Posts Tagged ‘Krugman’

Krugman’s blog, 2/18/17

February 20, 2017

There was one post on Saturday, “Trump’s Rosy Scenario:”

The WSJ reports that the Trump administration’s budget planning assumes very high economic growth over the next decade — between 3 and 3.5 percent annually. How was this number arrived at? Basically, they worked backwards, assuming the growth they needed to make their budget numbers add up. Credibility!

But the purpose of this post is mainly to explain why such a number is implausible — not impossible, but not something that should be anyone’s central forecast.

The claimed returns to Trumpnomics are close to the highest growth rates we’ve seen under any modern administration. Real GDP grew 3.4 percent annually under Reagan; it grew 3.7 percent annually under Clinton (shhh — don’t tell conservatives.) But there are fundamental reasons to believe that such growth is unlikely to happen now.

First, demography: Reagan took office with baby boomers — and women — still entering the work force; these days baby boomers are leaving. Here’s UN data on the 5-year growth rate of the population aged 20-64, a rough proxy for those likely to seek work:

Just on demography alone, then, you’d expect growth to be around a percentage point lower than it was under Reagan.

Furthermore, while Trump did not, in fact, inherit a mess, both Reagan and Clinton did — in the narrow sense that both came into office amid depressed economies, with unemployment above 7 percent:

This meant a substantial amount of slack to be taken up when the economy returned to full employment. Rough calculation: 2 points of excess unemployment means 4 percent output gap under Okun’s Law, which means 0.5 percentage points of extra growth over an 8-year period.

So even if you (wrongly) give Reagan policies credit for the business cycle recovery after 1982, and believe (wrongly) that Trumponomics is going to do wonderful things for incentives a la Reagan, you should still be expecting growth of 2 percent or under.

Now, maybe something awesome will happen: either driverless or flying cars will transform everything, whatever. But you shouldn’t be counting on it.

Blow and Krugman

February 20, 2017

In “Harry and Sidney: Soul Brothers” Mr. Blow offers on their 90th birthdays, an ode to two of the most remarkable men of our time.  Prof. Krugman has a question in “On Economic Arrogance:”  Why do Republicans imagine they can deliver growth?  Here’s Mr. Blow:

Please allow me to divert my gaze for one day away from our national political darkness and toward two national rays of light.

Monday is Sidney Poitier’s 90th birthday. His best friend of 70 years, Harry Belafonte, turns 90 on March 1.

This is an ode to and appreciation of the friendship — one of the most remarkable and resilient of our time — between two Hollywood royals.

Poitier and Belafonte didn’t meet until they were 20 years old, and yet Belafonte still considered Poitier his first real friend in life. As Belafonte put it, he lived a “nomadic” life as a child, shuttling back and forth between New York and islands of the Caribbean with his mother as she searched for work. “I did not get rooted long enough to develop what many people have the joy of experiencing, and that is childhood friends.”

The two men met at the American Negro Theatre, where Poitier worked as a janitor while studying with the company and where Belafonte worked as a stagehand. This was where they became performers.

The two men quickly broke through to each other, in part because they had so much in common. Not only were they the same age, they were both born to parents of West Indian heritage, enabling them to see the absurdity of racism in America from within and without and to bring a quasi-Pan-African sensibility to the African-American experience.

They shared the charmingly ordinary experiences that young friends share, like sneaking into the theater on the same ticket, each seeing half of a show, then filling each other in afterward on the half the other had missed. They called it “sharing the burden and the joy.”

And yet, by leaning on each other, supporting each other (Belafonte counseled Poitier though the dissolution of his marriage, which ended during his nine-year affair with actress Diahann Carroll), pushing each other, and yes, competing with each other (the first time Poitier was cast in a role, he was Belafonte’s understudy), they would both find tremendous popular success. Each man often took roles that the other had turned down or didn’t get.

In the 1950s Belafonte was dubbed the “King of Calypso” after his breakthrough album Calypso became the first LP in America to sell a million copies. In the early 1960s, Poitier became the first African-American to win the best actor Academy Award.

Even at the height of their success both men made an indelible mark on the Civil Rights Movement and changed the very idea of black masculinity.

In 1964, Belafonte convinced a hesitant Poitier to help him deliver $70,000 stuffed into a doctor’s bag to Freedom Summer volunteers in the South. They were met by Klansmen who chased them and fired guns at them. As one website put it, referring to the Student Nonviolent Coordinating Committee, “The trip ‘solidified Poitier’s commitment to SNCC,’ and he would become the symbol of the group’s goals for African-Americans.”

For Belafonte’s part, he formed a committee to support the movement and raised thousands of dollars to help bail the Rev. Dr. Martin Luther King Jr. out of jail, pay for the release of arrested protesters, help finance freedom rides and bankroll SNCC.

Belafonte and Poitier helped organize the March on Washington and helped plan King’s memorial after he was assassinated.

As for their impact on black masculinity, Belafonte has said of Poitier, “I don’t think anyone [else] in the world could have been anointed with the responsibility of creating a whole new image of black people, and especially black men.” In truth, Belafonte is being needlessly self-effacing here, because both he and Poitier accomplished this feat.

I’ve met both men and was enthralled by each. The first time I heard Belafonte speak in person, he spoke so eloquently and passionately that I was sure that he was reading a speech. He wasn’t. The next time I saw him I rehearsed a fan speech in my mind as I approached him, but before I could utter a word, he said to me, “I’m such a fan.” Mind. Blown.

When I was on my book tour, Poitier invited me to dinner in Beverly Hills. He was the most charming and graceful person I’ve ever met, famous or not. He told me: “I’m adopting you. I don’t have any sons. I have six daughters.” He insisted that I sign the book for him and his wife: “To Mom and Dad.”

Belafonte and Poitier demonstrated over a lifetime how celebrities could embody activism as well as the quiet power of dignity and grace.

King once said of Poitier: “He is a man of great depth, a man of great social concern, a man who is dedicated to human rights and freedom. Here is a man who, in the words we so often hear now, is a soul brother.”

In fact, I think that is what Poitier and Belafonte found in each other: a soul brother. Happy birthday, gentlemen.

Now, after that lovely bit of relief from our ongoing national nightmare, here’s Prof. Krugman:

According to press reports, the Trump administration is basing its budget projections on the assumption that the U.S. economy will grow very rapidly over the next decade — in fact, almost twice as fast as independent institutions like the Congressional Budget Office and the Federal Reserve expect. There is, as far as we can tell, no serious analysis behind this optimism; instead, the number was plugged in to make the fiscal outlook appear better.

I guess this was only to be expected from a man who keeps insisting that crime, which is actually near record lows, is at a record high, that millions of illegal ballots were responsible for his popular vote loss, and so on: In Trumpworld, numbers are what you want them to be, and anything else is fake news. But the truth is that unwarranted arrogance about economics isn’t Trump-specific. On the contrary, it’s the modern Republican norm. And the question is why.

