Reply to Tim Worstall (and more political nonsense)

Update:  if you only have time for one post today, read my Econlog post instead.

Here’s Tim Worstall in Forbes, discussing my skepticism about the existence of bubbles:

His example at one point was the housing market. You can go long housing: go buy a house. You can be neither long nor short housing: don’t buy one. But it’s very difficult indeed to go short housing.

And here’s Wikipedia:

John Alfred Paulson (born December 14, 1955) is an Americanhedge fund manager and billionaire[4] who headsPaulson & Co., a New York-based investment management firm he founded in 1994. He has been called “one of the most prominent names in high finance”[5] and “a man who made one of the biggest fortunes in Wall Street history”.[6]

His prominence and fortune were made in 2007 when he earned “almost $4 billion” personally and was transformed “from an obscure money manager into a financial legend”[6] by using credit default swaps to effectively bet against the U.S. subprime mortgage lending market.

So why didn’t lots of wealthy investors short the market like Paulson?  Because no one knew if it really was a bubble. If you look around the world you’ll see lots of countries where house prices soared between 2000 and 2006.  In some cases they leveled off, in some cases they then fell, in other cases they went still higher.  It’s a crap shoot.

And now for some red meat for Trump haters.  It turns out that yesterday I was too kind to Chris Christie, he was not too cowardly to attack Trump.  Today he endorsed him, as the GOP train wreck spirals ever further out of control.  Some Republicans say Trump must be stopped because he can’t win.  (I made that mistake earlier).  That’s exactly wrong.  Trump must be stopped because the betting markets say he can win, indeed he has a 30% chance of winning, conditional on getting the nomination.

Ezra Klein says the GOP tried to stop Trump and failed.  If they did try, it was a pretty pathetic attempt.  In the future, people are going to look at this in much the way they looked at the Joe McCarthy fiasco—who had the guts to oppose him? (In fairness, Trump’s not as bad as McCarthy, he’s far worse.  Anti-communism is actually an honorable cause, far more honorable than anti-McCarthyism. McCarthy’s sins were recklessness and dishonesty in a good case.  In contrast, Trump is recklessly and dishonestly promoting evil causes like xenophobia.)

In 1964, lots of top Republicans endorsed Johnson.  In 1972, lots of top Democrats endorsed Nixon.  Both Goldwater and McGovern were seen as unacceptable.  Yet they were each paragons of virtue compared to Trump.  If the GOP establishment had truly wanted to stop Trump (instead of just being worried about losing) they would have taken a similar position to the pro-Nixon Dems, and done it months ago.  Congressmen and Senators, Governors, conservative media and pundits, etc., etc., should have almost unanimously indicated that they would vote for Hillary over Trump.  But that assumes these are honorable men and women, which is obviously not the case, as you can tell by Christie’s pathetic attempt to angle for the VP spot.  I will give the National Review credit for criticizing Trump, but that’s not enough, you need to say that the GOP Establishment will vote for Hillary over Trump.  And say it loud.

Some say that doesn’t matter, as the GOP voters hate the Establishment.  Yes, but Trump only gets about 50% in head to head polls against people like Rubio.  He can’t win in the general election without the Establishment voters.

The betting markets say that both Trump and Rubio have a chance of winning in a general election, with Rubio at over 40%.  I believe in the EMH, but I admit to being mystified by this.  When was the last time that a political party won an election after self-immolating just months before?  (Or as Senator Graham puts it; “My party has gone batshit crazy.”)  I can’t imagine any Republican with half a brain voting for a guy that Rubio correctly calls a con man, nor can I imagine Trump telling his people to vote for Rubio, if he somehow got the nomination. This looks like a complete train wreck to me, and yet perhaps I’m missing something.  After all, Berlusconi was elected in Italy, and I’m not sure American voters are any more sensible than Italians.

Some say that Trump’s not that bad on some of the issues, indeed in some cases better than the mainstream candidates.  Talk about missing the point!  This isn’t about what Trump says he favors, it’s about what he is.  It’s comical that people actually believe that Trump’s positions on the issues are anything more than negotiating tactics to “close the deal.”  I actually have commenters telling me to defend my claim that Trump is a demagogue.  I don’t know how to do that.  Nor do I know how to convince you that the sky is blue. If you don’t see it, and apparently tens of millions do not, then there is really nothing to say.  Does he need to sport a little black mustache?

I know what how are thinking, Sumner’s unhinged, next thing you know he’ll compare Trump to Hitler.  No, I have no plans to compare him to “Hitler”, who is the ultimate symbol of evil, due to WWII and the Holocaust.  Instead I’d like to compare him to Mr. Hitler, just another nationalist politician participating in democratic elections in Germany during the early 1930s. This Hitler was a politician that (according to the NYT at the time) would certainly moderate his positions as he got closer to power, in the opinion of most experts.  But (you are thinking) this comparison is absurd, because that politician was contemptuous of democractic principles, like freedom of the press.  In contrast. . . . oh wait, this is hot off the press:

Republican presidential front-runner Donald Trump said on Friday that if elected he would “open up” libel laws to make suing the media easier.

Speaking at a rally in Fort Worth, Texas, Trump said the change was necessary to combat what he described as the “dishonesty” of major American newspapers.

No, Trump’s nothing like the “Hitler” we know and hate.  But he’s a lot like the hundreds of nationalists who started out like Mr. Hitler the politician, asking for your votes, and never ended up becoming “Hitler”.  Like a Juan Peron.  Or perhaps his good buddy Putin (who recently grabbed the Sudetenland, err, I mean Crimea), and even that’s perhaps an overstatement—libel suits are not as bad as being assassinated.

Oh wait, just like Putin he does like jokes about killing journalists :

At a Dec. 23 appearance in Grand Rapids, Michigan, he joked about killing journalists as the crowd thundered applause.

But he certainly doesn’t excuse Putin’s actions. Well, not very much:

After Russian President Vladimir Putin called Donald Trump “very talented,” the GOP frontrunner has defended Putin against suspicions that Putin kills journalists who don’t agree him.

It started on MSNBC’s Morning Joe last month when host Joe Scarborough asked about it.

Trump responded, “He’s running his country, and at least he’s a leader, unlike what we have on this country. I think our country does plenty of killing also, Joe, so you know.”

Yes, we know. But at least he doesn’t favor concentration camps, he’s undecided:

Republican presidential frontrunner Donald Trump told TIME that he does not know whether he would have supported or opposed the internment of Japanese Americans during World War II.

But at least he doesn’t think the IRS favors Jews over Christians.  Or does he?

I’m always audited by the IRS, which I think is very unfair — I don’t know, maybe because of religion, maybe because of something else, maybe because I’m doing this, although this is just recently,” Trump said in an interview with CNN’s Chris Cuomo immediately following the 10th GOP debate on Thursday night.

Cuomo cut in: “What do you mean religion?”

“Well, maybe because of the fact that I’m a strong Christian, and I feel strongly about it and maybe there’s a bias,” Trump said.

Cuomo cut in again: “You think you can get audited for being a strong Christian?”

“Well, you see what’s happened,” Trump said. “You have many religious groups that are complaining about that. They’ve been complaining about it for a long time.

Perhaps the IRS is controlled by “the Jews”.

But at least . . . oh I give up, I’m just persuading more and more people to vote for Trump.  The worse he gets, the more they like him.


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89 Responses to “Reply to Tim Worstall (and more political nonsense)”

  1. Gravatar of E. Harding E. Harding
    26. February 2016 at 15:02

    “But at least . . . oh I give up, I’m just persuading more and more people to vote for Trump.”

    -Exactly. Trump is an Ubermensch.

    And Putin, to my knowledge, hasn’t killed any journalists more than Rousseff.

  2. Gravatar of Albert Albert
    26. February 2016 at 15:19

    The feeling is “I’m as mad as hell, and I’m not going to take this anymore”.

    And if it requires putting people like you against the wall, no hard feelings but things happen…

    There is a burning feeling in lots of people’s guts. An unreasonable, vague feeling about “things”.

    And unless something in the air changes, it will spread, morph and become who knows what.

