Obama was bad, Trump was worse

Update:  This Dean Baker post suggests the WSJ article is highly misleading, in which case I was too hard on Obama.

The WSJ has an article discussing some comments made by President Obama, back in February 2009.  While speaking to Senator Reid, he indicated that the next day’s jobs report would be bad.  It was bad, unemployed rose to 7.6%.  Reid later mentioned these comments on the Senate floor.

That’s clearly something that Obama should not have done.  So why do I think Trump’s actions were worse?

If you go back to that period, everyone knew the jobs number was going to be horrific.  We’d recently been losing a massive number of jobs every month.  No, that doesn’t excuse the action; the leak did remove a tiny tail risk that the numbers would be OK.  But basically it would be pretty hard to profitably trade on the Obama leak.  If you could go back in a time machine, how would you trade on that inside information?  Sell stocks and buy Treasuries?  Sorry, but stocks soared dramatically higher after the jobs report, and Treasuries fell as bond yields rose strongly.  So Obama wasn’t really giving away any useful information:

Analysts said they were cheered that financial markets seemed to shrug off a government report showing that unemployment climbed to 7.6 percent in January as the recession deepened, a sign the job market was still far from hitting bottom.

“It’s a good sign that we’re trading up in the face of bad news,” said Ed Hyland, global investment specialist at JPMorgan Private Bank. “That’s one of the signs that you look for in the bottoming of a bear market.”

Although the statistics were grim, the so-called whisper numbers representing the most pessimistic estimates on Wall Street guessed that unemployment could have spiked to 8 percent last month, given the mass layoffs announced by employers.

Basically, Obama was leaking common knowledge that the jobs market sucked in January 2009.

Again, that’s not to defend his action; he should have kept his mouth shut.  But Trump’s action was worse.  Anyone who knows how Trump thinks would have interpreted his comment as an indication that a pretty decent jobs number was likely to occur.  Why would Trump do that tweet if the number was going to come in worse than expected?  Unlike with the Obama leak, traders who were lucky enough to see his tweet at 7:21am could have profited from the leak.

Of course the WSJ knows all of this, but chose not to publish the information.  To use David Henderson’s terminology, that’s “unforgivable“.

PS.  With Trump there are two types of people, those who see the elephant in the room, and those that cannot see it.  Almost every day there is a new Trump outrage.  When it occurs, some people dig up some sort of similar event with one of America’s previous 44 presidents.  They fail to see the pattern here, the uniquely outrageous nature of Trump.  It’s like a dot picture of an elephant:

Screen Shot 2018-06-06 at 1.48.59 PMSome people see the elephant, while others just see a bunch of individual dots–none of which look like an elephant.

None of Trump’s individual outrages make him look particularly awful.  It’s the daily drumbeat that paints the true picture.  You either see it or you don’t.  For those who cannot, I can’t help you.

Interestingly, America’s white nationalists do see the picture accurately.  They get it.  They see how all the points fit together.  That’s why they love Trump.

HT:  Viking

 

 


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42 Responses to “Obama was bad, Trump was worse”

  1. Gravatar of Scott H. Scott H.
    6. June 2018 at 10:33

    I thought we couldn’t trust anything Trump says.

  2. Gravatar of RF RF
    6. June 2018 at 10:38

    While I’m with you for the most part that Trump is a dolt, it seems Obama and Trump are guilty of the same misstep here. While we can try to parse the nuance of the Obama-leak vs the Trump-leak as you did above by pointing out everyone expected the 2009 number to be awful, one could counter that logic by pointing out everyone largely expected last week’s numbers to also be good (which they were).

    Similarly, simply because stocks rallied after the Obama leak doesn’t strike me as a salient defense, given it’s working backwards and using hindsight to justify something Obama should have never done. If we leverage that as a defense, one could argue the same on Trump’s behalf that stocks did the opposite of what they were expected to do after his leak. To frame what market expectations were prior to Trump’s release and what equities were viewed as being sensitive to, I’ve pasted below JP Morgan’s early morning brief that got sent out to institutional investors and investment banks the morning of the leak that discussed what to look for in the Jobs data:

    “US jobs report preview – as has been the case for several months, stocks are more sensitive to wages and the UR than the overall headline adds figure. The St is modeling the UR holding steady at 3.9% (same as Apr) w/the participation rate staying about unchanged at ~62.8%. Wages are modeled +0.2% M/M and +2.6% Y/Y (those numbers were +0.1% M/M and +2.6% Y/Y in Apr). The net adds number is being penciled in at +190K (vs. +164K in Apr). The best case scenario for the SPX would see the UR and participation rates both rise with wages that are no higher than forecast (and ideally the net adds number misses as the economy only needs to be adding ~100K people at this point to keep the UR steady; A drop in the participation rate and UR, along w/firmer wages, would likely act as a headwind for stocks (investors have moderated their Fed hike expectations a bit due in part to the events in Europe but a “hot” US jobs report, defined by big wages and a low UR, could force the FOMC to continue on its tightening path).”

