Let’s focus on some good news—air traffic control privatization

Let’s not focus on Trump’s childish, insulting and inaccurate attacks on London’s mayor.

Let’s not focus on the fact that democratically elected leaders almost universally despise Trump, even people who should be his ally (like Theresa May).  Or that that Trump only has good relations with bloodthirsty tyrants.

Let’s not focus on Trump’s idiotic “travel ban” tweets, which undercut his own administration.

Let’s not focus on the fact that even conservatives now view him as mentally unstable.

Let’s not focus on how Trump’s foreign policy team was blindsided when he left Article 5 out of his NATO speech.

Let’s not focus on the latest revelations about how the Russians tried to hack the elections, or how Trump tried to cover it up, or how the intelligence services don’t know whether to report info about “bad guys” to their boss, if the boss is very likely to be the bad guy:

These latest revelations may also point to a potential bind that top intelligence officials could find themselves in.

“What do you do if you’re serving the president, and this is information he has to know,” but it relates to a topic in which Trump’s and his associates’ ties are being examined as well, Carle asked.

Law enforcement and investigative officials typically do not inform the subjects of investigations of their findings. “But in this instance, that is the chain of command,” Carle said.

Let’s focus on the positive, Trump’s proposal to privatize air traffic control.  Here are a few thoughts:

1.  When in doubt, the presumption should always favor the private sector over the public sector.  There is a mountain of evidence that the private sector is usually more efficient.

2.  There may be cases where the public sector is more appropriate.  But even in those cases, an independent government-owned corporation may well be better than a government agency that Congress can easily order around.  I believe some of the European countries use that model.

3.  The pilots and the air traffic controllers favor privatization, an indication of just how outmoded their equipment is.

4.  We also need to privatize airports and airport security, a trend where the Europeans are far ahead of us.

Will Trump get this through Congress?  I doubt it.

PS.  Commenter Alexander Hamilton directed me to a letter signed by lots of economists, supporting Labour in the current British election campaign.  For those who don’t know, the current leaders of the Labour Party are big fans of people like Castro, Trotsky and Lenin.  Their favorite policies are similar to those that Chavez used to turn Venezuela into a basket case.  So what sort of economists are fans of this madness?

Dean Baker, Co-Director of the Center for Economic and Policy Research, Washington, DC

James K. Galbraith, Professor of Government, University of Texas, USA

Simon Wren-Lewis, Professor of Economic Policy, Oxford University

Trump and Corbyn.  Both the left and the right seem to have gone completely insane.  Is it something in the water?


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56 Responses to “Let’s focus on some good news—air traffic control privatization”

  1. Gravatar of Steve F Steve F
    6. June 2017 at 17:29

    We live in a period of chaos, perhaps brought upon by incompetent leaders and incompetent academia. Maybe Trump isn’t a solution to that, but he sure ain’t the problem.

  2. Gravatar of Steve F Steve F
    6. June 2017 at 17:33

    LOL I just realized there’s a Trump Derangement Syndrome tag. Yeah, I’d say that’s a good way of putting Trump living rent-free inside some peoples’ heads. Eating pizza with no plate, feet on pillows.

  3. Gravatar of ChacoKevy ChacoKevy
    6. June 2017 at 20:03

    I enjoy reading Dean Baker and don’t find him too nutty. FWIW, he also signed the letter endorsing Kevin Hassett to be CEA chair
    https://medium.com/@hassett.economists.letter/letter-in-support-of-the-nomination-of-kevin-hassett-to-be-chairman-of-the-council-of-economic-78c483f9821b

  4. Gravatar of Rajat Rajat
    7. June 2017 at 04:23

    Simon Wren-Lewis, that says it all – another one of the anti-austerity brigade.

  5. Gravatar of ssumner ssumner
    7. June 2017 at 05:14

    Steve, No we don’t live in a period of chaos, Just the opposite. Just out of curiosity, have you ever read a history book?

    ChacoKevy, You said:

    “I enjoy reading Dean Baker and don’t find him too nutty.”

    I agree. I listed those three names because I was surprised to see them on the list.

