Over the past 4 years, I’ve consistently argued that the press has gone easy on Trump. The criticism for his botched handling of the Puerto Rico hurricane was mild compared to the criticism Bush received for his handling of Katrina. (Perhaps neither president should be blamed, but there is a clear double standard.)

Trump outrages that would cause a normal president to be hammered by the press for months are barely even mentioned by the US news media. How much attention was paid to Trump’s praise of war criminals? Or his encouraging Xi to put Muslims into concentration camps? Or his claim that we should have stolen Iraq’s oil? Almost none. Why does he consistently get off almost scot-free?

Now the media seems to be acknowledging its shameful double standard:

He is held, by necessity, to a more forgiving standard than any modern president. But however low the bar is set, Trump continues to trip over it.

Here is the question by Guthrie that gave Trump the most difficulty:

“Let me ask you about QAnon. It is this theory that Democrats are a satanic pedophile ring and that you are the savior, of that. Now can you just, once and for all, state that that is completely not true?”

Answering this query should have been extremely simple. Trump couldn’t do it.

Imagine if Biden had been asked the same question. He would have had little difficulty saying, ‘No, the Democratic party is not the cover for a satanic sex ring.’ The reason reporters don’t pose this question to Biden is not because it would be too difficult for him to answer, but because it would be too easy.

Another example:

Guthrie asked Trump why he tweeted “a conspiracy theory that Joe Biden orchestrated to have SEAL Team Six, the Navy SEAL Team Six, killed to cover up the fake death of bin Laden.” If Biden had tweeted out a claim that Trump had killed somebody, and that person was in fact alive, he would probably be asked about it — a lot. Indeed, if Biden had tweeted a ludicrous murder accusation, it would represent a crisis for his campaign so dire that the press would likely talk about little else. His allies would be pressed to denounce him, and Democrats would be discussing ways to force him off the ticket. For Trump, it was just another item on the list of questions.

It’s not the first time Trump has made a baseless murder accusation.

PS. I like Matt Yglesias’ take on the Hunter Biden scandal:

One corrupt son is better than two.

PPS. This headline caught my eye:

Ardern Storms to Historic Election Victory After Crushing Covid

Wait . . . you mean voters like it when you prevent thousands of deaths?

Maybe that’s why Merkel is so popular.

Remember how people used to say, “This isn’t your grandpa’s recession”? Well this isn’t even your slightly older brother’s recession.

The government just announced that retail sales surged 1.9% in September, way above expectations. In a normal year, that would be 6-months worth of growth.

Some will argue that when rebounding from a deep slump it’s levels that matter, not growth rates. And to some extent that’s true. But retail sales had already fully recovered by August, so this figure pushes us well above trend.

It’s almost impossible to overstate the weirdness of this recession. In a normal recession, retail sales plunge sharply and take years to fully recover. Look at the Great Recession, for instance. This time around sales fully recovered in just 4 months, and just 5 months from the April trough sales are already above trend:

And yet despite the surge in retail sales, the overall economy remains deeply depressed. RGDP is down sharply, and total employment is down by roughly 10 million. What gives?

Obviously, this is not a normal demand-side recession. That’s why the fiscal cliff at the end of July did not affect retail sales. The economy is being held back by Covid-19, not a lack of disposable income. Covid is obviously a problem in the service sector, but more surprisingly is also a problem in manufacturing. But how could manufacturing remain deeply depressed while retail sales booms? Who builds the stuff being sold in stores?

American manufacturing is increasingly focused on investment, not consumer goods sold in stores (many of which are imported.). The slump in travel affects everything from fracking to aircraft manufacturing to hotel/restaurant construction. With less investment, there is less manufacturing of inputs used in investment, like oil pipelines for frackers. We’ve seen other manufacturing mini-slumps when oil prices tanked, even when the broader economy was OK.

We don’t need fiscal stimulus. We do need a fiscal relief package to help the many people who are being hurt by Covid-19. The difference between fiscal “stimulus” and a fiscal relief package is that the latter would not include $1200 checks to middle class Americans with jobs.

PS. This post is not a forecast. Hospitalizations are now entering a third wave, and this may slow the economy. I cannot predict Covid and thus I cannot predict the economy. I’m also not denying that demand still has some effect, even in a supply-side recession. Nor am I denying that it would be better to have a more expansionary monetary policy, expansionary enough to raise inflation expectations up to 2%. That’s all true. Nonetheless, this recession could end quickly if we get a widely available vaccine or a cure. It’s mostly supply-side, which means it’s nothing like 2009.

By “us” I mean well connected GOP investors:

On the afternoon of Feb. 24, President Trump declared on Twitter that the coronavirus was “very much under control” in the United States, one of numerous rosy statements that he and his advisers made at the time about the worsening epidemic. He even added an observation for investors: “Stock market starting to look very good to me!”

