We’re not in Kansas any longer

In the old days, the threat of bonds being defaulted on made the bonds less attractive to investors. Now we live in the land of Oz, and default threats make investors rush to buy the bonds. Here’s Bloomberg:

The currency’s outperformance — steamrolling even the traditional safe-haven yen, which fell to six-month lows past 140 per dollar last week — reflects the US’s unique position at the center of the global financial system. Even when the nation is flirting with default, investors have little choice but to flock to dollar-denominated assets like Treasuries for protection. 

An MLIV Pulse survey earlier this month showed US debt was second only to gold as the most popular asset to buy in the event of a default.

In the old days, if a candidate was enmeshed in a scandal his rivals would rush to take advantage of the situation—criticizing his behavior. Now we live in the land of Oz, where rivals rush to defend the person they are running against when it is discovered that he committed sexual assault. Here’s Time magazine:

But when the time came to actually stand up to him, Trump’s primary rivals and political enablers were too cowardly or calculating to throw much of a punch. Nikki Haley, Trump’s major declared opponent and former U.N. Ambassador, dismissed the potential indictment on Fox News as “more about revenge than it is about justice.” Another active candidate, businessman Vivek Ramaswamy, went further, blasting the “disastrously politicized prosecution” and calling on other Republicans to condemn it. Former Vice President Mike Pence, who is openly considering a run, told an interviewer the probe “reeks of the kind of political prosecution we endured in the days of the Russia hoax.”

PS. This quote from Tyler Cowen explains why I completely ignored the debt ceiling “drama”:

There may yet be a final round of drama, but the people who treated this event as the nothing burger it is were on the right track the whole way through.



12 Responses to “We’re not in Kansas any longer”

  1. Gravatar of Sara Sara
    1. June 2023 at 22:05

    Perhaps it’s age, perhaps it’s the endless array of movie watching.

    However, if you had read Alan Dershowitz’s substack, which we sent to you previously, you would have learned that the recent NY laws passed during the “me too movement” don’t require a very high bar for sexual assault; women don’t have to present much evidence at all; for example, there was no evidence presented the two had even met before; the event presumably took place thirty years ago, yet no witnesses remain due to the time frame between the purported act and the lawsuit. There were a number of contradictory statements made by the plaintiff including her statement that she “loved Trump” and “thought Trump was a great guy” before she filed suit, and after the presumed sexual assault. I don’t know about you, but if someone sexually assaulted me, I don’t think I would say they were a great guy afterwards.

    There were also a number of technical errors which will be thrown out in appeals, so the ruling will be struck down. One must also keep in mind that the jury pool was 99.9% anti-trump, which is mute because of the other technical errors during the trial, but which is also a factor appeals courts generally consider.

    People are NOT “defending sexual assault” as you allude to. They are instead defending a man from radicals on the left, hijacking the rule of law to go after their political opponents. We all know you are a radical that doesn’t like Trump. You think Trump is Hitler. You are also a utilitarian that is willing to use the law to achieve your end goal (like packing the courts, or going after politicians you don’t like, or bombing countries into submission); but most moderates don’t think that way. They want the rule of law to be upheld, which means giving the man a fair trial.

    In regards to the recent criminal charges over classified documents; this is just another political stunt; reasonable attorney’s know it will be thrown out; it’s possible that the charges are initially brought in a D.C. court, in front of a radical judge, and for the sole purpose to score a few political points, but on appeal it has no chance of succeeding.

    I suggest more reading, less movie watching.

  2. Gravatar of seer of things seer of things
    2. June 2023 at 00:11

    Mohamed El-Erian is a winner for telling CNBC Joe “I have limited time” when asked about his take on debt ceiling 2023. Gotta love is his choice of honesty over self-serving spin or obfuscation which is so rare of any successful person in our culture.

  3. Gravatar of ssumner ssumner
    2. June 2023 at 08:06

    Sara, LOL, I took no position on the validity of the charges in this post. Can’t you read?

    Seer, He has good sense.

  4. Gravatar of msgkings msgkings
    2. June 2023 at 10:48

    This also reflects the market’s correct view that the US will NEVER default despite all the theater when these debt ceiling fights happen. There are many things that would happen before skipping payments on bonds, like stopping Social Security checks from going out, and when those things happen the phones ring and the politicians would make a deal.