  6. Gravatar of Rob Rob
    7. June 2017 at 05:44

    I was actually pleasantly surprised by the manifesto. It’s definitely left labour stuff, but it lacked the really nutty Corbyn stuff (like the quotes about nationalising the banking system that City AM mentions).
    Basically we have a big hike in upper tax rates and corp tax, some nationalisation of quasi-private monopolies, a big infrastructure and public housing build, some half-baked collective bargaining ideas, a min wage hike, and various other spending priorities.

    I took this to mean that either he’s become less crazy in his views, or the rest of the party still has real power.

    Still definitely hope we won’t end up with him in charge though! Brexit really doesn’t seem like a great time to make the UK environment a lot less business friendly, and I’m not looking forward to a tax hike myself.

  7. Gravatar of Benjamin Cole Benjamin Cole
    7. June 2017 at 06:41

    There is a common theme–declining living standards for employees in developed nations. And most people (who need income) are employees.

    Tight money is part of the problem. Property zoning is another, along with exploding house prices. Globalization of wages. Criminalization of the very kinds of businesses most urban residents could start, such as push-cart vending, or truck vending.

    Add on central banks that target rates of unemployment to ensure there are always more people looking for work than job openings—a sort of econo-sadism superciliously sanctified as good monetary policy.

    In the US there are currently 1.4 people looking for a job for every job opening. The Fed calls that “labor shortages.”

    Americans voted in Trump, and Bernie Sanders put a good showing.

    The establishment is surprised? I am pleasantly surprised the results are not worse.

    Young men make 31% less today than in 1969. Who should they vote for? Hillary Clinton? Mike Pence? Jeb Bush?

    Does anyone believe a Jeb Bush could successfully bring wages for young men back to 1969 levels? That he would even want to?

  8. Gravatar of Doug M Doug M
    7. June 2017 at 07:58

    Of course we used to have private airport security, but we got rid of that in favor of the TSA.

    In praise of the TSA. I lost my wallet while traveling. Turns out I left it in the cab that took me to the airport. Anyway, I was quite impressed with the TSA’s ability to determine I was who I claimed to be.

  9. Gravatar of Steve F Steve F
    7. June 2017 at 08:01

    Scott, I understand the point you’re making about *relative* chaos. Now is not chaotic like ww1 was chaotic. However, examine your own language, where you called what economists by great numbers believe in as “madness”. I recall the profession having gone bonkers is why you began blogging in the first place. What we have is more akin to cultural or idea chaos, not material chaos. We have material stability and plenty.

  10. Gravatar of TravisV TravisV
    7. June 2017 at 08:02

    Yglesias: “Tax evasion is shockingly prevalent among the very rich”

    https://www.vox.com/2017/6/7/15745978/tax-evasion-zucman

  11. Gravatar of d d
    7. June 2017 at 08:07

    i suppose privatizing ATC might sense in the same way it does when the airlines ran the airport security pre 9/11. but dont expect it to fix all of the problems. since some of them come from the airlines themselves. the next gen ATC is actually in use, but part of the holdup is the airlines have to update their aircaft, which wont be done for a few years. will privatization help that? no. what the airlines really want is to make the ATC more ‘efficient’ by reducing the safety margins that now exist. but then wouldnt expect them to do a better job than s done nw, sense they are conflicted about safety

  12. Gravatar of Christian List Christian List
    7. June 2017 at 08:35

    A good result for Corbyn seems to be the next “big surprise” after Brexit and Trump. But like Brexit and Trump it’s not such a big surprise when you think about it. Those in power just really blew again.

    How could May call for re-elections in the first place. She wanted a big majority for her “hard Brexit” approach but what was she thinking? The Brexit vote was already only 50:50, and from that 50% many pro Brexit people don’t want a hard Brexit. And to make things worse that was the situation way before Trump’s presidency and before the disastrous negotiations.

    So what in the world was she thinking? Her only grounding seems to be that Corbyn is an idiot who will never get elected. Well that was Hillary’s only strategy against Trump as well and we all know how that played out.

  13. Gravatar of Tom Brown Tom Brown
    7. June 2017 at 09:24

    Just out of curiosity, have you ever read a history book?

    Lol… you know my dad turns 100 next month. I’ll ask him how chaotic it is now vs the rest of his life.

  14. Gravatar of msgkings msgkings
    7. June 2017 at 10:04

    @Steve F: you are just now familiar with that term?

