’ve never met an economist who ignores political consequences. Every one I’ve ever talked to has strong opinions on political consequences. You need to get past cliches.

    PC, You said:

    “Thiel didn’t really focus his attack on free trade agreements. His point was that the people in the middle of the US have been left behind, regardless of the cause.”

    That’s hard to believe, as Thiel is not dumb. He talked specifically about the costs of free trade, and said that this is a big issue that Trump has gotten right. Really, what was Trump right about? That we should have a 40% tariff on Chinese and Mexican goods? Does Thiel favor that? Trumpistas need to get serious, the man is completely bereft of good ideas. He has none.

    You said:

    “Housing was built in the wrong places for the wrong people.”

    That supports my post, not Thiel’s claims. Yes we need zoning reform. Maybe zoning restrictions have slowed growth. But that has nothing to do with Thiel’s claim that the 2006 housing boom is causing stagnation 10 years later. Why not blame our current stagnation on the 2000 tech boom? How about the Vietnam War? Or maybe the Baby Boom? Or global warming? You can’t just saying things, you need good reasons. Does the housing boom of 2006 reduce productivity growth today? Why? Does it reduce the labor force growth today? Why? How does it cause long run stagnation?

    You said:

    “In my view, Thiel argued that the result of the 2000 _tech_ bubble crash was particularly harmful to the tech community. Consider the counterfactual where the tech boom continued at a sustainable pace through 2000. Perhaps GDP would have _grown_ much more.”

    I don’t care about the tech community, America was fine. And Thiel implied it was devastating to America–it wasn’t. In any case, even if you believe that, Bill Clinton had nothing to do with the problem. So why does Thiel blame Clinton? Is it his fault if investors pay too much for tech stocks?

    And who’s going to wave the magic wand to make the tech boom “sustainable”? Was Bill Clinton supposed to do that?

    You said:

    “Do you really think that Trump is more likely to go to war than HRC, who’s bought and paid for by the military-industrial complex, not to mention foreign powers?”

    Actually yes, and I’ve frequently criticized Hillary for being too militaristic—Obama is better on that score. But yes, Trump is far more unstable and reckless than Hillary, and hence more likely to go to war.

    Harding, You said:

    “Trump’s point is that the U.S. should have a high stock of military equipment, not a high flow of it.”

    That makes no sense. A high stock is useless without a large army to use it. This is not like WWII—these are sophisticated weapons. And how will he crush ISIS? With a magic wand?

    And your claim that we facilitated two invasions is laughable.

    You said:

    “-Pretty well, actually.”

    You really say some stupid things. We lost another 20,000 lives, or more, and then lost the war. Get real.

    Scott, You don’t seem to understand that Iraq was highly unstable before 2001 (the date cited by Thiel.) There was no “stability” to be maintained. They invaded two countries. They committed mass murder against their own citizens. That’s a really unstable country. As for the no fly zone that you seem to think was successful:

    “Lesley Stahl on U.S. sanctions against Iraq: We have heard that a half million children have died. I mean, that’s more children than died in Hiroshima. And, you know, is the price worth it?

    Secretary of State Madeleine Albright: I think this is a very hard choice, but the price–we think the price is worth it.
    —60 Minutes (5/12/96)”

    Comments?

  11. Gravatar of ssumner ssumner
    1. November 2016 at 09:39

    Mark, Thanks, I tried to fix it.

  12. Gravatar of Scott Freelander Scott Freelander
    1. November 2016 at 09:45

    Scott,

    We must be defining stability differently. I don’t see what pre-no fly zone Iraq has to do with no fly zone Iraq. Iraq wasn’t nearly so capable of offensive operations against its neighbors with the US controlling more than 60% of its airspace, after having its military degraded, and while being under some pretty strict sanctions.

    As far as internal stability goes, the Kurds sometimes previously violently rebelled, but they had a measure of more autonomy with the no fly zones, and that situation had stabilized too.

    And what do chemical attacks against his own people, pre-no fly zones have to do with stability since? Stalin killed scores of millions of his own people, but I’d say the USSR had stability under him, in every sense that is relevant to this subject.

  13. Gravatar of Floccina Floccina
    1. November 2016 at 09:48

    @Effem, Glottalization is euphemism for China abandoning communism. Glottalization is most about China, that’s why so few people complain about the USA’s trade deficit with the northern Europeans.

  14. Gravatar of E. Harding E. Harding
    1. November 2016 at 09:52

    “And Trump is an immoral, vacuous demagogic conman. HRC is the lesser evil.”

    -In what way is the candidate promoting the most Russophobic combined with the most pro-Islamic rhetoric of a major-party candidate in any major power since Germany’s Hitler “the lesser evil”?

    “And how will he crush ISIS? With a magic wand?”

    -See the Panama, Grenada, Kuwait wars for reference.

    “And your claim that we facilitated two invasions is laughable.”

    -It’s true.

    “But yes, Trump is far more unstable and reckless than Hillary, and hence more likely to go to war.”

    -Really?

    https://www.youtube.com/watch?v=ThPslAHaLmA

    “We lost another 20,000 lives, or more, and then lost the war.”

    -Not under Nixon.

    Trump is far more stable and less reckless than Clinton, and about the same as Obama and Putin.

  15. Gravatar of Student Student
    1. November 2016 at 10:11

    Harding,

    1.) I don’t understand you love for Putin. Why are you so concerned about being friendly with a brutal oligarch robbing his people blind. A guy that arrests dissenters, the press, or anyone else saying something about the fact he is a horrible thug. A threat to freedom. This guy is attempting to undermine and ruin our great democracy… and you want to be his buddy. That’s nuts.

    2.) We are defeating ISIS. Haven’t you been paying attention? We are decimating them and they bleeding territory, money, and fighters. And we are doing it on the cheap (in relative terms as compared to say the overthrow of saddam).

    3.) ISIS is nothing like panama, Grenada, or Kuwait. It’s a guerrilla war.

    4.) Trump is a mentally unstable, self absorbed racist, with no plan whatsoever for how to govern. Who knows what that clown would do. It’s becoming more and more clear he just wings it. He just does shit without any plan or script. This is why he is dangerous. He has no respect for anything or anyone but himself. All this garbage about using the Russians to defeat Hillary, how he treats women, how he talks about brown people. The dude will say and do anything to improve his lot. He cares nothing about anyone else. If he destroys democracy to win, so be it. If he has to round up all the Browns into camps and ship them out to win, he will do it. I would rather randomly pick a kid from an elementary school than give a power hungry narcicist the reigns.

  16. Gravatar of Adam Ricardo Adam Ricardo
    1. November 2016 at 10:20

    Scott, the unemployment rate does not reflect the sixteen year ~15% decline in labor hours by 21-29 year olds and ~10% decline by 30-55 year olds. It’s clear that this groups labor hours has been falling since the China trade shock.

  17. Gravatar of Steve Steve
    1. November 2016 at 11:12

    All of the candidates use micro reasoning for macro policy. That’s why they both support fiscal stimulus plus other crazy stuff.

    As for automation, I agree. Automation is the real risk, both because it creates distributional risks, and political instability (as robot owners capture regulators).

    I actually think there is a much deeper problem. I think automation creates a deep emotional and cultural purposelessness. Plus staring at computer screens all day triggers anxiety at the biological level, which is probably a factor in the rapidly rising desire for sedation, suicide, and political vitriol.

    I share the fear the Trump exploits that angst, by fanning it, demagoguing it and misdirecting it.

    At the same time, Hillary is a vicious and uninspiring person. She instinctively attacks the messenger, has a bunker mentality, imagines vast conspiracies, relies on divisive race and gender rhetoric, and may start a war with Russia to divert from a likely criminal investigation into the Weiner and Podesta files. Or Hillary might trip and fall on the nuclear football during an alcoholic paranoid bender.

    I fear the establishment really fked us hard, really really fking hard. I’d much prefer president Bernie with R congress, or president Cruz with D congress. At least the topline message would be vaguely inspirational, which is important for tempering a festering cultural angst.

    Keep in mind it was the establishment on both sides that wanted a titanic matchup of Hillary/Bush, then Hillary/Trump once bush went limp… The DNC/Media complex outdid itself to kill Bernie (and elevate Trump), and the Business/Consultant/Senate leadership class were NeverCruz. A pox on all their houses; may they be the ones to suffer the worst non-lethal radiation burns.

    We’re all emotional now. Election derangement. I expect Scott to rip me for losing 90 iq points in thinking Hillary is dangerous and poisonous to the national dialogue, too. Hopefully we can agree that, starting Nov 9th, we will push back against whatever crazy irrational rhetoric comes out of Washington.

  18. Gravatar of Steve Steve
    1. November 2016 at 11:15

    This isn’t good:

    On Mon, Mar 2, 2015 at 10:57 PM, John Podesta
    wrote:

    > On another matter….and not to sound like Lanny, but we are going to have
    > to dump all those emails so better to do so sooner than later

    https://wikileaks.org/podesta-emails/emailid/41841

  19. Gravatar of Doug M Doug M
    1. November 2016 at 11:48

    The “problem” with free trade is that the costs are obvious — the people put out of work because they cannot compete — and the benefits more subtle — cheaper stuff, and a more efficient global workforce.

    There also is some bits of zero-sum thinking. If it is good for China, it must be bad for the US. Or, if the rich are getting richer, they are getting rich on the backs of the middle class.

    The fundamental tenets of economics is that the economy is not zero sum. It is possible to make everyone better off.

  20. Gravatar of brendan brendan
    1. November 2016 at 11:57

    1) Banning trade would shrink the pie but not forestall growth. Banning new techs that substitute for labor would. Efficiency and innovation aren’t the same.
    4) Scott, Syria has had small scale civil wars for decades, yet none delivered anything like this death toll. Why? Realists like Patrick Cockburn and Stephen Walt (who detests Trump) have been explaining why for several years. Because our Sunni allies like Saudi, Qatar, and probably Turkey have been funneling people, weapons, and money to the rebels. We not only knew about it but supported it – Assad Must Go! Many years ago some British General said about intervening in foreign Civil Wars: 1) don’t, 2) if you do, choose the side that is gonna win, and 3) make them win fast.