Before I get there, a word about why extreme growth optimism is unwarranted.

The Trump team is apparently projecting growth at between 3 and 3.5 percent for a decade. This wouldn’t be unprecedented: the U.S. economy grew at a 3.4 percent rate during the Reagan years, 3.7 percent under Bill Clinton. But a repeat performance is unlikely.

For one thing, in the Reagan years baby boomers were still entering the work force. Now they’re on their way out, and the rise in the working-age population has slowed to a crawl. This demographic shift alone should, other things being equal, subtract around a percentage point from U.S. growth.

Furthermore, both Reagan and Clinton inherited depressed economies, with unemployment well over 7 percent. This meant that there was a lot of economic slack, allowing rapid growth as the unemployed went back to work. Today, by contrast, unemployment is under 5 percent, and other indicators suggest an economy close to full employment. This leaves much less scope for rapid growth.

The only way we could have a growth miracle now would be a huge takeoff in productivity — output per worker-hour. This could, of course, happen: maybe driverless flying cars will arrive en masse. But it’s hardly something one should assume for a baseline projection.

And it’s certainly not something one should count on as a result of conservative economic policies. Which brings me to the strange arrogance of the economic right.

As I said, belief that tax cuts and deregulation will reliably produce awesome growth isn’t unique to the Trump-Putin administration. We heard the same thing from Jeb Bush (who?); we hear it from congressional Republicans like Paul Ryan. The question is why. After all, there is nothing — nothing at all — in the historical record to justify this arrogance.

Yes, Reagan presided over pretty fast growth. But Bill Clinton, who raised taxes on the rich, amid confident predictions from the right that this would cause an economic disaster, presided over even faster growth. President Obama presided over much more rapid private-sector job growth than George W. Bush, even if you leave out the 2008 collapse. Furthermore, two Obama policies that the right totally hated – the 2013 hike in tax rates on the rich, and the 2014 implementation of the Affordable Care Act – produced no slowdown at all in job creation.

Meanwhile, the growing polarization of American politics has given us what amount to economic policy experiments at the state level. Kansas, dominated by conservative true believers, implemented sharp tax cuts with the promise that these cuts would jump-start rapid growth; they didn’t, and caused a budget crisis instead. Last week Kansas legislators threw in the towel and passed a big tax hike.

At the same time Kansas was turning hard right, California’s newly dominant Democratic majority raised taxes. Conservatives declared it “economic suicide” — but the state is in fact doing fine.

The evidence, then, is totally at odds with claims that tax-cutting and deregulation are economic wonder drugs. So why does a whole political party continue to insist that they are the answer to all problems?

It would be nice to pretend that we’re still having a serious, honest discussion here, but we aren’t. At this point we have to get real and talk about whose interests are being served.

Never mind whether slashing taxes on billionaires while giving scammers and polluters the freedom to scam and pollute is good for the economy as a whole; it’s clearly good for billionaires, scammers, and polluters. Campaign finance being what it is, this creates a clear incentive for politicians to keep espousing a failed doctrine, for think tanks to keep inventing new excuses for that doctrine, and more.

And on such matters Donald Trump is really no worse than the rest of his party. Unfortunately, he’s also no better.

Brooks and Krugman

February 17, 2017

Today Bobo has decided to tell us all about “What a Failed Trump Administration Looks Like.”  He gurgles that without grown-ups in charge, the government could stop working.  “Don Shipp” from Homestead, FL will have something to say.  Prof. Krugman has a question in “The Silence of the Hacks:”  Is subversion in the defense of tax cuts no vice?  Here’s Bobo:

I still have trouble seeing how the Trump administration survives a full term. Judging by his Thursday press conference, President Trump’s mental state is like a train that long ago left freewheeling and iconoclastic, has raced through indulgent, chaotic and unnerving, and is now careening past unhinged, unmoored and unglued.

Trump’s White House staff is at war with itself. His poll ratings are falling at unprecedented speed. His policy agenda is stalled. F.B.I. investigations are just beginning. This does not feel like a sustainable operation.

On the other hand, I have trouble seeing exactly how this administration ends. Many of the institutions that would normally ease out or remove a failing president no longer exist.

There are no longer moral arbiters in Congress like Howard Baker and Sam Ervin to lead a resignation or impeachment process. There is no longer a single media establishment that shapes how the country sees the president. This is no longer a country in which everybody experiences the same reality.

Everything about Trump that appalls 65 percent of America strengthens him with the other 35 percent, and he can ride that group for a while. Even after these horrible four weeks, Republicans on Capitol Hill are not close to abandoning their man.

The likelihood is this: We’re going to have an administration that has morally and politically collapsed, without actually going away.

What does that look like?

First, it means an administration that is passive, full of sound and fury, but signifying nothing. To get anything done, a president depends on the vast machinery of the U.S. government. But Trump doesn’t mesh with that machinery. He is personality-based while it is rule-based. Furthermore, he’s declared war on it. And when you declare war on the establishment, it declares war on you.

The Civil Service has a thousand ways to ignore or sit on any presidential order. The court system has given itself carte blanche to overturn any Trump initiative, even on the flimsiest legal grounds. The intelligence community has only just begun to undermine this president.

President Trump can push all the pretty buttons on the command deck of the Starship Enterprise, but don’t expect anything to actually happen, because they are not attached.

Second, this will probably become a more insular administration. Usually when administrations stumble, they fire a few people and bring in the grown-ups — the James Baker or the David Gergen types. But Trump is anti-grown-up, so it’s hard to imagine Chief of Staff Haley Barbour. Instead, the circle of trust seems to be shrinking to his daughter, her husband and Stephen Bannon.

Bannon has a coherent worldview, which is a huge advantage when all is chaos. It’s interesting how many of Bannon’s rivals have woken up with knives in their backs. Michael Flynn is gone. Reince Priebus has been unmanned by a thousand White House leaks. Rex Tillerson had the potential to be an effective secretary of state, but Bannon neutered him last week by denying him the ability to even select his own deputy.

In an administration in which “promoted beyond his capacity” takes on new meaning, Bannon looms. With each passing day, Trump talks more like Bannon without the background reading.

Third, we are about to enter a decentralized world. For the past 70 years most nations have instinctively looked to the U.S. for leadership, either to follow or oppose. But in capitals around the world, intelligence agencies are drafting memos with advice on how to play Donald Trump.

The first conclusion is obvious. This administration is more like a medieval monarchy than a modern nation-state. It’s more “The Madness of King George” than “The Missiles of October.” The key currency is not power, it’s flattery.

The corollary is that Trump is ripe to be played. Give the boy a lollipop and he won’t notice if you steal his lunch. The Japanese gave Trump a new jobs announcement he could take to the Midwest, and in return they got presidential attention and coddling that other governments would have died for.

