Our Trumpian Treasury

In Washington DC, all the best and the brightest in both parties are horrified by the prospects of a Trump Presidency.  But perhaps we owe Trump an apology, as in some respects he already controls our trade policy.  Here’s a report from 4 months ago:

The U.S. government is sending a message to countries it believes are manipulating their currencies: We’re watching you.

A Treasury report targets five countries in particular: China, Japan, Korea, Taiwan and Germany. Each meets at least two of the three criteria that “determine whether an economy may be pursuing foreign exchange policies that could give it an unfair competitive advantage against the United States.”

At a time when currency devaluation has become a major tool used by multiple countries to stimulate growth, the U.S. is looking to protect its own interests. The report is an outgrowth of the Trade Facilitation and Trade Enforcement Act of 2015, a bipartisan effort aimed at stemming the global race to the bottom.

The criteria to determine whether a country should be on the “Monitoring List” of countries using unfair currency practices are: a trade surplus of larger than $20 billion, or 0.1 percent of U.S. GDP; a trade surplus with the U.S. that is more than 3 percent of that country’s GDP; “persistent one-sided intervention,” defined as purchases of foreign currency amounting to more than 2 percent of the country’s GDP in a one-year period.

No country meets all three criteria, according to the report, though the five on the list meet at least two.

For those not familiar with open economy macroeconomics, those criteria reach almost Trumpian levels of ignorance.  Where to begin:

1.  If you worry about this sort of thing (and a few respectable economists do) then you would look at a completely different set of criteria.  For instance, the trade deficit is a meaningless data point, if anything, you’d look at current account deficits.

2.  Bilateral deficits with the US are stupidity squared, a data point of no conceivable relevance, even to the most mercantilist economist on Earth.  All that “matters” is overall surpluses or deficits, not bilateral.

3.  If you are looking for “villains”, you would certainly not look at overall surpluses; rather you’d focus on surpluses as a share of GDP, or some similar metric.  Otherwise you’d be biased against large countries.  The current account surplus for China is about $170 per capita, for Switzerland it’s over $8000 per capita.  Even as a share of GDP the Swiss surplus is far higher.

4.  “Intervention” should not be defined as purchases of foreign assets, but rather as high government saving rates.  All government saving tends to have the same effect on the CA balance, whether it is used to buy domestic or foreign assets.

5.  The Treasury singles out Asian countries in a Trumpian fashion, for no apparent reason.  Switzerland has a $71 billion CA surplus, and engages in massive purchases of foreign assets to hold down the value of the SF.  There’s two criteria right there.  Why did it not make the list?  I have no idea, its trade surplus is also well above $20 billion.  Lots of other northern European countries also have massive CA surpluses, and spend lots of money holding down the value of their currencies.  In contrast, China’s recently been trying to hold up the value of its currency.

6.  If you were an American mercantilist, I’d think that you’d be much more worried about Germany’s $300 billion CA surplus, than China’s $250 billion CA surplus.  Germany exports lots of capital goods that might otherwise be bought from America, whereas China tends to export less sophisticated goods, which might otherwise be produced in other Asian countries, or Mexico.  Norway, Sweden, the Netherlands and even Italy have CA surpluses far in excess of $20 billion.  Notice that the Treasury follows in the proud tradition Pat Buchanan and Donald Trump in pointing fingers mostly at Asian countries, even though the logic of their mercantilist argument would suggest we should target the northwest Europeans.  Perhaps Germany was put on the list to try to make the racism appear a bit less blatant.

PS.  I forgot to shed a few tears for the “victims” of all this evil currency manipulation.  There’s Australia, with its $62 billion deficit, and no recessions in 25 years.  The UK, with its $162 billion deficit and the US, with its $473 billion deficit.  Both countries have a 4.9% unemployment rate.  In contrast, those sneaky eurozone members with their $394 billion CA surplus keep stealing our jobs, which probably explains their 10.1% unemployment rate.

PPS.  I don’t put all this on the Treasury; it’s Congress that forces them to engage in this sort of nonsense.

PPPS.  Speaking of Trump, last May I had commenters earnestly informing me that I should support Trump because he favored low interest rates.  Now Trump is slamming Yellen for her low interest rate policy.  Trump reminds me of that anecdote about 100 monkeys typing away.  Yes, there’s a tiny chance they might randomly type out Hamlet, but I’d put my money on something far worse.  There are many more ways to screw up than there are ways to succeed.

And no, this is not “normal” in politics.  Normal politicians lie and change their views on occasion.  Hillary’s not much worse than average (although she is certainly worse.)  But Trump’s just completely off the charts in terms of policy ignorance and personal dishonesty.  I’ve never seen anything close to this in my life, and I’ve been following politics since the late 1960s.  Nixon might have been closest on the honesty criterion, but of course was far more knowledgeable.  And even Nixon tried to avoid statements that were obvious lies. He was a devious liar.  Trump just doesn’t care.  He’ll look you in the eye and tell you that he opposed the Iraq War.  And the reporter who asked the question will be too cowardly to call him a liar to his face.  I almost hope Trump wins.  We deserve him.