    How many times will we violate those wise rules before we learn?

    Maybe you agree – yet you say there’s no evidence that Trump will be any better. But I don’t get the sense you’re qualified to know. I don’t think you’ve read much about the insider stories of how foreign policy has been getting made in the last few administrations.

    Walt, who hates Trump every bit as much as you do, wrote a book called the Israel Lobby, whose well documented thesis you consider to be inconceivably bigoted.

    Yes, Trump is inconsistent and poorly informed. But there’s at least a chance he’ll drag the bipartisan establishment kicking and screaming away from its cartoonishly hawkish post 9/11 stance.

    p.s. Not a word on the key meta-issue here? “If you don’t conform, they don’t count you as diverse.” Do you not feel anything, any outrage at all, at how narrow the range of safe opinions is for people running big US institutions? You still insist the Trump thing has nothing to do with free speech?

    I remember when you claimed that official libel laws (Trump threatened a suit or something) silence more productive viewpoints than do unofficial PC-driven influences. Remarkable.

  21. Gravatar of Massimo Heitor Massimo Heitor
    1. November 2016 at 12:15

    #1: I emphatically agree with Sumner. Thiel highlights legitimately worrisome economic indicators that we should be worried about, but blaming free trade doesn’t make sense.

    #3: Sumner is downplaying government’s role in the housing policy bubble, that IMO, was largely a result of bad policies.

    #4: Sumner is weakest. I’d go as far as to say Sumner is wrong.

    “Believe me, Saddam’s regime was going to end in a bloody mess, regardless of what we did.”

    Absolutely. The US didn’t take a happy prosperous nation and turn it into a bloody mess, the US took a bloody mess and turned it into a different bloody mess. In the process we spent a ton of money, thousands of US soldier lives, and built up huge anti-US/western animosity and blame in the process. That is still a disaster. The bloody mess that resulted was not sufficiently better than the bloody mess that would have resulted without massive US intervention to justify the costs. Let Saddam or other middle east factions be the bad guy for such scenarios and take the blame rather than the west.

    There are similar stories for other MENA conflict scenarios in Libya, Syria, and Somalia.

    “The 5 wars that Mr. Thiel refers to are basically all aimed at ISIS/Al Qaeda or their allies.”

    This is really false. We also attack dictators that may be evil, but also were the main opposition to groups like ISIS and Al Qaeda.

    In Syria, Assad may be evil, but he is ISIS’s main opponent. The US literally armed rebels that later became ISIS or joined ISIS. And even the other non-ISIS factions often have some degree of support for some brand of Islamic extremism and hostility towards the west.

    When there are these wars between multiple factions that hate the west, the west should minimize their involvement. There seemed conflict between Hillary and Obama on this where Hillary preferred more intervention and Obama preferred less.

    I’d also stress the big issues that Thiel didn’t mention in this speech: immigration, racial politics, and the culture war. Thiel has donated to Numbers USA, which is an immigration restrictionist group. Thiel wrote the book, “The Diversity Myth” in 1996, which suggests his stance on the culture wars issues of race/diversity/equality. There are very intelligent arguments on the Thiel/Trump side of these issues and they are hard to talk about.

  22. Gravatar of Massimo Heitor Massimo Heitor
    1. November 2016 at 12:21

    @student,

    “Why are you so concerned about being friendly with a brutal oligarch robbing his people blind. A guy that arrests dissenters, the press, or anyone else saying something about the fact he is a horrible thug. A threat to freedom.”

    Why? Because the risks are greater than the rewards. If we had a guarantee of a happy outcome, sure, oust Putin, make Russia a happier place. If we run the risk of disaster including nuclear war, I would prefer minimizing risks of those negatives.

  23. Gravatar of brendan brendan
    1. November 2016 at 12:27

    I’m repeatedly struck and impressed by how much Scott knows, in detail, about economic history. I wish other economists weighted that stuff more heavily.

    But I’m with Massimo. That claim that all these wars are about ISIS is objectively false.

    Just as an example, Wikileaks showed that Hillary knew Qatar was funding ISIS (and funding Bill Clinton) in 2013. Knew that Assad was fighting ISIS. Knew that ISIS operated fluidly across the Syrian/Iraqi border.

    And yet there’s no evidence whatsoever we tried to stop our allies from helping ISIS until 2015. Why?

    Because overthrowing Assad was the priority. Why?

    Read mainstream academic Trump-hater Steven Walt’s book on the Israel Lobby.

    We all have cues we use to decide who is worth listening to. When I hear an economist say: “monetary policy is outta bullets, gotta do some fiscal stimulus”, I’m checked out.

    I think Scott decided long ago that anyone who suggested groups like AIPAC are pushing us into insane wars is not worth listening to. And so he’s got quite a blind spot.

  24. Gravatar of MikeDC MikeDC
    1. November 2016 at 12:36

    @ Doug M,

    A more subtle point regarding trade agreements is that even though they create positive sum outcomes, they still leave a lot of room for distribution of the gains from trade that many folks consider unfair or immoral. An outcome in which you net a gain of $1,000,000 from a trade and net $1 is still a positive sum trade. But most people would say I got screwed in the trade and you made out like a bandit.

    When I attempt to be charitable when trying to figure out what the hell Trump is talking about, this is what I hear. The existence of gains from trade is an economic fact. But in complex international agreements, their distribution is a matter of negotiation.

  25. Gravatar of ssumner ssumner
    1. November 2016 at 12:45

    Scott, Yeah, we define stability differently. I don’t view 100,000s of people dying as “stable”. And if it is, I want no part of it.

    Harding, You said:

    “Not under Nixon.”

    And you complain I don’t take you seriously.

    Steve, You said:

    “I fear the establishment really fked us hard, really really fking hard.”

    Americans have the highest living standard the world’s ever seen, and its getting higher year by year. Let’s stop the whining, we are doing great. You don’t see Canada whining, they are rapidly increasing their rates of immigration, and negotiating free trade agreements. Syrians have a right to bitch about things, we don’t.

    Brendan, You said:

    “You still insist the Trump thing has nothing to do with free speech?”

    Trump opposes free speech. He has said that after the election he will “stop” the media from saying all their lies about him, via tighter libel laws. How does that idea sound to you? I am much more worried about Trump suing me than I am about campus SJWs. Actually I’m not all that worried about either, but Trump’s at least a tiny potential threat to me.

    You said:

    “Efficiency and innovation aren’t the same.”

    Yes they are. If you don’t get that, then you don’t understand the issue. Both involve a trade-off between growth and disruption. It’s EXACTLY the same. No difference at all. Nobody say we should stop automation or trade, the issue is a slowdown in each, so there’d be less disruption. It’s exactly the same issue.

    You said:

    “Scott, Syria has had small scale civil wars for decades, yet none delivered anything like this death toll.”

    Why does everyone want to blame the US for every problem in the world? We didn’t start their civil war, it’s a fight between Sunnis and others. We did not cause the war in Syria or Libya or Yemen or Afghanistan. The Middle East is a screwed up place, and it would be screwed up if the US did not exist. Indeed without the US, Iraq, Iran and Saudi Arabia might all be at war right now. WWIII.

    I just don’t get this fixation on blaming the US for everything that goes wrong in the world. I see it on both the right and the left.

    Massimo, You said:

    “Absolutely. The US didn’t take a happy prosperous nation and turn it into a bloody mess, the US took a bloody mess and turned it into a different bloody mess. In the process we spent a ton of money, thousands of US soldier lives, and built up huge anti-US/western animosity and blame in the process. That is still a disaster.”

    That’s exactly what I said. So why do you say I’m wrong?

    And I agree that the government played a role in housing during the boom, and have criticized if for doing so. But what does that have to do with today’s slow GDP growth?

    You said:

    “Assad may be evil, but he is ISIS’s main opponent.”

    Are you implying that Assad is less evil than ISIS? Because he isn’t.

    As far as diversity, I don’t recall Trump saying he opposed legal immigration—which is far more important than illegal immigration. So I would not assume that Trump and Thiel agree on immigration. Trump wants faster GDP growth, whereas stopping immigration would make us Japan. Do you think Trump wants America to grow like Japan? He says he favors 4% growth.

  26. Gravatar of ssumner ssumner
    1. November 2016 at 12:52

    Steve, I won’t rip you for losing 90 IQ points, I intensely dislike Hillary as well. (And I lose IQ points in my political posts.)

    But I do think we all tend to overdo politics a bit—there are more important issues that need attention.

  27. Gravatar of E. Harding E. Harding
    1. November 2016 at 13:02

    “This guy is attempting to undermine and ruin our great democracy… and you want to be his buddy.”

    -How long has your party been at war with Eurasia? Did you remember when the Democratic Party was actually the party against rabid Russophobia? Both of these are serious questions, by the way, so answer them. BTW, at least I’m consistent here: I opposed Mitt Romney in 2012 throughout the election cycle.

    Watch
    https://www.youtube.com/watch?v=ThPslAHaLmA
    again.

    Putin has been the most moral leader of any major power for the past few years.

    I agree. Only Hillary is strong enough to tackle Russian “aggression”. Pre-register for the draft today.

    “Are you implying that Assad is less evil than ISIS? Because he isn’t.”

    -Sure, he is.

    “We didn’t start their civil war, it’s a fight between Sunnis and others.”

    -Wrong on both counts, and highly ignorant of the facts.

    “And you complain I don’t take you seriously.”

    -What? Nixon won the war, Ford and Congress lost the peace.

    “How does that idea sound to you?”