  3. Gravatar of ssumner ssumner
    26. February 2016 at 15:32

    I just knew you’d the first responder. :)

  4. Gravatar of E. Harding E. Harding
    26. February 2016 at 15:40

    I think the rise of China had a larger negative impact on Mexico than on the U.S. “Made in Mexico” was out-competed by “Made in China”. The channel was most likely a productivity-based one, in which the loss of Mexican jobs to the Chinese lowered Mexican productivity relative to counterfactual by an employment shift from the tradeable to the non-tradeable sectors in Mexico.

  5. Gravatar of E. Harding E. Harding
    26. February 2016 at 15:41

    @ssumner, are you pulling my leg? I can’t tell. :-)

  6. Gravatar of Cameron Cameron
    26. February 2016 at 15:43

    “That’s exactly wrong. Trump must be stopped because the betting markets say he can win, indeed he has a 30% chance of winning, conditional on getting the nomination.”

    Exactly. This is also why (among other reasons) any sensible person should be terrified of Sanders. He must be defeated so that Trump can be as well.

    Ted Cruz should run as a third party candidate and break the Republican vote in two. Why not? Republicans need to get slammed repeatedly (stop letting them win in the midterms!) so they finally realize they need to move towards the center on various issues.

    Some slightly encouraging news:

    https://iemweb.biz.uiowa.edu/quotes/Pres16_Quotes.html

    The not-so-liquid Iowa electronic markets have the Republican candidate receiving something like ~44%(44-46%) of the vote versus ~56%(50-59%) for the democrat AND that’s with a 10% chance for Bernie to win the nomination and a 25% for Rubio to win the nomination! I’ve never gotten to see a real landslide in my lifetime… maybe this will be my chance. Clinton 2016!

  7. Gravatar of Joe Joe
    26. February 2016 at 15:48

    Mr. Hitler was a much better public speaker than Trump. I’m not really able to follow all of Trump’s odd, nonsequitur rantings.

  8. Gravatar of E. Harding E. Harding
    26. February 2016 at 15:51

    @Cameron, Booo.

    @Joe Maybe so. Trump has a good speaking style, but it can easily get off-topic.

  9. Gravatar of Benjamin Cole Benjamin Cole
    26. February 2016 at 16:37

    Scott Sumner: I find the religious posing of Cruz and Rubio to be equally insulting as Trump’s posturing. Cruz contends his campaign is divinely inspired. Rubio says he prays to God and thanks the Creator that Bush Jr was president on 9/11.

    Trump says Iraq was a $5 trillion waste and we should have not invaded. So, who is Hitler?

    And Hillary Clinton? After 15 years the United States is still occupying Afghanistan, thanks in part to the policies of Hillary Clinton. She contends the US can occupy any nation which has different social constructs than the United States, particularly in gender issues.

    And Kasich? He says he wants 16 aircraft carrier strike forces, not the 12 we have now which is about 11 more than any other nation has. Aircraft carriers are offensive weapon systems. So is Kasich a Nazi?

    Actually, I am trying to figure out why the GOP establishment is so dead set against Trump. It may be that Trump is in fact independent and not aligned with the various interest groups, including military groups, hardwired into the GOP. If my suspicion is correct, that makes Trump the anti-militarist or if you prefer the anti-Hitler.

  10. Gravatar of John Hamilton John Hamilton
    26. February 2016 at 16:38

    I’m happy to see I’m not the only one going crazy. The most bothersome thing to me is that the rules for the presidential nomination could be changed by the RNC. We don’t have to have this system where a demagogue can hijack a party.

  11. Gravatar of Giuseppe C Giuseppe C
    26. February 2016 at 17:30

    Scott, I didn’t really like the reference to Berlusconi. It is true that they are similar in some ways, as Zingales pointed out a few years ago, in this article that you might have already read (http://www.city-journal.org/2011/eon0519lz.html), but Berlusconi voters could not be considered stupid, at least when Berlusconi ran for the first time in 1994. He seemed a reasonable and likeable person, an anti-communist, and many had hopes about him. Even Milton Friedman celebrated his victory, hoping he could reform Italy, together with Friedman’s student Antonio Martino, Minister of Foreign Affairs in that cabinet. Trump, on the contrary, leaves no room for hopes. We all have a problem with his very same electoral promises. The risk with Trump is not that he might not hold his promises once elected, like Berlusconi. The risk is that he might really carry out his xenophobic, protectionist and statist agenda.

  12. Gravatar of Scott Freelander Scott Freelander
    26. February 2016 at 17:43

    Scott,

    For what it’s worth, I agree with 100% of your post on both EMH and Trump.

    And frankly, Krugman’s article today on this subject is dead on. Most right kidding people in this country have no principals. That’s why almost no one cares about what National Review has written about Trump. They have excoriated him since his announcement as a candidate, but largely from the perspective of conservative principals. They need to focus more on his anti-democratic nature and lack of humanity.

    Even still, that probably wouldn’t sweat baby more people. They could also try explaining how dumb his protectionist and anti-immigrant ideas are, but what are they going to do, provide the links to Marginal Revolution University?

    The world would be a much better place if more people watched those videos.

  13. Gravatar of Scott Freelander Scott Freelander
    26. February 2016 at 17:46

    I shouldn’t post from my phone, considering how stupid the auto-correct is.

  14. Gravatar of Zack Zack
    26. February 2016 at 17:50

    Benjamin Cole,

    Trump also talks about seizing oil in the middle east, says “torture works,” says he would target family members of terrorists for assassination, and strongly supported invading Libya. He doesn’t sound anti-militarist to me.

  15. Gravatar of Jim S. Jim S.
    26. February 2016 at 17:53

    I can’t help thinking that Republicans are reaping what they have sown. When I was 16 my father took me to see George Wallace on his campaign stop in our town. It was clear to me from the laugh lines and applause lines that Wallace was a simple bigot and most of the audience were also bigots. Republicans courted and won these voters with dog whistles for 50 years. From Goldwater’s anti-civil rights bill stand, to Nixon’s southern strategy, to Reagan’s Philadelphia Mississippi state rights speech and welfare queen talk, to Lee Atwater’s ad and push poll work, to anti-gay mobilization in the Clinton and G. W. Bush terms, to Trump’s anti-Mexican slurs the Republicans have exploited the bigoted strain of America. They always found the high principal that would justify discriminating against the out group. We have made tremendous progress, South Carolina (South Carolina!!) has a black Republican Senator. But on the whole post Eisenhower republicans have had a sad record of exploiting bigotry for votes.

  16. Gravatar of Scott Freelander Scott Freelander
    26. February 2016 at 18:04

    The scariest thing about Trump is that, as I mentioned last year(most of my political predictions here have been very wrong, but those were about Greece and the EU), a fair number of even Democrats might go for Trump. There are some racists, protectionists, and anti-immigration types in the Democratic Party. Also, there’s probably some percentage that will go for a strong man.

    It doesn’t help that Trump is a brilliant self-promoter and Hillary is damaged and not a great candidate.

  17. Gravatar of Scott Freelander Scott Freelander
    26. February 2016 at 18:07

    Benjamin,

    Trump is an impulsive narcissist and Cruz strikes me as a creepy sociopath. Both are con men and very dangerous, but Cruz has no shot at winning.

    They are both much worse than the rest of the Republican field, in a number of ways.

  18. Gravatar of Scott Freelander Scott Freelander
    26. February 2016 at 18:10

    Cameron, you wrote: “Republicans need to get slammed repeatedly (stop letting them win in the midterms!) so they finally realize they need to move towards the center on various issues.”

    Remember that Republicans in many states gerrymander the districts. It’s not as if they’re winning these elections fairly. True, Democrats did the same thing for decades, but that doesn’t make it right. Look at what the Democrats in Congress became by the early 90s.

    Fortunately, here in Florida, we made gerrymandering unconstitutional. It should be unconstitutional nationally.

  19. Gravatar of E. Harding E. Harding
    26. February 2016 at 18:11

    Speaking of the IRS, the IRS is part of the Treasury Dept., and the last four Secretaries of Treasury (if not more, I haven’t looked further) have been…

    So I wouldn’t be at all surprised if Trump was right on this matter.