I said “almost”, I’m not quite there yet.  🙂


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54 Responses to “Our Trumpian Treasury”

  1. Gravatar of Benjamin Cole Benjamin Cole
    15. September 2016 at 04:42

    The yen is up 19% against the US dollar YTD.

    What? What? Huh? They are currency manipulators? Is someone in charge at Treasury who…like…reads newspapers? You know, every once in a while?

    And we are telling the Bank of Japan to not pursue an expansionist monetary policy? As they sink into deflation (again)?

    Trump is a loose cannon of the deck of rudderless ship in choppy waters. Thankfully, he is not loaded, and the shoals are far away.

    The political parties and interest groups in the US try to make every election “crucial” or “vital” and speak of horrific global threats.

    Actually, the threats to US are as minuscule as any in history for any nation ever. We are the least threatened people of all time. No one wants to invade the US, and terrorists are but a heinous annoyance.

    Maybe President Kaine will be okay.

  2. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    15. September 2016 at 04:57

    Meanwhile, Hillary is still a self-absorbed harridan probably more dangerous than The Donald at his egomaniacal worst. Remember The Politics of Meaning (1993);

    ————–quote————–
    We are caught between two great political forces. On the one hand we have our economy—the market economy—which knows the price of everything but the value of nothing. That is not its job. And then the state or government which attempts to use its means of acquiring tax money, of making decisions to assist us in becoming a better, more equitable society as it defines it. That is what all societies are currently caught between—forces that are more complex and bigger than any of us can understand. And missing in that equation, as we have political and ideological struggles between those who think market economics are the answer to everything, those who think government programs are the answer to everything, is the recognition among all of us that neither of those is an adequate explanation for the challenges confronting us.

    And what we each must do is break through the old thinking that has for too long captured us politically and institutionally, so that we can begin to devise new ways of thinking about not only what it means to have economies that don’t discard people like they were excess baggage that we no longer need, but to define our institutional and personal responsibilities in ways that answer this lack of meaning.

    We need a new politics of meaning. We need a new ethos of individual responsibility and caring. We need a new definition of civil society which answers the unanswerable questions posed by both the market forces and the governmental ones, as to how we can have a society that fills us up again and makes us feel that we are part of something bigger than ourselves.

    Now, will it be easy to do that? Of course not. Because we are breaking new ground. This is a trend that has been developing over hundreds of years. It is not something that just happened to us in the last decade or two. And so it is not going to be easy to redefine who we are as human beings in this post-modern age. Nor will it be easy to figure out how to make our institutions more responsive to the kind of human beings we wish to be.

    But part of the great challenge of living is defining yourself in your moment, of seizing the opportunities that you are given, and of making the very best choices you can. That is what this administration, this president, and those of us who are hoping for these changes are attempting to do.
    ————endquote———-

    Now that IS scary.

  3. Gravatar of Jerry Brown Jerry Brown
    15. September 2016 at 05:07

    Consider that Germany technically doesn’t even have its own currency. They must be incredibly adept manipulators to end up on this list.

  4. Gravatar of Scott Sumner Scott Sumner
    15. September 2016 at 06:38

    Ben, You said,

    “Maybe President Kaine will be okay.”

    Hillary’s health problems should make all thoughtful Americans more willing to vote for her.

    Jerry, Good point. But that’s only true by the Treasury definition—they can still impact their real exchange rate if they wish, via domestic deflation.

  5. Gravatar of Ray Lopez Ray Lopez
    15. September 2016 at 07:23

    I hate to say it, but a good post by Sumner. Indeed bilaterial trade is meaningless. And long term, as in decades, a strong dollar is meaningless. This is because money is neutral, it has no real effects on an economy. Trade imbalances mean nothing, neither trade deficits nor do trade surpluses, in and of themselves. For example, Philip II’s Spain in the 16th century had a positive balance of trade due to selling dear silver and gold cheaply mined from the New World, but they ‘wasted’ this money on armies and it resulted in naught. By contrast, at times the USA has expanded rapidly such as during the 19th century (under btw a gold standard) and ran trade deficits, see here: http://www.cato.org/publications/trade-policy-analysis/americas-maligned-misunderstood-trade-deficit

  6. Gravatar of H_WASSHOI (Maekawa Miku-nyan lover) H_WASSHOI (Maekawa Miku-nyan lover)
    15. September 2016 at 07:49

    To achieve the IT 2%, Japan need 1 dollar = 140 yen.

  7. Gravatar of Art Deco Art Deco
    15. September 2016 at 08:29

    n Washington DC, all the best and the brightest in both parties are horrified by the prospects of a Trump Presidency.

    Recall Conrad Black’s observation that the political class had flubbed every single major issue of the post-Cold War world bar welfare reform. The initiative for welfare reform came from state governors like Tommy Thompson, btw. These are the people who allow the appellate judiciary to dictate social policy, who’ve made educational institutions worse than they’d otherwise be, who cannot kill off a stew of corruption like HUD or a pointless subsidy to Boeing like the ExIm Bank, etc. “Best and the brightest” at what? At sucking up lobbying fees?