    -Absolutely fantastic.

    “I am much more worried about Trump suing me than I am about campus SJWs.”

    -Then stop writing lies.

    “Indeed without the US, Iraq, Iran and Saudi Arabia might all be at war right now.”

    -If hypotheticals were horses, philosophers would ride.

    “Actually I’m not all that worried about either, but Trump’s at least a tiny potential threat to me.”

    -That little statement says a lot about you, all of it bad. If you’re not an enemy of the SJWs, you’re an enemy to the people.

    “We did not cause the war in Syria or Libya or Yemen or Afghanistan.”

    -Yes, the United States did cause all these wars, just like the Fed caused the Great Recession, only with more deliberate purpose.

    Sumner, stick to economics. You’re terrible at politics and foreign policy. I’d want you running the Fed, but you’d be the world’s worst congressman.

    “I don’t view 100,000s of people dying as “stable”. And if it is, I want no part of it.”

    -Me neither. That’s why I support Donald Trump.

    “Because overthrowing Assad was the priority.”

    -No, it wasn’t. Bleeding the Axis of Resistance was. That’s why I, unlike many people, correctly predicted the results of the Syrian airstrikes trial balloon in 2013.

  28. Gravatar of E. Harding E. Harding
    1. November 2016 at 13:04

    “then Hillary/Trump once bush went limp…”

    -Boehner supported Trump, but Cruz won the endorsement primary from governors and senators. Bush supported Cruz. There was a big split in the establishment due to all the establishment candidates fading into non-existence.

  29. Gravatar of E. Harding E. Harding
    1. November 2016 at 13:06

    “But I do think we all tend to overdo politics a bit—there are more important issues that need attention.”

    -No, there actually aren’t. Again, this election is a titanic life-or-death struggle to determine the future of America. Immigration. War. Courts. Every one is on the line. Nothing at all like 2012.

  30. Gravatar of ssumner ssumner
    1. November 2016 at 13:06

    Adam, Only a tiny percentage of the decline can be attributed to China trade, and don’t forget than prime age male LFPR has been falling since the 1960s.

    It’s mostly things like automation and disability.

    Women are probably not impacted by the China trade, as they tend to work in services where jobs are plentiful.

  31. Gravatar of PG PG
    1. November 2016 at 13:33

    Scott,

    You said:

    “He talked specifically about the costs of free trade, and said that this is a big issue that Trump has gotten right. Really, what was Trump right about?”

    Trump was right about the fact that the flyover country has born the brunt of the cost of free trade while the greatest beneficiaries of globalization are the same elites who preach at them about how racist and sexist they are. The NYT often talks about the dangers of rising inequality, but their preferred candidate is very much in favor of policies that will exacerbate inequality in this country. At least Trump doesn’t have a history of giving handouts to wealthy donors. At least Trump’s donor base is much smaller than Clinton’s.

    You said:

    “But that has nothing to do with Thiel’s claim that the 2006 housing boom is causing stagnation 10 years later. ”

    That claim isn’t his main point. His main point is that our government has been doing a terrible job of dealing with, not to mention creating, “bubbles” of various kinds. So bad a job, in fact, that he thinks it’s worth voting for a flawed candidate like Trump, on the basis of him being an outsider and having some tiny probability of changing the course of the government. Now, maybe you don’t think our government is doing such a bad job, but a lot of people, particularly those living in flyover country, do.

    You said:

    “And who’s going to wave the magic wand to make the tech boom “sustainable”? Was Bill Clinton supposed to do that?”

    I don’t think the government should prop up any industry, but it’s amusing to compare the government’s response to the financial crisis, including the auto bailouts, to its response to the tech crash. Could this difference possibly be related to our stagnating economy? Could making taxpayers prop up shrinking and zero-sum-game industries while leaving growth industries to rot possibly have negative effects on productivity growth?

    Would Trump do any differently? Who knows? Can he do much worse?

    You said:

    “Trump is far more unstable and reckless than Hillary”

    You keep repeating this, and I just don’t see it. Sure, he’s not as PC as Hillary. But he is nowhere near as corrupt as Hillary, which is much more important to me. If “unstable and reckless” means “not beholden to wealthy donors,” sign me up.

  32. Gravatar of Christian List Christian List
    1. November 2016 at 14:23


    I was quite disappointed to see him defend Trump in such an unpersuasive manner. He argues that while Trump has flaws, he got the big issues right. In fact, Thiel is almost completely wrong on these points:

    I thought exactly the same things 1-2 days ago when I read about Thiel’s weird points for the first time. I was quite sure that you would rip him apart – and you did.

    I wonder why he made these false statements. Does he really believe this stuff? I see two explanations:

    1. He doesn’t really believe it but he thinks it will get Trump a lot of votes. So he repeats it again and again (like Trump does). I find this a bit too implausible because Thiel must know that his personal impact on voters is not relevant enough by far.

    2. He does believe what he’s saying. End of story. This would prove again that you can be a total genius and a total moron at the same time depending only on the issue.

    It’s quite interesting that Thiel is supporting Trump for all the wrong reasons.

  33. Gravatar of Steve Steve
    1. November 2016 at 14:23

    Scott- I’m not blaming the establishment for wrecking the country. I think America is Great and want to keep it Great. I’m angry that they fingered the scales to give us Hillary and Trump, the two most dangerous options.

    First they come for Rubio- flip flopper, bought a boat on credit. Dangerous!

    Then they come for Lyin’ Ted. He’d let citizens set marriage laws by plebiscite at the state level. Bigot!

    Then Bernie would give us European health care, which statistically seems cheaper and more efficient than here. IRRESPONSIBLE AND INNUMERATE!

    Now in the waning week before election day…NUCLEAR WAR!

    The growing frog in pot hyperbole of the commentariat drives me nuts.

    I’d take national health care or marriage laws by state plebiscite over nuclear war any day. Why didn’t they tell me that back when we had a choice?

  34. Gravatar of Steve Steve
    1. November 2016 at 14:32

    Also, in terms of “more important issues” I agree, that’s why I’m fingering three-pronged concerns about technology.

    1. social impacts of having “good living standards” but literally nothing dignified to do except self-medicate

    2. big data, cyber-espionage, cyber-framing, strong encryption, cloak and dagger propaganda, manipulation of public through asymmetric information

    3. new technologies becoming weaponized (drones, robots, AI, miniaturization, Elon Musk stuff)

  35. Gravatar of Steve Steve
    1. November 2016 at 14:41

    Frankly, all three of these things are coming into play in the current election, and I don’t see any of them going away.

    1. not much to add not, but the labor impacts seem likely to grow

    2. look at Wikileaks, but also the power of those who hoard information and selectively release. But also those who have secretive handshakes (as revealed in Wikileaks); imagine the power with strong encryption, more data, and more discretion.

    3. Most controversial. I want to read Oppenheimer, Feynman, Einstein, etc. What happens when a technology suddenly becomes evil and various players gradually realize that?

    For example, I have a hunch Russia realizes it is way behind in digital technology, but is war gaming a cyber-Stalingrad strategy to freeze Western digital weapons while relying on botnets, EMPs, deglobization, and analog tech to win and rebuild. Tom Clancy stuff.

  36. Gravatar of E. Harding E. Harding
    1. November 2016 at 14:47

    Steve, for Clinton, blame the Blacks and Hispanics.

    For Trump, blame Lyin’ Ted’s inability to win close states like Missouri, Arkansas, Louisiana, and North Carolina, as well as the calendar making Trump’s home state come right after Ryan’s.

    BTW, Cruz chose Fiorina as VP, who has the same foreign policy as Clinton -if anything, worse. Of course, Trump did the same thing with Pence, but he’s not a Princeton-educated lawyer and he wanted to pick a guy with political experience, and Pence had bogs of it.

    If I were Trump, I would have picked Rand Paul, but I understand the need to have an un-dynamic VP with ties to the political establishment to get things done.

  37. Gravatar of Steve Steve
    1. November 2016 at 14:50

    Also with robots doing all the work, (geographic) comparative advantage goes away, which mean free trade doesn’t matter much.

    It becomes all about IP, and government power.

  38. Gravatar of Carl Carl
    1. November 2016 at 14:53

    “Are you implying that Assad is less evil than ISIS? Because he isn’t.”
    He’s no saint, but he is better than ISIS.

  39. Gravatar of Nathan Taylor Nathan Taylor
    1. November 2016 at 14:59

    One nuance here when I watched Thiel. I thought Thiel wasn’t defending Trump at all. Thiel’s well aware Trump hardly holds a coherent view on anything. So I think Thiel was merely stating policies he believed (through his own ideological tinted glasses) made sense, and paid lip service to Trump. Using “big picture” as an end run euphemism.

    This doesn’t impact Scott’s critique of those views in the post. Rather I think tying Thiel’s views back to Trump is missing the point of what Thiel was trying to do. Thiel has longer term political ambitions, either as kingmaker or king. So focusing directly on critiquing Thiel’s views and glossing over his lip service to Trump would have been more interesting way to write this post, even if most of the substance was the same.

  40. Gravatar of B Cole B Cole
    1. November 2016 at 16:14

    The globalists are a little glib on “free trade and open borders.”

    It is not free trade but managed trade we have.

    So, the propertied class wants zoning (limits supply) but trade deficits (more demand for investment property from offshore) and lots of immigration (more demand for housing).

    We want free trade—but not in property and not in my neighborhood.

    Trading limited supply rent-producing houses for t-shirts in a managed $500 billion chronic trade deficit…might be a bit glib to argue this is a positive.

  41. Gravatar of B Cole B Cole
    1. November 2016 at 16:33

    Add on: free traders never seem to want to discuss this topic: suppose in 2017 there were a sudden surge of 500 billion dollars in demand for US goods and services from offshore. In general trade balance next year.

    What would this increase in demand mean for American businesses and workers?