But hours earlier, senior members of the president’s economic team, privately addressing board members of the conservative Hoover Institution, were less confident. Tomas J. Philipson, a senior economic adviser to the president, told the group he could not yet estimate the effects of the virus on the American economy. To some in the group, the implication was that an outbreak could prove worse than Mr. Philipson and other Trump administration advisers were signaling in public at the time.

The next day, board members — many of them Republican donors — got another taste of government uncertainty from Larry Kudlow, the director of the National Economic Council. Hours after he had boasted on CNBC that the virus was contained in the United States and “it’s pretty close to airtight,” Mr. Kudlow delivered a more ambiguous private message. He asserted that the virus was “contained in the U.S., to date, but now we just don’t know,”

. . .

To many of the investors who received or heard about the memo, it was the first significant sign of skepticism among Trump administration officials about their ability to contain the virus. It also provided a hint of the fallout that was to come, said one major investor who was briefed on it: the upending of daily life for the entire country.

“Short everything,” was the reaction of the investor, using the Wall Street term for betting on the idea that the stock prices of companies would soon fall.

Of course none of this is illegal:

[L]egal experts say . . . it is not apparent that any of the communications about the Hoover briefings violated securities laws. The Justice Department and the Securities and Exchange Commission would have several hurdles to clear before establishing that Appaloosa or other funds that received insights from Mr. Callanan, either directly or through intermediaries, acted improperly.

In America, the SEC focuses on finding witches. For instance, just imagine how they’d react if I gave investment advice in the blog—such as my opinion on Tesla stock. I call this a “witch hunt” because there is no scientific evidence that registered investment advisors can pick stocks better than a monkey. But actual government corruption? Nothing to see here — move right along.

PS. I feel a bit less stupid about all my previous stupid posts on society’s increasing stupidity, now that Tyler has dipped his toe in the water. (Yes, I know, linking isn’t endorsement.)

PPS. Speaking of stupidity, this caught my eye:

You’re the president,” Guthrie said. “You’re not like someone’s crazy uncle 

Trump’s not like someone’s crazy uncle? What kind of drug was she taking?

Here’s Bloomberg:

The Treasury market is now so large that the U.S. central bank may have to continue to be involved to keep it functioning properly, according to Federal Reserve Vice Chair for Supervision Randal Quarles . . .

“It may be that there is a simple macro fact that the Treasury market being so much larger than it was even a few years ago, much larger than it was a decade ago and now really much larger than it was even a few years ago, that the sheer volume there may have outpaced the ability of the private market infrastructure to support stress of any sort there,” Quarles said.

In plain English, what does this mean? What is the bad thing that would happen in the Treasury market if the Fed did not intervene in times of stress? If that bad thing happened, would it create an easy profit opportunity for someone like me (an investor who can wait out periods of stress?)

Why does increased size make the Treasury market more fragile? One normally thinks in terms of size and liquidity being positively correlated. Is “stress” different from illiquidity?

Suppose the Fed intervened in the MBS market during times of stress in the T-bond market. Would that fail to address the problem? I.e., is the problem Treasury debt-specific, and not just a generalized lack of liquidity, (which can be addressed by adding more reserves?)

How does this problem relate to the “safe asset shortage” that people often discuss? Would addressing the safe asset shortage by issuing more T-bonds also make the Treasury market bigger and thus even more fragile?

PS. Just to be clear, Quarles does not seem to be discussing central bank support of government debt in the traditional sense, which meant intervening to keep government financing costs low. When the Fed injects more reserves into the system, they tend to pay interest on those reserves at a rate comparable to T-bill yields. Thus the Fed is not “monetizing the debt” in the original meaning of the phrase.

Here’s the abstract of Robert Hetzel’s new Mercatus paper, which discusses the Fed’s response to Covid-19:

The quantity theory, which posits a causal relationship between money and prices, is among the oldest theories in economics. Starting in March 2020 as the COVID-19 pandemic affected the United States, money surged at a historically rapid pace. Historical experience, most recently with the Great Inflation of the mid-1960s through the 1970s, suggests that an uncontrolled surge in inflation is coming. Other factors in the intellectual and political environment are also reminiscent of the Great Inflation. The Federal Reserve has reverted to its 1950s “cost and availability” view of monetary transmission. There also exists a widespread belief that inflation is a nonmonetary phenomenon. In Keynesian terms, because the Phillips curve, which relates inflation and unemployment, is presumed to be flat, the Fed can push the unemployment rate to historically low levels. Federal Open Market Committee (FOMC) chair Jerome Powell asserts that the course of the recovery will be dictated by the behavior of the virus. That makes sense in that the recession arose as a shock to potential output. Powell and the FOMC, however, treat the recession as if it originated in a large negative aggregate-demand shock requiring extremely stimulative monetary policy. The FOMC should follow a rule that ensures that the spring 2020 bulge in money dissipates.

The paper presents a monetarist critique of recent Fed policy.

I’m less worried about inflation, as you don’t see high inflation expectations in the TIPS markets. But Bob is right that the intellectual climate increasingly resembles the 1960s, when belief in a (flawed) Keynesian model led to some serious policy errors. So this is certainly something to keep an eye on.