  8. Gravatar of Scott Freelander Scott Freelander
    15. September 2016 at 10:57

    In the good ole days, people like Krugman would speak out about this sort of thing, but at the zero lower bound, supposedly mercantilism makes sense. How can people Krugman even be considered an economist anymore? He’s just emblematic of the decay of reason among left-wing economists. The right wing economists are no better, and some are worse. Art Laffer? Larry Kudlow? They’re jokes.

    That’s why, even though I’m liberal, I get more out of reading the more libertarian-minded economists. They can criticize both the left and the right, with much less of the sort of partisan rot that’s conquered many previously good minds.

    The libertarian economists have their biases too, but they tend to err on the side of being more tolerant, which is not the worst sin in the world. I personally think that Austrians like Bob Murphy aren’t economists, for example, but Peter Boettke certainly is an economist, and one worth paying attention to. Yet, Murphy gets far more attention on some very good blogs I read.

    Sadly, having a PhD in economics doesn’t mean much.

  9. Gravatar of Massimo Heitor Massimo Heitor
    15. September 2016 at 11:16

    I generally agree with Sumner that free trade is good, Sinophobia as preached by Trump, economist Peter Navarro, and members of US congress is generally unreasonable and bad. BTW, Paul Ryan said he’s not that different than Trump on trade.

    The Obama administration classified the Nidal Hasan shooting as “workplace violence”. Obama shames any association between Islam and Islamic terrorism as rank bigotry, and denounces any form of Islamic group guilt, but applies that exact same type of group wide guilt to whites and especially the US Confederacy.

    On issues of race, immigration, and the culture war, Trump really is a refreshing voice of honesty and intelligence. He’s willing to fight back against the left in ways the rest of the right has not.

    Even David Frum, a outspoken Trump critic, openly agrees with much of Trump’s points of immigration and says that the Trump speech on immigration that has most public political speakers horrified is mostly very basic common sense.

  10. Gravatar of ChargerCarl ChargerCarl
    15. September 2016 at 11:50

    The Chinese trade us goods and trinkets for homes, education, and life under the protection of benevolent American institutions. The only difference is that our production must be consumed on our shores.

  11. Gravatar of Helmut Schmidt (@HelmutSchmidtDC) Helmut Schmidt (@HelmutSchmidtDC)
    15. September 2016 at 12:44

    Wow, what a shocking lack of knowledge of political economy. How do you write on this stuff?

    Hello, do you know anything about the Bretton Woods conference, i.e. the first United Nations Conference, and titled the Monetary and Financial Conference?

    It was believed at that time that competitive currency devaluation was a major cause of World War II, and fixing exchange rates was the solution. We had the elegant Keynes’ solution in the Bancor, that ultimately wasn’t adopted.

    But sheesh, the Triffin Paradox is real. The days of floating exchange rates are over now that China is issuing sovereign debt denominated in IMF Special Drawing Rights, the new Keynes’ Bancor. Hello, the president of the bank of china has been calling specifically for Keynes’ Bancor since the recession began 8 years ago.

  12. Gravatar of E. Harding E. Harding
    15. September 2016 at 12:48

    “Perhaps Germany was put on the list to try to make the racism appear a bit less blatant.”

    -Trump has repeatedly said the EU and NATO are ripping the US off. So he’s less racist than Obama.

    “Now Trump is slamming Yellen for her low interest rate policy.”

    -Listen to his reasoning. Every politician in his position would do exactly this. Why does he oppose Yellen’s low-interest rate policy? Explicitly because it makes Obama look too good. Trump wants only himself to look good.

    “Speaking of Trump, last May I had commenters earnestly informing me that I should support Trump because he favored low interest rates.”

    -He still does, and you still should.

    Your points on trade are obviously accurate.

    So, Trump’s new tax plan is out. It actually raises taxes on rich single people (as the Soviet Union used to do, correctly in my opinion). Douthat likes it better than Mitt Rmoney’s. A true fusion of supply-side and reformicon thinking.

    The fire rises.

    Make America Great Again!

  13. Gravatar of Bonnie Bonnie
    15. September 2016 at 12:53

    Trump says he’d print money in response to an economic crash. He gets nailed, here and by Hillary who says printing money caused the crisis in the first place. When Trump sounds like Hillary and/or like Mr. Lacker, he gets nailed again (this time deservedly). There appears to be a double standard here, because all I remember reading about Hillary’s position on The Money Illusion is, “The Fed is run by economists. Politicians can’t be expected to know about monetary policy.”

  14. Gravatar of E. Harding E. Harding
    15. September 2016 at 13:00

    “Hillary’s health problems should make all thoughtful Americans more willing to vote for her.”

    -A barely living president (Woodrow Wilson, for instance) is not something Americans want.

  15. Gravatar of Major.Freedom Major.Freedom
    15. September 2016 at 16:23

    Sumner is pro-political elitist.