  42. Gravatar of Massimo Heitor Massimo Heitor
    1. November 2016 at 16:53

    “Are you implying that Assad is less evil than ISIS? Because he isn’t.”

    I imply that Assad is mostly attacking rivals in Syria and not US/Europe/west. ISIS is directly linked to attacks in the west. (Am I wrong? I only have casual knowledge)

    My assertion is the US should retaliate against aggressions and defend itself and it’s strong allies, but minimize involvement with other wars. If different rival factions are fighting each other, and are not particularly good allies of ours, we should stay out of it, even if it involves higher causualties. Particularly in the middle east, the different factions there should take more ownership and responsibility for developing peace.

    Beyond that, I don’t know how to gauge how evil Assad is relative to ISIS. Could you suggest a measurement rubric?

    “I don’t recall Trump saying he opposed legal immigration”

    Sure, he did. He proposed pausing Muslim legal immigration. I presume the idea is to choose type and quantities of immigrants that benefit the US, not the other way around.

    “I would not assume that Trump and Thiel agree on immigration.”

    Thiel’s chosen immigration restrictionist advocacy group clearly likes Trump a lot:
    https://www.numbersusa.com/content/elections/races/presidential/donald-trump.html

    I remember you said you preferred immigration specifically from China. Isn’t that overtly discriminatory, and implicitly racially discriminatory? Why would you discriminate in favor of a would be migrant from China and against a potential migrant from other parts of the globe?

  43. Gravatar of Bob OBrien Bob OBrien
    1. November 2016 at 16:57

    I watched Peter Thiel’s speach to the National Press Club and I completely agree with Scott’s comments #1 thru #4. Thiel had a perfect soap box to promote the good Trump ideas and he just failed in my opinion. Instead he should have focused his speach on:

    0) Federal Government Spending and Debt
    1) Education Choice
    2) Supreme Court picks
    3) Reduce government regulations
    4) Better tax policy (example: lower corporate tax rate)
    5) Law and Order

  44. Gravatar of Greg Greg
    1. November 2016 at 18:11

    Nailed it. Well said. I just can’t figure out at all what Thiel sees in this guy. He doesn’t even have bad policy ideas…he has NO ideas. All hyperbole and fluff.

  45. Gravatar of Scott Freelander Scott Freelander
    1. November 2016 at 18:41

    Scott,

    I don’t really understand how you’re defining stability with respect to Iraq. I define stability in this case in terms of the balance of power in the middle east. It seemed much more stable before Saddam was toppled and de-Baathifcation. Iran benefited from a weaker Iraq and could begin to try to shape a balance of power more in its favor, which helped destabilize the middle east in the process. Also, of course, some of the insurgent forces in Iraq spilled over into Syria.

    I also think it’s obvious that Iraq itself was more stable under Saddam. There wasn’t the open civil war between Sunnis and Shiites, for example, and no opportunity for ISIS to form there. Sometimes the mass killings by dictators lead to more stability. That doesn’t mean such situations are ideal, but I think life under Saddam or Assad would be better than that under ISIS.

    Since you think the Iraq invasion of 2003 was a mistake, how could you not favor the previous stability, as I define it?

  46. Gravatar of Don Don
    1. November 2016 at 20:04

    Prof Sumner said: “that free trade is devastating to workers in manufacturing is nonsense”, because “job losses are partly offset”. Partly! PARTLY!!

  47. Gravatar of MP MP
    1. November 2016 at 23:19

    Scott,

    At the risk of injecting some economics into the discussion, why do you say that the current accountv deficit is caused by the savings/investment imbalance target than the other way around? Isn’t this one of those equalities that days nothing about causality?

    Thanks

  48. Gravatar of MP MP
    1. November 2016 at 23:21

    *rather* than the other way around

  49. Gravatar of Massimo Heitor Massimo Heitor
    1. November 2016 at 23:36

    “Trump wants faster GDP growth, whereas stopping immigration would make us Japan. Do you think Trump wants America to grow like Japan? He says he favors 4% growth.”

    This argument that immigration is necessary for economic growth is a deliberate ideologically driven lie cooked up by academic social scientists.

    Paul Collier said:

    “social scientists have strained every muscle to show that migration is good for everyone.”

    George Borjas said:

    “I have long suspected that a lot of the research was ideologically motivated, and was being censored or filtered to spin the evidence in a way that would exaggerate the benefits and downplay the costs.”

    If population growth were really so critical for economic growth why not simply use domestic birth rate boosting programs instead that avoid the ethnic conflict issues. If my theory of ideological driven manipulation is right, the very types that spin evidence in favor of immigration will recoil in horror and boosting native birth rates and evading demographic ethnic replacement efforts.

  50. Gravatar of Daniel Daniel
    2. November 2016 at 01:46

    This is just retarded.

    Elections are just a popularity contest between social coalitions.

    The winners rise in status, the losers fall.

    And since nobody wants to lose status, they become very bitter.

    Right now, the contest is between working class white men and an alliance between the underclass and the upper class (which, incidentally, consists of white men).

    The upper class wants to stick it to the working class. The working class, being stupid (if they were smart, they wouldn’t be working class) has been too slow to realize they are under attack – and, as such, is mostly losing.

    It’s as simple as that, everything else is just selfishness-driven rationalization.

  51. Gravatar of ssumner ssumner
    2. November 2016 at 04:27

    Carl, You said:

    “He’s no saint, but he is better than ISIS.”

    That’s not correct. I’m going to assume you don’t know what Assad has done.

    Ben, You asked:

    “What would this increase in demand mean for American businesses and workers?”

    It would mean nothing. Unemployment would not change.

    Massimo, You said:

    “I imply that Assad is mostly attacking rivals in Syria and not US/Europe/west. ISIS is directly linked to attacks in the west. (Am I wrong? I only have casual knowledge)

    You are wrong. Assad is intentionally committing mass murder against civilians. Those civilians are not his ‘rivals”. And a Syrian life is worth just as much as a French or German life. At least that’s what those GOP conservative Christians are supposed to believe, if they ever read their Bibles. At least utilitarians like me believe it.

    You said:

    “My assertion is the US should retaliate against aggressions and defend itself and it’s strong allies, but minimize involvement with other wars.”

    I agree, although I’d include its weak allies as well, if they are in a treaty organization.

    As for Muslim immigration, Trump has already backed off that promise, he would now allow Muslim immigration. In any case, that’s only a small share of the total. America will continue to become more diverse whether Trump is elected or not, and millions will continue to flow in legally from Latin America and Asia. So alt-righters who oppose Trump for “anti-diversity” reasons will be disappointed—nothing will change.

    You said:

    “I remember you said you preferred immigration specifically from China.”

    I do not think we should discriminate based on ethnicity. My point was unbiased approach that this would (de facto) mean lots of immigrants from India and China, as they comprise 1/2 of the developing world.

    Scott, I don’t favor stability, as you define it. When there is that sort of “stability” I favor revolution. Better to go down fighting than live in that nightmarish regime. Again, I’m not defending the US invasion, just saying that Iraq is better off without Saddam. He killed more of his people than we did. The Iraqi’s would have and should have revolted at some point. Syrians revolted against Assad, and Iraqis would have done the same.

    Don, Keep reading . . . sigh

    MP, The saving investment balance causes the real exchange rate, which causes the trade imbalance. That’s what macro theory predicts.

    Daniel, Yes, the first sentence of your comment described the rest of it quite accurately.

  52. Gravatar of Benjamin Cole Benjamin Cole
    2. November 2016 at 04:48

    Egads. From WaPo, just one hour ago.

    “Hillary Clinton and Donald Trump are tied in the new Washington Post-ABC News Tracking Poll which finds Trump now holds an edge on which candidate is honest and trustworthy.

    A 59 percent majority of likely voters disapprove of Clinton’s handling of questions about her use of personal email while secretary of state. This number, however, is no higher than the 60 percent who disapproved just over one week ago, before the FBI’s announcement Friday that it may examine additional emails after previously closing its investigation in June.

    However, Trump has opened up an eight-point advantage over Clinton on which candidate is more honest and trustworthy, leading 46 to 38 percent among likely voters. The two candidates were tied on this measure the last time a Post-ABC poll asked the question in September; when asked individually, past polls found majorities seeing each candidate as dishonest.”

    –30–

    I suspect Trump lacks the gravitas to be President, much like a helium ballon in a zephyr does.

    The American people think otherwise?

    PS I do not understand how a $500 surge in demand for US produced goods and services, from offshore in 2017, would “mean nothing.” Unless the premise is monetary offset.

    But then I do not understand anything anymore.

    Trump could get elected.

    The BIS says years of monetary accommodation has driven interest rates and inflation down.

    The US set up an Islamic puppet narco-state in Afghanistan, world’s greatest exporter of opium. We throw pot-heads in prison.

    Surging exports would do nobody any good in the U.S.

    I am taking up gardening for a living.

  53. Gravatar of Carl Carl
    2. November 2016 at 05:41

    Scott:
    I stand by my claim. Assad’s body count may be higher because he has an air force but thats a matter of capacity not intent.

  54. Gravatar of MikeDC MikeDC
    2. November 2016 at 06:34

    Here’s my Turing Test response.

    Scott Sumner says:
    Suppose you put a gun to my head and forced me to defend Thiel’s claim. What would be my argument? I’d say that both trade and automation lead to a move away form the sorts of jobs that unskilled men are good at, and that these trends may reduce the male LFPR.

    OK, good. We’ve identified a real issue.

    But what a strange argument for Thiel to make! The arguments against free trade and automation are identical. Is this Silicon Valley entrepreneur actually opposed to creative destruction?

    This is rhetorical hand waving. Everyone is opposed to extreme creative destruction in practice, even as we acknowledge that free trade and automation are the appropriate long-term policies.

