Trump’s mandate

There is no issue that Trump emphasized more than having Mexico pay for a new border wall.  The suggestion always got huge applause from his crowds.  Now there are disturbing signs that America’s Congress is about to ignore the will of the voters, and spend $38 billion on a boondoggle that no one seriously expects to work.  So sad!!

Voters need to contact their representatives, whether Democrat or Republican and insist that not a dime of taxpayer money be spent on the wall. Trump repeatedly insisted that Mexico would pay, and the voters gave him a mandate to fulfill that promise.

Some people seem to think Trump favors having US tax money spent on the wall. Wrong!

Now is the time to rally around Trump and loudly insist that no US funds are spent on the wall.

PS.  Here is the stock market recovery after the March 2009 lows:

screen-shot-2017-01-10-at-10-39-37-pm

Trump fans think Obama had nothing to do with the massive rise in the S&P from the lows of roughly 700, but Trump definitely caused the small (roughly 6%) rise since the November election (black dot to yellow dot.)

Here is what I believe:

1. They may well be right.

2.  They have not presented any persuasive evidence that they are correct.

In other words, you Trumpistas may be right, but don’t expect any non-Trumpistas to believe it.  Just take a look at the graph, and you can see how absurd the claim seems.

Now you might reply that this is a superficial criticism, and that sophisticated analysis shows that Trump helped the stock market but Obama did not.  But Trump is all about superficial, and completely rejects sophisticated analysis, of any sort. This is the guy who picked Peter Navarro to advise him on trade.

PPS.  Even if you ignore all the accusations of conflict of interest for Trump and his cabinet picks, it’s been far and away the worse interregnum I’ve ever seen.  Yes, FDR’s transition from Hoover probably did much more damage, but this has been an almost non-stop set of face palm moments.  Telling us that CIA reports of Soviet anti-Hillary actions were ridiculous, and then later implicitly admitting they were correct.  (And now he calls the latest allegations of Russian dirt on him as “Fake News”.  Okaaaay.)  The two China fiasco.  The suggestion that we need more nukes.  The pro-Putin posture.  The increasingly clear evidence that Trump has absolutely no plan to fix Obamacare, or anything else on the domestic front. The picks of economic advisors from the 1% of economists who do not understand Ricardian trade theory, and foreign policy advisors from the kookiest fringes of the GOP.  The new ambassador to Israel.  The embarrassing tweets.  Steve Bannon. Jeff Sessions.

We now know that the General Election Trump was the real Trump; he’s not a serious man who was pretending to be a demagogue.  This is who he is; it’s not an act.  He’s in way over his head.  I expect that the Congressional debate of Obamacare will be an absolute horror show, and Trump will provide no leadership. It’s going to be fun watching the faces of Republicans when they find out what the new health care regime will look like.  I can hardly wait.

Fortunately Presidents don’t have much say on the domestic front, so the country will probably be fine (unless his trade policy is even worse than I fear).  Let’s hope his foreign policy screw-ups are not too serious.

PPPS.  Trump repeatedly promised to release his tax returns.  Where are they? (Perhaps Putin has them—if so, he knows how to gain maximum leverage from them.)

 


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27 Responses to “Trump’s mandate”

  1. Gravatar of Major.Freedom Major.Freedom
    10. January 2017 at 21:20

    This blogpost is fake news.

    No matter who pays for the wall, US taxpayers, Mexicans, aliens, whoever, the payment process is REQUIRED to go through the formal appropriations process.

    No matter where the proceeds for the wall come from, they STILL need to factor it into the budget — there’s literally no other way to go about it.

    Let’s say Mexico LITERALLY writes Trump a check for the wall (side note: this isn’t what Trump has ever meant). Guess what happens to that check? It goes into our budget. So our budget gets [wall money]. Next step? You guessed it: the Congressional the appropriations process, where we decide how much money to spend on what!

    So the headlines Sumner is reading don’t say Mexico isn’t paying for the wall. If all of the costs associated with the building are equal to proceeds from the taxation of Mexican imports or remittance payments (somewhere in the billions), then Mexico did pay for the wall. No matter what, Trump will still have to ask Congress to pay for the wall, because Mexico cannot build a wall on US soil. Did Trump ever say that Mexico will build the wall, or only that Mexico would pay for it?

    DISCLAIMER: I am an anarchist, not a supporter of Trump, just a disliked of fake news.