    The first instance of that malady was called Clinton Derangement Syndrome, followed by Bush Derangement Syndrome, Obama DS, and then Trump and (H)Clinton DS.

    Basically politics has gotten dumber and way more partisan since 1994

  15. Gravatar of d d
    7. June 2017 at 10:09

    as a side note it seems that other countries that have privatized their ATC, now pay up 59% higher fees than the taxes were. course some of the fees passed on b some of the airlines may include their own fees too.

  16. Gravatar of Alec Fahrin Alec Fahrin
    7. June 2017 at 12:27

    Personally, based upon the solution suggested by the administration (non-profit pseudo-private ATC), I don’t think it is much benefit. Then again, the current system is about as bad as it can get.
    Either way, I seriously doubt it’ll get through the senate. The Democrats are not voting on anything Trump touches. Uncomprising bipartisanship is gonna send this nation into a far worae state in my opinion. I’d expect an extreme left Dem candidate for 2020.

    The boundaries of what is politically acceptable or “normal” has expanded significantly in the last few years. Dems and left-leaning media made it seem like Trump will end the world and the USA. When he doesn’t, his failures and attacks on the institutions become normalized.

    There was a very… stimulating released two days before the election of Pres Trump.
    https://en.m.wikipedia.org/wiki/HyperNormalisation
    I would recommend everyone watch it if they have the time.

    “In Russia, Vladimir Putin and his cabinet of political technologists create mass confusion. Vladislav Surkov uses ideas from art to turn Russian politics into a bewildering piece of theater. Donald Trump used the same techniques in his presidential campaign by using language from Occupy Wall Street and the extreme racist right-wing. Curtis asserts that Trump “defeated journalism” by rendering its fact-checking abilities irrelevant.
    The American Left’s attempt to resist Trump on the internet had no effect. In fact, they were just feeding the social media corporations who valued their many additional clicks.”

  17. Gravatar of Scott Freelander Scott Freelander
    7. June 2017 at 12:57

    I prefer to think of Corbyn as merely trying to take the UK back to the stagflation and wasteful nationalized industries of the 70s.

  18. Gravatar of Adam Adam
    7. June 2017 at 13:21

    My brother is a pilot. I’m fairly certain he doesn’t support privatization, although he agrees that there’s a desperate need for modernization.

    His wife is also a pilot. I’m less sure where she stands. I’ll have to ask her. I’d guess she’s not for privatization.

    That said, commercial airline pilots, being overwhelmingly ex-military, are a super conservative bunch. Nonetheless, I’m not sure it’s true that pilots support privatization.

  19. Gravatar of DonG DonG
    7. June 2017 at 15:52

    I agree there is a feeling of chaos. I attribute this to a lack of faith in institutions. Some days, it seems there is nothing that can be trusted: religion, education, government, news, police, … The military still polls well, but people are war-weary. Here’s some data: https://fivethirtyeight.com/features/americans-dont-trust-their-institutions-anymore/

  20. Gravatar of E. Harding E. Harding
    7. June 2017 at 16:32

    Sumner, everything you wrote about Trump sounds good to me. What Trump does that really p*sse me off (and keeps me #NeverTrump) is stuff like this:
    https://www.reddit.com/r/syriancivilwar/comments/6fw20m/pres_trump_on_the_terror_attacks_in_iran_we/
    https://www.reddit.com/r/syriancivilwar/comments/6fnqdu/breaking_usled_coalition_strikes_proregime_forces/

    What you write about Corbyn’s crappy economics and the ridiculousness of any economist supporting him is accurate, but I want him to become PM, anyway, just because I don’t like Theresa May and think a Corbyn victory would be an epic blow to unhelpful foreign policy.

  21. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 16:45

    Let’s not focus on Trump’s childish, insulting and inaccurate attacks on London’s mayor.

    Those “attacks” on the London mayor were neither childish nor inaccurate. They were brutally accurate, and they were clearly also insults. Nothing wrong with insulting people, right Sumner? lol

    I bet you had no clue that the current London mayor defended the 9/11 terrorists as their lawyer.

    I bet you had no clue that all 12 suspects of the recent Manchester terror attack were released without charge by the London Police. The London mayor is in charge of the London Police. This may be nothing, but given the mayor’s affinity towards Islamic terrorism, there may be more to it.