  20. Gravatar of Joe Joe
    26. February 2016 at 18:13

    E. Harding: “off topic”? LOL! You’re assuming Trump even has a topic top begin with!

  21. Gravatar of E. Harding E. Harding
    26. February 2016 at 18:13

    “Trump is an impulsive narcissist”

    http://blog.dilbert.com/post/139910704581/how-to-spot-a-narcissist-trump-persuasion-series

    You are correct on all the rest.

  22. Gravatar of E. Harding E. Harding
    26. February 2016 at 18:15

    And Joe, he does.

  23. Gravatar of Scott Freelander Scott Freelander
    26. February 2016 at 18:15

    Scott,

    One thing I find very interesting is how relatively unimportant, or even counterproductive the ability to raise money from corporate and wealthy individuals seems to be. I remember hating the Citizens United ruling, and yet I thought that maybe I could be wrong about the effects of the ruling.

    Well, I think it’s safe to say the court was wrong about public perceptions of corruption due to big donors, but perhaps was right that the effect is not to simply turn the country over to those donors. Given that Trump can win states while spending so little money and that Sanders can do as well as he has with average donations of $27, despite a noticeable lack of charisma, perhaps says a lot. There’s good reason to believe Hillary’s fundraising could cause her problems against Trump.

    Milton Friedman seemed to be against allowing corporations to offer political donations. I agree with him about the dangers big business often present with respect to restricting freedom and elbowing out competition.

  24. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    26. February 2016 at 18:23

    ‘ McCarthy’s sins were recklessness and dishonesty in a good case. ‘

    Joe McCarthy was neither reckless nor dishonest. It was his critics who were that. People like Owen Lattimore, who is responsible for McCarthy’s reputation being blackened. He did it with a sustained attack–with Democrat Millard Tydings help–mostly with his ridiculous ‘Ordeal by Slander.’ The book got published miraculously quickly just after the Tydings Committee ended its kangaroo court investigation of McCarthy’s famous ’57’ speech in Wheeling, West Virgina. Here’s a bit from Lattimore’s book;

    ———quote———
    I wonder a bit how a man so young as Joseph McCarthy [HSIB note; he was 42 years old at the time, Lattimore all of 50], whose acquaintance with national and international affairs is so recent [HSIB note; he was a Marine Corps veteran of WWII], can have become such a great expert on the difficult and complex problem of China and the Far East. My wonder on this score increased when I read his speech on the Senate floor. Some of his material is from Chinese and Russian sources. Or perhaps I should say that some of his exotic material on Mongolia appears to trace back to some Russian source of distinctly low caliber.

    I did not know that the Senator was a linguist. But really, the material that the Senator read is so badly translated and so inaccurate that I am sure that I should not like to place the blame for in the learned Senator. Indeed, I fear that the sound and fury come from the lips of McCarthy, but that there is an Edgar Bergen in the woodpile.
    ———-endquote————

    Get it? Charlie McCarthy, heh heh. That was Lattimore’s style. Necessitated by the fact that McCarthy had the facts on HIS side.

    For those interested in the actual history of McCarthyism:

    http://hisstoryisbunk.blogspot.com/search?q=ordeal+by+slander

  25. Gravatar of Bonnie Bonnie
    26. February 2016 at 18:25

    Trump is wrong about a lot of things, and he undoubtedly will make our economic problems much worse if he manages his way into the White House. We simply cannot afford him. That is almost entirely why I am against him, aside from my libertarian stripe compared to his promised use of government.

    I am no expert in judging what is inside the heart of another. However, Trump doesn’t appear to me to give off vibes as someone who has malicious intent or is motivated by self serving indifference. We’ve discussed those types of people individually here on your blog, along with many more who unknowingly committed great sin toward their fellow countrymen with the genuine desire to help them instead. You have rightly chalked up those mistakes to good intentions gone terribly bad; and with that in mind, I am more puzzled by this post than I am stirred.

    It’s probably better to stick with attacking ideas rather than people.

  26. Gravatar of Cameron Cameron
    26. February 2016 at 18:38

    Scott Freelander,

    That doesn’t explain why they won in 2010, when district lines were more favorable to dems, or why they lost in 2012, when districts were just as unfavorable as 2014. It has a lot to do with turnout and Republicans inability to nominate a candidate without making him/her say stupid things (Trump has solved this problem!). I also think monetary policy has a lot to do with the recent political instability. Republicans wouldn’t have won so decisively in 2010 or 2014 without the slow recovery. Bad monetary policy probably has greater political costs than economic ones.

    I should be clear that I only think Republicans should lose because they are slightly crazier relative to Dems at the moment and I think we need a reset. I’m actually closer to intellectual conservatives than intellectual liberals, and both parties are much less reasonable than they were ~20 years ago.

  27. Gravatar of E. Harding E. Harding
    26. February 2016 at 18:52

    “Trump is wrong about a lot of things, and he undoubtedly will make our economic problems much worse if he manages his way into the White House.”

    -Then the stock market should rise if Clinton wins, or fall if Trump wins on election day. I just don’t see that happening.

  28. Gravatar of Ray Lopez Ray Lopez
    26. February 2016 at 19:04

    Sumner still suffering from jet lag, but instead of sleeping he posts… Don’t you know that your IQ drops when you’ve not had good sleep? Explains this post.

    Sumner: fails to read the author “but it’s ***very difficult**** indeed to go short housing.” and points to John Paulson’ success shorting. But if you saw or read “The Big Short” you’d see indeed it was very difficult (though not impossible) even for institutional traders to short housing.

    Sumner: “Trump must be stopped because the betting markets say he can win” ??? what is this crazy talk? Must be stopped because he can win!? That’s what they said about Huey Long, and some crazy took this saying too literally. Does Sumner believe in democracy or not?

    Sumner: “In fairness, Trump’s not as bad as McCarthy, he’s far worse.” – not even close, not fair! McCarthy’s destroyed lives, Trump just talks about making illegal aliens lives more miserable. Much as I don’t like Trump, he’s no McCarthy.

    Sumner: “Perhaps the IRS is controlled by “the Jews”.”??? Perhaps Sumner is controlled by paranoia? Trump is no Hitler. And if you read Sir Ian Kershaw’s volumes on Hitler, you’ll find the early Hitler (“Mr. Hitler” as Sumner calls him) much more reasonable than the latter Hitler (when he lived in Vienna he even had Jewish friends). E. Harding can tell you more on this, as he admires Hitler.

    That said, if I was to vote (it’s too difficult to register to vote when living overseas, due to Republican-led changes in the law, but I digress), I would vote for the Democratic ticket. But Trump is not bat-shiite crazy, just a good talker.

    PS–E. Harding gone crazy with posts, lol, he’s on fire! And one good point nobody (?) has made on Trump: he may be akin to a ‘protest vote’?

  29. Gravatar of Carl Carl
    26. February 2016 at 19:23

    Scott:
    Moderate Republicans could just back Gary Johnson instead of backing the Democrat. It would be far more palatable ideologically for them.

  30. Gravatar of E. Harding E. Harding
    26. February 2016 at 19:27

    “Does Sumner believe in democracy or not?”

    -Seconded.

    “Much as I don’t like Trump, he’s no McCarthy.”

    -Seconded.

    “E. Harding can tell you more on this, as he admires Hitler.”

    -Another ridiculous smear by Ray Lopez. It wasn’t at all clear from a contemporaneous perspective that Hitler would be worse than the establishment when he came to power, but once he abolished democracy and began his campaign against the Jews, the danger he presented had become clear.

    Hitler became firmly antisemitic after the rise of the Wiemar Republic. He was calling for the extermination of the Jews by 1922, but nobody at the time could be sure he meant it.

    “E. Harding gone crazy with posts, lol, he’s on fire!”

    -Maybe so; I feel like I’m posting too much.

    “And one good point nobody (?) has made on Trump: he may be akin to a ‘protest vote’?”

    -Not really. Ron Paul was a protest vote. Trump is a bona fide candidate.

  31. Gravatar of Lorenzo from Oz Lorenzo from Oz
    26. February 2016 at 19:33

    Cultural dislocation and prolonged economic stress. It’s not a good combination. See the 1930s. (Blaming the Fed and various other central banks for most of the prolonged economic stress in both cases can be, of course, taken as read.)