  16. Gravatar of Bob Murphy Bob Murphy
    15. September 2016 at 17:32

    Scott Freelander wrote:

    I personally think that Austrians like Bob Murphy aren’t economists, for example, but Peter Boettke certainly is an economist, and one worth paying attention to. Yet, Murphy gets far more attention on some very good blogs I read.

    Sadly, having a PhD in economics doesn’t mean much.

    Nobody else seemed to notice Freelander’s comment–but I did!!

  17. Gravatar of Gary Anderson Gary Anderson
    15. September 2016 at 17:41

    Hillary is back on the trail, Harding. Read it and weep.

    Again, no fan of Hillary, hoping she will be a reluctant neocon, less interested in war simply because she is married to Bill Clinton. We didn’t have much war back when he was president, remember? That was before the neocons took over with Cheney, copresident.

    Cheney did 9/11. There is more proof of that than there is proof of OJ Simpson’s guilt.

    So, Republicans deserve Trump. They earned Trump because of their bad behavior. And Guiliani was on video saying that the tower not hit by a plane, WTC7, was going to come down.

    Now he has turned into a crazy man. You can’t have that crap weighing on your conscience and be normal. Cheney has no conscience, but Bush and Guiliani do.

    They know they did wrong and are covering up wrong, massive evil, the crime of the millennium.

  18. Gravatar of Scott Freelander Scott Freelander
    15. September 2016 at 17:48

    Bob Murphy,

    I want to mention that I didn’t mean that as a personal slight. I don’t know if there’s a way of expressing what I did without it being personal in some sense. I’m not saying you’re unintelligent, but I think that your rejection of some obvious empirical truths means that you reject much of macroeconomics.

  19. Gravatar of Scott Freelander Scott Freelander
    15. September 2016 at 17:55

    And actually Bob, I was hoping Krugman would debate you, even though I’m not crazy about the perspectives either of you hold. The reasoning for not debating you would have been sound, had he not then later debated Ron Paul. At least you have formal education in economics. But, one certainly hasn’t been able to expect fairness or consistency from Krugman in a very long time.

  20. Gravatar of ssumner ssumner
    15. September 2016 at 18:14

    Helmut, You said:

    “It was believed at that time that competitive currency devaluation was a major cause of World War II”

    Yes, fortunately the profession has moved on from that nonsense.

  21. Gravatar of morgan warstler morgan warstler
    15. September 2016 at 18:28

    Scott, it’s hard to have rational conversations with someone who speaks like this:

    “He’ll look you in the eye and tell you that he opposed the Iraq War.”

    https://www.washingtonpost.com/news/the-fix/wp/2016/02/19/donald-trump-wasnt-so-anti-iraq-war-after-all-quelle-surprise/

    First note the HEADLINE in WaPo. “Donald Trump wasn’t so anti-Iraq war after all.”

    This is the honest take from WaPo, that has morphed into your screaming he is a liar.

    —-

    NOW listen to the interview… this is the ONE YEAR ANNIVERSARY of 9/11.

    That is EXACTLY what a person who lives in NYC on the anniversary of 9/11, an has been historically arguing for control of resource extraction and NEVER for Democracy building says when he he’s not very excited about a war.

    THE WAPO HEADLINE ADMITTED IT TONALLY THEN…

    Now read WaPo’s Dan Dresner (May 10, 2016), yes you have to read it:

    https://www.washingtonpost.com/posteverything/wp/2016/05/10/why-donald-trump-seems-invulnerable-to-the-flip-flop-charge/?utm_term=.ca4a5de70cba

    “Trump’s relationship with the truth is based more on a mixture of bemusement and contempt. Those sentiments, however, are on full display with his media interviews, and they do not seem phony at all. It’s that tonal authenticity that inoculates Trump against many of the standard accusations that fell normal politicians.”

    READ IT.

    Again, the point is Trump’s TONAL AUTHENTICITY TELLS YOU WHAT HE IS REALLY SAYING. Dan Drezner hate Trump, but just 4 months ago he admitted you have to listen to trump’s tone.

    YES YOU HAVE TO TOO, or you lose debates about tTump.

    ——

    To Howard Stern fans, to normals, they know that the closest Trump ever got to supporting Iraq War reason 9/11/2002 and he says

    “YEAH I GUESS SO, I wish the first time it was done correctly.”

    That’s not TRUMP SUPPORTED THE WAR HE IS A LIAR.

    —-

    Dan Drezner admitted it.

    WaPo admitted it.

    And NOW they are LYING and YOU ARE LYING…

    And if you can’t step up and say

    “Trump barley endorsed invading Iran, slammed Bush 1 and Clinton for letting this happen and then almost immediately began tonally pissing on the war after that first remark”

    You are LYING.

    Be the man you want everyone else to be Scott.

    You must be charitable to your opponents in debate…

  22. Gravatar of morgan warstler morgan warstler
    15. September 2016 at 18:41

    This is Hillary today:

    https://www.youtube.com/watch?v=FDkTjswOOHI&feature=youtu.be

    WATCH HER EYES.

    She cannot look up straight and hold her eyes focus on areas with bright lights or action, without THAT BRAIN THING rearing its head.