    Let’s not focus on the fact that democratically elected leaders almost universally despise Trump, even people who should be his ally (like Theresa May). Or that that Trump only has good relations with bloodthirsty tyrants.

    GOOD. It is good to be despised by communist-globalist “world leaders”. Kim Jong Un despises Trump.

    50 years ago Trump would have been a conventional western leader. In today’s predominantly socialist-globalist intellectual and political environment, conventional western values are despised.

    You yourself despise conventional western values. You want individuals to be sacrificed, by terrorism if need be, in the name of some greater good that is decidedly anti-western, anti-individualism. You never criticize the anti-western value “SJW’s” who preach collectivism and group identity politics, over individualism.

    Let’s not focus on Trump’s idiotic “travel ban” tweets, which undercut his own administration.

    How are they idiotic and why would undercutting the Trump administration be a bad thing?

    Let’s not focus on the fact that even conservatives now view him as mentally unstable.

    You mean all of those qualified psychiatrists and psychologists in Congress who are pushing a planned narrative?

    Let’s not focus on how Trump’s foreign policy team was blindsided when he left Article 5 out of his NATO speech.

    What good is article 5 when so many countries are violating their pact in FINANCING Nato?

    This is a persuasion tactic to get countries to “pay their fair share”.

    Let’s not focus on the latest revelations about how the Russians tried to hack the elections, or how Trump tried to cover it up, or how the intelligence services don’t know whether to report info about “bad guys” to their boss, if the boss is very likely to be the bad guy:

    FAKE NEWS ALERT

    There cannot be “revelations” about Russia trying to “hack the election” when no such evidence exists.

    DNC data analyst Seth Rich leaked the DNC emails to Wikileaks through Kim Dot Com, and democrat operative Warren Moon faked the Russian fingerprints in the electronic signatures, truly amateur level if you research it, all of this has been PROVEN by Wikileaks publications.

    In other news, the market has deemed Comey’s testimony as positive for the US:

    https://i.imgur.com/RTZavts.png

    ———————-

    Sumner’s blog is DEEP STATE PROPAGANDA

  22. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 16:49

    Even James Clapper, who has all the motive in the world to lie about Trump, said over and over that Russia did not attempt to “hack the election”.

    Leaking DNC emails that show criminal activity and massive voter fraud is not “hacking of an election”, it is informing the public. Yes yes, I know you prefer a dumbed down public. Only way for them to vote the way you want them to vote.

  23. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 16:50

    “When in doubt, the presumption should always favor the private sector over the public sector.”

    Except when it comes to money production and distribution.

    Then it’s SOCIALISM!

  24. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 16:59

    Buzzfeed claims it published false Russia dossier because it was being circulated in the government.

    Comey claims he circulated the dossier because it was going to be published by the media.

    That’s obvious collusion between corrupted media establishments and the deep state.

  25. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 17:00

    CNN caught lying, again:

    https://i.imgur.com/n5sJ10R.png

  26. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 17:04

    https://imgur.com/0MDmPEt

  27. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 17:06

    Europe is in the hands of childless leaders. UK, Italy, France and German leaders have no children.

    This country is in the hands of a leader with 5 children and 8 grandchildren.

    Who do you really think will be more concerned with aggrandising themselves in the present, with less concern for the future generations?

  28. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 17:07

    Comey claims to have briefed Trump on the fake Russian dossier to prepare him for any media reports.

    But the media used that exact briefing to try to make the hoax look real. Just go back and look at all the “why it would be included in a briefing if it’s not real” garbage from the previous hearings.

    It was a setup.

  29. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 17:19

    This Ex FBI guy with 47 hard drives, 600,000,000 documents, has proof that the CIA – NSA – FBI spied on 20,000,000 ordinary Americans:

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

  30. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 17:20

    CNN and WaPo:

    FAKE NEWS

    https://i.imgur.com/KXoI64h.jpg

  31. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 17:25

    Great news, folks! The President is setting up a hotline for anyone who felt icky after being asked for their loyalty from their boss.