    The destruction of civility is part of the current travails. Apologists claim that PC “is just politeness”, which is nonsense on stilts. It assumes the malevolence of its targets and legitimises point-and-shriek personal abuse in the name of tolerance. It weaponises civility while emptying it of content.

    The US has increasingly conformist media/IT/academia/entertainment industries, significantly alienated from Main St US; industries which buy rather too much into forms of the above.
    http://www.businessinsider.com.au/charts-show-the-political-bias-of-each-profession-2014-11

    Which also, inevitably, produces a range of reactions: including pathological ones. (Hello, The Donald.) Pathology feeding pathology.

    The phenomenon of “wedding cake fascism” (suing a bakery for not wanting to bake a cake for a same-sex wedding) is a manifesting example of cultural dislocation. Same-sex marriage gets legalised (yah!) by judicial fiat (hmmmm) and no time for social adjustment is allowed, you have to surrender completely and immediately or else YOU ARE EVILLL! Any failure to completely conform will mean that pointing and shrieking will ensue. As David Frum noted in a recent article, “white male” becomes an accusation rather than a description.
    http://www.theatlantic.com/magazine/archive/2016/01/the-great-republican-revolt/419118/

    Industries whose point is to set cultural tones and provide cultural services are not in a good position to whine if their self-indulgent failures have consequences.

    (BTW On the issue of embracing opinion narrowness, do folk in academia realise that failure to protect intellectual freedom on campus–I realise economics is a hold out–empties tenure of any defensible justification?)

  32. Gravatar of Steve Steve
    26. February 2016 at 19:42

    Here’s what New Jersey thinks of Christie:

    “In fact, Trump is all that a guy like Christie could ever hope to be. Take airplanes, for example. Christie has a penchant for private jets that he could no longer afford once his finances began to dwindle.”

    “The speculation is that Christie’s angling for some sort of post in a Trump presidency. I wouldn’t doubt that for a moment. The Guv seems tired of New Jersey and an escape on Jan. 20, 2017, would be perfectly timed.”

    “Christie is a transactional politician. He is deeply suspicious of principled politicians. He and Cruz are opposites.”

    “So this was a smart move politically for the Guv. Not only that, it gives him an excuse to do what he likes most: Get out of Jersey.”

    “Expect to see him on the stump in a lot of places far from Trenton. As a hatchet man, he’s among the best.”

    http://www.nj.com/opinion/index.ssf/2016/02/donald_trump_and_chris_christie_birds_of_a_feather.html

  33. Gravatar of Steve Steve
    26. February 2016 at 19:49

    “(Or as Senator Graham puts it; “My party has gone batshit crazy.”)”

    I believe Lindsey Graham was looking in the mirror when he said that.

    “Lindsey Graham jokes about murder of Ted Cruz”
    http://www.cnn.com/2016/02/26/politics/lindsey-graham-ted-cruz-dinner/

    Cruz is the guy who could join forces with Rubio… so who exactly is batshit crazy here?

  34. Gravatar of Christian List Christian List
    26. February 2016 at 19:52

    I watched Christie and Trump and I agree they sounded a lot like con men. Or in other words like demagogues. Or in other words like actors. Or in other words like populists. Or in other words like politicians. That’s what politicians do, don’t they? Is this really news? I agree that Trump is doing this act really well but he hardly invented it.

    http://www.vox.com/2016/2/26/11120530/chris-christie-endorses-donald-trump

    I admire your efforts to ‘expose’ Trump but in order to do that we need to be get the facts as right as possible. For example:

    “At least he doesn’t favor concentration camps, he’s undecided:”

    Trump is clearly talking about the past here. (“I would have had to be there at the time to tell you, to give you a proper answer.”) I find his answer is remarkably honest in this case. Most politicians would lie in this case and bullshit their voters with stuff like “I would have been so against this” when in fact most of the politicians (and judges) during this time supported the internment. It’s highly implausible that they wouldn’t have just followed the herd. Most politicians follow the herd today, they would have followed the herd back then. They will tell you otherwise of course but that’s just dishonest. I don’t like Trump but his answer in this case is pretty good on so many levels.

    “But at least he doesn’t think the IRS favors Jews over Christians.”

    He’s not talking about Jews at all. It’s not a good idea to imply that he is talking about Jews here or that he is crazy when in fact there was a pretty huge IRS scandal. All he does is playing with the IRS scandal.

    I also think the comparisons to Hitler, Putin and Juan Peron are not helpful. There’s at least one huge difference: The three dictators mentioned rule(d) countries with very weak democratic traditions and foundations. In my opinion the US is the oldest and most stable democracy in the world. The US democracy outlived Andrew Jackson, Teddy Roosevelt, FDR, Nixon and a devastating civil war. It will easily outlive The Donald.

  35. Gravatar of ssumner ssumner
    26. February 2016 at 19:54

    Ben, If you walk into the nearest insane asylum, the odds are that a random person you pick would not be a member of the GOP establishment. Is not being a member of the GOP establishment the only criterion you look for in a President? You don’t care if he’s a paranoid lunatic who thinks the IRS is going after him because he’s a devout Christian?

    BTW Trump supported the Iraq War:

    http://www.buzzfeed.com/andrewkaczynski/in-2002-donald-trump-said-he-supported-invading-iraq-on-the#.wtnagJn3MV

    He said he opposed it? Well that’s what Trump does, he lies. And not like other politicians, furtively and hoping he doesn’t get caught. He doesn’t even care that everyone knows he’s lying, because (as he said) he could shoot someone in the middle of 5th Avenue and his supporters wouldn’t care.

    Zack, You said:

    “Trump also talks about seizing oil in the middle east, says “torture works,” says he would target family members of terrorists for assassination, and strongly supported invading Libya. He doesn’t sound anti-militarist to me.”

    That’s right. We are learning that a big share of Americans are basically closet Nazis. (No where near a majority, but a big share) Torture is fine with them. Anything is fine as long as it’s against Muslims.

    E. Harding, You said:

    “So I wouldn’t be at all surprised if Trump was right on this matter.”

    And you wonder why I make fun of people like you and Ray. I’m sure the Jews that control the IRS are on the lookout for devout Christians, in this country that is what, 80% Christian. And when you think “Christian fundamentalist” what comes to mind? Ted Cruz? Jerry Fallow? No, that famous Christian fundamentalist Trump!! Audit that Christian SOB!

    Scott, Good point about Citizen’s United.

    Bonnie, You said:

    “However, Trump doesn’t appear to me to give off vibes as someone who has malicious intent or is motivated by self serving indifference. ”

    He doesn’t? I’ve never seen a public figure (in America) who seems more malicious in my entire life. He’s the kind of person who enjoys mocking the physical characteristics of other people, almost like a high school bully. I suppose other politicians may be like that in secret, but they usually have enough sense to keep their mouth shut.

    Ray, You said:

    “McCarthy’s destroyed lives, Trump just talks about making illegal aliens lives more miserable.”

    McCarthy made it so Hollywood screen writers had to do their work under a different name. Trump wants to expel 11 million men, women, and children, many (who were born here) to a country they have never lived in.

    Carl, Vote for Gary Johnson if not in a swing state, vote for Hillary if in swing state.

  36. Gravatar of Christian List Christian List
    26. February 2016 at 19:59

    Not to mention that the US democracy bet the British Empire, the USSR and Hitler. The Donald is nothing compared to this. If the The Donald really becomes President he has to adapt to the US democracy or he will be gone. Not the other way round.

  37. Gravatar of ssumner ssumner
    26. February 2016 at 20:02

    Christian, You said:

    “I watched Christie and Trump and I agree they sounded a lot like con men. Or in other words like demagogues. Or in other words like actors. Or in other words like populists. Or in other words like politicians. That’s what politicians do, don’t they?”

    There you go comparing Trump to Hitler again. I get so sick of that. Yes, both Trump and Hitler are human beings, they are both politicians, they are both populists, they are both demagogues, but you don’t seriously believe they can be compared, do you?

    Yes, i’m mocking your logic.

  38. Gravatar of Steve Steve
    26. February 2016 at 20:08

    ” I actually have commenters telling me to defend my claim that Trump is a demagogue.”

    ZING! LOL!

    Obama was post-partisan. Trump is post-policy.