    It’s defensible position to say that we should pursue free trade and automation, but do more than provide lip-service to the very real human issues caused by rapid economic change. Beyond the economics, work you can feel good about has a lot of well-researched benefits.

    The “Trump Policy” is to address this reality and get a better deal for the losers. The “Global Elite” policy is to say tough tits, losers. More concretely…

    The rise of manufacturing destroyed millions of jobs in farming. Farmers were devastated, with many being forced to go out of business. In retrospect, should we regret that transformation?

    Nope, but we should recognize that this was a major societal transformation, and one can imagine varying policy choices which would have made it more or less painful and rapid.

    But it gets worse. The free trade opponents always tend to use misleading data. They try to estimate all the jobs lost to trade, but in policy terms they never actually criticize trade, just free trade agreements.

    That makes it better, not worse. It would be worse to be an outright Luddite and say “Free Trade Bad”. Because in criticizing the agreements, they’re sidestepping criticism of basic economics (gains from trade) and leveling their criticism at the distribution of the gains from trade. Which, when it comes to a single-shot agreement between governments, is entirely up to negotiation and is a completely fair point to make.

    But those agreements probably only account for a tiny fraction of the jobs lost to trade, and trade is only a small fraction of the job losses from automation.

    But as economists, we ignore thinking like this, and we think at the margin. So while it may be a small fraction of the total, it may represent a significant marginal improvement.

    To put it differently, this is what doing more than paying lip-service to the losers of free trade and automation means in practice. It means we aren’t going to be backward and the benefits of free trade and automation, because on net they’re beneficial, but we are going to fight for the best possible distribution of gains instead of saying “let them eat cake”.

    Either they should have the courage of their convictions and oppose all trade (which would devastate Hollywood, Boeing, high tech, America’s farmers, and many other groups), or they should say they favor the pre-NAFTA trade rules.

    This is where your IQ starts to seriously drop. Because you’ve already acknowledged they’re making a different, and more subtle argument, and you just ignore it and rail against a straw man.

    But those rules still would have allowed most of those low-skilled jobs to go overseas. Even before NAFTA, tariffs were pretty low. So which is it, Mr. Thiel?

    Thiel’s comments on trade merely pander to the prejudices of angry, poorly informed blue-collar workers. They do not offer any solutions.

    Of course they do. Both pander and offer real solutions. The pandering is obvious. The solution is that while they aren’t going to abandon free trade:
    1) Ben is right… we have managed trade in the relevant cases.
    2) The distribution of gains from such managed trade is up for negotiation.
    3) The Bush-Clinton era policy making elite did not and will not negotiate very good deals on trade and immigration vis-a-vis the working class.

    Thus, the solution is to throw out that regime and replace it with one that will continue long-run economic liberalization, but will fight harder at the margin to improve outcomes for the working class citizens of the country.

  55. Gravatar of Scott Freelander Scott Freelander
    2. November 2016 at 07:36

    Scott,

    Where’s the evidence that there would likely have been a revolution in Iraq sans the US toppling of Saddam? I understand there were revolts in many countries in the region, but some of the regimes, like Saudi Arabia, held up well, or ultimately prevailed, like the military regime in Egypt.

    As for your stated preferences concerning a revolution in Iraq, I never guessed you were such an idealist! No wonder we disagree on the issues we do. This explains why you want to be a member of a permanent outsider party, which is totally out of touch with the realities of national and international politics.

    I consider myself a neo-realist and don’t particularly think Saddam’s fall was positive overall. I think the balance of power with Saddam in office was not only more favorable to US interests, but was better for many, if not most Iraqis. Of course, that may not be true in the long run, but I think it could be.

    I can’t say I agree that Saddam killed more of his own people than the US did. If you count the Iraqis we killed in 2 wars and sanctions, the number might be in the neighborhood of one-and-a-half million, though no one has precise figures. Saddam’s invasion of Iran led to roughly half-a-million Iraqi deaths, as I recall, and he killed some number of tens or hundreds of thousands to try to maintain his order.

    Back to your idealism, you have me wondering how your perspective can serve you in a world in which there is deadly serious competition between states and non-state actors to influence balances of power in favor of various interests. I think many libertarians and dovish liberals are very naive to think non-interventionism can be a guiding principle of policy. It is not a policy, but a stance.

  56. Gravatar of Massimo Heitor Massimo Heitor
    2. November 2016 at 07:39

    “Assad is intentionally committing mass murder against civilians. Those civilians are not his ‘rivals”.”

    Abraham Lincoln intentionally committed mass murder against the American civilians he was sworn to protect. The US fire bombed Dresden in WWII or dropped nuclear bombs on Japan to inflict maximum civilian damage. Basically every war involves intentionally killing civilians. Assad’s war is no different.

    The big moral differentiator is in WWII, the German/Japanese were the clear aggressors, and killing their civilians has some imperfect moral justification. With the Lincoln + Assad scenarios, they are fighting for power and authority and they have much less of a justification to kill civilians.

    “And a Syrian life is worth just as much as a French or German life.”

    Nations like France/Germany/US are supposed to care more about their own members and serving the interests of their members more than those of complete strangers. That’s a fundamental basis of a nation, which admittedly is being challenged by today’s globalism. This isn’t incompatible with Christian morality at all.

    Christians morality may assert that their souls have equal value at some spiritual level. And Christian morality emphasizes charity and kindness. But even Christians are allowed to care for their own families, their own neighbors, and their own countrymen more than strangers. There are also limits to charity and some expectation of reciprocity.

    The risk:reward ratio of US military intervention is terrible. The competing factions in Syria generally don’t like the west, no matter how noble our intentions, the Syrian factions would probably not give us lasting good will if we intervened, and intervention probably would still result in a bloody mess anyway just like the Iraq intervention. Those middle aest factions need to take more responsibility for establishing peace and bear the consequences if they don’t.

    “So alt-righters who oppose Trump for “anti-diversity” reasons will be disappointed”

    No president will deliver ultimate paradise and fix everyone’s problems in life. However, even you must acknowledge that if people want to pump the brakes on ethnic hyper-immigration, Trump is a more logical choice than Hillary.

  57. Gravatar of Scott Freelander Scott Freelander
    2. November 2016 at 08:04

    Scott,

    I’m further wondering how your idealism is reconciled with your stated utilitarianism. We seem to have the many of the same ultimate goals, but you would not be willing to have the amount of “blood on your hands” that I would to help achieve them. I am very willing to support methods you would consider dirty and appalling.

    For example, you would not hold a communist or fascist ideology against a Supreme Court nominee, but focus instead on the person’s behavior. I don’t know how that works in practice. How do you know the communist or fascist that appears to respect the constitution and laws in prior rulings and public opinions would continue to do so after reaching a position in which removal would be unlikely? Especially given that there would presumably be plenty of non-communists and non-fascists to choose from, why take a risk on people with ideologies incompatible with our system and philosophy of government? And what is the calculus if you choose to accept such risk?

    I see the unwillingness to sometimes get one’s hands dirty as sometimes appeasing others who are all too willing to exploit the decency of opposition. That doesn’t mean there aren’t moral limits, but it does mean that there is a moral relativism that I think you would find very uncomfortable.

  58. Gravatar of Tom Brown Tom Brown
    2. November 2016 at 11:55

    From CalTech physicist Sean M. Carroll’s twitter feed on Thiel:
    https://twitter.com/seanmcarroll/status/793177136047661056?lang=en
    Sean is my favorite “science communicator.”

  59. Gravatar of Major.Freedom Major.Freedom
    2. November 2016 at 14:06

    Sumner you wrote:

    First of all, as Kevin Erdmann has so ably demonstrated, what’s distinctive about real estate was not a high level of construction during the boom (it was only slightly above average) but rather the extremely low levels since 2008. If anything, America’s built far too few housing units over the past 10 years, which is why rents are so high. Whatever is holding back our economy’s growth; it is certainly not an excess of housing units.

    Every single one of those sentences is false.

    The reason housing construction was “too low” after 2008 was because it was TOO HIGH prior to 2008. Kevin Erdmann did not “demonstrate” that there was no unsustainable housing boom. He only made an attempt to apologise for it in the hopes that he can convince himself that the Fed did not cause an unsustainable boom. That is his function, his role. To provide propaganda to excuse the Fed from the blame for the bust being inevitable after what it caused prior.

    First, what Erdmann fails to grasp and what you fail to grasp is that booms are not only present when there is a minimum increase over time to the construction of anything. An unsustainable boom can be present even with FALLING production in that industry. This is the case when the fall should have been greater than it was, on the basis of actual consumer preferences and savings patterns (which you have taken continuous dumps on your entire career as unimportant), but credit expansion and inflation brought about by the central bank prevents that amount of fall from taking place.

    So no, you can’t just crudely look to the appearance of historical trends and conclude that there is or is not a boom on the basis of the trend. The science of business cycles is based on counterfactuals, not historical patterns and data mining.

    Erdmann did not show anything other than cherry picked history. He did not prove or disprove the theory Peter Thiel was alluding to.

    You are not a housing dictator who can declare that too few houses have been built since 2008 on the basis of your own personal preference. “If anything” is another way of saying an arbitrary baseless claim. The relevant preferences are individuals, ALL individuals, in a free market, which you take continual dumps on all the time every time you pander for more dollar alcohol which always props up what should not be propped up, and suppresses what should not be suppressed.

    What is holding the growth back is violence. Biggest coercive institution is the government, specifically in the domain of money and spending.

  60. Gravatar of Christian List Christian List
    2. November 2016 at 14:59

    @Tom Brown

    NYMag (in your link) got it nearly right:

    Thiel supports Trump for exactly the reasons he keeps telling us: because he’s a crank who doesn’t have a very deep understanding of politics.

    The correct version should read: Thiel supports Trump for exactly the reasons he keeps telling us: because Trump is a crank who doesn’t have a very deep understanding of politics.