    As you can see, the jobs print wasn’t exactly the “best case scenario”…in fact, one could argue the print was “bad” for equities given average hourly earnings came in above survey expectations, participation rate declined m/m, and unemployment dropped. So using your logic above for defending Obama, one could reasonably suggest Trump is also exonerated because stocks ended up rallying on the job print, even though many in market were expected this data to cause them to fall.

    But all that aside, both were foolish for leaking the information.

  3. Gravatar of Side Bar Side Bar
    6. June 2018 at 11:08

    The real issue is that norms, as a general matter, have been challenged and removed throughout society on a rapid basis without much incident. Every social issue in America proceeds by tearing down norms as irrational – and that is because all rules are irrational in isolation – by design rules are over and under inclusive (see your example of why it didn’t matter that Obama released the news before the report, it still broke the unwritten rule!). Complex interactions of rules and systemic rationality are hard to see. So no one cares if Trump tears down one norm or another, we’ve seen this before in other contexts and the world hasn’t crumbled to the ground. I just don’t know which societal norms matter for sustaining prosperity

  4. Gravatar of Burgess Burgess
    6. June 2018 at 11:18

    Let’s not ignore the other major difference between Obama’s action and Trump’s: Obama’s leak was in a private conversation with a senator, while Trump’s was a tweet. Big difference.

  5. Gravatar of Martinghoul Martinghoul
    6. June 2018 at 11:58

    In the interest of honesty, the characterisations of at least some of the details of the Obama ‘leak incidents’ are incorrect. Specifically, Obama’s comments made in a speech on the 5th of Feb 2009 were made before he’s been briefed. Since market participants know when the President gets briefed, they knew that Obama was just guessing (it didn’t take a genius back then), rather than leaking specific privileged information. This is in stark contrast to the recent Trump’s tweet and is unfortunately not mentioned in the WSJ article. Same obviously goes for the June 2009 and July 2010 examples provided in the article. Thus that leaves only the incident where Obama discussed the numbers in a phone call with Senator Reid and ‘others’, which feels quite different to me (it’s a phone call between two senior government officials, made public the next day, after the report has been released).

  6. Gravatar of bill bill
    6. June 2018 at 12:08

    I think talking to one senator is less leaky than tweeting to millions. But I’m deranged too.

  7. Gravatar of ChacoKevy ChacoKevy
    6. June 2018 at 12:23

    Off-topic but perfectly analogous: the Music City Miracle was a forward pass.

  8. Gravatar of Bob Murphy Bob Murphy
    6. June 2018 at 12:59

    Dean Baker agrees with you, Scott.

    Jesse Jackson doesn’t.

  9. Gravatar of Christian List Christian List
    6. June 2018 at 13:17

    The Elephant in the room is your Trump Derangement Syndrome.

    And why does Viking get the HT when I was the one who found the piece in the WSJ? Now that’s outrageous.

    https://www.themoneyillusion.com/the-fine-line-between-corruption-and-stupidity/#comment-3710231

  10. Gravatar of Mark Z Mark Z
    6. June 2018 at 13:52

    “Interestingly, America’s white nationalists do see the picture accurately. They get it. They see how all the points fit together. That’s why they love Trump.”

    Christ, Scott, you paint quite the opposite picture here: that, on the topic of Trump, you and others forget entirely how to reason.

    Try: “communists understood the picture accurately: that’s why the CPUSA loved Obama.” “Black nationalists understood what was going on, that’s why they loved Obama.” And Trump has never personally met with a white nationalist leader to discuss policy issues and got a nice smiling photo op with him, like Obama did with a prominent black nationalist. If you’re going to apply the guilt by endorsement fallacy, apply it uniformly at least. Or better yet, try being logical instead.

    Secondly, you’re being plainly dishonest about those you disagree with. Trump does have his devotees, but most people who don’t share in the hysteria over him mainly argue that his “outrages” are generally inconsequential. Trump said something dumb or offensive on Twitter today? So what? Some of us measure how things are going by the number of dead in overseas wars or economic performance, standard of living, etc., rather than by whatever dumb things the president says.

    We measure Lyndon Johnson in terms of the Vietnam War, the poor economic performance (or, if one likes him, the Civil Rights legislation); the fact that he routinely showed his penis to other politicians and screwed half the senate staff, those ‘outrages’ are historical curiosities.

    In fact, it’s entirely fair to contend that if the the media and technology were like they are today 50 years ago, Johnson or even Kennedy (screwed a 19 year old intern in her first week of the job in the white house) would’ve been as scandalous as Trump’s. Really, go read up on the things Johnson is known to have said that would probably have made the news in a matter of hours if it weren’t the 60s. When the world is still here in two years very much the same as it was two years ago, it will be the level-headed people who will look best in retrospect.