If you want to roll the Trump administration, you’ve got to get in line. The Israelis got a possible one-state solution. The Chinese got Trump to flip-flop on the “One China” policy. The Europeans got him to do a 180 on undoing the Iran nuclear deal.

Vladimir Putin was born for a moment such as this. He is always pushing the envelope. After gifting Team Trump with a little campaign help, the Russian state media has suddenly turned on Trump and Russian planes are buzzing U.S. ships. The bear is going to grab what it can.

We’re about to enter a moment in which U.S. economic and military might is strong but U.S. political might is weak. Imagine the Roman Empire governed by Monaco.

That’s scary. The only saving thought is this: The human imagination is vast, but it is not nearly vast enough to encompass the infinitely multitudinous ways Donald Trump can find to get himself disgraced.

“The court system has given itself carte blanche to overturn any Trump initiative, even on the flimsiest legal grounds.”  What a pile of crap — give us a citation of some of those “flimsiest” legal grounds, you worthless hack.  Here’s what “Don Shipp” had to say:

“No one could watch yesterday’s Faulknerian, stream of consciousness, psycho drama, and not be concerned about the mental stability and solipsistic tendencies of Donald Trump. We all saw it. The existential problem is that the Republican Party could utilize it’s control of the Congressional committee system, subpoena power, and the creation of select committees to thoroughly investigate the Russian debacle and monitor any future Trump anomalies, but blind ambition and their position as parasites on the political host of Donald Trump, precludes them from putting the welfare of the nation ahead of their political agenda. Mitch McConnell oozes fetid partisanship to the point of squalid political immorality. Paul Ryan’s obsession with enacting his economic agenda renders him spineless and unwilling to confront the conservative radicals in the House whose co-operation he would need to investigate Trump.”

And now here’s Prof. Krugman:

The story so far: A foreign dictator intervened on behalf of a U.S. presidential candidate — and that candidate won. Close associates of the new president were in contact with the dictator’s espionage officials during the campaign, and his national security adviser was forced out over improper calls to that country’s ambassador — but not until the press reported it; the president learned about his actions weeks earlier, but took no action.

Meanwhile, the president seems oddly solicitous of the dictator’s interests, and rumors swirl about his personal financial connections to the country in question. Is there anything to those rumors? Nobody knows, in part because the president refuses to release his tax returns.

Maybe there’s nothing wrong here, and it’s all perfectly innocent. But if it’s not innocent, it’s very bad indeed. So what do Republicans in Congress, who have the power to investigate the situation, believe should be done?

Nothing.

Paul Ryan, the speaker of the House, says that Michael Flynn’s conversations with the Russian ambassador were “entirely appropriate.”

Devin Nunes, the chairman of the House Intelligence Committee, angrily dismissed calls for a select committee to investigate contacts during the campaign: “There is absolutely not going to be one.”

Jason Chaffetz, the chairman of the House oversight committee — who hounded Hillary Clinton endlessly over Benghazi — declared that the “situation has taken care of itself.”

Just the other day Republicans were hot in pursuit of potential scandal, and posed as ultrapatriots. Now they’re indifferent to actual subversion and the real possibility that we are being governed by people who take their cues from Moscow. Why?

Well, Senator Rand Paul explained it all: “We’ll never even get started with doing the things we need to do, like repealing Obamacare, if we’re spending our whole time having Republicans investigate Republicans.” Does anyone doubt that he was speaking for his whole party?

The point is that you can’t understand the mess we’re in without appreciating not just the potential corruption of the president, but the unmistakable corruption of his party — a party so intent on cutting taxes for the wealthy, deregulating banks and polluters and dismantling social programs that accepting foreign subversion is, apparently, a small price to pay.

Put it this way: I’ve been seeing comparisons between the emerging information on the Trump-Putin connection and the Watergate affair, which brought down a previous president. But while the potential scandal here is far worse than Watergate — Richard Nixon was sinister and scary, but nobody imagined that he might be taking instructions from a foreign power — it’s very hard to imagine today’s Republicans standing up for the Constitution the way their predecessors did.

It’s not simply that these days there are more moral midgets in Congress, although that, too. Watergate took place before Republicans began their long march to the political right, so Congress was far less polarized than it is now. There was widespread agreement between the parties on basic economic ideas, and a fair amount of ideological crossover; this meant that Republicans didn’t worry so much that holding a lawless president accountable would derail their hard-line agenda.

The polarization of the electorate also undermines Congress’s role as a check on the president: Most Republicans are in safe districts, where their main fear is of primary challengers to their right. And the Republican base has suddenly become remarkably pro-Russian. Funny how that works.

So how does this crisis end?

It’s not a constitutional crisis — yet. But Donald Trump is facing a clear crisis of legitimacy. His popular-vote-losing win was already suspect given the F.B.I.’s last-minute intervention on his behalf. Now we know that even as the F.B.I. was creating the false appearance of scandal around his opponent, it was sitting on evidence suggesting alarmingly close relations between Mr. Trump’s campaign and Russia. And nothing he has done since the inauguration allays fears that he is in effect a Putin puppet.

How can a leader under such a cloud send American soldiers to die? How can he be granted the right to shape the Supreme Court for a generation?

Again, a thorough, nonpartisan, unrestricted investigation could conceivably clear the air. But Republicans in Congress, who have the power to make such an investigation happen, are dead set against it.

The thing is, this nightmare could be ended by a handful of Republican legislators willing to make common cause with Democrats to demand the truth. And maybe there are enough people of conscience left in the G.O.P.

But there probably aren’t. And that’s a problem that’s even scarier than the Trump-Putin axis.

Blow and Krugman

February 13, 2017

In “The Power of Disruption” Mr. Blow tells us history shows that it works.  Prof. Krugman, in “Ignorance Is Strength,” says what they don’t know can hurt them, but also us.  Here’s Mr. Blow:

The Trump resistance movement is stretching its wings, engaging its muscles and feeling its power. It is large and strong and tough. It has moved past debilitating grief and into righteous anger, assiduous organization and pressing activism.

Welcome to the dawn of the fighting-mad majority: The ones who didn’t vote for Trump and maybe even some who now regret that they did.

They are charging forward under the banner of sage wisdom that has endured through the ages: Show up, get loud and fight back. Do it with your body and words, with your time and money, with every fiber of yourself. They see what this dawning regime means and they don’t intend, not even for a second, to wait around to see what happens. “What happens” is happening right now and it’s horrific.

Donald Trump is a vulgar, uninformed, anti-intellectual, extremely unpopular grifter helming a family of grifters who apparently intend to milk their moment on the mount for every red cent.

Trump still hasn’t released his taxes or fully disconnected from his businesses. His wife is suing The Daily Mail because she believes the newspaper may have injured her “unique, once-in-a-lifetime opportunity” to “have garnered multimillion-dollar business relationships for a multiyear term.” When his daughter Ivanka’s clothing line was dropped by Nordstrom, Trump lashed out at the retailer on Twitter, citing Ivanka as something of his moral compass: “My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person — always pushing me to do the right thing! Terrible!” This begs the question: “Why do you need someone to push you to do the right thing?”