    You can SEE IT come across her face 5-6 times in 12 minutes, god examples at 2:40.

    She is averting her eyes down even when speaking extemporaneously.

  23. Gravatar of morgan warstler morgan warstler
    15. September 2016 at 18:52

    This is her in 1992

    https://www.youtube.com/watch?v=W18zHyY-Doo

    Speaking from notes, ad-libbing, LOOK AT HER EYES.

    Now look, I taught / coached debate at world class level, nobody GETS WORSE OVER 25 YEARS of publo speaking.

    NOBODY. And Hillary today, Hillary for the past 4 years has been deteriorating as a speaker.

    And the media is now lying and acting like Hillary has never been a good speaker.

    Go watch old Hillary speeches… nobody gets worse at public speaking, except Hillary, over past 4 years…

    Scott suspects something s wrong with her. He’s already jumped to, a sick POTUS is good!

    Again, Scott BE CHARITABLE WITH YOUR OPPONENTS…

    Say what you really think, grant the very best case of your opponents position and argue against that….

    —-

    Here’s a funny:

    Aaron Sorkin’s West Wing forecast this, telling us a person who conceals MS (onset Parkinson’s / stokes / brain damage etc) is morally bad and acting greedily.

    And should expect to be impeached.

    We are now less than 60 days out and Scott isn’t saying:

    “If Hillary is sick, she must admit it and then argue as a sick person she will be a better POTUS”

    Scott is hoping she’ll pay hide the salami.

    Scott favors lying when it accomplishes his goals.

  24. Gravatar of Bob Murphy Bob Murphy
    15. September 2016 at 19:04

    Scott Freelander wrote:

    And actually Bob, I was hoping Krugman would debate you…

    Why? I’m not an economist. You mean like, we would debate male pattern baldness?

    (I’m just having fun Scott. I have certainly said things online that I would’ve worded differently if I realized the person was “right there.” But you didn’t just say, “Murphy is way off on macro.” You said I’m not an economist, and you can’t understand why so many blogs pay attention to me. So I wonder what purpose my debating Krugman would serve?)

  25. Gravatar of Gary Anderson Gary Anderson
    15. September 2016 at 21:06

    Morgan, Trump didn’t scream his position on the Iraq War too loudly. He is often quiet, hoping people won’t notice. When he said, Yeah, I guess so, that was support. He didn’t say, no, I guess not. You turn arguments, plain English, on its head.

    You can’t debate your way out of a paper bag.

    You are in denial.

  26. Gravatar of Scott Freelander Scott Freelander
    16. September 2016 at 02:44

    Bob Murphy,

    As I pointed out, I don’t think Krugman’s an economist anymore either, so economics wouldn’t be the draw. The draw would be fhe bizarre nature of the debate. It would be a spectacle. I would want to watch it for the same reason I watched your debate with Warren Mosler.

    I basically just don’t think either of you are really scientists. Einstein wasn’t a scientist after about 1916 either, which is why he never made a major contribution after general relativity. His rejection of quantum mechanics doomed him to irrelevance.

    So again, nothing personal, but I think you’re basically a philospher of economics and a political philosopher and I think Krugman is largely a partisan hack. I personally don’t think philosophers serve a purpose in the modern world, and I think even less of partisan hacks. I think Mises Institute types are entirely irrelevant to economic science, whereas people like Krugman and Stiglitz are actually taking the science backwards, because the latter can still get published in respectable journals as well as mass media. Laffer, Kudlow, and their ilk have trivialized economic science from the right.

  27. Gravatar of Scott Freelander Scott Freelander
    16. September 2016 at 02:49

    I should point out also that I don’t think MMT has anything to offer. It’s based on very obvious misunderstandings of both theory and empirics.

  28. Gravatar of morgan s warstler morgan s warstler
    16. September 2016 at 05:51

    Gary,

    This is Obama by Bill Clnton Jan. 8, 2008:

    “It is wrong that Senator Obama got to go through 15 debates trumpeting his superior judgment and how he had been against the war in every year, enumerating the years, and never got asked one time, not once, well, how could you say that when you said in 2004 you didn’t know how you would have voted on the resolution, you said in 2004 there was no difference between you and George Bush on the war. And you took that speech you’re now running on off your website in 2004. And there’s no difference in your voting record and Hillary’s ever since. Give me a break. This whole thing is the biggest fairy tale I’ve ever seen.”

    —–

    Basically the hit on Obama was he gave speech against the war in 2002 (I have long argued this was how he got so much more $$$ from Rezko from Iraq, if you are Saddam you are sending money to ANYBODY against the war) but then…

    Obama starts running for Senate and he DECLINES TO SAY HOW HE’D HAVE VOTED on the war.

    THEN he starts in on more troops to get out faster etc. Which is basically lock step with BUSH GOP everybody.

    And again, I am charitable, and very good at this stuff…

    The point is Obama was a little squishy much longer than into the War than Trump was….

    And honestly, being charitable, thats BC once Obama had skin in game politically, he needed to be more nuanced.

    Hillary was probably far more into it.