  11. Gravatar of SeanM SeanM
    6. June 2018 at 13:57

    [i’m reposting what i just commented on David’s post]

    as a bond trader for whom this number is the most relevant release of the month by far, i can add something to this. Feb 2009 was the 4th of 6 consecutive months of worse than 700k job losses. the range of expectations was in the 600k-900k. [an aside, these numbers were all revised later, as is usual, and because of the magnitude the revisions were large. it does not change the point if the reported number at the time was 600 vs 500-700 range of expectations] both the best and worst case expectations could be fairly described by Obama as a “bad jobs report”. his saying it was bad did not actually convey useful information. yes there was some risk we would have had a -400k signaling a deceleration, but given the context of his conversation it’s far from clear he wouldn’t have still considered that a “bad jobs report”.

    as for trumps situation, expectations were ~150-250. trump’s tweet definitively signaled that we were going to be in the top half of that distribution and likely beat expectations. to a market participant, it was many times more significant in terms of information revealed early. it happens to be the case now that wages matter more than jobs numbers, so it’s admittedly hard to actually trade off that single piece of information alone.

    […] as an actual market participant these two things are not even close to being close. it would also be trivial for anyone with any numeracy to see that.

  12. Gravatar of Massimo Heitor Massimo Heitor
    6. June 2018 at 14:33

    Sumner’s core complaint about Trump is related to race, and particularly white nationalism. That is a recurring theme in Sumner’s writing. Sumner has simultaneously refused to really talk about race and evaded explaining what his views and his moral guidelines are. If race is such a big factor in Sumner’s thinking, he should elaborate his views on race, and hopefully identify some objective moral guidelines that apply to all races and don’t just bash specific ethnic groups.

    Hasn’t every country in human history been nationalist and preferred its tribal members to outsiders? China, Japan, Ethiopia, Mexico, Gulf States, etc?

    Sumner wrote that, “America is not a white country, in the sense that Japan is a Japanese country. America is a multiracial country, and always has been.” Does Japan have moral license to restrict immigration and exclude foreigners? Are the ethnically white/black/Arab residents of Japan somehow less Japanese than the residents of mixed Ainu Islander and Han Chinese ethnicity?

    When Obama posed smiling with Louis Farrakhan, and possibly had Farrakhan’s staff work on his political campaign, was that morally ok? Was it racist or ethnic nationalism? Or when Obama chose Jeremiah Wright as his mentor and political ally for twenty years and a church based on “black liberation theology”? I could list more, but that’s more than enough for a comment.

  13. Gravatar of B Cole B Cole
    6. June 2018 at 15:55

    Somehow I just cannot work myself into froth over Trump.

    LBJ got us into Vietnam. Richard Nixon prolonged the war for several years for political reasons.

    George Bush Junior got us into Afghanistan and Iraq.

    The above wars were fantastically expensive, counterproductive, and resulted in epic human carnage.

    Trump?

    In comparison, a lightweight pipsqueak!

  14. Gravatar of ssumner ssumner
    6. June 2018 at 16:21

    RF, I did not “defend” Obama, I pointed out that what he did was wrong, but caused less harm than Trump’s faux pas. Obama’s leak did not lead to a profitable trading opportunity in the bond market. Trump’s did. Nothing you said refutes that basic point.

    Martinghoul, If what you say is true then the WSJ should be ashamed of itself. (It’s bad enough that they ignored the market reaction.)

    Massimo, You said:

    “Hasn’t every country in human history been nationalist and preferred its tribal members to outsiders?”

    No. America is not a white country. Within the current borders of the US, we’ve always had lots of blacks and Hispanics, from the very “beginning” (i.e. 1776, not to mention the Indians). They belong here.

    White nationalists just don’t get the fact that it’s not “your country”. America is a melting pot, and always has been.

    The current waves of Chinese and Indians and Mexicans are viewed by most Americans as no more foreign that the Irish and Jews were when they came over in the 1800s and early 1900s. Read some history.

  15. Gravatar of Lawrence D’Anna Lawrence D'Anna
    6. June 2018 at 16:32

    Oh, come on this is weak.

    Trump ambiguously hinted (or not) that the numbers were bad, on twitter, for all to see.

    Obama unambiguously and privately disclosed that the numbers were bad.

    What Obama did, in this one particular instance, is obviously worse. It doesn’t matter at all how “common knowledge” it was that he news was going to be bad. Either following the process matters or it doesn’t. If it doesn’t then neither of them did anything wrong. If it does than Obama’s leak is worse.

    I can’t believe you’re making this argument. Just admit you were wrong on this one.

  16. Gravatar of ssumner ssumner
    6. June 2018 at 18:09

    Lawrence, Read Dean Baker’s post, you might learn something.

    Everyone, I can’t help it if my commenters don’t understand the EMH. I’m not here to teach basic economics.

  17. Gravatar of Student Student
    6. June 2018 at 20:29

    “No. America is not a white country. Within the current borders of the US, we’ve always had lots of blacks and Hispanics, from the very “beginning” (i.e. 1776, not to mention the Indians). They belong here.