Then, top Trump adviser Kellyanne “QVC” Conway, from the confines of the White House briefing room, said during a televised interview: “Go buy Ivanka’s stuff is what I would say.” She continued: “I’m going to give a free commercial here: Go buy it today, everybody; you can find it online.”

Unethical is too kind a word for these classless cretins. Furthermore, Trump has nominated, and his Republican conspirators in the Senate have confirmed, a rogues’ gallery of some of the least qualified, most questionable appointees in recent memory. Aside from some of them being the fiercest critics of the very agencies they are charged with leading, some have also been accused of bigotry, plagiarism, insider trading and overall vacuousness.

Trump’s Muslim ban has also been an absolute disaster and has met some much-applauded resistance in court, most recently with the United States Court of Appeals for the Ninth Circuit rebuking the administration’s lawyers like children.

This administration is already manifesting as the disaster we knew it would be; the stench of its rot surrounds us. What is there to wait and see? A rose will never bloom from a weed; you must snatch that thing up at first sight, by the root.

That is why you are seeing so much grass-roots resistance from a multiplying array of groups. One of the most prominent is called “Indivisible.” The Nation interviewed Ezra Levin, a former Democratic staffer and co-founder of the project and reported on the exchange: “Levin says that Indivisible built on the Tea Party’s model of ‘practicing locally-focused, almost entirely defensive strategy.’ This, he adds, ‘was very smart, and it was rooted in an understanding of how American democracy works. They understood that they didn’t have the power to set the agenda in Washington, but they did have the ability to react to it. It’s Civics 101 stuff — going to local offices, attending events, calling their reps.”

I would add that these groups are practicing one of the most effective tactics of confronting power: disruption. Town hall meetings have been disrupted; protesters disrupted Education Secretary Betsy Devos’s plans to enter a Washington school.

Disruption works!

When Frederick Douglass attacked Abraham Lincoln by saying that he “seems to possess an ever increasing passion for making himself appear silly and ridiculous, if nothing worse,” Douglass was being disruptive.

When women suffragists paraded through Washington, they were being disruptive.

When Rosa Parks refused to surrender her seat, she was being disruptive.

When civil rights activists marched across the Edmund Pettus Bridge, they were being disruptive.

When LGBT people fought back at The Stonewall Inn, they were being disruptive.

When Act Up flooded Times Square, they were being disruptive.

When Occupy Wall Street refused to move from their parks, they were being disruptive.

When Black Lives Matter took to the streets and ground traffic to a halt, they were being disruptive.

When Native Americans stood in resistance at Standing Rock, they were being disruptive.

When Elizabeth Warren persisted, she was being disruptive.

Disruption is not a dirty word; in this environment, it’s a badge of honor.

Yes, it’s important to show up on Election Day, but it is also important to show up on the hundreds of days before and after. This is what the resistance movements are saying to Trump and his America: Buckle your seatbelts, because massive disruption is in the offing.

Trump is not normal. He is not competent. And we will not simply sit back and suck it up.

Now here’s Prof. Krugman:

When I travel to Asia, I’m fairly often met at the airport by someone holding a sign reading “Mr. Paul.” Why? In much of Asia, names are given family first, personal second — at home, the prime minister of Japan is referred to as Abe Shinzo. And the mistake is completely forgivable when it’s made by a taxi driver picking up a professor.

It’s not so forgivable, however, if the president of the United States makes the same mistake when welcoming the leader of one of our most important economic and security partners. But there it was: Donald Trump referring to Mr. Abe as, yes, Prime Minister Shinzo.

Mr. Abe did not, as far as we know, respond by calling his host President Donald.

Trivial? Well, it would be if it were an isolated instance. But it isn’t. What we’ve seen instead over the past three weeks is an awesome display of raw ignorance on every front. Worse, there’s no hint that either the White House or its allies in Congress see this as a problem. They appear to believe that expertise, or even basic familiarity with a subject, is for wimps; ignorance is strength.

We see this on legal matters: In a widely quoted analysis, the legal expert Benjamin Wittes described the infamous executive order on refugees as “malevolence tempered by incompetence,” and noted that the order reads “as if it was not reviewed by competent counsel at all” — which is a good way to lose in court.

We see it on national security matters, where the president continues to rely on a chief adviser who, suspicious closeness to the Kremlin aside, appears to get his strategic information from right-wing conspiracy theorists.

We see it on education, where the hearings for Betsy DeVos, the education secretary, revealed her to be completely ignorant about even the most elementary issues.

We see it on diplomacy. How hard is it to ask someone from the State Department to make sure that the White House gets foreign leaders’ names right? Too hard, apparently: Before the Abe flub, the official agenda for the state visit by Theresa May, the British prime minister, repeatedly misspelled her name.

And on economics — well, there’s nobody home. The Council of Economic Advisers, which is supposed to provide technical expertise, has been demoted from cabinet rank, but that hardly matters, since nobody has been nominated to serve. Remember all that talk about a trillion-dollar infrastructure plan? If you do, please remind the White House, which hasn’t offered even a ghost of a concrete proposal.

But let me not be too hard on the Tweeter-in-chief: disdain for expertise is general in his party. For example, the most influential Republican economists aren’t serious academics with a conservative bent, of whom there are many; they’re known hacks who literally can’t get a number right.

Or consider the current G.O.P. panic over health care. Many in the party seem shocked to learn that repealing any major part of Obamacare will cause tens of millions to lose insurance. Anyone who studied the issue could have told them years ago how the pieces of health reform fit together, and why. In fact, many of us did, repeatedly. But competent analysis wasn’t wanted.

And that is, of course, the point. Competent lawyers might tell you that your Muslim ban is unconstitutional; competent scientists that climate change is real; competent economists that tax cuts don’t pay for themselves; competent voting experts that there weren’t millions of illegal ballots; competent diplomats that the Iran deal makes sense, and Putin is not your friend. So competence must be excluded.

At this point, someone is bound to say, “If they’re so dumb, how come they won?” Part of the answer is that disdain for experts — sorry, “so-called” experts — resonates with an important part of the electorate. Bigotry wasn’t the only dark force at work in the election; so was anti-intellectualism, hostility toward “elites” who claim that opinions should be based on careful study and thought.

Also, campaigning is very different from governing. This is especially true when the news media spend far more time obsessing over your opponent’s pseudo-scandals than they do on all actual policy issues combined.

But now things have gotten real, and all indications are that the people in charge have no idea what they’re doing, on any front.

In some ways this cluelessness may be a good thing: malevolence may indeed be tempered by incompetence. It’s not just the court defeat over immigration; Republican ignorance has turned what was supposed to be a blitzkrieg against Obamacare into a quagmire, to the great benefit of millions. And Mr. Trump’s imploding job approval might help slow the march to autocracy.