    You are voting for a pig-in-a-poke. Who knows what the hell you will get. Christie is a guy facing unemployment in 2017, who decided to hitch himself to a billionaire.

    The Republican establishment is embarrassing beyond belief. Romney attack Trump over tax returns??? Rubio and Cruz harping endlessly on the 8 Polish illegals Trump hired 38 years ago, and not divulging his tax returns? So the strategy is now to attack Trump for being a successful businessman? So attack Trump on his strengths? And from the massive tax-fraud Romney?

    FWIW, I agree that Trump is sh*!!y and full of empty rhetoric but come on, if Lindsey Graham jokes about murdering Ted Cruz and Romney attacks Trump for being successful, exactly which part of the Republican party needs an enema?

  39. Gravatar of ssumner ssumner
    26. February 2016 at 20:09

    Christian, You said:

    “It’s not a good idea to imply that he is talking about Jews”

    Of course not. It’s his supporters who think that, like commenter E. Harding above. Seriously, he attracts racists and anti-Semites like moths to a flame. But yes, when you claim the IRS is going after Christians the clear implication to voters is that it is not targeting Jews and Muslims. Sorry, but that’s how things work.

    As for your excuse that his opposition was just about the 1940s, and he would not favor such policies today, nice try, but it won’t work:

    “Trump added that he believes wartime sometimes requires difficult choices. “It’s a tough thing. It’s tough,” he said. “But you know war is tough. And winning is tough. We don’t win anymore. We don’t win wars anymore. We don’t win wars anymore. We’re not a strong country anymore. We’re just so off.””

  40. Gravatar of ssumner ssumner
    26. February 2016 at 20:11

    Steve, The GOP Establishment is worthless? That’s like saying the sun sets in the West.

  41. Gravatar of Richard A. Richard A.
    26. February 2016 at 20:12

    Since this is an economics blog, who are the economic advisers behind Trump, Cruz, and Rubio.

  42. Gravatar of LC LC
    26. February 2016 at 20:16

    Scott:

    Two good posts today. With Trump, America the brand has already lost much prestige. Just imagine the fate of dissidents in Beijing, Moscow and Tehran, or people like Malala Yousafzai, who have counted on US for strong moral support. Now, when the people who are running the US government are shown to be power hungry charlatans who will kiss up to a fascist racist buffoon, their causes must seem hollow and will be viewed with more cynicism by their own compatriots. It’s a bad loss for America.

  43. Gravatar of ssumner ssumner
    26. February 2016 at 20:39

    Richard, I can’t imagine any serious economist working for Trump. His or her reputation within the profession would immediately go right down the toilet. But he’ll find some “heterodox” economists who are in it for the power and money. Someone who claims the benefits of free trade are a “myth”, and that immigrants are stealing our jobs.

    LC, Sad but true. Hopefully he’ll lose in the end as badly as Le Pen lost in the French general election.

  44. Gravatar of Steve Steve
    26. February 2016 at 20:41

    “Richard, I can’t imagine any serious economist working for Trump.”

    Lol, get ready to pitch Trump on NGDP targeting.

    If he makes fun of your family, remind him that Ivanka is a communist block anchor baby.

  45. Gravatar of Christian List Christian List
    26. February 2016 at 20:42

    Of course Trump and Hitler can be compared. I never said they can not be compared. At least I hope so. You can compare everything with everything. You can compare apples with oranges and Budweiser with real beer . I just think it’s not that helpful, it leads only to “insights” in the sense that they are both humans / politicians / demagogues. That’s not helpful to me.

    As for your comments about the IRS and the interment camps. I think you just read what you really want to read. He is not talking about Jews. He is talking about deeply religious Christians. Why are you picking Jews and Muslims? That’s mostly happening in your mind. I’m an atheist for example. Why is he not talking about atheists in your opinion? Why is he not talking about Christians, that are not deeply religious? We interpret what we want to interpret, it’s mostly happening in our minds.

    That same with the internment camps. You simply do not mention “I hate certainly hate the concept of it”. He never says he supports internment camps. But he gives quite some room for interpretations. I think that’s exactly what he wants to do most of the time: Giving answers that are pretty vague but also pretty strong (sounding) so that every voter can read into his statements what he wants to her.

  46. Gravatar of Steve Steve
    26. February 2016 at 20:50

    On a serious note, I feel sanguine about Trump’s 30% conditional odds of winning given a nomination. I believe that the 30% odds of winning are highly correlated to the 30% chance he moderates his rhetoric and hires good advisers. Scott Brown already convinced him to tone down the obscenity.

    I think the crux of the problem is that the ideal president would be 1/3 Bernie, and 2/3 Cruz, but the establishment system won’t allow any such person to see the light of day given ideological enforcement. Trump will succeed, or fail, spectacularly. This too shall pass.

  47. Gravatar of Christian List Christian List
    26. February 2016 at 21:09

    @LC
    It’s odd to think that the dissidents in countries like Iran would care about Trump already. In 2009 Iran was close to a revolution but there was zero support from Obama except he’s usual meaningless speeches.

    I bet you would call this “strong moral support” but it isn’t. Obama did not make the world more stable, unfortunately the exact opposite happened. Think of Russia, Ukraine, Turkey, Southeast Asia, Israel, Egypt, Iraq, Afghanistan, Libya, huge parts of Africa and of course Syria. It’s pretty obvious by now that Obama’s disengagement strategy is not working at all.

  48. Gravatar of E. Harding E. Harding
    26. February 2016 at 21:26

    “I’m sure the Jews that control the IRS are on the lookout for devout Christians,”

    -Or they could be just giving breaks to Brighton Beach tax fraudsters, instead concentrating their effort on some White gentile New Yorker. A far greater proportion of billionaires are Jews than is the general population. I would be surprised if even 60% of the billionaire population in America were Christian.

    “As for your comments about the IRS and the interment camps. I think you just read what you really want to read. He is not talking about Jews.”

    -How do you know, Christian?

    “Hopefully he’ll lose in the end as badly as Le Pen lost in the French general election.”

    -Politics is not about policy. And I’m currently estimating a Trump win conditional on getting nominated at 51%.

    “Just imagine the fate of dissidents in Beijing, Moscow and Tehran, or people like Malala Yousafzai, who have counted on US for strong moral support.”

    -Screw them- the more they’re relying on the West as opposed to the native population for moral support, the less they have legitimacy. These dissidents are merely a tool of the West for it to take control of other countries. Just look at Libya. Syria. Ukraine. Compare Algeria. Jordan. Belarus. And Trump is a “fascist racist buffoon”? LOL.

    “He is deeply suspicious of principled politicians.”

    -Honesty and patriotism are not among Cruz’s principles.

    I would not have come to the conclusion Trump was actually talking about Jews in that quote unless Sumner suggested it, but now that he did, it does make sense.

    BTW, the best attacks on Trump are to challenge his status as a standard-bearer of master morality. Challenge him on his own premises. Sumner’s slave morality-based attacks are futile for his cause, and he understands that.

    “Is not being a member of the GOP establishment the only criterion you look for in a President?”

    -No. But it’s surely one of them.

    “You don’t care if he’s a paranoid lunatic who thinks the IRS is going after him because he’s a devout Christian?”

    -No. Not at all.

    “Seriously, he attracts racists and anti-Semites like moths to a flame.”

    -True. But that’s not because he’s racist or anti-semitic. It’s because he’s totally un-PC.

    “That’s right. We are learning that a big share of Americans are basically closet Nazis. (No where near a majority, but a big share)”

    -Yes. And they (mostly Rubio supporters) skew strongly towards educated.

    “Since this is an economics blog, who are the economic advisers behind Trump, Cruz, and Rubio.”

    -I don’t think Trump has any important economic advisers. Cruz might have Beckworth, IDK. Rubio has all the best economists the establishment can muster immediately by his side.

    “Who knows what the hell you will get.”

    -An America made Great Again.

  49. Gravatar of E. Harding E. Harding
    26. February 2016 at 21:36

    This is Trump’s actual 2011 Libya policy -way better than Hillary’s:

    http://www.wsj.com/video/trump-we-should-take-libya-oil/7E12BC15-38AE-465F-949A-CDB65ED6DC75.html

    Same with me.