    White nationalists just don’t get the fact that it’s not “your country”. America is a melting pot, and always has been.”

    Completely agree. I don’t know how you can read the facts any other way. We are all immigrants here. There have been periods of upheveal about the latest arrivals and how this time they are different but they have always proven foolish.

    That’s also beside the fact that it’s good for innovation (the more perspectives the better), entrepreneurship (rates of entrepreneurship are high among immigrants), and easing the impact of falling domestic birth rates.

  18. Gravatar of Christian List Christian List
    6. June 2018 at 23:52

    Dean Baker’s post looks good at first but how in the world does he know which information Obama had at which point in time? He doesn’t elaborate on this at all. What is he? Mr. Know-it-all? Very odd.

    On a second look it looks like one of those posts where the person knows nothing about the situations at all but constructs every incident pro Obama. I have no problem with that (if it’s really true) but what is his basis? That Obama is a nice guy who wouldn’t do such things?

  19. Gravatar of Michael Byrnes Michael Byrnes
    7. June 2018 at 03:18

    I have a question for Scott based on this part of his post:

    “Anyone who knows how Trump thinks would have interpreted his comment as an indication that a pretty decent jobs number was likely to occur. Why would Trump do that tweet if the number was going to come in worse than expected? Unlike with the Obama leak, traders who were lucky enough to see his tweet at 7:21am could have profited from the leak.”

    Just out of curiosity, how much money could Trump and cronies make if he used this approach to deliberately spread misinformation?

    Backing up, my view of Trump vs the Mueller investigation (or, more broadly, Trump’s corruption catching up with him) has been that each side is sort of competing on a different playing field. The investigation(s) of Trump are playing on the “rule of law” field – did Trump and/or his subordinates engage in provable corruption? Trump’s defense, meanwhile, is playing on the field of public relations. His defense strategy, if it can be called that, is to maintain high levels of support among enough of his base that the GOP congress will continue to give him political cover.

    One more thing: one of the points made about Trump’s pre-politics corruption (Adam Davidson’s reporting is a good source for this) is that Trump isn’t a good businessman. He’s been making money via corrupt deals with foreigners (most notably Russian oligarchs), but within that framework he hasn’t been maximizing his profits – rather he deals with anyone who will throw a few bucks his way regardless of whether he is extracting the best deal for himself – because he has no capacity to do that.

    All of that said, I’ve been thinking about what signs will predict who is winning: Trump (via public relations) or his opponents (via rule of law). What I expect to see if Trump is going to win is a flood of “respectable” people who have generally kept themselves out of the fray going over to becoming Trump supporters in droves. Also people who have thus far been seen as Trump opponents will start groveling.

    This post from Scott gave me a sense of what we might expect if Team Trump decides that it is going to lose. Maybe, before some especially disappointing jobs numbers, Trump will put out a tweet like this one – “Looking forward to the jobs report” – before an especially poor set of numbers. That will encourage traders to assume that a good report is on the way, while his family and other cronies take the other side of that deal based on their inside knowledge.

  20. Gravatar of RF RF
    7. June 2018 at 05:18

    >RF, I did not “defend” Obama, I pointed out that what he did was wrong, but caused less harm than Trump’s faux pas. Obama’s leak did not lead to a profitable trading opportunity in the bond market. Trump’s did. Nothing you said refutes that basic point.

    I feel like I posted plenty to refute that basic point. I literally work on a trading desk at an investment bank, and when we came into work that morning and saw the jobs data we all expected the market to trade down. I supplied the JPM commentary from that morning that gets sent out at like 6:30AM which corroborated our views that many in the market viewed a decline in the UR rate and a rise in wages to both be negative events for equities — yet when we got exactly that data the market rallied, rather than decline. I remember this because I felt kind of silly afterward given I had communicated to folks from the desk prior to the market open it would probably be a rough day in the market. Again, maybe I was indeed the fool given I work on a debt trading desk not equities and out kicked my coverage somewhat, but I point to JPM’s blast to institutional investors that morning (and whole week leading up to the jobs report for that matter) we weren’t the only ones in the market with this view. The point is both leak events saw the market do the opposite of what many were expecting it to do given the data, which IMO somewhat negates your point that Obama’s leak is uniquely mitigated by the market.

    Maybe we are splitting hairs as ultimately I am with you that saying something to majority leader of the Senate is quite different than blasting it out on twitter. Furthermore, we are in agreement on the elephant in the room, so hopefully I’m not belaboring the whole point. Thanks for the earlier response.

  21. Gravatar of Mike Sandifer Mike Sandifer
    7. June 2018 at 08:00

    Scott may not be here to teach basic economics, but hopefully he can just start referring people to his new textbook.

  22. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    7. June 2018 at 08:20

    ‘Obama’s leak did not lead to a profitable trading opportunity in the bond market. Trump’s did.’