But meanwhile, who’s in charge? Crises happen, and we have an intellectual vacuum at the top. Be afraid, be very afraid.

Oh, trust me, Paul — I’m terrified.

Brooks, Cohen, and Krugman

February 10, 2017

Bobo wants someone to come up with “A Gift for Donald Trump,” and he frets over what to give the man who has everything.  “Ross McLaurin” from Houston, TX will have something to say…  In “Preserving the Sanctity of All Facts” Mr. Cohen says in a new era of “alternative facts” and the talk of “fact-based” journalism, the simple truth is under siege.  Prof. Krugman, in “When the Fire Comes,” says we should get ready for the inevitable presidential power grab.  Here’s Bobo:

If you could give Donald Trump the gift of a single trait to help his presidency, what would it be?

My first thought was that prudence was the most important gift one could give him. Prudence is the ability to govern oneself with the use of reason. It is the ability to suppress one’s impulses for the sake of long-term goals. It is the ability to see the specific circumstances in which you are placed, and to master the art of navigating within them.

My basic thought was that a prudent President Trump wouldn’t spend his mornings angrily tweeting out his resentments. A prudent Trump wouldn’t spend his afternoons barking at foreign leaders and risking nuclear war. “Prudence is what differentiates action from impulse and heroes from hotheads,” writes the French philosopher André Comte-Sponville.

But the more I thought about it the more I realized prudence might not be the most important trait Trump needs. He seems intent on destroying the postwar world order — building walls, offending allies and driving away the stranger and the refugee. Do I really want to make him more prudent and effective in pursuit of malicious goals?

Moreover, the true Trump dysfunction seems deeper. We are used to treating politicians as vehicles for political philosophies and interest groups. But in Trump’s case, his philosophy, populism, often takes a back seat to his psychological complexes — the psychic wounds that seem to induce him into a state of perpetual war with enemies far and wide.

With Trump we are relentlessly thrown into the Big Shaggy, that unconscious underground of wounds, longings and needs that drive him to do what he does, to tweet what he does, to attack whom he does.

Thinking about politics in the age of Trump means relying less on the knowledge of political science and more on the probings of D.H. Lawrence, David Foster Wallace and Carl Jung.

At the heart of Trumpism is the perception that the world is a dark, savage place, and therefore ruthlessness, selfishness and callousness are required to survive in it. It is the utter conviction, as Trump put it, that murder rates are at a 47-year high, even though in fact they are close to a 57-year low. It is the utter conviction that we are engaged in an apocalyptic war against radical Islamic terrorism, even though there are probably several foreign policy problems of greater importance.

It’s not clear if Trump is combative because he sees the world as dangerous or if he sees the world as dangerous because it justifies his combativeness. Either way, Trumpism is a posture that leads to the now familiar cycle of threat perception, insult, enemy-making, aggrievement, self-pity, assault and counterassault.

So, upon reflection, the gift I would give Trump would be an emotional gift, the gift of fraternity. I’d give him the gift of some crisis he absolutely could not handle on his own. The only way to survive would be to fall back entirely on others, and then to experience what it feels like to have them hold him up.

Out of that, I hope, would come an ability to depend on others, to trust other people, to receive grace, and eventually a desire for companionship. Fraternity is the desire to make friends during both good and hostile occasions and to be faithful to those friends. The fraternal person is seeking harmony and fair play between individuals. He is trying to move the world from tension to harmony.

Donald Trump didn’t have to have an administration that was at war with everyone but its base. He came to office with a populist mandate that cut across partisan categories. He could have created unorthodox coalitions and led unexpected alliances that would have broken the logjam of our politics.

He didn’t have to have a vicious infighting administration in which everybody leaks against one another and in which backstairs life is a war of all against all.

He doesn’t have to begin each day making enemies: Nordstrom, John McCain, judges. He could begin each day looking for friends, and he would actually get a lot more done.

On Inauguration Day, when Trump left his wife in the dust so he could greet the Obamas, I didn’t realize how quickly having a discourteous leader would erode the conversation. But look at how many of any day’s news stories are built around enmity. The war over who can speak in the Senate. Kellyanne Conway’s cable TV battle du jour. Half my Facebook feed is someone linking to a video with the headline: Watch X demolish Y.

I doubt that Trump will develop a capacity for fraternity any time soon, but to be human is to hold out hope, and to believe that even a guy as old and self-destructive as Trump is still 0.001 percent open to a transformation of the heart.

And there’s probably a 0.001% chance that I’ll see pigs flying past my house.  Here’s what “Ross McLaurin” had to say:

“Sure, and if only Hitler had been more like Mother Teresa, Hugo Chavez the benefit of a degree in economics and Nero a fire extinguisher.

On what rational basis do you expect a 70 year old man whose well publicized and ill advised business and personal dealings over many decades will change? My recollection is that he has been involved in over 3500 lawsuits as he attempts to bully or weasel his way out of his dealings. Why would you possibly have any transactions with such a person?

He is an artist when it comes to convincing the gullible. As good a writer as you are, you are not in that category and I don’t know why you are trying to convince me or yourself that their exists the slightest possibility that Trump will transform into someone totally different that the “Donald” that he has been parading around for decades.”

Next up we have Mr. Cohen:

Fact-based journalism is a ridiculous, tautological phrase. It’s like talking about oxygen-based human life. There is no other kind. Facts are journalism’s foundation; the pursuit of them, without fear or favor, is its main objective.

But in this time of President Trump’s almost daily “fake news” accusations against The New York Times, and of his counselor Kellyanne Conway’s “alternative facts,” and of untruths seeping like a plague from the highest office in the land, there’s increasing talk of “real” or “fact-based” journalism.

That’s ominous. Fact-based as opposed to what other type? To state the obvious, fake news websites fed by kids in Macedonia to make a buck are not journalism. These sites use fabricated stuff in journalism’s garb to further political ends.

There’s a targeted “Gaslight” attack on journalists designed to make them doubt their sanity. It’s emanating from the White House and aims to drag everyone down the rabbit hole where 2+2=5.

Velocity trumps veracity. That is the puzzle and the menace of our age.

Speed and disruption have more psychological impact than truth and science. They shape the discourse. The debunking of a fake news story is seldom as powerful as the story itself. Trump says “X.” Uproar! Hordes of journalists scurry to disprove “X.” He moves on, never to mention it again, or claims that he did not say it, or insists that what he really said was “Y.”

People begin to wonder: Am I imagining this? They feel that some infernal mechanism has taken hold and is dragging them toward an abyss. The president is a reference point; if he lies, lying seeps deep into the culture. Americans start to ask: Will we ever be able to dislodge these people from power? What are they capable of?

Simon Schama, the British historian, recently tweeted: “Indifference about the distinction between truth and lies is the precondition of fascism. When truth perishes so does freedom.”