  32. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 17:27

    CONFIRMED: DNC paid the ‘Russian’ founder of CrowdStrike to hack its server so it could be blamed on Russia

    http://themillenniumreport.com/2017/06/dnc-hackers-finally-identified/

  33. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 17:29

    Glenn Greenwald: Mainstream U.S. Media is Culpable for Disseminating Fake & Deceitful News on Russia

    https://www.democracynow.org/2017/1/5/glenn_greenwald_mainstream_us_media_is

  34. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 17:31

    London mayor Sadiq Khan once said moderate muslims were ‘Uncle Toms’:

    https://i.imgur.com/zXpwfeK.jpg

    Is Khan a jihadist?

  35. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 17:36

    Obama slush fund shut down:

    https://www.discussionist.com/10151357257

    background:
    https://imgur.com/lPvj2S4

  36. Gravatar of Kevin Erdmann Kevin Erdmann
    7. June 2017 at 20:01

    Travis V:

    That could be restated, more accurately, as, “Tax evasion is shockingly prevalent among the highly taxed.” which is probably about as close to a generalized truth as we can find in economics. The choice of framing is a direct measure of the sort of attribution error that comes from politics. They aren’t avoiding taxes because of a generalized truth. They are avoiding taxes because of who they are. So, we shouldn’t adjust policies to account for a known generality. We should turn the screws even tighter. Find ways to block avoidance. Raise taxes higher. Because that’s what you have to do with those types of people.

  37. Gravatar of ssumner ssumner
    7. June 2017 at 20:36

    Doug, You are the first person I’ve met who has anything good to say about the TSA.

    Adam, I was talking about airline pilots. I wouldn’t expect the other pilots favor deregulation, because the regulations favor smaller aircraft.

  38. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 20:56

    Here is how you know Theresa May, inadvertently or otherwise, is incompetent and oblivious about how to safeguard individual liberty. Here are quotes from her on Tuesday:

    “We should do even more to restrict the freedom and the movements of terrorist suspects when we have enough evidence to know they present a threat, but not enough evidence to prosecute them in full in court.”

    “And if human rights laws get in the way of doing these things, we will change those laws to make sure we can do them…”

    This loser of a PM refuses to protect her citizens through restricting unvetted and dangerous criminals from pouring into the UK (one of the key reasons for the Brexit vote), and instead allows them to pour in, cause massive damage and chaos, and her response is to attack individual human rights, which will of course affect all citizens.

    Sumner is worried about Trump not being on good terms with that psycho?

  39. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 21:00

    Europeans have been given a false choice between the ideological cult of multiculturalism, which is a euphemism for moral relativism, or, martial law conditions.

    Either accept anti-western and anti-enlightenment depravities from jackbooted terrorist thugs, or else the jackboot will come from the state.

    It may be the case that Europe will need rescuing from destruction yet again. Germany already tried to destroy Europe twice, now they’re doing it a third time.

  40. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 21:08

    The whole Comey investigation of the Trump campaign for “collusion with Russia” was a cover story for Susan Rice on behalf of Obama and Hillary unmasking and spying on Trump during and before the election, and other citizens.

  41. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 21:12

    Julian Assange: “Comey happy to out Trump’s words about the Flynn investigation but conspicuously conceals what Trump says about cracking down on leaks? Why?”

    https://mobile.twitter.com/JulianAssange/status/872596115836850179

  42. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 21:15

    When Comey investigated Clinton, he gave her five top aides immunity and helped them destroy evidence.

  43. Gravatar of Major.Freedom Major.Freedom
    7. June 2017 at 21:17

    Alan Dershowitz: “POTUS has constitutional authority to direct the FBI. There was no obstruction of justice.”

  44. Gravatar of Major.Freedom Major.Freedom
    8. June 2017 at 02:59

    Bill and Hillary Clinton had actual black slaves:

    https://www.facebook.com/curaffairs/photos/a.887812247982150.1073741828.871068566323185/1343280799101957/?type=3&theater

    https://www.amazon.com/Superpredator-Clintons-Abuse-Black-America/dp/0692736891/ref=pd_sim_14_1?_encoding=UTF8&pd_rd_i=0692736891&pd_rd_r=88BBC7YXNK87N9BTG23W&pd_rd_w=8WtxP&pd_rd_wg=15VRW&psc=1&refRID=88BBC7YXNK87N9BTG23W

  45. Gravatar of John John
    8. June 2017 at 07:59

    Scott. Off topic but can you do a post on draghis decision to hold interest rates steady despite cutting his own long term inflation forecast? Do you think the ECB is losing credibility here?