    What EVIDENCE can you produce to support that assertion?

    ‘Everyone, I can’t help it if my commenters don’t understand the EMH.’

    Do you think Burt Malkiel understands it?

  23. Gravatar of E. Harding E. Harding
    7. June 2018 at 09:19

    Very stupid post, as is almost anything Trump-related from Sumner. Trump’s tweet actually gave NO information (in fact, implying he had no information) while Obama’s remark gave SOME information. Also, @ScottH is correct; you can’t trust anything Trump says about the past, much less the future. @RF, @Lawrence, agreed. Sumner’s just overdosed on the idiocy pills.

    The current waves of Chinese and Indians and Mexicans are viewed by most Americans as no more foreign that the Irish and Jews were when they came over in the 1800s and early 1900s. Read some history.

    Not. An encouraging. Sign.

  24. Gravatar of E. Harding E. Harding
    7. June 2018 at 09:26

    “Interestingly, America’s white nationalists do see the picture accurately. They get it. They see how all the points fit together. That’s why they love Trump.”

    Some do. Most don’t. I don’t.

  25. Gravatar of Christian List Christian List
    7. June 2018 at 10:03


    Obama’s leak did not lead to a profitable trading opportunity in the bond market.

    I agree with Patrick R. Sullivan. You can’t really prove or diprove this hypothesis but the latter version is more likely: All the persons he talked to had a great trading opportunity. This is especially true because Obama was pretty trustworthy while Trump is not. And as E. Harding says: Obama gave actual information away.

    We need to go back to what Trump actually tweeted:

    “Looking forward to seeing the employment numbers at 8:30 this morning.”

    That’s so exceptionally harmless, it’s mind blowing. This statement could mean anything. Especially from Trump.

    He could have written:
    “Looking forward to seeing the very very great employment numbers at 8:30 this morning. They are just great, so great, omg they are great, we are just so great.”

    From the mouth of Trump this could still mean anything, from a job gain to a loss of 500,000 jobs. Really anything. There could be a major recession and he would still declare how great things are going.

    And you want to tell us that you would have betted on this “great trading opportunity” because it was such a good bet? No, it wasn’t a good bet. It was a terrible bet. Playing Russian roulette would have been a safer bet. Scott, in this case you are just so FAKE NEWS.

  26. Gravatar of RPLong RPLong
    7. June 2018 at 10:30

    Scott Sumner “can’t help you” if you can’t see Trump the way he sees Trump, and he “can’t help you” if you don’t understand the EMH the way he understands it.

    How can he help me?

  27. Gravatar of Massimo Heitor Massimo Heitor
    7. June 2018 at 10:54

    @sumner,

    “White nationalists just don’t get the fact that it’s not ‘your country'”

    Who owns any country? I see two logical answers:

    1) The nationalist answer is that the existing citizens own the country and they have a reasonable and important motivation to keep outsiders out to avoid diluting their ownership of the nation.
    2) The open border answer is that no one owns any country, everyone should have freedom to move around the globe, no one has valid authority to prohibit that, and even that nation states shouldn’t exist and shouldn’t claim ownership of the Earth.

    While my instinctual preference is to stick with the nationalist status quo answer, I strongly agree with half of the open border arguments, I disagree with the other half, and am curious about finding reasonable compromises.

    I can respect some criticism of white nationalism and white racism if it seems to follow some fair and consistent logic that applies to other similar tribal identity groups. With Sumner, I don’t see that at all. Sumner is outraged by the slightest whisper of white nationalism but refused to acknowledge more obvious black nationalism with Obama and Farrakhan and Al Sharpton and Jeremiah Wright and refuses to acknowledge Japanese nationalism in his writings about Japan or any of the other obvious glaring forms of non-white tribal nationalism around the globe. At econlog, while Caplan + Henderson have focused open border political advocacy on the US and Europe, they will also say that the same rules apply to all nations and ethnic groups, and just like the Europeans don’t own Europe and the Americans don’t own America, the Japanese don’t own Japan, the Chinese don’t own China, the Jews don’t own Israel, the Indians don’t own India, Mexicans don’t own Mexico, and the Africans don’t own Africa. With Sumner, I see this unreasonable one-sided perspective.

    And to Sumner’s second point, there have been blacks/hispanics/Indians living in the geographic US since it’s founding in 1776. Is that implying that those groups have special privileged claim to the present country? In the nationalist model, yes, the black/hispanic/indian descendents of those people are full citizens and do have privileged claim just like the descendants of the white settlers and Founding Fathers. In the open border model, that history doesn’t matter. Sumner doesn’t seem to support either model.

    @Student,

    “We are all immigrants here.” Every nation is composed of people that ultimately came from somewhere else. The absurd implication is that the US is somehow unique in this sense while other nations are real nations where the citizens have been there since the dawn of the fabric of time itself.