The enormity of the defiling of the White House in just three weeks is staggering. For decades the world’s security was undergirded by America’s word. The words that issued from the Oval Office were solemn. It was on America’s word, as expressed by the president, that the European continent and allies like Japan built their postwar security.

Now the words that fall from Trump’s pursed lips or, often misspelled, onto his Twitter feed are trite or false or meaningless. He’s angry with Nordstrom, for heaven’s sake, because the department store chain dropped his daughter Ivanka’s clothing line! This is the concern of the leader of the free world.

Unpresidented!

I was struck by how Paul Horner, who runs a big Facebook fake-news operation, described our times in The Washington Post: “Honestly people are definitely dumber. They just keep passing stuff around. Nobody fact-checks anything anymore — I mean, that’s how Trump got elected. He just said whatever he wanted, and people believed everything, and when the things he said turned out not to be true, people didn’t care because they’d already accepted it. It’s real scary. I’ve never seen anything like it.”

We’ve never seen anything like it because when hundreds of millions of Americans are connected, anyone, clueless or not, can disseminate what they like with a click.

Horner came up, during the campaign, with the fake news story that a protester at a Trump rally had been paid $3,500. It went viral. We’ve had fake news accounts of how Hillary Clinton paid $62 million to Beyoncé and Jay Z to perform in Cleveland, and how Khizr Khan, the father of the Muslim American officer killed in Iraq, was an agent of the Muslim Brotherhood. Fake news — BREAKING! SHOCKING! — swayed the election.

Now we have President Trump suggesting that the real fake news is his negative polls — along with CNN, The New York Times, The Washington Post and any other news organizations that are doing their jobs: holding his authority to account and bearing witness to his acts. Stephen Bannon, Trump’s man of the shadows, thinks the media should “keep its mouth shut.” We won’t.

Sometimes I try to imagine what Trump’s Reichstag fire moment might be. In February 1933, a few weeks after Hitler became chancellor, fire engulfed the parliament in Berlin — an act of arson whose origin is still unclear. A recent New Yorker article by George Prochnik quoted the Austrian writer Stefan Zweig on Hitler’s savage reaction: “At one blow all of justice in Germany was smashed.”

From a president who loathes the press, who insults the judiciary, who has no time for American ideals of liberty or democracy, and whose predilection for violence is evident, what would be the reaction to a Reichstag fire in American guise — say a major act of terrorism?

We can only shudder at the thought.

Facts matter. The federal judiciary is pushing back. The administration is leaking. Journalism (no qualifier needed) has never been more important. Truth has not yet perished, but to deny that it is under siege would be to invite disaster.

And now here’s Prof. Krugman:

What will you do when terrorists attack, or U.S. friction with some foreign power turns into a military confrontation? I don’t mean in your personal life, where you should keep calm and carry on. I mean politically. Think about it carefully: The fate of the republic may depend on your answer.

Of course, nobody knows whether there will be a shocking, 9/11-type event, or what form it might take. But surely there’s a pretty good chance that sometime over the next few years something nasty will happen — a terrorist attack on a public place, an exchange of fire in the South China Sea, something. Then what?

After 9/11, the overwhelming public response was to rally around the commander in chief. Doubts about the legitimacy of a president who lost the popular vote and was installed by a bare majority on the Supreme Court were swept aside. Unquestioning support for the man in the White House was, many Americans believed, what patriotism demanded.

The truth was that even then the urge toward national unity was one-sided, with Republican exploitation of the atrocity for political gain beginning almost immediately. But people didn’t want to hear about it; I got angry mail, not just from Republicans but from Democrats, whenever I pointed out what was going on.

Unfortunately, the suspension of critical thinking ended as such suspensions usually do — badly. The Bush administration exploited the post-9/11 rush of patriotism to take America into an unrelated war, then used the initial illusion of success in that war to ram through huge tax cuts for the wealthy.

Bad as that was, however, the consequences if Donald Trump finds himself similarly empowered will be incomparably worse.

We’re only three weeks into the Trump administration, but it’s already clear that any hopes that Mr. Trump and those around him would be even slightly ennobled by the responsibilities of office were foolish. Every day brings further evidence that this is a man who completely conflates the national interest with his personal self-interest, and who has surrounded himself with people who see it the same way. And each day also brings further evidence of his lack of respect for democratic values.

You might be tempted to say that the latest flare-up, over Nordstrom’s decision to drop Ivanka Trump’s clothing line, is trivial. But it isn’t. For one thing, until now it would have been inconceivable that a sitting president would attack a private company for decisions that hurt his family’s business interests.

But what’s even worse is the way Sean Spicer, Mr. Trump’s spokesman, framed the issue: Nordstrom’s business decision was a “direct attack” on the president’s policies. L’état, c’est moi.

Mr. Trump’s attack on Judge James Robart, who put a stay on his immigration ban, was equally unprecedented. Previous presidents, including Barack Obama, have disagreed with and complained about judicial rulings. But that’s very different from attacking the very right of a judge — or, as the man who controls 4,000 nuclear weapons put it, a “so-called judge” — to rule against the president.

The really striking thing about Mr. Trump’s Twitter tirade, however, was his palpable eagerness to see an attack on America, which would show everyone the folly of constraining his power:

[Trump’s tweet, which I can’t figure out how to get in here, reads as follows:

Just cannot believe a judge would put our country in such peril. If something happens blame him and court system. People pouring in. Bad!]

Never mind the utter falsity of the claim that bad people are “pouring in,” or for that matter of the whole premise behind the ban. What we see here is the most powerful man in the world blatantly telegraphing his intention to use national misfortune to grab even more power. And the question becomes, who will stop him?

Don’t talk about institutions, and the checks and balances they create. Institutions are only as good as the people who serve them. Authoritarianism, American-style, can be averted only if people have the courage to stand against it. So who are these people?

It certainly won’t be Mr. Trump’s inner circle. It won’t be Jeff Sessions, his new attorney general, with his long history of contempt for voting rights. It might be the courts — but Mr. Trump is doing all he can to delegitimize judicial oversight in advance.

What about Congress? Well, its members like to give patriotic speeches. And maybe, just maybe, there are enough Republican senators who really do care about America’s fundamental values to cross party lines in their defense. But given what we’ve seen so far, that’s just hopeful speculation.

In the end, I fear, it’s going to rest on the people — on whether enough Americans are willing to take a public stand. We can’t handle another post-9/11-style suspension of doubt about the man in charge; if that happens, America as we know it will soon be gone.

Krugman’s blog, 2/7/17

February 9, 2017

There was one post on Tuesday (sorry I missed yesterday, but I was sick as a dog), “Is There A Trump Bubble?”:

Everyone knows that stocks and interest rates have soared since the election; at the same time, if you aren’t worried about erratic policies from the Tweeter-in-chief, you’re really not paying attention. So are markets getting it all wrong?