  50. Gravatar of Ray Lopez Ray Lopez
    26. February 2016 at 21:39

    Christian List wins in the thread war with Scott Sumner; indeed Sumner is putting words in Trump’s mouth. Trump is smart enough to not mention “Jews”, even if that’s what he meant (which it is not).

    Sumner on housing prices: “If you look around the world you’ll see lots of countries where house prices soared between 2000 and 2006. In some cases they leveled off, in some cases they then fell, in other cases they went still higher. It’s a crap shoot.” – no, wrong. Look at this chart (the only one I could find) http://www.economist.com/blogs/dailychart/2011/11/global-house-prices – only Mexico did not have a housing crash between 2005-2009. Sure prices recovered around the world, naturally I would add, without much bailout money, but that’s a topic for another thread.

    Sumner soft-shoes McCarthyism, but makes it seem that Trump can instantly expel 11 million illegal aliens by Executive Order (he cannot; the US Supreme Court has already decided this, only Congress can pass a law that expels illegals).

    Sumner the hypocrite. As “Steve” says, if Trump offers Sumner a job as economic adviser, he’ll come running.

  51. Gravatar of E. Harding E. Harding
    26. February 2016 at 21:42

    “It’s pretty obvious by now that Obama’s disengagement strategy is not working at all.”

    -I call it a strategy of engagement on the wrong side, except in the cases of the Taliban and the Houthis.

    The U.S. never had any influence in Egypt.

  52. Gravatar of E. Harding E. Harding
    26. February 2016 at 21:43

    “(he cannot; the US Supreme Court has already decided this, only Congress can pass a law that expels illegals)”

    -Isn’t it the President’s job to enforce the law?

  53. Gravatar of Ray Lopez Ray Lopez
    26. February 2016 at 21:46

    @myself – playing around with the Economist worldwide housing prices interactive, it appears Germany, South Africa and China are also countries that did not have a housing bubble in the 00’s. Still, most of the world did (look at Ireland) so Sumner’s logic is flawed, making it seem the price surges were ‘randomly distributed’ (“a crap shoot”).

  54. Gravatar of Lorenzo from Oz Lorenzo from Oz
    26. February 2016 at 22:01

    Scott: the 1964 (Republicans endorsing LBJ) and 1972 (Democrats endorsing Nixon) examples are a bit apples-with-oranges comparisons, as the US political Parties are way more ideologically divided now than they were back then.

    And trust in US government and politicians was much higher also. Applying Ezra Klein analysis, prominent Republicans saying “we would endorse Hillary over Trump” would probably have increased The Donald’s appeal. The level of voter anger, distrust and alienation currently being displayed are recipes for pathological outcomes. Hence The Donald.

  55. Gravatar of Riccardo Riccardo
    26. February 2016 at 22:25

    Dear Scott,
    Amen brother, you’re right on all counts. I applaud your hard line on Trump: instead of pretending there’s a nuance that makes his appeal palatable, you call him out for the would-be dictator rising on racist sentiments that he clearly is. I’m amazed by how many people defend him or play down the danger. That’s how Germany allowed Hitler. And in so many ways the Germany of the nineteen thirties is like America today: a cowed super power yearning for its past greatness.

  56. Gravatar of E. Harding E. Harding
    26. February 2016 at 22:57

    Ricardo, what kind of stuff are you taking?

  57. Gravatar of msgkings msgkings
    26. February 2016 at 22:59

    @Riccardo: seconded with extreme emphasis, very good post. Same to you Scott, Trump is simply an embarrassment and a disgusting person to even be considered as President of what in my opinion is still the best nation on earth.

  58. Gravatar of E. Harding E. Harding
    26. February 2016 at 23:06

    msgkings, you’re not nuts, just suffering from a severe case of Trump Derangement Syndrome.

    Have.. to.. stop.. commenting… so.. much…

  59. Gravatar of Lorenzo from Oz Lorenzo from Oz
    26. February 2016 at 23:28

    Hmm. Maybe I spoke too soon. Just a conservative pundit, but perhaps the start of a trend. At very least, the author provides a specifically conservative rationale for supporting Hillary against The Donald.

    http://thefederalist.com/2016/02/24/ill-take-hillary-clinton-over-donald-trump/

  60. Gravatar of Mark Mark
    26. February 2016 at 23:30

    “Republicans need to get slammed repeatedly (stop letting them win in the midterms!) so they finally realize they need to move towards the center on various issues.”
    They have moved leftward on some issues. The wrong issues, unfortunately (protectionsism, minimum wage, etc.). Unfortunately, it seems both parties are most popular for their worst features.

    The saddest thing is the death of economic freedom as a political ideal in this election cycle. Maybe from now on the choice will be between left-populism and right-populism.

    It’s likely the whole election will be decided by the end of March 1. If Hillary wins big over Bernie, and Trump does better than the other two, then I think that’s game, set, and match, Clinton winning by the biggest landslide in recent history. There’s no conceivable way Trump would have a chance against Clinton. Best case scenario may be that if Clinton wins and the GOP keeps congress, she won’t be able to do too much damage from the oval office.

    Oh, I should ask, since Trump’s relative economic “progressivism” doesn’t redeem him for his other opinions, can we now officially deem to be a hypocrite any progressive who claims FDR was a good president? Can’t imagine his supposedly wondrous economic policies can redeem him from sending all those Japanese people to concentration camps.

  61. Gravatar of Mark Mark
    26. February 2016 at 23:45

    @Lorenzo: Don Boudreaux at cafehayek (not a conservative, but generally right leaning libertarian) made the case for even Sanders over Trump; his reasoning being that, whether Trump or a Democrat wins, bad economic policies (and other policies) will be implemented; but that if Trump wins, the damage will be longer-lasting because of the damage he will do to certain ideas associated with the GOP (free market policies) even as he practices the opposite policies.

    From the perspective of a small=government conservative (young as I am even I can remember when small government was the central plank of their platform; my how things change) Trump is a worst case scenario. Not only does he implement the wrong policies, but, due to the predictable imbecility of the public, manages to discredit the right policies he doesn’t implement.

  62. Gravatar of J.V. Dubois J.V. Dubois
    27. February 2016 at 02:37

    I feel for you. I recall talking to my hungarian friends who were about to vote for Orban in 2010. There were some really intelligent people. I just did not understand how they could not see what was plainly in front of my eyes.

  63. Gravatar of Lorenzo from Oz Lorenzo from Oz
    27. February 2016 at 02:52

    Mark: yes, Don Boudreaux has an arguable case.

    J V Dubois: Merkel has since managed to make Orban look good to a lot of folk outside Hungary.

    As a general comment; here in Oz, John Howard and Tony Abbott showed how right-of-centre PMs could make non-Eurocentric yet high migration policies work in a way which a solid majority of the electorate accepts. (Hint: border control, unashamedly cherry-pick and have a clear national interest justification.) Why is that demonstrably working model apparently such a hard act to copy?

    But, hey, could say the same about monetary policy …

  64. Gravatar of Lorenzo from Oz Lorenzo from Oz
    27. February 2016 at 03:00

    Scott: btw, you are correct, the point about Trump is precisely that he COULD win. People presuming Hillary (or whoever) would beat him do not have past history on their side nearly as much as they think.

    Not on the peace-and-bread model.
    http://www.douglas-hibbs.com/Election2012/2012Election-MainPage.htm

    Nor on the electoral cycle model of Helmut Norpoth:
    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2110789

    Which he is currently claiming is predicting President Trump.
    http://www.usnews.com/news/articles/2016-02-26/trump-will-become-president-statistical-model-says

    Of course, if Bloomberg ran, that could change things …

  65. Gravatar of Peter Peter
    27. February 2016 at 04:33

    Trump’s “university” seems to have been a scam.

    http://www.nationalreview.com/corner/432010/trump-university-scam

  66. Gravatar of Negation of Ideology Negation of Ideology
    27. February 2016 at 05:33

    John Hamilton –

    “I’m happy to see I’m not the only one going crazy. The most bothersome thing to me is that the rules for the presidential nomination could be changed by the RNC. We don’t have to have this system where a demagogue can hijack a party.”