  2. Gravatar of Jerry Brown Jerry Brown
    10. January 2017 at 21:59

    Major.Freedom, Maybe Trump was trying to get the Mexicans to hate him so much that they would build a great big wall on their side of the border just to keep him out. Then Trump could say look at the wall the Mexicans paid for.

  3. Gravatar of Kevin Erdmann Kevin Erdmann
    10. January 2017 at 23:15

    Well, duh. Markets are forward looking. Clearly the drop from July 2008 to November 2008 was because of the growing realization of an Obama victory. A clear example of EMH.

    :-)

  4. Gravatar of Scott Freelander Scott Freelander
    10. January 2017 at 23:56

    Good post. In case anyone’s interested, I looked up the changes in prices since November 8 of all the inferior goods-related stocks I could think of. Almost all of them are up. Here’s the list, with % change and the beta.

    CPB: 9.01%, .41(Campbell’s Soup)
    HRL: -6.7%, .45(Hormel Foods)
    DLTR: 2.8%, .62(Dollar Tree)
    WMT: -2.2%, .10(Wal-Mart)
    AZO: 8.4%, .62(Autozone)
    AAP: 23.4%, 1.13(Advance Auto Parts)
    MCD: 5.4%, .67(McDonald’s)
    YUM: 4.8%, .80(YUM Brands, including Taco Bell, KFC, Pizza Hut, and WingStreet)

    Also, interestingly, many luxury stocks have been lagging the market, and that was even more the case a month ago.

    http://www.cnbc.com/2016/12/08/no-trump-bump-for-luxury-stocks.html

    Currently, the S&P Global Luxury Index is up 3.3% since November 8, but just a month ago it was up less than 1%. Of course, there is some non-US exposure there.

    http://us.spindices.com/indices/equity/sp-global-luxury-index

    These are far from perfect metrics, obviously, and I’d appreciate any additional names of inferior goods- or luxury-related companies, but this is consistent with the idea that policies pursued during the Trump era are only expected to be net beneficial due to higher interest rates making the zero bound less of a potential factor in the next downturn.

    Any positives associated with lower taxes and regulation might be entirely swamped by deficit spending, protectionism, and some unwise changes to the corporate tax code, to mention just a few examples.

  5. Gravatar of dtoh dtoh
    11. January 2017 at 02:40

    @Scott,
    I think the issue was stopping illegal immigration. The wall and who pays for it was rhetoric. Please stop being deliberately obtuse.

  6. Gravatar of Christian List Christian List
    11. January 2017 at 03:13

    I know you will say that you have meant your critique of the funding of “The Wall” (trademark) in your super-ironic super-funny way (that no one gets). It’s still worth addressing since most media outlets are complaining in their well-known dishonest way as well, which is no surprise. I still don’t think Trump supporters will fall for this. They never fell for it in the past so why would they now.

    Trump already said that he plans to make Mexicans (or South Americans in general) pay for it via fees. I’m not saying that this is a good plan and that I support it, I don’t really care to be honest, but acting like there is no plan at all (no matter how stupid it might be), is not being honest. You don’t beat Trump with lies, mostly because he is an expert in this field and therefore will beat you in this field easily with his “skill” and vast experience.

  7. Gravatar of James Alexander James Alexander
    11. January 2017 at 04:22

    Nice write-up of “Monetary Offset”
    https://www.bloomberg.com/news/articles/2017-01-10/monetary-offset-defined-the-fed-s-wet-blanket-quicktake-q-a

  8. Gravatar of The Original Gordon The Original Gordon
    11. January 2017 at 04:57

    MF, I would have thought an anarchist would want to see the wall fully funded by Mexico *before* it was built. Now, money is to be stolen from taxpayers, and there *might* be some scheme for getting it back?

    Of course, I understand that you are not a Trump supporter, merely an anarchist who cannot bring himself to criticize Trump for his theft, driven by a useless piece of political symbolism.

  9. Gravatar of ssumner ssumner
    11. January 2017 at 08:54

    dtoh, That may be what you think, but it’s wrong. The cost of the wall is an order of magnitude more important that “stopping illegal immigration”. Even worse, people who know something about immigration generally don’t think the wall would work. That’s why it’s so important to avoid wasting $38 billion. How can you equate $38 billion with at most a tiny reduction in the flow of migrants from Mexico?