I’ve been wondering about that — and yes, in the first few hours after the election I thought, briefly and wrongly, that a crash was coming quickly. But anyway, I decided to crunch a few numbers — and surprised myself. I still think markets are underrating the risk of catastrophe. But I’m not as sure as I was that there’s a huge Trump bubble buoying markets — because when you actually look at the data, the market action has been much smaller than the hype.

Look first at stocks. Yes, they’re up since the election. But how does this rise compare with past fluctuations? Not very big, actually:

What about real interest rates? I’ve been arguing that the widespread belief in serious fiscal stimulus is wrong, which means that a really big rise in real interest rates wouldn’t be warranted. But it turns out that the movement isn’t that big:

There was an overshoot early one, but at this point it’s only about 30 basis points, consistent with fiscal stimulus of maybe 1 percent of GDP. Still high, I think, but not yuge.

Inflation expectations are also up, but that may reflect various non-Trump things like growing evidence that we really are close to full employment.

I still think that markets are too sanguine. But the truth is that they haven’t moved nearly as much as the hype suggests, so the case for either a huge Trump effect or a huge Trump bubble is a lot weaker than you might think.

Krugman’s blog, 2/6/17

February 7, 2017

There was one post yesterday, “Dude, Where’s My Policy?”:

What Trump has done or tried to do over the past two years — wait, it’s really only been two weeks? — is incredibly bad. But spare a bit of attention to what doesn’t seem to be happening. Has anyone heard anything, anything at all, about domestic policy development?

Remember, after the election Wall Street decided that we were going to see a big push on infrastructure, tax cuts, etc.. Some analysts were warning that progressives should be ready for the possibility that Trump would engage in “reactionary Keynesianism.” Worrying parallels were drawn between Trumpism and autobahn construction under you-know-who.

But if there’s a WH task force preparing an infrastructure plan, it’s very well hidden; maybe they’re waiting to figure out how to turn on the lights. Seriously, I’ve been saying for a while that there will be no significant public construction plan. Wall Street economists, at least, are starting to catch on.

Meanwhile, that Obamacare replacement is … still nowhere to be seen, with GOP Congresspeople literally running away when asked about it.

Big tax cuts — and savage cuts to social programs — are still very much on the Congressional Republican agenda, and they could put it all together, hand it to Bannon, and have Trump sign it without reading. But I’m starting to wonder: surely they planned to unveil things during the Trump honeymoon, with the public prepared to believe that it was all done with the little guy’s interests in mind. Even pre 9-11 Bush could count on media goodwill and supine Democrats to ram through his tax cuts.

But now? With massive public distrust, and media fully willing to do real reporting on the distribution of tax cuts, not “Democrats say that the rich are the big winners”? With the media infatuation on Serious, Honest Paul Ryan at least temporarily dented by his avid support for Muslim bans and all that? Maybe they’ll do it anyway, but it seems a lot less certain than it did in November.

At this point I’m starting to wonder whether there will be any real movement on economic policy, as opposed to random insults aimed at allies.

It’s odd that the markets are, so far, not reflecting any of this; they’re basically unchanged from the levels they reached after the initial Trump Boom euphoria. But surely the odds have shifted, and there’s now a real possibility that on domestic policy, at least, we’re in for a period of sound, fury, and tweets signifying nothing.

Blow and Krugman

February 6, 2017

Mr. Blow believes that the President* needs “A Lesson in Black History” and that Donald Trump has much to learn from Frederick Douglass.  First off that he’s no longer with us…  Prof. Krugman, in “Springtime for Scammers,” says they’re making financial predators great again.  Here’s Mr. Blow:

Last week at a supposed Black History Month “listening session” at the White House, Donald Trump made this baffling statement: “I am very proud now that we have a museum on the National Mall where people can learn about Reverend King, so many other things. Frederick Douglass is an example of somebody who’s done an amazing job that is being recognized more and more, I notice.”

It sounded a bit like he thought the inimitable Douglass, who died in 1895, was some lesser-known black leader who was still alive.

When Press Secretary Sean Spicer was asked what Trump meant by his Douglass comments, Spicer responded:

“I think he wants to highlight the contributions that he has made. And I think through a lot of the actions and statements that he’s going to make, I think the contributions of Frederick Douglass will become more and more.”

Assuming that the “he” in that sentence refers to Douglass, these numbskulls are actually referring to him as a living person and have absolutely no clue who Douglass is and what he means to America.

Social media had a field day with this, relentlessly mocking the team, but for me the emotion was overwhelming sadness: How could the American “president” or a White House press secretary, or any American citizen for that matter, not know who Douglass is?

Let’s be absolutely clear here: Frederick Douglass is a singular, towering figure of American history. The entire legacy of black intellectual thought and civil rights activism flows in some way through Douglass, from W.E.B. DuBois to Booker T. Washington, to the Rev. Dr. Martin Luther King Jr., to President Barack Obama himself.

Douglass was one of the most brilliant thinkers, writers and orators America has ever produced. Furthermore, he harnessed and mastered the media of his day: Writing an acclaimed autobiography, establishing his own newspaper and becoming the most photographed American of the 19th century.

Put another way: If modern social media existed during Douglass’s time, he would have been one of its kings.

Douglass also was a friend of Susan B. Anthony and an advocate for women’s civil rights as well as the civil rights of black people, understanding even then the intersectionality of oppressions. In fact, the motto of his newspaper, The North Star, was “Right is of no Sex — Truth is of no Color — God is the Father of us all, and we are all Brethren.”

But perhaps one of the best reasons Trump and Spicer need to bone up on Douglass is to understand his relationship with Abraham Lincoln and to get a better sense of what true leadership looks like.

Douglass was a blistering critic of Lincoln from the beginning. In Lincoln’s first Inaugural Address, he quoted from one of his previous speeches in which he had said “I have no purpose, directly or indirectly, to interfere with the institution of slavery in the states where it exists,” and he went on to defend the Fugitive Slave Act, promising the slave states full enforcement of it as long as it was on the books.

This incensed Douglass, who said of the remarks: “Not content with the broadest recognition of the right of property in the souls and bodies of men in the slave states, Mr. Lincoln next proceeds, with nerves of steel, to tell the slaveholders what an excellent slave hound he is.”

Although Douglass’s cutting critique of Lincoln began to soften after Lincoln announced the preliminary Emancipation Proclamation, Douglass continued to be unhappy throughout the Civil War about the unequal treatment of black soldiers in the Union Army. But even in the midst of this criticism, Lincoln entertained Douglass at the White House.

Although Douglass wasn’t fully satisfied with Lincoln’s positions, Douglass remarked of the meeting: “Mr. Lincoln listened with earnest attention and with very apparent sympathy, and replied to each point in his own peculiar, forcible way.”