    I was pleased to see it not even get close to that this time. Biden and McCarthy actually handled it like grownups and to be honest it’s only ‘crises’ like these that get them to ever cut any spending.

    It’s a shame this is what is needed to force spending discipline of even a modest amount. Of course, if a Republican is president they just raise the ceiling without comment…they raised it 3 times under Trump.

  5. Gravatar of Anonymous Anonymous
    3. June 2023 at 02:03

    It has been discovered that Scott Sumner committed sexual assault.

    Don’t look at me like that, I took no position on the validity of the claim above. Learn to read.

  6. Gravatar of ssumner ssumner
    3. June 2023 at 08:16

    Anonymous, Really, who discovered that about me? A jury determined he had done it, after considering eye witness testimony. But I’ll concede that “determined” would have been less ambiguous than discovered. So fair point.

    Either way, the previous comment had no relevance for this post, which was obviously not about whether Trump was guilty, rather about how politicians usually react when scandals involving opponents fall onto their laps.

    Why can’t people stick to the topic at hand?

  7. Gravatar of Ricardo Ricardo
    5. June 2023 at 16:52

    The intolerant democrats, and their anti liberty party are at it again.

    This time they attacked a trans woman for wearing a MAGA hat.


    But Sumner wants us to believe Trump is Adolf Hitler, farmers and their cattle farts are killing the environment, and conservatives are terrorists.

  8. Gravatar of Alexander Turok Alexander Turok
    6. June 2023 at 05:05

    “Either way, the previous comment had no relevance for this post, which was obviously not about whether Trump was guilty, rather about how politicians usually react when scandals involving opponents fall onto their laps.”

    Not always, none of Biden’s Democratic rivals embraced Tara Reade. It depends on how much you think your voters are going to accept dubious accusations because they want them to be true.

  9. Gravatar of Edward Edward
    6. June 2023 at 06:39

    It might have been a nothing burger, but it’s still not a good idea to play Russian Roulette, even if your gun has five empty chambers and
    You roughly know where the bullet is and how to avoid it. There’s always a small chance….

    And anyway, have you SEEN the drool down their face MORONS in Congress this time, Scott? It seems like the Republican Party keeps getting stupider and more cruel. People like Lauren Boebert MTG, and Chip Roy…

    And we thought the “Tea Party” of 2011 was extreme…

  10. Gravatar of ssumner ssumner
    6. June 2023 at 07:40

    Alexander, Wait, did a jury find Biden guilty?

    That’s not much of an analogy.

    Edward, Lots of Dems favor Trump over DeSantis, seeing him as a weaker rival. Big mistake. Trump might win.

  11. Gravatar of Edward Edward
    9. June 2023 at 02:58

    Sumner used to tell us the border issue was all manufactured hysteria from the “hard right” and “misinformation”.


    Well, here is Robert F. Kennedy at the border, in real time, showing you first hand that hundreds of people in just one night were let inside. He says over 7M (according to border agent data) have come across in three years. They are loaded onto busses, sent to cities around the country, and never heard from again.

    As he said, it’s totally unsustainable. Open borders is a travesty. It’s terrible for the people who are living here. Nobody knows who many of these folks are. No background checks, no visas, nothing at all. All they have to do is show up with a sob story, and an agent lets them in.

    They will need work. And do you know how many of them Sumner will employ.

    Yep. Zero.

    He doesn’t have enough money to employ one. That means you and I and so many others have to try and find jobs for them: jobs that don’t exist. That also pushes down the wages of the blue collar working class, and denigrates the hard work of so many foreigners who went to college, worked hard, and came on HB1 Visas the right way.

  12. Gravatar of TMC TMC
    9. June 2023 at 11:04

    “rather about how politicians usually react when scandals involving opponents fall onto their laps.”

    It was logical for them not to use this to attack Trump. If they become the front runner, the same tactics would be used to attack them. Better not give it credence now. Live by the sword….

    I don’t see these attacks are specific to Trump, though he’s a bigger target because of his big mouth. Kavanaugh’s accuser was found to lie about every single thing that could be investigated, but the attack was almost successful. Most people would have caved.

    Next Hitler of the month will be DeSantis – if he starts gaining on Trump.

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