    But now we’re looking at accurately and we go back to Trump… and it’s VERY HARD to put Trump closer to Hillary on the war issue… he’s clearly closer to Obama.

    That’s as deep and honest dive. Accurate and charitable.

    Scott is wrong. Hillary is wrong.

  29. Gravatar of morgan s warstler morgan s warstler
    16. September 2016 at 05:56

    MMT is a bunch of dirty hippies who admit, when you beat on them, that Monetary Policy is just another tool hegemony (top half) uses to keep Govt from being more powerful than the hegemony. It’s a nice stick.

    And they think if they just describe the 30K foot view of Fiscal / Monetary work, they will break thru and the Govt will become more powerful than top half.

    This of course won’t happen. Top half will throw a Zombie Apocalypse and put MMT heads on pikes.

    Money is a not a Democratic good.

  30. Gravatar of Art Deco Art Deco
    16. September 2016 at 07:02

    You said I’m not an economist, and you can’t understand why so many blogs pay attention to me. So I wonder what purpose my debating Krugman would serve?)

    Pretty much everything he has to say is status-conscious or an exercise in status games.

  31. Gravatar of Ray Lopez Ray Lopez
    16. September 2016 at 08:32

    Also relevant to this debate is that in the USA “Super 301” in trade law has not been abolished (though apparently not used since 2002). Perhaps Trump will resurrect it?

    https://en.wikipedia.org/wiki/Section_301_of_the_Trade_Act_of_1974

  32. Gravatar of Student Student
    16. September 2016 at 08:38

    You want to catch trump dead in a lie. The doctor’s note trump game to america’s doctor said he weighed 237 pounds. Growing up having participated in several sports where one had to consistently track there weight, I have developed an ability to be pretty accurately assess how much someone weighs just by looking at them.

    I’d bet $1,000 bucks Trump is 265-295 pounds.

    Exhibit A (Trump standing next to a 350-400 pound Chris Christie):

    http://media2.s-nbcnews.com/j/newscms/2016_08/1435666/160226-chris-christie-donald-trump-1p_640ed92c270f7663a33558f11b444bcb.nbcnews-fp-1200-800.jpg

    Exhibit B (Trump sitting by 225 pound Tom Brady):

    https://i.kinja-img.com/gawker-media/image/upload/t9946ntlracdussdic4d.jpg

    I am 99.9% sure he closer to 300 than 225.

    If you are willing to lie about something as stupid and obvious as that, you are willing to lie about anything.

  33. Gravatar of Art Deco Art Deco
    16. September 2016 at 08:58

    I am 99.9% sure he closer to 300 than 225.

    I’m north of 90% sure you’re wrong. My fat self weighs 225# and I’m about the same height. Trump is thinner than yours truly.

  34. Gravatar of Student Student
    16. September 2016 at 09:00

    Then chris Christie must weigh 250. Hahaha. Yours truely should get a new scale.

  35. Gravatar of Student Student
    16. September 2016 at 09:03

    I am under 6 foot and less than 225 and trump looks like a whale compared to me.

  36. Gravatar of Gary Anderson Gary Anderson
    16. September 2016 at 10:50

    But Morgan, Obama is not running. Trump is running on the theme that he opposed the Iraq War. Prior to the war that was not true.

    And he pretty much has two stances on every issue so opposing and not opposing the Iraq War is similar to wanting low and high interest rates, or wanting to march all the illegals to the border or not march them to the border.

    If you take the opposite position to yourself on every fricken issue, what are you? Nobody knows what Trump stands for.

    And one thing we know, he has not denounced David Duke because Trump’s racism is based on the same misguided theory, that western civilization is superior therefore western white people are superior.

    But of course, through time, there have been other great cultures. Mayan and Aztec cultures were advanced. Chinese culture was advanced.

    And really, Roman and Euro cultures have turned out to be as barbaric as any in history. The Romans ruled by brute force. They were barbaric people. The Euro culture produced Adolph Hitler. He was a mass murderer. So was Stalin. The UK/US Empire has killed, according to Noam Chomsky, over 50 million people. UK/US colonialism was a murderous achievement.

    So, how do you judge a culture, just by its inventions? No, you judge a culture by its barbaric behavior. And we are not second to anyone in that. It is estimated that deaths in the colonization of America exceeded 30 million.

    Empire kills. And Euro empire and anglo empire are no exception: https://en.wikipedia.org/wiki/List_of_wars_and_anthropogenic_disasters_by_death_toll

  37. Gravatar of Jason Jason
    16. September 2016 at 14:31

    Scott what do you think of the news stories that have Johnson pulling support from CLINTON as well as trump in some states like Nevada?

  38. Gravatar of Ray Lopez Ray Lopez
    16. September 2016 at 15:32

    @Student – athletes have more muscle and less fat than regular people, hence for the same height they weigh more. Maybe that’s why Trump seems heavier to you.

    “Want to lose 10 pounds of ugly fat?” “Cut off your head”. Da-da-dum.