  46. Gravatar of Justin D Justin D
    8. June 2017 at 09:26

    –“There is a common theme–declining living standards for employees in developed nations.”–

    For a subset of the population this is surely true, but plenty of people are doing great in the current economy. The median family income in which both spouses work full-time is now north of $100,000 in the US.

    –“In the US there are currently 1.4 people looking for a job for every job opening. The Fed calls that labor shortages.”–

    That’s actually down now to 1.17 as of April (7.06 million unemployed, 6.04 million job openings per JOLTS). That’s the second lowest ratio going back to December 2000 (it was 1.12 in January 2001). And May unemployment is down to 6.86 million which, on the same level of job openings, would be just 1.13 unemployed individuals per job opening. U-5 unemployment is 5.2%, matching the prior cycle low in Dec2006 and just half a point above the all-time low of 4.7%.

    In short, this is a very, very good labor market right now.

    Wage growth is restrained because there is little productivity growth. In 2010Q3, GDP per payroll employee was $128,980, inflated by the CPI to March 2017 dollars. In 2017Q1, it was just $130,484, an increase of 0.18%/yr over the past 6 1/2 years. Given increased benefit costs, we shouldn’t expect real wages per payroll employee to be any higher today than in 2010. I’m guessing a lot of this is statistical, in that the recession caused an disproportionate number of low skill workers to lose their jobs, and the recovery reversed that, but even over the past 10 years, CPI-deflated GDP per payroll worker has only increased at a 0.6% pace, and with health care expenses having grown as they have, we shouldn’t expect average cash wages per payroll employee deflated by the CPI to be any higher today than 10 years ago.

    Had productivity growth been closer to 2%, this cycle would have felt like the late 1990s with respect to wage growth and household income growth, in addition to the surge in equity prices and decline in unemployment actually experienced.

    The U.S. needs productivity-enhancing reform.

    –“Young men make 31% less today than in 1969. Who should they vote for? Hillary Clinton? Mike Pence? Jeb Bush?”–

    This strikes me as extremely unlikely. What’s the source? Somehow, I think we’re not comparing like populations (e.g. 20 year old full time factory workers in 1969 vs. 20 year old part-time work university students today). Real median earnings of all men in full-time work is slightly higher today ($51k/yr) than 1969 ($49k/yr) per the Census Bureau’s 2015 Income and Poverty report. If younger men really are doing a lot worse, than it stands to reason that older men are doing a lot better than in 1969.

  47. Gravatar of Adam Adam
    8. June 2017 at 11:00

    My brother flies for American and his wife flies for Delta (or will soon having recently moved up from a regional).

    I see the head of the pilot union for Southwest said he favored privatization, but I’m not sure whether that projects across the industry.

    Private pilots tend to be against the usual proposals because they include user fees they’ll have to pay.

  48. Gravatar of Alec Fahrin Alec Fahrin
    8. June 2017 at 12:34

    Mr. Sumner, a few weeks ago you discussed the Indian economy and the decision to ban 86% of the currency. You essentially said “wait till Q1 numbers are out”.

    India’s economy grew much slower than expected. Only 6.1%. Investment and construction actually FELL, and half the growth was because of an odd 32% increase in public spending (YoY for all numbers).

    Are you willing to make a post about this, and recent Indian monetary policy? I think it is very interesting, especially since NGDP growth in India fell to about 10% in Q1(near record low).

  49. Gravatar of Major.Freedom Major.Freedom
    8. June 2017 at 17:03

    Efficient markets hypothesis confirmed?

    https://i.imgur.com/dPMrb2r.jpg

    Key points about today:

    Speaking about Loretta Lynch, Comey testified: “At one point the attorney general directed me not to call it an ‘investigation’ but instead to call it a ‘matter,’ which confused me and concerned me”

    Will Sumner call this obstruction of justice? Of course not!

    Look at this sad group of liberals/progressives watching Comey testify. They were primed and led to believe Comey would confirm all the fake Russia news and would lead to impeachment:

    https://i.imgur.com/jZYhX95.jpg

    Comey also admitted his incompetence – the FBI never directly examined the DNC servers, and took Crowdstrike’s word for it that it was Russia.