    Exactly. Political parties are private institutions that can set their own rules. After this election debacle is over, the RNC should immediately set experience requirements in order to appear on any state Republican Presidential ballot and be in the debates. I would suggest 8 years as a Republican office holder, with at least 4 years in high office – defined as Congressman, Governor, Mayor of a city with more than one million people, or Cabinet Secretary.

    People like Carson, Cain, Trumps, etc., say they are Republican. Tell them “Great! Run for the Senate, or Governor. When you have a record to evaluate we’ll gladly consider you for President.” Then we can have more time in the debates for candidates who are actually qualified.

  67. Gravatar of Jackson Jackson
    27. February 2016 at 06:02

    “People like Carson, Cain, Trumps, etc., say they are Republican. Tell them “Great! Run for the Senate, or Governor. When you have a record to evaluate we’ll gladly consider you for President.” Then we can have more time in the debates for candidates who are actually qualified.”

    So essentially you would say that they should come back in a few years when they can demonstrate a vague skill which some might even call a credential of unknown ability. What exactly are you looking for? Someone who merely puts in the time? That’s what prisoners do in jail, and I’m not loathe to lump politicians and criminals together, but the passing of time has no real meaning in terms of quality or qualification.
    For all of you out there who seem to place a high value on political experience, please explain, if you can; what is political experience and why is it valuable? Give me an example, one that makes the point clear because as we all know there are a great many people with years of experience in politics, many of whom have done nothing else. Most of these experienced people are not desirable as presidential candidates.
    And lastly, I might ask: Why is Trump appearing to be particularly more loathsome to some more than H. Ross Perot?

  68. Gravatar of Derivs Derivs
    27. February 2016 at 06:06

    “If asset prices are obviously too high, and likely to fall after the bubble bursts, then markets are not efficient.”

    If you accept price as the output of a feedback mechanism seeking equilibrium, then there is nothing wrong with accepting efficiency with price of 200 at time 0 and price of 80 at time 1. At both moments the market is simply in equilibrium. The hubris is in assuming one can possibly know the fair value of any traded asset.

    You don’t want to watch the big short, but it very well explains the bet was not so much home prices but credit quality mispricing on more of an actuarial level, or how it was well put in the movie “like dog shit wrapped in cat shit” (but being priced as AAA). The fact home prices were being supported by this paper… well, “why didn’t lots of wealthy investors short the market” – that’s a different story…

  69. Gravatar of ssumner ssumner
    27. February 2016 at 06:55

    Giuseppe, Good point about Berlusconi. I was thinking about his later years, when he clearly became more Trump-like. But Trump is worse.

    Jim, I half agree and half disagree. I agree that GOP views have attracted bigots, but I don’t think those views have been out of the mainstream. Indeed until a few years ago the GOP was pro-immigration. Bush worked hard to prevent bigotry against Muslims after 9/11. Issues like crime, welfare reform, affirmative action, states rights, etc., are completely legitimate, whatever you think of the GOP’s views. (The war on drugs was not legitimate, but the Dems were just as bad.) Trump really is a radically different politician. Banning Muslims is not a defensible position, nor is being agnostic about concentration camps, nor is trying to silence the media for “libel” violations.

    Christian, You said:

    “He is talking about deeply religious Christians.”

    Surely you are joking! Even Trump himself has never claimed to be deeply religious. He’s probably an atheist.

    You said:

    “Giving answers that are pretty vague but also pretty strong (sounding) so that every voter can read into his statements what he wants to hear.”

    Finally we agree on something. It’s called dog whistle politics.

    Ray, You said:

    “Christian List wins in the thread war with Scott Sumner; indeed Sumner is putting words in Trump’s mouth. Trump is smart enough to not mention “Jews”,”

    I never said he did. And Christian is telling us that implying things doesn’t matter, Trump is only guilty if he specifically says things. So doesn’t that also apply to me?

    And you are laughably wrong about housing prices, in the majority of cases they are still at “bubble” levels, or even higher.

    Lorenzo, I agree that the polarization was much greater today, but I am confident that the Establishment could have stopped Trump if they wanted to. Even today they are not even trying. We are discovering that there is no “great right wing conspiracy.”

    Mark, Good points.

    JV, Yes, the Orban comparison is a good one.

    Lorenzo, I like Australia’s immigration policy.

    Jackson, You asked:

    “Why is Trump appearing to be particularly more loathsome to some more than H. Ross Perot?”

    Did you read my post?

  70. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    27. February 2016 at 06:58

    ‘McCarthy made it so Hollywood screen writers had to do their work under a different name.’

    ‘Et tu, Scott?’

    McCarthy had NOTHING to do with Hollywood screen writers and their problems (entirely of their own making, btw). McCarthy was a Senator, not a member of HUAC, and as far as I know never mentioned anyone with Hollywood connections, ever.

    Unless you count Gustavo Duran, who is mentioned by name in Hemingway’s ‘For Whom the Bell Tolls.’ In McCarthy’s first speech, February 1950–2-1/2 years after Dalton Trumbo and his communist comrades disrupted the HUAC hearings–McCarthy named Duran as one of the communists working in the U.S. government. As part of the UN delegation in New York. About which McCarthy was right to be appalled.

    For the actual story of why Hollywood writers got blacklisted, I recommend the (albeit, self-serving) memoir of the only member of The Hollywood Ten to renounce his communist past, Edward Dmytryk;

    http://www.amazon.com/Odd-Man-Out-Memoir-Holllywood/dp/0809319993

  71. Gravatar of John Thacker John Thacker
    27. February 2016 at 07:23

    Plenty of politicians like Trump got elected as Democrats in the first half of the 20th century. I recommend everyone read V. O. Key’s Southern Politics in State and Nation if you’ve never done so:
    http://www.amazon.com/Southern-Politics-State-Nation-V-O/dp/087049435X

    Hard for any of them to get elected nationally, though. I suppose Trump’s best opportunity is to be a sort of Woodrow Wilson or Nixon.

  72. Gravatar of Dan W. Dan W.
    27. February 2016 at 07:35

    If you want government constrained by the rule of Constitutional law then the people need to back the candidate who makes the argument for Constitutional law. But the kingmakers deride Ted Cruz and say no one likes him. So apparently the way we are to decide our president is on how many Facebook friends the person has. And we wonder why we have lawless government? The “people” are getting exactly what they want. Good and hard.

  73. Gravatar of ssumner ssumner
    27. February 2016 at 08:24

    Patrick, As I mentioned before, you are barking up the wrong tree. You need to convince the historians, not me. I have to rely on the history books, for areas where I don’t have expertise.

  74. Gravatar of Jeff Jeff
    27. February 2016 at 09:05

    When I was a kid, we saw films of the Nazi death camps and read about the Rape of Nanking. The message of the culture was clear: This is what happens when you don’t stomp out xenophobia every time it rears its ugly head. I don’t know when or why we stopped teaching that.

    Bad economic times bring bad politicians to the fore. The Depression brought us Hitler, who brought us World War 2 and the Holocaust. But it wasn’t just the bad economy that empowered Hitler, it was the German voters (correct) perception that they were being screwed after the first World War.

    While the Great Recession was not nearly as bad as the Depression, it did feature bailouts of the least deserving at the expense of everyone else, and now it’s the American voters who have the (correct) perception that they’ve been screwed. Just about everyone in the respectable political establishment went along with the bailouts, so it’s little wonder that the voters are turning to formerly marginal figures like Sanders and Trump. What’s kind of strange is that Trump himself probably also approved of the bailouts, but no one is holding him responsible for them, perhaps because he wasn’t in any office back then.

  75. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    27. February 2016 at 09:35

    Scott, could you give me the name of a history book that claims that McCarthy had something to do with the Hollywood blacklist?

  76. Gravatar of Ray Lopez Ray Lopez
    27. February 2016 at 09:39

    @Jeff – “The message of the culture was clear: This is what happens when you don’t stomp out xenophobia every time it rears its ugly head.” – so, you are prepared to let your daughter or son marry a black, if you’re white? Good on you. Because that’s the litmus test for lack of xenophobia, not ‘separate but equal’. BTW must people are not as enlightened as you and I and our host here, hence the appeal of Trump and E. Harding and Steve Sailor et al. Understandable, as some of my relatives are the same way.

