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:

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.)

In recent years, the unemployment rate has fallen to low levels (4.7%).  Some people continue to argue, however, that there is a lot of labor market slack.  They point to data such as the U-6 unemployment rate, as well as the labor force participation rate. But with today’s jobs report, it’s becoming almost impossible to continue arguing for labor market slack.  The labor market is clearly tightening:

There is no longer any respectable argument for monetary or fiscal stimulus.  There are arguments for stimulus that deny the natural rate hypothesis, but having lived through the 1970s once, I’d just as soon not experience it again.

Time for supply-side policies, beginning with a repeal of those idiotic overtime rules.  Then on to tax reform.

PS.  I am at the AEA meetings, so blogging will be sporadic for the next few days.

I have pretty similar views on monetary policy as Ryan Avent, but I’m going to quibble slightly with this:

At the same time, a period of inflation above the Fed’s 2% target would give the central bank more headroom to raise its benchmark interest rate. The higher the level of long-run nominal rates, the less likely rates are to fall back to zero the next time trouble strikes.

Back in 2009, 2010, 0r 2011, it would have made sense to try to overshoot the 2% inflation target.  But not today, with unemployment at 4.6%.  If we pushed inflation above 2% when the economy is strong, then we’d have to shoot for under 2% inflation when the economy is weak.  We’d be more likely to fall back to zero next time.

Indeed this is basically what went wrong in 2008.  Inflation exceeded 2% during the housing boom.  Thus when the Fed needed to move aggressively to ease policy in 2008, they held back in fear of inflation (which ran above 2% during 2008).  It would make more sense to shoot for below 2% inflation during booms, and above 2% inflation during recessions.

Ryan does have some forceful arguments for higher inflation, but I think they’d be more effective if couched in terms of a change in the inflation target.  Thus instead of calling for an overshoot of the 2% target by 1/2%, it would make more sense to call for undershooting a new and higher 3% inflation target, by 1/2%.  Increasing the inflation target to 3% would indeed give the Fed more room to cut rates in the next recession, in a way that overshooting the 2% target would not.  In addition, undershooting the target during a boom is more consistent with the spirit of NGDP targeting, which Ryan has previously endorsed.

This all might seem like a meaningless quibble; “What difference does it make what we do to the target, as long as we get 2.5% inflation.”  In the very short run it may make no difference.  But if you don’t make monetary policy decisions in the context of a clearly defined policy regime, then the economy is likely to be less stable, especially when we reach a turning point in the business cycle.

As always, this 3% inflation target is not my preferred option (I prefer NGDPLT). I’m just trying to illustrate what I think is the most fruitful approach for people with current views on policy that might be described as “dovish.”

2016 was a good (but exhausting) year, and 2017 should be even better.  I’m too tired to post on economics today, so just a few random observations:

Predictions:  Trump will shake up the BLS, and appoint people willing to tell the “truth” about unemployment.  The official unemployment rate will jump from 4.6% to 40% in early 2017.  That will allow Trump to bring the rate down sharply over the next four years.

Resolutions:  Watch more NBA basketball.

Two years ago I was asked to name the people I most admired.  Here are the three athletes I named:

Kareem Abdul Jabbar, Russell Westbrook, Giannis Antetokounmpo

Does this blog have something similar to the Sports Illustrated curse?  See for yourself:

Since then, Kareem was interviewed by Tyler Cowen, and there’s also this:

And how are the other two doing?

Westbrook was already a good player two years ago (but not “average triple double for a season” good).  Giannis was a nobody.  And notice that 3 of the top 5 are from the 2012 OKC team.  Replace Roberson with Harden on last year’s team and you have a OKC championship (they weren’t all that far away without Harden.)

Westbrook gets my vote for the greatest under 6’4″ athlete, and Giannis for the best 6’11” or above athlete.  Ever.  Where does Giannis’s athleticism come from?  I suppose I can’t avoid posting the picture that has caused 17.3% of the Bucks (male) fans to change their sexual preference:

PS.  When I was in junior high school I was the tallest person in class, but was always picked last when they chose sides for basketball.  Life is deeply unfair.

PPS.  Last night Giannis had 35-9-7-7-2, and the Bucks’ rookie second round draft pick had a triple double.  Life is beautiful.

PPPS.  My most admired artist was Dylan.  I heard that he also had a pretty good year.

PPPPS.  Under politician most admired I put:

Politicians:  Can’t think of any

This year Gary Johnson stole my line, and 2016 validated my cynicism.

PPPPPS.  OK commenters, any rating that puts Lebron at #10 is garbage, but why do you have to be such killjoys?