  28. Gravatar of ssumner ssumner
    7. June 2018 at 11:31

    Christian, You said:

    “Dean Baker’s post looks good at first but how in the world does he know which information Obama had at which point in time?”

    1. The information was not available to anyone until late in the day on Thursday.

    2. The burden of proof is on the WSJ. Isn’t that obvious?

    RF, There may have been some uncertainty about stocks (which respond differently to wages and jobs) but surely not the 10-year bond, which responds the same way to wages and bonds.) It was clearly a strong jobs report.

    But even if Trump only removed say 30% of tail risk, that’s vastly more useful that Obama’s comment which removed less than 1% of tail risk.

    Massimo, You said:

    “The nationalist answer is that the existing citizens own the country and they have a reasonable and important motivation to keep outsiders out to avoid diluting their ownership of the nation.”

    Thank God you weren’t in charge back in 1776.

  29. Gravatar of Massimo Heitor Massimo Heitor
    7. June 2018 at 12:12

    @sumner,

    “Thank God you weren’t in charge back in 1776.”

    From the preamble to the Constitution, the US was founded “for ourselves and our posterity”. The word “posterity” meaning blood descendants or progeny. In more modern language, “blood and soil”. The US was very clearly founded on principles of self-governance, not on open borders.

    The more reasonable argument that is that sure, the US was founded on nationalism, blood and soil, normal tribal membership passed down largely via blood inheritance, and arguably white supremacy, but moving forward we need a different model. It’s less reasonable to simply repeat rhetorical catch phrases like “Nation of Immigrants” coined by 20th century politicians to advance the canard that the US founding fathers designed this nation as a non-nation open border prototype rather than the tribal nation of self-governance that they wrote about.

    What if the Founding Fathers from 1776 did more explicitly argue for the nationalist model? Would that make it more righteous or moral? Some nations, notably Israel, are more clear that that nation exists to serve a specific ethno-religious group and is not for everyone else. Open borders advocates are clear that those declarations violate rights of migration and should not hold authority.

  30. Gravatar of Student Student
    7. June 2018 at 12:37

    @Massimo,

    What ownership of the nation are you afraid of losing? Are you afraid of losing your possessions? Of having your vote’s weight go from 1/200M or so to 1/400M? What is is that you think you need to protect from the “others”?

    Also, do you realize that if the US would have adopted your position in 1776, Merica would probably still be a technological lagging second world country?

    Do you see that the very reason we are what we are is because we rejected the fearful bunker mentality you are advocating.

  31. Gravatar of Lawrence D’Anna Lawrence D'Anna
    7. June 2018 at 12:47

    “Read Dean Baker’s post, you might learn something”

    You’re right, I did learn something.

    Dean Baker raises a completely different argument from your “everyone knew it was going to be bad anyway”. His argument is that Harry Reid is “cleared to receive a wide variety of classified information under the assumption that they can be counted on not to disclose it inappropriately “.

    I don’t much like that argument either.

    It’s absolutely not true that congress is cleared to receive classified information on the assumption they will not disclose it. Congress regularly does leak classified information, either intentionally or by carelessness. Nobody with any sense would assume they can be counted on not to disclose it. They are cleared to receive classified information despite this because they are congress. They need that access to perform their oversight functions. Also they write the laws that provide for the protection of classified information in the first place.

    All that is kind of beside the point though because this is sensitive financial information, not classified defense/intelligence information. And that makes it even worse because congress has exempted itself from the laws against insider trading.

    Baker wisely qualifies with “I don’t know all the details on the rules about sharing these data”. I don’t know all the details either. *Maybe* I’m wrong. If there is something in those rules that specifically authorizes Harry Ried to receive this information, I’d be wrong.

    But after that Baker goes on to say “I feel comfortable in saying that discussing the report with someone who has been cleared to see our most important national security secrets is not the same thing as sharing it with 50 million Twitter followers”

    To that I say, no it’s not the same. It’s way worse. Unambiguously disclosing the report to one of the few people with legal immunity to trade on that information is worse than ambiguously disclosing it to the whole world.

  32. Gravatar of Massimo Heitor Massimo Heitor
    7. June 2018 at 14:21

    @Student,

    Your presumption is absurd that the US would be a “technological lagging second world country” with a more restrictive immigration model. It’s plausible that the US could be more successful in technological and economic terms than it is today if it had chosen a more restrictive and selective immigration model in the past. I’ve read these arguments and I don’t find them convincing. I also don’t find the people making these arguments credible advocates for pre-existing US citizens. I am convinced of the humanitarian benefit to foreigners of the western immigration model, and I consider that the main positive. I see net negatives to existing citizens, which is why some express voting preference accordingly.

    “Do you see that the very reason we are what we are is because we rejected the fearful bunker mentality you are advocating.”

    Ah, the “who we are” rhetorical tactic (https://youtu.be/gouAcayDwLM). Arguably, the principles of self governance that the US was founded on can be viewed as a “bunker mentality”. That is “who we are”, or at least it was who most of us were until recently.