  61. Gravatar of Bill Ellis Bill Ellis
    2. November 2016 at 17:19

    This kinda weasely argument always bugs me…. “And as far as the 2 million lives lost (a figure that seems high to me), we have no idea how many would have been lost with a counterfactual continuation of previous policy.”

    yep…we have NO Idea… so we don’t have to take responsibility for how we completely fucked up…killing millions…wasting trillions…

    Hell…. with this kinda logic any action we take can’t be criticized because hey…the counterfactual could be worse…

  62. Gravatar of Bill Ellis Bill Ellis
    2. November 2016 at 17:20

    The stupidest thing Scott ever said….”Syria and Libya show that dictatorships in that region are quite capable of falling into murderous civil wars without a US invasion of their country. “

  63. Gravatar of Tom Brown Tom Brown
    2. November 2016 at 20:13

    https://twitter.com/BrendanNyhan/status/793974553886265345

  64. Gravatar of Brent Royal-Gordon Brent Royal-Gordon
    3. November 2016 at 02:18

    I’d say that both trade and automation lead to a move away form the sorts of jobs that unskilled men are good at, and that these trends may reduce the male LFPR. But what a strange argument for Thiel to make! The arguments against free trade and automation are identical. Is this Silicon Valley entrepreneur actually opposed to creative destruction?

    Perhaps the way Thiel thinks Trump is “right on the big issues” is that Thiel believes Trump is right to blame trade for the plight of unskilled men—not because this belief is correct, but because it redirects popular anger from the Valley to China. In other words, he supports strategically lying to the electorate because he doesn’t think they can be trusted to do the right thing with knowledge of the truth.

  65. Gravatar of ssumner ssumner
    3. November 2016 at 05:17

    Ben, You said:

    “I do not understand how a $500 surge in demand for US produced goods and services, from offshore in 2017, would “mean nothing.” Unless the premise is monetary offset.”

    You are reasoning from an accounting relationship. It tells you nothing about causation. Read my very early post (within the first couple weeks) on reasoning from a C + I + G + (X-M) If X is more than M, then I is more than S. And yes, I assume monetary offset, why wouldn’t I?

    Carl, Sure, but then the difference between Hitler and the Boston Marathon bombers is just capacity, not intent. I can’t judge anyone’s inner feelings, all I know is what they do. Assad’s policy seems to be to either kill or force into exile the ethnic groups that oppose him–or at least that’s how he’s acting. (And yes, I understand that would be impossible, too many Sunnis, but he’s going down that road.) Not sure how the ISIS is worse, but maybe they are.

    MikeDC, You said:

    “The “Trump Policy” is to address this reality and get a better deal for the losers. The “Global Elite” policy is to say tough tits, losers. More concretely…”

    Don’t waste time with this sort of garbage, it doesn’t even pass the laugh test. Even Thiel is not dumb enough to think Trump will renegotiate NAFTA so that American workers don’t lose jobs. That’s sheer fantasy. In any case, Trump now says he favors even freer trade than Obama.

    Scott, You said:

    “I think the balance of power with Saddam in office was not only more favorable to US interests, but was better for many, if not most Iraqis.”

    Polls are somewhat ambiguous on this question. Recall that 80% of Iraqis are Shia or Kurds, and they were persecuted by Saddam. Kurds feel overwhelmingly better off today, while 46% of Shia said things were better under Saddam. And 55% of Sunnis. Given that it’s the nature of people to grouse about current conditions (many Chinese say things were better under Mao, ditto for Russians and Stalin) I’m not totally convinced things were better under Saddam. Yes, you can certainly make a strong argument, but those polls seem “ambiguous” to me.

    https://thinkprogress.org/poll-iraqis-say-theyre-worse-off-after-war-view-iran-unfavorably-e5696abdee87#.9uz3ro6kj

    And you haven’t commented on the Albright quote I asked you about. That 500,000 dead kids is just a pesky unfortunate detail in our wonderfully successful no fly policy.

    BTW, I have no idea if the 500,000 figure is correct, although she did not challenge it. But then I also don’t know about the 2,000,000 figure someone raised, which also seems pulled out of thin air.

    More generally, you should stop making assumptions about what I believe (which are often not true.) I’m pretty agnostic on foreign policy–I don’t know what the best policy is, and have said so many times. Respond to specific quotes.

    Massimo, I don’t waste time responding to comments comparing Assad to Lincoln.

    “This isn’t incompatible with Christian morality at all.”

    You obviously know nothing about Christianity. We are supposed to regard all lives as equally precious. I know many people do not, but that’s their problem, not mine. I am utilitarian.

    Bill Ellis, I said:

    “Don’t bother commenting against my views of the Iraq war—I agree that our 2003 invasion was a huge mistake.”

    You really need to work on your reading comprehension. Maybe you don’t know the meaning of “huge”, Sometimes spelled “yuuuge.” And no, we did not kill 2 million people. If you are going to make arguments, at least get some accurate data.

    You said:

    “The stupidest thing Scott ever said….”Syria and Libya show that dictatorships in that region are quite capable of falling into murderous civil wars without a US invasion of their country. “

    Sorry, I must have missed the invasions of those two countries that trigger their civil wars. You really are an idiot.

  66. Gravatar of Scott Freelander Scott Freelander
    3. November 2016 at 05:50

    Scott,

    On the Albright quote, I recall that a Harvard study years ago concluded that more than a million Iraqis died due to coalition sanctions, with the majority being children, the elderly, the sick, and generally the most vulnerable. I don’t see what that has to do with the no fly zone policy.

    I was opposed to the sanctions then and I don’t think that was a mistake on my part. In fact, I never cared about whether Hussein had WMD and thought that a somewhat stronger Iraq would have been beneficial to maintaining stability, but with the no fly zones and a general containment policy. I think the world would have been better off with Iraq being able to trade freely.

    As far as assumptions on your beliefs are concerned, I’m certainly guilty. That’s on me.

  67. Gravatar of MikeDC MikeDC
    3. November 2016 at 06:19

    Don’t waste time with this sort of garbage, it doesn’t even pass the laugh test. Even Thiel is not dumb enough to think Trump will renegotiate NAFTA so that American workers don’t lose jobs. That’s sheer fantasy. In any case, Trump now says he favors even freer trade than Obama.

    You are over-specifying a claim into unlikelihood (Trump will renegotiate a NAFTA) and ignoring the more general premise (Trump will take a much harder negotiating stance on intl trade).

    “Will Trump have scrambled eggs for breakfast” is irrelevant compared to “Will Trump have eggs for breakfast”.

    Will Trump formally re-open some kind of negotiation of a 20 year old treaty? Nope. Will he threaten, cajole, and propose taxes, tariffs and punishments for companies like Carrier and Ford? He’s already doing it. Clinton is already not doing it.

    Will Trump give the Rubber stamp approval to TPP that Clinton is likely to give? Seems unlikely.

    Who is more likely to crack down on illegal immigration, Trump or Clinton? It’s pretty obviously Trump.

  68. Gravatar of E. Harding E. Harding
    3. November 2016 at 07:59

    “Assad’s policy seems to be to either kill or force into exile the ethnic groups that oppose him–or at least that’s how he’s acting. (And yes, I understand that would be impossible, too many Sunnis, but he’s going down that road.)”

    -Sumner, are you such an ignoramus as to think the government-held areas are majority non-Sunni? They’re not. It’s the rebels who are blocking people from leaving rebel-held zones. Admit it, Sumner, you have no idea what’s going on in Syria.

    “many Chinese say things were better under Mao, ditto for Russians and Stalin)”

    -How many is “many”? It’s not a substantial portion of the population of either country.
    “Even Thiel is not dumb enough to think Trump will renegotiate NAFTA so that American workers don’t lose jobs. That’s sheer fantasy.”

    -Nah; if Trump wins, it’ll happen. But it’s still a bad idea.

    “I’m pretty agnostic on foreign policy–I don’t know what the best policy is, and have said so many times.”

    -All that says is that you’re badly ignorant about foreign policy.

    “Massimo, I don’t waste time responding to comments comparing Assad to Lincoln.”

    -They’re right.

    “Sorry, I must have missed the invasions of those two countries that trigger their civil wars. You really are an idiot.”
    -Pot, meet kettle. Seriously, I can’t believe a guy with your IQ, faced with the disagreement of literally every commentator here, would continue to defend such a self-evidently stupid statement.

  69. Gravatar of Craken Craken
    3. November 2016 at 08:55

    Mr Sumner has an extremely naïve view of American foreign policy. America has destroyed or facilitated the destruction of multiple Middle Eastern nations with malice aforethought. These arbitrary attacks gave organizations like ISIS and Al Qaeda space to develop their networks and take territory. This aggressive foreign policy is a bipartisan game. Now, I do not subscribe to utilitarianism (morality=arithmetic? Really? Ah, economists.). I do, however, subscribe to the value of civilization; and these policies certainly do not promote it, especially with their unsurprising blowback of utterly unassimilable “refugees” flowing into the West. This is the work Hillary intends to continue and intensify. To threaten Russia because Russia will not permit America to destroy yet another nation it deems, in its towering superiority, to be morally reprobate–Insanity.

    To reelect the Establishment means: More wars–>More hostile Muslim immigrants–>More terrorism–>More Big Brother–>More concentrated power–>More corruption…More tyranny. When everything except technology is on a downward trajectory, you do not reinforce the trajectory.

  70. Gravatar of rayward rayward
    3. November 2016 at 09:12

    Most of Thiel’s speech at the NPC on Monday was about bubbles, bubbles, bubbles and criticism of the Fed for promoting them. I have speculated that Thiel would prefer a Fed that is more Austrian in principles, in particular a Fed that would allow a free-fall in asset prices in the event of a financial crisis (Peter Boettke’s often-expressed preference). That didn’t go over very well with Thiel’s and Boettke’s friends. Am I wrong?