  77. Gravatar of Ray Lopez Ray Lopez
    27. February 2016 at 09:45

    @Patrick R. Sullivan – just Google it. Here is the reference, Sumner is broadly correct, and it would not surprise me if the Senate talked to the House (as is common): (Wikipedia) “HUAC and SACB – McCarthy’s hearings are often incorrectly conflated with the hearings of the House Committee on Un-American Activities (HUAC). HUAC is best known for the investigation of Alger Hiss and for its investigation of the Hollywood film industry, which led to the blacklisting of hundreds of actors, writers, and directors. HUAC was a House committee, and as such had no formal connection with McCarthy, who served in the Senate, although the existence of the House Un-American Activities Committee thrived in part as a result of McCarthy’s activities.”

  78. Gravatar of Jose Romeu Robazzi Jose Romeu Robazzi
    27. February 2016 at 10:58

    As a citizen of a country that has a proven con man as president of influential politician for the last 13 years, I tell you, Trump does not “promote xenophobia”. Xenophobia is there, for some reason, and he just thrives on its existence. Also, He does not “promote” distrust of the press, distrust and suspicion of the press are there, for some reason, and he exploits it. But I am a true liberal, society shall have the leader of its own chosing, and I don’t think that GOP Establishment should have “stopped” Trump a few monts ago, nor that it should stop him now. That is precisely why governments should be small and have limited powers, in a democratic setting, one cannot prevent Trumps, Mr. Hitlers, or Lulas from coming to power …

  79. Gravatar of Negation of Ideology Negation of Ideology
    27. February 2016 at 14:39

    Jackson –

    “So essentially you would say that they should come back in a few years when they can demonstrate a vague skill which some might even call a credential of unknown ability. What exactly are you looking for? Someone who merely puts in the time? ”

    What’s vague about the duties of the Presidency? I’m not just talking about putting in time, that’s a necessary condition, not a sufficient one. I’m interested in what they have accomplished in office, how they voted, who they appointed, when they compromised,etc.

    My guess is you wouldn’t evaluate a job applicant for any other position without considering experience. I’m sure there are plenty of doctors who have years of experience and aren’t good hires. That doesn’t mean you would hire a real estate tycoon who has never practiced medicine to do brain surgery. You’d limit the pool of applicants to those who have relevant experience and then choose among them.

    And I don’t think Ross Perot or Ben Carson are loathsome. Just like me and 99% of us, they are not qualified to be President.

    You ask for an example of someone with experience who has made a good President. I don’t know who you consider a good President, but every President, good or bad, has had experience in government. They have almost all served in Congress, Cabinet Secretary, or as Governor, or as a General in a major war. I think the only exception might be Chester Arthur, who ran the Port Authority before become Vice President.

  80. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    27. February 2016 at 16:57

    Well, well. Looks like I don’t have to convince the Coen Brothers;

    https://www.youtube.com/watch?v=kMqeoW3XRa0

    Their new movie, ‘Hail, Caesar’ features a dimwitted actor played by George Clooney who gets kidnapped by a group of Communist screen writers who’ve been slipping pro-Commie propaganda into their scripts, and now want to sabotage one of major studio’s biblical epics.

    Sorta like what happened to Edward Dmytryk in real life, only it was a metaphorical kidnapping.

  81. Gravatar of Brian Donohue Brian Donohue
    27. February 2016 at 17:48

    You’re not as good at politics as you are at monetary economics.

    Mr. Hitler wrote a book in 1923. Mr. Trump wrote a book in 1985.

    Very different books.

    Weimar 1930. USA 2016. Very different governments.

    Given the massive inertia of Washington DC and the lack of any ideology driving Trump, I find your parallels to be pretty weak tea.

  82. Gravatar of Philo Philo
    27. February 2016 at 20:08

    The judgment of personal virtue and the judgment of political acceptability are quite distinct. My impression is that Goldwater and McGovern were paragons of virtue compared to the average Presidential candidate, but nevertheless most people judged them to be unacceptable candidates. Bill Clinton, who was seriously deficient in personal virtue, surprised me by (apparently) being a reasonably good President. The fact that Trump is a jerk has little bearing on his fitness for high office; let’s hope President Trump surprises us like Clinton, rather than like Hitler.

  83. Gravatar of msgkings msgkings
    27. February 2016 at 22:37

    Yeah, let’s hope! Fingers crossed it’ll be fine, or maybe Hitler. Sounds good to me.

  84. Gravatar of ssumner ssumner
    28. February 2016 at 07:24

    Patrick, No, but many books will claim that “McCarthyism” led to that blacklist, AFAIK.

    Jose, You said:

    “That is precisely why governments should be small and have limited powers”

    Brian, Where did I say Trump was equal to Hitler? They are very different, as you say. My point was that he’s similar to a lot of quasi-fascists who never went on to become “Hitler”.

    Philo, You said:

    “let’s hope President Trump surprises us like Clinton, rather than like Hitler.”

    Let’s hope he is not elected, and we don’t do that experiment. (BTW, I think his policy views would be similar to Hillary’s)

    msgkings, Exactly. (And I say that not because he would be another Hitler (very unlikely) but rather because he might be another Peron, or Berlusconi, or Putin-type.

  85. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    28. February 2016 at 11:02

    ‘Patrick, No, but many books will claim that “McCarthyism” led to that blacklist, AFAIK.’

    Then those books will be chronologically challenged. The blacklist by studio producers came in the wake of The Ten’s disruptive, obnoxious performance in HUAC hearing of October 1947. McCarthy didn’t make his first anti-Communist foray until February 1950.

  86. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    28. February 2016 at 11:12

    Even Wikipedia gets the Blacklist’s origin right;

    https://en.wikipedia.org/wiki/Waldorf_Statement

    ———-quote———
    The Waldorf Statement was a two-page press release issued on December 3, 1947, by Eric Johnston, president of the Motion Picture Association of America, following a closed-door meeting by forty-eight motion picture company executives at New York City’s Waldorf-Astoria Hotel. The Statement was a response to the contempt of Congress charges against the so-called “Hollywood Ten”.

    ….

    “Members of the Association of Motion Picture Producers deplore the action of the 10 Hollywood men who have been cited for contempt by the House of Representatives. We do not desire to prejudge their legal rights, but their actions have been a disservice to their employers and have impaired their usefulness to the industry.

    We will forthwith discharge or suspend without compensation those in our employ, and we will not re-employ any of the 10 until such time as he is acquitted or has purged himself of contempt and declares under oath that he is not a Communist.

    On the broader issue of alleged subversive and disloyal elements in Hollywood, our members are likewise prepared to take positive action.

    We will not knowingly employ a Communist or a member of any party or group which advocates the overthrow of the government of the United States by force or by any illegal or unconstitutional methods.
    ———–endquote———

    As Ronald Reagan used to say, ‘There’s critics, and there’s box office.’ The studio executives chose box office. And they were correct to do so. They had a responsibility to their shareholders to protect against a public reaction against what had been televised into their homes; a bunch of pampered Communist movie people throwing a temper tantrum.

  87. Gravatar of ssumner ssumner
    29. February 2016 at 19:51

    Patrick, OK, fair point, I guess I was thinking in terms of McCarthyism as an adjective, not the specific actions of McCarthy. But fair point.

    I still say you need to convince the historians that McCarthy was not reckless, before you convince me.

  88. Gravatar of Jacob Aaron Geller Jacob Aaron Geller
    1. March 2016 at 08:48

    “I believe in the EMH, but I admit to being mystified by this.”

    What I think you might be missing is that a) a lot of Republicans fear a primary challenge and b) the importance of the White House to individual GOP politicians might be overestimated, especially given their success at the state and local levels without it. So what we might be seeing is individually rational behavior on the part of GOP politicians and operatives amounting to irrational group-level behavior.

    That is speculative, and you might think a political party like the GOP would be better able to solve coordination problems than *this,* but…

  89. Gravatar of Jacob Aaron Geller Jacob Aaron Geller
    2. March 2016 at 07:11

    PS – Matt Yglesias has a piece today about why the GOP hasn’t, can’t, and won’t stop Donald Trump. The title is “Only Hillary Can Stop Trump” or something like that.

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