  39. Gravatar of HW HW
    16. September 2016 at 15:42

    International trade aside, this bias exists in most areas. Consider the fact that Norway has annual whaling catches 2-3 times that of Japan, yet there is no controversy surrounding whaling in Norway (per capita they whale 50 times as much as Japan, and Iceland is well ahead of either). https://iwc.int/total-catches

  40. Gravatar of Student Student
    16. September 2016 at 17:32

    Ray,

    Tom Brady is about the same height as trump and weighs 225 but he has 1/3 the neck fat and half the diameter. Doesn’t that contradict your point?

    Chris Christie weighs 350 minimum and looks about as portly (maybe a touch more). There is no chance in hell trump weighs less than 270. Look at him, he is a minimum of 40% body fat… And on a 6’3” frame.

    The dude lied about his weight by at least 40 pounds. It’s obvious to anyone that has ever had to make weight in anything.

    Look at the Christie trump picture again and tell me he weights 120-150 pounds less than Christie. Your dreaming man.

  41. Gravatar of Joe Leider Joe Leider
    16. September 2016 at 17:33

    I’m actually curious and would love a blog post on whether monetary policy would become easier or tighter under Trump. It’d be an interesting amalgam of market monetarist thinking and Trump derangement syndrome.

    He recently said some super hawkish things, but I feel as if having a completely unpredictable con man as president must = easy money. After all, Hitlet meant easy money, right?

  42. Gravatar of Joe Leider Joe Leider
    16. September 2016 at 17:37

    Gary Anderson, remember that civilization itself kills a lot in aggregate, but hunter gatherer societies mean a lot more violent death proportionally. Food for thought…

  43. Gravatar of Student Student
    16. September 2016 at 17:42

    My bad about the contradiction part, had a good time at a winery and misread. That said, anyone thinking trump weighs a a full Scott Sumner less than Christie has had more wine than I.

  44. Gravatar of Major.Freedom Major.Freedom
    16. September 2016 at 23:43

    Scott Freelander:

    Your posts about what true economics is and is not, is fallacious. Empiricism applied to human actions is not economics. It is data collection. It is history.

    If you utilize the method of physicists and chemists when studying the economy, you’re not doing economics.

    Bastiat, Turgot, Menger, Cairnes, Robbins, Keynes, Mises, Hayek, all these folks did not study the economy using empiricism. According to your misguided and uninformed mentality, none of them were economists.

    Empiricism does not work for economics. This is because there are no constants in human action. We are a learning species. We cannot predict our own future knowledge. New knowledge is learned unexpectedly by nature. Neither you nor mainstream economists far superior in intelligence than you, have ever found any constants the way physicists and chemists have found constants.

    Given knowledge is fundamentally unpredictable based on constants, it follows that our actions, which are motivated by our knowledge, are also fundamentally unpredictable based on constants. The fact that there are no constants is why empiricism fails.

    Not only that, but empiricism applied to human knowledge and actions is self-contradictory. For empiricism is based on tacit claims to a priori truths, the same kind of claims of truth that it asserts is not possible for us. The most glaring is the a priori assumption that the laws of reality are time invariant. In order for empiricism to even work, time invariant cause and effect laws are assumed as true. Yet empiricism ostensibly claims that all knowledge is either hypothetical and possibly false, or analytic and merely semantic arbitrary rules for manipulating terms and symbols.

    If empiricism was applied to itself, then empiricism is either hypothetical, in which case it would have to admit the possibility of being wrong, or it is analytic, in which case it would just be a definition. None of these qualify as any theory of knowledge, or epistemology.

    True economics is not this waste of time and resources job creation program of sitting in an office applying regressions, equations and formulas to historical data. The reason such a thing has become so popular is because any idiot can do it. The less sophisticated the method, the more mass appeal it has. Oh sure, in the upper echelon there are people who are highly skilled at manipulating symbols and terms according to a quantity of rules that would rival the federal register. Yet it is about as socially valuable as remembering the first 200 digits of Pi. A person can spend 10 years remembering the numbers, and do what only a handful of people in the world can do, but it is still just remembering a number.

    You don’t have any idea just why you believe empiricism is “the” method. You just got exposed to it, and you accepted it without a critical or questioning judgment. You are clearly at this time not even able to do such a thing. You believe it is sacrelege to do so. Your mindset is not that of an intellectual, but rather a bean counting pundit.

  45. Gravatar of Scott Sumner Scott Sumner
    17. September 2016 at 06:14

    Morgan, I hope you don’t believe that nonsense. I’ve I had said “Yes, I guess I support the war” I would not be bragging about how smart I was to oppose it. But that’s just me. And what is your defense of his 100s of other lies?

    Student, He lies every day–no need to focus on weight.

    Jason, I’ve told intellectuals for years that the libertarians may pull just as much support from the Dems. But they don’t believe me, because the libertarians are seen as being “on the right”. In this election Johnson is pulling more from the Dems, in some polls.

    HW, Good example. Another bias is that East Asia moral values are not taken seriously by whites. When the death penalty is discussed, people often say the US is the only developed country that still uses it, whereas a number of East Asian developed countries still have it. Basically, whites view East Asians as morally inferior–they are not taken seriously.