  71. Gravatar of Massimo Heitor Massimo Heitor
    3. November 2016 at 10:16

    @sumner

    “I don’t waste time responding to comments comparing Assad to Lincoln.”

    Because Lincoln is a sacred cow.

    You criticize Trump for “idolizing” Putin (which I doubt). The party of Lincoln idolizes a man who mass murdered his own people for power.

    “Assad’s policy seems to be to either kill or force into exile the ethnic groups that oppose him–or at least that’s how he’s acting. (And yes, I understand that would be impossible, too many Sunnis, but he’s going down that road.)”

    Sumner seems to suggests that the Syria conflict has a Shia+Alawite vs Sunni nature to it.

    I’ve read credible sources although I can’t find links at the moment, that say that most of Assad’s military and government is predominantly Sunni and the Syrian conflict is definitely not along Sunni vs Shia/Alawite lines. The Syrian Sunni see themselves as Syrian Arab Muslims not as Sunni specifically.

    “Why does everyone want to blame the US for every problem in the world?”

    You should know the answer to this:

    #1) Because the US has something worth taking. Poor and powerless aren’t worth guilting and resenting, the rich and powerful are.
    #2) Because the US is quite willing to play the victim game. Other rich countries like Saudi Arabia have done horrible things but have far less tolerance for appeasing various others claiming victim hood.

    And because everyone wants to blame the US for all of its problems that is a good reason to minimize involvement and let someone else be the bad guy.

    @Daniel,

    Your comment is spot on: Insightful and perfect.

  72. Gravatar of ssumner ssumner
    3. November 2016 at 11:19

    MikeDC, You said:

    “Trump will take a much harder negotiating stance on intl trade).”

    “Harder” is WORSE for American workers. Economists have known this for 200 years, but the public still has trouble with the concept of the gains from trade.

    “Will Trump give the Rubber stamp approval to TPP that Clinton is likely to give? Seems unlikely.”

    And that’s unfortunate, as it’s a good trade deal.

    Trump says he wants freer trade than Obama. Tell me how that helps American workers Be specific.

    Craken, You said:

    “Mr Sumner has an extremely naïve view of American foreign policy. America has destroyed or facilitated the destruction of multiple Middle Eastern nations with malice aforethought. . . . This is the work Hillary intends to continue and intensify. To threaten Russia because Russia will not permit America to destroy yet another nation it deems, in its towering superiority, to be morally reprobate–Insanity.”

    I’ll give you a pass because you are new here, and don’t know that I frequently criticize Hillary’s militarism. But don’t ever post a comment like that again.

    As for the claim that we are intentionally destroying lots of Middle Eastern nations, make sure that tinfoil hat you’re wearing doesn’t pinch too tight.

    Harding, You said:

    “It’s not a substantial portion of the population of either country.”

    I’ll bet it is.

    “I can’t believe a guy with your IQ, faced with the disagreement of literally every commentator here,”

    So you think my other commenters are as crazy as you are? Give me the exact day we “invaded” Libya. If you don’t, I’ll ban you from this site.

  73. Gravatar of Scott Freelander Scott Freelander
    3. November 2016 at 11:38

    Craken,

    How would any American President, or the US, benefit from purposely destroying countries in the middle east? And if the goal was to destroy, why the hundreds of billions spent to try to rebuild Iraq and Afghanistan?

    And are you really naive enough to think the Russians have good intentions or are neutral? Look at what they’re helping do to Aleppo. They don’t have the restrictive rules of engagement the US has.

    You seem to be one of many who fail to understand that non-intervention is a tactical decision, not a strategy. Russia and every other country and non-state actor in the middle east are in a competition to influence the shape of the balance of power. This is going on in every other region of the world as well, and losses of influence in one region in which a country has interests are fungible. They create a worse position of negotiation everywhere else.

  74. Gravatar of Massimo Heitor Massimo Heitor
    3. November 2016 at 20:41

    “I don’t waste time responding to comments comparing Assad to Lincoln.”

    This site admits that Lincoln extensively targeted civilians. This site claims that the big difference between Lincoln slaughtering innocent American civilians and Assad’s behavior is that Lincoln was fairly elected while Assad was elected in a rigged election.

    http://foreignpolicy.com/2012/11/14/is-bashar-al-assad-syrias-abraham-lincoln/

  75. Gravatar of morgan s warstler morgan s warstler
    3. November 2016 at 20:47

    I’ve come to believe Scott’s personal China issues mess with him on Trump. He can’t see past his family.

    That’s what ruins your IQ here Scott… I will make you smarter:

    1. Thiel made a NEW specific argument about Trade.. and lo and behold, it is the SAME ONE I MAKE. Our REAL GOAL is to OWN foreign markets… not TRADE with them. We want to be their landlords.

    Thiel:

    “The sheer size of the US trade deficit shows that something has gone badly wrong. The most developed country in the world should be exporting capital to less developed countries; instead, the United States is importing more than $500 billion dollars every year. That money flows into financial assets; it distorts our economy in favor of more banking and more financialization; and it gives the well- connected people who benefit a reason to defend the status quo. But not everyone benefits, and Trump voters know it.”

    The example I always use is Trump’s WALL is obvious way to force Mexico to BEND OVER and end Article 27 (which Trump is well aware of) and let OUR CAPITAL LEAVE THE US STOCK MARKET AND BUY UP ALL THEIR BEACHES and reap the gains of turning them into #NewFlorida

    2. This gets to WHY Trump, Thiel, Me and others who instinctively get out blank sheets of paper and say why not this! look at the current situation and sound crazy.

    Again, let me be specific…. Thiel SEES China chasing out Uber, Apple, Facebook, Netflix… and soon Amazon… the way that that TRUMP SEES the deal Boeing had to do with China.

    Trump means we play ALLTHE CARDS… “hey China, you no longer get to send kids here to study UNLESS you bring Uber back, apologize and guarantee completely fair competition… YES, China, profits there wil flow to Uber investors… F*CK YOU.

    “Hey China, yo want US movies? You take them thru US streaming services OWNED by US capital.”

    It ends here-> “Hey China, you let us buy and own land there and provide full property rights.”

    3. The POIINT here is that Scott and you other guys don’t really BELIEVE in FREE TRADE” you are Chickens, the hard core amongst us our PIGS… we trust our lives to it.

    What this means is we think Free Trade is like CRACK… early on, we got those poor Chinese suckers hooked on capitalism by negotiating based on simple TRADE of goods, where they kept the bigger piece, whatever makes them happy.

    But the process of BREAKING THEM, of ALTERING them… of MAKING EARTH: THE UNITES NATIONS OF AMERICA, that comes by slowing turning them out like a street whore, hooked on crack and NOW we force them to open their markets.

    It’s not overnight!

    But we don’t go do trade deals talking about Human Rights and Global Warming.

    We go in with, WE WANT OUR CAPITAL TO OWN YOUR SH*T… thats’ the goal!

    So look Scott… Globalization isn’t about the UN, it’s about everyone becoming US, and by US, we mean TEXANS.

    Look, I get it, you are older, and plaque on your brain keeps you from forming new ideas and you don’t have the god’s favorite entrepreneur gene. And you don’t like people looking at China like they are a bunch of dummies… but you think they are!

    YOU THINK when China cuts deals with us that keep our capital from buying up China, they are missing out! You think they are dummies.

    I think they are dummies bc they are commies and we got them hooked and NOW we can start to break them.

    Every couple of years, Bezos has to do a depth measure and show the market he can turn big profits on a dime…

    Every once and while over this 100 year China project, we have to send in someone like trump to GIVE THEM THE FEAR, to MAKE THEIR *SSHOLE PUCKER, AND OPEN THEIR MARKETS UP.

    Thats how this stuff works.

  76. Gravatar of Carl Carl
    3. November 2016 at 21:42

    Massimo:

    “The party of Lincoln idolizes a man who mass murdered his own people for power.”

    I wouldn’t characterize fighting to preserve the union, then freeing the slaves, then offering generous terms to the South after the war as the acts of a mass murderer lusting for power.

  77. Gravatar of Massimo Heitor Massimo Heitor
    4. November 2016 at 06:01

    “I wouldn’t characterize fighting to preserve the union, then freeing the slaves, then offering generous terms to the South after the war as the acts of a mass murderer lusting for power.”

    Fighting to preserve the union is very literally fighting for power.

    The slavery bit confuses the whole issue. Abolition was a just cause worthy of pressure and ultimately violence, but Lincoln was quite eager to allow slavery to continue indefinitely. Lincoln also wanted to deport sub-saharan blacks. Lincoln and General Sherman’s biggest enemies before the war were the more hardcore abolitionists. If the North demanded the South end slavery and offered terms of freedom and sovereignty, that would be noble. Instead the North did the exact opposite, demanded an absolute forfeiture of southern sovereignty and was quite flexible on the whole slavery issue.

    If Assad completes ruthlessly crushing opposition, achieves all of his lust for power and prestige objectives, spins some narrative that makes him a sacred cow national hero in the history books, I’m sure he can throw any compliant opposition survivors a bone too.

  78. Gravatar of ssumner ssumner
    4. November 2016 at 07:05

    Massimo, You knowledge of history is laughable. Lincoln was “eager” to have slavery continue???

    Morgan, If you want me to read a long comment, don’t start off with a bunch of idiotic comments right at the top.

  79. Gravatar of Carl Carl
    4. November 2016 at 09:07

    Morgan:
    “Our REAL GOAL is to OWN foreign markets… not TRADE with them. We want to be their landlords.”

    I hope not. I’m not a big fan of colonialism.

  80. Gravatar of MikeDC MikeDC
    4. November 2016 at 10:35

    Scott,
    “Harder” is WORSE for American workers. Economists have known this for 200 years, but the public still has trouble with the concept of the gains from trade.