    “What ownership of the nation are you afraid of losing?”

    These arguments have been presented many times, by people smarter and more eloquent than I. But a quick attempt:

    Lee Kuan Yew once said (http://www.spiegel.de/international/spiegel/spiegel-interview-with-singapore-s-lee-kuan-yew-it-s-stupid-to-be-afraid-a-369128.html): “In multiracial societies, you don’t vote in accordance with your economic interests and social interests, you vote in accordance with race and religion.”

    Obama was a big proponent of racial preferences in higher education, in government hiring, and across industry. This doesn’t seem in my interest.

    In my reading of openborders.info, they agree. That’s why Nathan Smith predicts an end to “one person, one vote.” Racial friction is expected and supposed to escalate, undermine solidarity, undermine the welfare state, undermine government itself, and deliver a more free market driven society. Open border advocate Michael Huemer advocates a “reasonable anarchist” idea of market driven non-government society. I find that idea beautiful and exciting (and scary). But while these guys are smarter and higher status than I, they have no way of knowing how these radical changes to demographics and society will play out.

  33. Gravatar of Mike Sandifer Mike Sandifer
    7. June 2018 at 15:10

    “The nationalist answer is that the existing citizens own the country and they have a reasonable and important motivation to keep outsiders out to avoid diluting their ownership of the nation.”

    What does this even mean? Ownership of all resources within the borders? What if they help expand those resources, on net? Then what? A slowing working age population, as the US is experiencing, is just another reason to increase immigration, not restrict it. Otherwise, whatever you think you own in the US will be worth less in the future.

  34. Gravatar of E. Harding E. Harding
    7. June 2018 at 20:47

    “But even if Trump only removed say 30% of tail risk, that’s vastly more useful that Obama’s comment which removed less than 1% of tail risk.”

    Sumner, this is pure hindsight bias on your part. Had Trump’s actions not changed even a bit and the jobs report have been bad, you’d have been laughing at Trump’s tweet for being a very typical bad Trump prediction. Heads, (according to you) Trump loses, tails (according to you), Trump loses.

  35. Gravatar of Massimo Heitor Massimo Heitor
    8. June 2018 at 04:12

    @sumner,

    You’ve written who you believe does *not* own this country? Who *does* own a country? Not just US, but any country? Who are the rightful owners?

    You don’t believe that this country was founded for “ourselves and our posterity” from the perspective of the Founding Fathers?

    @Sandifer,

    You (and others) are making the argument that immigration benefits existing citizens. This argument is made a lot, I don’t find it credible. The people making that argument are not credible advocates of the interests of of existing citizens. It’s politically harder to advance freedom of migration if you acknowledge that it hurts existing citizens, so expansionists assert the opposite, but that doesn’t make it so. I’ve read CATO, Alex Nowrasteh is a kind man, but I think they are basically wrong.

    First, the fact that most immigration expansionist policy is pushed against passionate voter will and sentiment is a big warning sign. Expansionists dismiss any dissenting voter preference as uninformed or bigoted or deplorable, and while I agree on other issues, on immigration, this dismissal of voter preference is not justified.

  36. Gravatar of Michael Sandifer Michael Sandifer
    8. June 2018 at 06:07

    Massimo,

    I don’t think there could be evidence for the economic benefits of immigration that would ever change your mind. That’s because your primary motivation is bigotry.

    Nationalism is bad enough, as practiced by Abe in Japan, but at least he’s willing to open up the borders to vastly increase immigration to try to offset problematic demographics. I think you’d be fine with the US GDP shrinking over a generation, as occurred in Japan, if you can keep the “others” out.

    There is no greater problem in the developed world today than people like you. But, you perhaps overestimate how broad your movement is, just as your opponents continue to underestimate the depth. I think a big backlash is coming, a la California a generation ago, but less acute.

    Let’s just hope that voters don’t give the populist left a chance after the movement lead by Trump sinks under the weight of it’s own absurdity and incompetence.

  37. Gravatar of doug M doug M
    8. June 2018 at 10:21

    A leak is a leak.

    If the market moves due as a result of the jobs report, it is because the report is not on exceptions. If the expectation is bad, and the number released is worse that will move the market.

    If the president is leaking information that is shaping exceptions.

    Since the president distributed his leak in a wide broadcast, that is less damaging than leaking it to one reporter, as it is not distributing the information preferentially. Essentially everyone has the same opportunity to profit.

    Now, the president (and members of congress) are not beholden to insider trading laws. If any of them want to leak information, unless it impacts national security, there is no law that prevents it. It might not be advisable but it is not illegal.

    Even worse, if congressman wants to short the stock of a company the day before he announces his intention to open an investigation, he can. Same thing if he plans to push for new regulations.