    Christian, I don’t understand your point. How does that conflict with my claim that Mexicans should pay for the wall, not Americans? Don’t build a wall until there is actually legislation forcing Mexico to pay. You say there is a plan—fine, let’s see it implemented before building the wall. I’m perfectly fine with starting it before we’ve received the full $38 billion from Mexico, but at a minimum we at least need legislation in place to assure they pay. Is that too much to ask? So where is the legislation?

    And no, taxes on Americans doing business with Mexico don’t count, I want a tax on Mexicans, not Americans.

    You said:

    “You don’t beat Trump with lies, mostly because he is an expert in this field and therefore will beat you in this field easily with his “skill” and vast experience.”

    You really are funny sometimes. There are no lies in my post, if there were you would have cited them. As far as Trump’s skill, how are his lies about Russian hacking working out for him now?

  10. Gravatar of ssumner ssumner
    11. January 2017 at 08:54

    James, See my new Econlog post.

  11. Gravatar of E. Harding E. Harding
    11. January 2017 at 10:46

    “Telling us that CIA reports of Soviet anti-Hillary actions were ridiculous, and then later implicitly admitting they were correct.”

    -Get mental help for your senility.

  12. Gravatar of Sean Sean
    11. January 2017 at 11:24

    I partially consider Trumps lack of big ideas as a positive. His big idea is a wall. $40 billion boondoggle. Bush had the Iraq War and Obama had ObamaCare both are well into the trillion dollar boondoggle category.

    As for the stock market isn’t it mosttly monetary policy. I’d credit Trump for the rally since election since the leaks of his tax plans directly benefits a lot of stocks. But a lot of the equity market move was simply the market wanting to go up once a risks event was removed.

  13. Gravatar of Doug M Doug M
    11. January 2017 at 11:24

    The US Mexcio border is 2000 miles

    $ (38 Billion / 2000 miles)(1/5280 ft / mile) = $3,600 per linear foot.

    Who is building this wall!

  14. Gravatar of ssumner ssumner
    11. January 2017 at 13:26

    Sean, Trump will also have his own ObamaCare. But yes, there are much worse boondoggles than the wall, let’s see what else Trump comes up with.

  15. Gravatar of Massimo Heitor Massimo Heitor
    11. January 2017 at 13:35

    It was widely acknowledged that a Trump administration would tax remittances to Mexico or add some kind of tariff on Mexico to finance the immigration border. And that Mexico would probably not willingly make payments directly for the wall.

    It is reasonable to expect Trump to begin or at least outline the revenue recuperation from Mexico process first and not just punt to “later”.

    Suggesting that Trump is equivocating or somehow failing on his mandate to make Mexico pay for the wall is absurd.

  16. Gravatar of Christian List Christian List
    11. January 2017 at 14:05


    As far as Trump’s skill, how are his lies about Russian hacking working out for him now?

    I don’t see how this has harmed him. Maybe you can tell me how this has harmed him? Did he lose credibility? With whom? With you? With the NYT? With whom?

    I was pleasantly surprised that he admitted that the Russians hacked the DNC. This reinforced my opinion that my prediction might come true: Trump will be way tougher on Russia and Putin than all those biased media outlets would have people believe. This should be rather easy as well since all those outlets basically predicted that Putin and Trump will exchange social fraternal kisses.

  17. Gravatar of Engineer Engineer
    11. January 2017 at 14:29

    $3600/ft? Double fencing and landmines are not cheap…

    I never thought I would live to see the day when the Democrats are the big defenders of our intelligence services. There is a lot of “group think” in most government agencies. All this Russian talk is just that. The more you discuss Putin, the bigger the guy becomes. Let it go..You need to expect cyber and defend against it.

  18. Gravatar of ssumner ssumner
    11. January 2017 at 15:14

    Massimo, How is a tax on remittances to Mexico equivalent to making Mexicans pay for the wall? Maybe you are one of those people who considers Mexican-Americans to be “Mexicans” not Americans”. How about that Mexican American judge in Indiana—is he a Mexican in your view? Should Trump get him to pay for the wall?

    Christian, You said:

    “I don’t see how this has harmed him. Maybe you can tell me how this has harmed him? Did he lose credibility?”

    You mean that someone with zero credibility cannot lose any more? Hmm, I suppose you are right.

    Engineer, You said:

    “I never thought I would live to see the day when the Democrats are the big defenders of our intelligence services.”

    You just don’t get it. This is not about the CIA (I don’t trust them), it’s about Trump. First he says the charge is ridiculous, then he says it’s true.