    Joe, I’ve said a number of times that Presidents don’t influence monetary policy any longer. They did in the 1970s, but not today.

  46. Gravatar of Art Deco Art Deco
    17. September 2016 at 07:12

    Yours truely should get a new scale.

    We’ve got two in the house, not to mention the ones in my doctor’s office.

  47. Gravatar of Art Deco Art Deco
    17. September 2016 at 08:46

    When the death penalty is discussed, people often say the US is the only developed country that still uses it, whereas a number of East Asian developed countries still have it. Basically, whites view East Asians as morally inferior–they are not taken seriously.

    No, the people you’re talking to are just ignorant on this point.

  48. Gravatar of Jose Romeu Robazzi Jose Romeu Robazzi
    17. September 2016 at 11:33

    It would be nice if a Trump victory led the US to start thinkjing on a parliamentary system… Strong presidential system in a liberal democracy is a contradiction that only can lead do failure in the long run… The US has been there for a mere 100+ years and it is clearly not working very well…

  49. Gravatar of Art Deco Art Deco
    17. September 2016 at 12:43

    It would be nice if a Trump victory led the US to start thinkjing on a parliamentary system… Strong presidential system in a liberal democracy is a contradiction that only can lead do failure in the long run… The US has been there for a mere 100+ years and it is clearly not working very well…

    The jalopy has been running for 227 years, bar the recent unpleasantness ca. 1863. No one’s motivated to repair anything. The starboard side is chock-a-bloc with ancestor-worshipers who fancy no one has ever or could ever improve on James Madison’s handiwork. The portside does not care as long as the appellate courts make stuff up and insist the constitution requires they get what they want. One of the very few prominent officials to suggest a parliamentary order was Lloyd Cutler. He was writing about 35 years ago.

    Parliamentary institutions per se would address secondary problems. We should attack our worst problems first.

  50. Gravatar of morgan warstler morgan warstler
    18. September 2016 at 05:31

    “And what is your defense of his 100s of other lies?”

    Scott the guy is making a mockery of your class and I endorse that completely.

    I have waited most of my life for Al (Rodney Dangerfield) from CaddyShack to run the country.

    The fact we finally have WWE candidates running THIS KIND OF CAMPAIGN and it portends our future should excite you!

    Our goal is to automate govt, to minimize the discretion of the bureaucracy, to shrink and privatize it’s labor force, and for that to happen… We have to strip back the veneer of it’s respectability and it’s solemn piety.

    Trump’s humility is assured, bc he is IN ON THE JOKE. My god man, he is deconstructing the entire edifice of respectable govt, BOLDY screaming the emperor wears no clothes….

    And you say he is the liar?

    Look, at this point, all I can ask is if the guy ACTUALLY wins, you at least enjoy the bonfire.

    Take comfort that Tech is ready to step in and make lives better, but it takes a bureaucracy completely destroyed, it must ride in back sitting b*tch.

  51. Gravatar of morgan warstler morgan warstler
    18. September 2016 at 05:34

    Forget Parliament, and hell it’s sounds nuts, but forget the Executive.

    What comes next and forever in the future is SOFTWARE, nothing else matters.

  52. Gravatar of Bill Ellis Bill Ellis
    19. September 2016 at 16:16

    As different as this election is…Even putting trump’s colossal incompetence and ignorance aside…

    This election comes down to the same basic argument as every other election…

    We have a choice between two sides that both believe that they have the best way to get to the best possible outcome…

    One side believes that the best policy for all is to make things easier for the elite, the most capable of us….and harder for the poor, the least capable of us… All in the name of motivation…

    The other side believes that all will benefit most… with policies for keeping the least capable us out of situations of degradation and deprivation… And to have thoses of us who are most capable, help the most… All in the name of the science of human development…

    so if you can ignore the completely incompetence of trump…( his campaign behavior is a text book list of symptoms of dementia onset ) then it does make sense to vote for trump if you believe in the “punish the poor ” world view…

    I wonder…how deep does one’s need to punish poor people and reward the elite have to go to be able to be blind to trump…??? Especially the obviously intelligent, well informed people that are for him….

  53. Gravatar of Bill Ellis Bill Ellis
    19. September 2016 at 16:38

    Gary Anderson…
    Maybe Morgan’s not in denial.. you have to listen to his tone to know… if you can’t listen to his tone you can know what he means at all… As far as we know everyting Morgan said…could mean the exact opposite of what he said…

    The only way to be fair to Morgan is to let him tell you what his tone means… It’s just completely unreasonable to ask a person to be accountable for their words…

    Me…I just adopt a tone where everything I say can be taken as sarcasm… Then I get to decided if I meant what I said or not at anytime… Just like trump…

  54. Gravatar of Gary Anderson Gary Anderson
    19. September 2016 at 18:51

    Lol, Bill, tough to understand tone by reading. That is why I label the satire I have written as satire so people won’t be fooled. 🙂

    http://www.examplesofglobalization.com/p/political-satire.html

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