  38. Gravatar of Massimo Heitor Massimo Heitor
    8. June 2018 at 13:47

    @Sandifer,

    It’s really not bigotry to try to understand the Sumner world view on the issues of race, tribe, and immigration. Those issues clearly drive his criticism of Trump and his political view. What are his views on those issues? Sumner angrily says that white nationalists don’t own the US or presumably Europe. OK, then, in the Sumner worldview, who does own the US? Do the same rules apply to other nations, like Japan? If different rules apply to Japan than the US or Europe, what justifies that difference? Those questions aren’t loaded or trick questions, they are broad questions to get the gist of Sumner’s world view. Sumner said he doesn’t really believe in open borders, he doesn’t believe in nationalism, then what is his moral ideology? And why can’t he express it in plain language?

    I’m not even arguing ideology. I’m not really arguing that nationalism is better than open borders. But I am challenging views that seem hypocritical. If you consider immigration restrictions immoral and efforts to preserve identity or culture immoral, then the Japanese nationalists in Japan seem more openly guilty than white nationalists in US and Europe. Sumner writes extremely favorable of Japan and recommends Noah Smith who speaks admirably of their openness to foreigners. While there is some truth that Japan has opened up somewhat, this is mostly false. From other mainstream press articles, “[Abe’s] reluctance to relax the rules for migrant workers is facing mounting criticism in Japan, where less than 2 per cent of the population are foreign born. That compares with more than 20 per cent in the UK.”, “Japan has welcomed less than 1,000 refugees since 1982”, “Tokyo’s rigid refugee policy — the government maintains a 99 percent rejection rate”, they are extremely selective about high skill immigrants, they are limits about bringing over family members, they strongly favor temporary guest workers instead of permanent immigrants, Japan deliberately prefers foreigners from ethnically similar Asian countries and not foreigners from Africa or the Middle East, and Japan is very aggressive and successful at getting illegal/unwanted people out. For all the vitriol that Sumner and Noah Smith have directed at white nationalists in the US and Europe, they seem to be asking for much more reasonable and moderate terms.

    I suspect Noah Smith writes so favorably of Japan’s openness, not because it’s true, but because he’s engaged in a more personal fight with immigration restrictionists in the US and Europe, and he wants to twist the truth in Japan for ideological reasons to make his opponents look bad.

    “you perhaps overestimate how broad your movement is… I think a big backlash is coming,”

    Backlashes are absolutely coming. I would bet on it. I also have no idea how broad “my movement” is. I do consider Trump my hero, he’s the greatest President of all time, but I certainly didn’t think he would get elected, and while I hope he will get reelected, I’d pessimistically bet against it.

    I’m also not dead set on closed borders and classic nation states. I’m convinced there are more reasonable compromises that can reasonably and fairly serve people of all races and all national origins, even including Sumner’s dreaded white nationalists in the US and Europe.

  39. Gravatar of Michael Sandifer Michael Sandifer
    10. June 2018 at 02:17

    I can’t speak for Scott, but my impression is that his view on immigration policy is pragmatic. He knows immigration is good economically, but thinks open borders is unrealistic politically.

  40. Gravatar of Michael Sandifer Michael Sandifer
    10. June 2018 at 02:30

    I favor open borders, but not open citizenship. Let any non-criminal come and stay in the US for as long as they want, but be selective in who gets citizenship.

    I would limit citizenship to save money on entitlement spending and to limit the impact of unlimited immigration on voting.

    Anyone who successfully served 4 years in the military would have earned citizenship.

    Only citizens would be eligible for Social Security, the $10k UBI I favor, and the minimum guaranteed subsidized hourly salary of $12/hour. I would eliminate all other welfare and federal healthcare programs to pay for the general subsidies and totally deregulate the healthcare industry. I would allow citizens to take the present value of their GUI, based on average life expectancy, in a lump sum to pay for medical expenses.

    To be clear, food stamps, public housing programs, Medicare, Medicaid, the VA, CHIP, etc. would all be eliminated.

  41. Gravatar of Tullius Tullius
    10. June 2018 at 03:56

    Michael,

    your views are reasonable but not realistic – at least from the European view. As result of decisions by constitutional courts in Germany and Europe any migrant gets (almost) the basic full Social Security package. Generally everybody who can get inside of Europe has a very good chance to stay here.

  42. Gravatar of Michael Sandifer Michael Sandifer
    10. June 2018 at 06:54

    Tullius,

    Yes, well I love the idea of the EU, but there obviously need to be significant reforms.

    I think EMU was a disastrous mistake and I think all of southern Europe and Ireland should abandon it. That may sound particularly crazy in the case of Ireland, but it’s only a matter of time before they face another recession with too little stimulus from the ECB. Politically, of course, I don’t see politicians there opting to create a banking crisis by leaving the EMU in absence of an acute and prolonged downturn.

    I’m far from being a legal scholar, or even a scholar, for that matter, but I don’t think we’ll be legally required to offer most welfare benefits to non-citizens here in the US. That said, anyone born in the US is automatically a citizen.

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