  50. Gravatar of Major.Freedom Major.Freedom
    8. June 2017 at 17:51

    Top 10 things learned from Comey’s testimony today:

    https://i.redd.it/hjtvn88cxi2z.jpg

  51. Gravatar of Major.Freedom Major.Freedom
    8. June 2017 at 18:00

    Comey testifies that the NYT story that Trump “collided with the Russians” was fake news:

    https://mobile.twitter.com/RouserNews/status/872834210851155968

    How’s Sumner’s nose? Probably in need of some decongestant spray! Hahaha

  52. Gravatar of Major.Freedom Major.Freedom
    8. June 2017 at 18:04

    I will bet the narrative will shift back to “muh tax returns!”

  53. Gravatar of Benjamin Cole Benjamin Cole
    8. June 2017 at 18:06

    Justin–

    Good comments on your part.

    https://www.bls.gov/web/jolts/jlt_labstatgraphs.pdf

    From BLS: “Since January 2016, the ratio (job hunters to job opening) has leveled off and has remained between 1.2 and 1.4…The ratio of unemployed persons per job opening was 1.2 in April 2017.”

    Okay, so still more people wanting a job than job openings. We are bouncing along between 1.2 and 1.4. Why tighten now? There is no wage inflation.

    The Phillips Curve is dead. In Japan there are more job opening than job hunters and no inflation. One reason why Tokyo is regarded as the best big city in the world to live in: Lots of jobs, low housing costs.

    We can learn from Japan.

    https://www.washingtonpost.com/news/wonk/wp/2017/05/08/researchers-have-answered-a-big-question-about-the-decline-of-the-middle-class/?utm_term=.252704860c11

    The above story is the cite for the young men make 31% less today than in 1969.

    You are correct, the older you are, the better you are doing in the US. No doubt about it.

    We are nearly a gerontocracy!

    I agree on improving productivity–on the other hand, steel workers today produce five times per man as they did in the 1960s, but are paid less.

    In the current era, the good macroeconomics is to target “tight” job markets.

    And if the powers that be do not seek “tight” job markets (but do seek tight property markets through property zoning)?

    See Corbyn? Trump? Sanders? And we may in the first inning.

    I will say it again: If we want voters to imbibe free markets, should not “tight” job markets be the largest portion of the juice?

    Or, should we target always more people wanting work than there are jobs, while tightening up housing markets through property zoning?

  54. Gravatar of Benjamin Cole Benjamin Cole
    8. June 2017 at 18:08

    Dudes:

    http://www.independent.co.uk/News/uk/politics/jeremy-corbyn-prime-minister-labour-results-election-latest-betfair-exchange-odds-a7780431.html

    “Jeremy Corbyn is now odds-on favourite to become next prime minister”

    —30–

    See that headline? Think 2020. If there is a charismatic Bernie Sanders out there in the U.S…..

  55. Gravatar of ssumner ssumner
    9. June 2017 at 06:07

    John, The ECB has already lost a lot of credibility. I’m not sure this decision makes it worse, but it might.

    Alec, I’ll do a post at some point.

  56. Gravatar of Justin D Justin D
    12. June 2017 at 07:42

    Benjamin,

    It’s been a few days, but wanted to respond. I suppose if you believe in ‘long and variable lags’ it could make sense to tighten (i.e. if you think that today’s hike will cool things off in early to mid 2018), but ever since I’ve read a little bit of Sumner I’ve been favor of NGDP targeting. If it were up to me, I’d set a 3.5% level target (which is about the same as the 3.6% average NGDP growth over the past 5 years) and let it go.

    Thanks for the link. I suspect the main reason for the gap must be more part-time workers and people going back to school, because again the Census Bureau has median earnings for full-time male workers slightly higher than back then. A 27 year old man in 1969 was more likely to have been in full-time work for the better part of a decade, whereas today a lot of men get out of undergrad at 23 or 24 years old, work a year or two and then go back to school.

    As for the steel worker bit, that seems very difficult to believe. Steel & Iron industry net margins are in the 1-3% range. Who is benefiting from all of that productivity increase? I suppose steel margins used to be much higher, and they’ve fallen substantially so that consumers of steel are the one’s benefiting from increased productivity, as neither labor nor capital seem to be.

    http://csimarket.com/Industry/industry_Profitability_Ratios.php?ind=107

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