    The public has more trouble with the distribution of gains from trade than the fact of their existence.

    Economists, myself included, hand wave a lot about the former, which is a matter of some negotiation and uncertainty, and subsume it into the latter, which is an economic fact we can feel certain about.

    Trump says he wants freer trade than Obama. Tell me how that helps American workers Be specific.

    Err… how specific do you want me to be? I’m not trying to be glib with that, but you’re asking a question that has a lot of valid answers. For example:

    * A pure economics answer? Freer trade creates a net gain in consumer surplus.

    * Political economy? Trump suggests he will negotiate better than Obama, and that “freer trade” means that while Obama negotiated deals in which the US gained a small, share of the net gains from trade (and US workers even less), other countries gained proportionately more through maintenance of trade rules, subsidies, and other restrictions that a Trump administration would quash through negotiation.

    * Political science / game theory / Machiavellian? Just as “only Nixon could go to China”, credibility and trust matter. A substantial enough portion of the public and voters will never trust Clinton with a trade agreement, so she would never get it through Congress. Just like Obama couldn’t. On the other hand, if Trump committed to a series of bilateral negotiations (which he has suggested), even if he didn’t get any better of a “deal” than the TPP, his prior credible (seeming) opposition to the issue would largely silence the opposition to the deal.

    Again… how specific do you want me to be. I could take the day off work and cite the relevant public choice literature on agenda control . I could cite Scott Sumner’s opinions on the power of credibility…

  81. Gravatar of morgan s warstler morgan s warstler
    4. November 2016 at 11:22

    My arguments are more fun and new than MikeDC, but he’s saying same thing

    Carl.. STOP. “Colonize “where they adopt 1st world property rights and sell us their land.. is GOOD. ALWAYS GOOD.

  82. Gravatar of Student Student
    4. November 2016 at 11:38

    Your belief that trump is a good negotiator is farce. The only thing that saved that guy from himself was that he accidentally built a brand (using the money daddy made) when he wasn’t attempting to.

    If your point is we should force China to open up to us capital inflows and negotiate bilateral trade deals. Fine. Any administration can do, even a Clinton one. We don’t need a dangerous nationalist with a narcissistic personality to do so. And anyways, I have absolutely no confidence trump can or will deliver anything on trade.

    Also, your idea of first world property rights is really corporatism where a different set of billionaires possess all the wealth.

    I find your position rather dark and scary. You aren’t arguring for an inclusive society based on empathy and treating others as inherently dignified individuals. It’s screw the Chinese billionaire to benefit a different set (ie non Wall Street) american billionaires with the seeming goal of making them trillionaires.

    Once again, no thanks. You and trump need to spend a year or so living a serf’s life.

  83. Gravatar of Massimo Heitor Massimo Heitor
    4. November 2016 at 12:18

    @sumner

    “You knowledge of history is laughable. Lincoln was “eager” to have slavery continue???”

    I spent the whole weekend with an actual Lincoln scholar who gives speeches on Lincoln at universities. He agrees with some of my points and doesn’t dispute the rest. Even he as a Lincoln admirer, will stress that Lincoln wasn’t a strict abolitionist and his biggest enemies were the more fierce abolitionists.

    Two Lincoln quotes:

    “I have no purpose, directly or indirectly, to interfere with the institution of slavery in the States where it exists. I believe I have no lawful right to do so, and I have no inclination to do so.”

    “My paramount object in this struggle is to save the Union, and is not either to save or to destroy slavery. If I could save the Union without freeing any slave I would do it, ”

    @morgan

    “Our REAL GOAL is to OWN foreign markets… not TRADE with them. We want to be their landlords.”

    This sounds crazy. I’m a huge Trump fan, but free trade is good and opposition sounds nuts. Peter Navarro is a nut.

  84. Gravatar of Carl Carl
    4. November 2016 at 13:05

    Morgan:
    Ok I reread your post and it contains a lot of statements that sound like colonialism, but i guess you’re just saying that we need to negotiate the ability to have US property rights enforced on foreign soil. As long as it’s a two way street that isn’t colonial, but it would be a great way to stifle trade as you wait around for countries to change to a US legal system before you trade with them.

  85. Gravatar of morgan s warstler morgan s warstler
    4. November 2016 at 13:31

    Carl,

    You, Scott,and everyone else are WRONG and I and Thiel are right.

    Mexico: we can now FORCE Mexico to adopt 1st world property rights. They will BEND OVER. Just simply ask yourself, why would the WALL come down?

    A: because 10M+ American families have grandparents who retied to #NewFlorida in their $75K beach Condo with healthcare that cost 25% as much… that you hope to inherit when they kick the bucket.

    Mexico will RACE to get that Wall taken down.

    Now on China… the FINAL STEP is 1st world property rights, and htey are not there yet, think of it as 100 years from Nixon…

    RIGHT NOW, the next step is to threaten to CUT OFF their access to US Education system and US trade IF they do not allow US capital to compete FAIRLY in their markets the thing we are best at: Software and Entertainment.

    Thiel gets it. I get it.

    And Scott listens to Thiel’s speech and MISSED it… Thiel is guy with BILLIONS of people’s money to invest and he correctly SEES the stock market bubble and housing bubble as… not being able to put our capital where it should be be put… foreign markets.

    And Scott and all his whining is WRONG. We are right.

    And Hilary and Obama are too stupid and able to be bought off and have no entrepreneur gene and thats’ just that.

    Right now, US trade concerns should be laser focused on: IS China letting Uber, Amazon, Netflix, Airbnb and UNFETTERED access tot heir 1.3B consumers… are they going OUT OF THEIR WAY to prove to us, they GET THE NEW DEAL…

    If not we break them.

  86. Gravatar of Carl Carl
    4. November 2016 at 16:15

    Morgan:
    You may be right. The threat of losing access to US universities may scare the Chinese into enforcing intellectual property rights in China.

    But I’d bet against it. I think you’d just end up
    – increasing the number of applications to Canadian, European and Chinese universities,
    – dropping the quality of graduate students and graduate research going on in US universities,
    – increasing tuitions for US students,
    – stiffing the most pro-US people in China–those who want to spend 4 years here studying at their own expense–and, I would venture, also the people most likely to support strengthening IP law in China.

  87. Gravatar of morgan s warstler morgan s warstler
    4. November 2016 at 17:09

    Carl, you’d be wrong.

    You are WRONG bc free trade is GREAT, and the Chinese are not animals… and they are smart enough, and invested enough NOW, to see that they GAIN by having open and fair competition… at least not gong backwards.

    If you thunk they are animals… say so.

    If you think free trade isn’t that great… why are you / Scott / etc pushing for it?

    Gotcha :)

  88. Gravatar of Student Student
    4. November 2016 at 18:38

    Ok ignore the fact you all are greedy… Whatever.

  89. Gravatar of Student Student
    4. November 2016 at 18:41

    Greed is always wrong. Period.

  90. Gravatar of Student Student
    4. November 2016 at 18:42

    Treat others as you would want to be treated is always right. Period.

  91. Gravatar of Student Student
    4. November 2016 at 18:58

    Morgan is greedy, simple as that.

    He who loves gold will not be justified, and he who pursues money will be led astray by it. Many have come to ruin because of gold, and their destruction has met them face to face. It is a stumbling block to those who are devoted to it, and every fool will be taken captive by it.

    — (Sir. 31: 5–7)

    Who is the covetous man? One for whom plenty is not enough. Who is the defrauder? One who takes away what belongs to everyone. And are not you covetous, are you not a defrauder, when you keep for private use what you were given for distribution? When some one strips a man of his clothes we call him a thief. And one who might clothe the naked and does not—should not he be given the same name? The bread in your hoard belongs to the hungry; the cloak in your wardrobe belongs to the naked; the shoes you let rot belong to the barefoot; the money in your vaults belongs to the destitute. All you might help and do not—to all these you are doing wrong.

    – Basil of Ceserea

    I am often reproached for continually attacking the rich. Yes, because the rich are continually attacking the poor. But those I attack are not the rich as such, only those who misuse their wealth. I point out constantly that those I accuse are not the rich, but the rapacious; wealth is one thing, covetousness another. Learn to distinguish.

    – John Chrysostom

  92. Gravatar of Carl Carl
    4. November 2016 at 21:42

    Morgan:
    You’ve just written that the Chinese are dumb because they’re commies but at the same time they’ll embrace free and fair competition and welcome us as their landlords after we threaten to remove their access to our universities and our consumers, because they’re smart and because we’ve gotten them hooked like crack whores on capitalism.

    You’ve said the Mexicans will race to tear down the wall (which I guess trump will have built with Mexican money) because they will be so eager to have Americans rush in and buy up all their coastal real estate.

    And you’ve told me I’m against free trade and that I think the Chinese are animals because I said you’ll stifle trade with China if you demand China change its IP laws before we will trade with them and because I pointed out that banning Chinese students from American Universities would be an act of self sabotage.

    Then you declared victory.

    You don’t happen to be sitting next to a door mouse do you?

  93. Gravatar of morgan s warstler morgan s warstler
    5. November 2016 at 10:58

    Carl, you aren’t the smart, which sucks.

    1. free trade is GREAT and all people can get to point they understand it. (me)

    2. free trade is GREAT, but Chinese are too stupid to get it.

    3. free trade isn’t that great, but lets help the stupid Chinese.

    You and Scott get to be either 2 or 3.

    It USED TO BE the Chinese were too stupid to get it… so we got them hooked on it, but taking short end of straw in trade terms.

    MY ARGUMENT is they were 2, and now they are 1.

    Since they moved to 1, we HAVE TO HIT THEHM AND MAKE THEM BEND.

    I win… :)

  94. Gravatar of Carl Carl
    5. November 2016 at 20:57

    Morgan:
    I agree. You win. You’ve proven I’m stupid like Deng Xiaoping.

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