  19. Gravatar of Engineer Engineer
    11. January 2017 at 16:34

    I get that we elected a president that I consider a few fries short of a happy meal. The fact that he seems to have a good personal relationship with the president of the only country that could turn the US into a nuclear wasteland…That is a very good thing.. I would be a lot more worried if there was great animosity.

  20. Gravatar of Engineer Engineer
    11. January 2017 at 16:50

    If the Russian truly left evidence that they did the hack..Then they are amateurs and we should be happy with their bumping actions. The CIA/NSA would never so careless. Hilary and DNC left themselves undefended..Which is the real story. Hilary was emailing her passwords around..Is she really that clueless..That is my question.

  21. Gravatar of Massimo Heitor Massimo Heitor
    11. January 2017 at 22:05

    Sumner,

    If you tax remittances the real cost of the tax falls on both sending party and receiving party, which in this case include Mexican citizens living in Mexico. The Mexican government may even be willing to spend a one time fee to avoid such a tax.

    I suspect you know that. Maybe you aren’t being serious?

    Judge Gonzalo P. Curiel is a US citizen and also a member of the San Diego La Raza Lawyers Association which is a racial group whose charter is to help ethnically hispanic people and exclude people of other ethnic groups. I am not opinionated on whether he is labeled a Mexican American or something similar.

  22. Gravatar of ssumner ssumner
    12. January 2017 at 06:19

    Massimo, And so you can’t even answer a simple question.

  23. Gravatar of Massimo Heitor Massimo Heitor
    12. January 2017 at 08:41

    Sumner,

    “How is a tax on remittances to Mexico equivalent to making Mexicans pay for the wall?”

    A tax on remittances to Mexico imposes a real cost on the receiver of remittances which are Mexicans living in Mexico. That tax revenue can be used to finance an immigration barrier. Of course, there are other options such as trade tariffs, taxes on visas, etc.

    “How about that Mexican American judge in Indiana—is he a Mexican in your view?”

    I would personally label/categorize Judge Curiel as an American of Mexican descent. The label Mexican American is also reasonable. The label Mexican is not reasonable since he was born in the US and has (AFAIK) spent his whole life in the US.

    “Should Trump get him to pay for the wall?”

    Not intentionally or directly, no. Wealth extracted from him and other US citizens residing in the US shouldn’t count as “Mexicans paying for the wall”. If he is impacted my remittance taxes or trade tariffs, that isn’t wrong, but it shouldn’t count towards Trump’s pledge of having Mexico/Mexicans pay for the immigration barrier.

  24. Gravatar of flow5 flow5
    12. January 2017 at 16:48

    The CIA is all right. It’s the FBI that needs reorganized. The FBI watched OJ Simpson for 5 months before he murdered Nicole and Ron.

    And anyone who thinks Obamacare would work is simply stupid.

  25. Gravatar of flow5 flow5
    12. January 2017 at 16:53

    When’s the last time anyone hung around the U.S. / Mexican border? Has anyone studied the huge shift in the Hispanic population in say, California? I lived in La Jolla (across the street from Children’s Beach).

  26. Gravatar of Trump Is So Awful He Defies Reason Trump Is So Awful He Defies Reason
    12. January 2017 at 21:07

    […] January 10, Scott opened a post like this: “There is no issue that Trump emphasized more than having Mexico pay for a new […]

  27. Gravatar of Major.Freedom Major.Freedom
    14. January 2017 at 11:09

    flow5:

    The CIA needs to be abolished. It is corrupt beyond all imagination of reasonable normal Americans.

    The Original Gordon:

    Please don’t mistake my description of what Trump said and plans to do, with an advocacy of it.

    Of course I can “bring myself to criticize Trump for his theft.” Yes he is now a thief. But what good will that do on your ears? What, did you need to hear that from me? Are you seriously considering concluding that anarchism is the optimal morality?

    The money that will be used to pay for the wall in the short term was already stolen. Trump didn’t invent government theft. He is taking advantage of it and believes that him taking control of the state will make the country better off as compared to someone else taking control of it.

    I do not at all advocate for your money or anyone’s money to be stolen to pay for the wall. What I advocate is an abolition of all states, prohibiting a world state, and to have absolute protection of individual property rights in the moral and legal senses. No wall would be needed across the US-Mexico border. Rather, you would see walls like Obama is building around his new DC home, and like the anti-wall Hollywood celebrities comfortable and safe behind their own walls around their homes, calling people who can’t afford their own walls racist and xenophobic for wanting a Mexico wall.

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