This stands in stark contrast to Trump’s avoidance of black intellectuals and even any real critics. Trump’s “listening session” seemed to be populated only by his black appointees and supporters.

Lincoln and Douglass would go on to develop a genuine friendship and Douglass would become something of Lincoln’s conscience on the slave issue. In fact, Lincoln called Douglass “one of the most meritorious men, if not the most meritorious man, in the United States.”

That is what leadership and growth look like. Lincoln grew from the association with and counsel from his onetime critic, to become one of the greatest presidents America has ever known.

Indeed Black History Month began not as a month but a week: Negro History week, the second week of February. It was established in 1926 by noted black historian Carter G. Woodson, and choosing February was no coincidence: It honored the birthdays of Lincoln, who freed the slaves, and Douglass, who helped direct his conscience.

Trump would do well to study this history; he has much to learn from it. As the historian Woodson’s personal motto went: “It’s never too late to learn.”

Trump study?  When pigs fly.  Here’s Prof. Krugman:

People keep saying that Donald Trump is a populist. I do not think that word means what they think it means.

OK, it’s true that our so-called president — hey, if he can say that about a judge who ruled against him, surely we can say that about him — is channeling the racism and bigotry of some ordinary Americans, and in so doing sticking it to squeamish elites that take the Constitution both seriously and literally. But so far his economic policies are all about empowering ethically challenged businesses to cheat and exploit the little guy.

In particular, he and his allies in Congress are making it a priority to unravel financial reform — and specifically the parts of financial reform that protect consumers against predators.

Last week Mr. Trump released a memorandum calling on the Department of Labor to reconsider its new “fiduciary rule,” which requires financial advisers to act in their clients’ best interests — as opposed to, say, steering them into investments on which the advisers get big commissions. He also issued an executive order designed to weaken the Dodd-Frank financial reform, enacted in 2010 in the aftermath of the financial crisis.

Both moves are very much in line with the priorities of congressional Republicans and, of course, the financial industry. For both groups really, really hate financial regulation, especially when it helps protect families against sharp practice.

Why, after all, was the fiduciary rule created? The main issue here is retirement savings — the 401(k)’s and other plans that are Americans’ main source of retirement income over and above Social Security. To invest these funds, people have turned to financial professionals — but most probably weren’t aware that these professionals were under no legal obligation to give advice that maximized clients’ returns rather than their own incomes.

This is a big deal. A 2015 Obama administration study concluded that “conflicted investment advice” has been reducing the return on retirement savings by around one percentage point, costing ordinary Americans around $17 billion each year. Where has that $17 billion been going? Largely into the pockets of various financial-industry players. And now we have a White House trying to ensure that this game goes on.

On Dodd-Frank: Republicans would like to repeal the whole law, but probably don’t have the votes. What they can do is try to cripple enforcement, especially by undermining the Consumer Financial Protection Bureau, whose goal is to protect ordinary families from financial scams.

Unlike other parts of Dodd-Frank, which are supposed to reduce the risk of a future financial crisis — and won’t be fully tested until the next major shock hits — the bureau is designed to deal with problems that afflict consumers in good times and bad. And by all accounts it has been a huge success, increasing transparency, reducing fees, and exposing fraud. Remember the Wells Fargo scandal, in which the bank was found to have signed millions of customers up for accounts, credit cards, and services without their consent or knowledge? This scandal only came to light thanks to the bureau.

So why are consumer protections in the Trump firing line?

Gary Cohn, the Goldman Sachs banker appointed to head Mr. Trump’s National Economic Council — populism! — says that the fiduciary rule is like “putting only healthy food on the menu” and denying people the right to eat unhealthy food if they want it. Of course, it doesn’t do anything like that. If you want a better analogy, it’s like preventing restaurants from claiming that their 1400-calorie portions are health food.

Mr. Trump offers a different explanation for his hostility to financial reform: It’s hurting credit availability. “I have so many people, friends of mine that had nice businesses, they can’t borrow money.” It would be interesting to learn what these “nice businesses” are. What we do know is that U.S. banks have generally shunned Mr. Trump’s own businesses — from which, by the way, he hasn’t separated himself at all — perhaps because of his history of defaults.

Other would-be borrowers, however, don’t seem to be having problems. Only 4 percent of the small firms surveyed by the National Federation of Independent Business report themselves unsatisfied with loan availability, a historic low. Overall bank lending in the United States has been quite robust since Dodd-Frank was enacted.

So what’s motivating the attack on financial regulation? Well, there’s a lot of money at stake — money that the financial industry has been extracting from unwitting, unprotected consumers. Financial reform was starting to roll back these abuses, but we clearly now have a political leadership determined to roll back the rollback. Make financial predation great again!

Brooks, Cohen, and Krugman

February 3, 2017

Bobo has surpassed himself this time…  He’s extruded a thing called “A Return to National Greatness” in which he moans that the true American myth is dynamic and universal, yet the countermyth of Trump and Bannon is winning, and he also has the unmitigated gall to inform his readers that people on the left aren’t patriotic.  Maybe he should consider the differences between patriotism and jingoism…  There will be a response from a reader.  Mr. Cohen, in “United States to Australia: Get Lost,” says it is grotesque for Trump to dismiss Australia’s stranded refugees as the next “Boston bombers.”  Prof. Krugman, in “Donald the Menace,” says this isn’t a strategy; it’s a syndrome.  Here, FSM help us all, is Bobo:

The Library of Congress’s main building is one of the most magnificent buildings in Washington, or in the country. It was built in a pivotal, tumultuous time. During the 23 years in the late 19th century that it took to design and build the structure, industrialization transformed America. More people immigrated to America than in the previous 250 years combined.

The building articulates the central animating idea that held this bursting, turbulent country together. That idea is best encapsulated in the mural under the dome of the main reading room. A series of monumental figures are depicted, each representing a great civilization in human history and what that civilization contributed to the human story.

It starts with a figure representing Egypt (written records) and then continues through Judea (religion), Greece (philosophy), Islam (physics), Italy (the fine arts), Germany (printing), Spain (discovery), England (literature), France (emancipation) and it culminates with America (science).

In that story, America is placed at the vanguard of the great human march of progress. America is the grateful inheritor of other people’s gifts. It has a spiritual connection to all people in all places, but also an exceptional role. America culminates history. It advances a way of life and a democratic model that will provide people everywhere with dignity. The things Americans do are not for themselves only, but for all mankind.

This historical story was America’s true myth. When we are children, and also when we are adults, we learn our deepest truths through myth.

Myths don’t make a point or propose an argument. They inhabit us deeply and explain to us who we are. They capture how our own lives are connected to the universal sacred realities. In myth, the physical stuff in front of us is also a manifestation of something eternal, and our lives are seen in the context of some illimitable horizon.

That American myth was embraced and lived out by everybody from Washington to Lincoln to Roosevelt to Reagan. It was wrestled with by John Winthrop and Walt Whitman. It gave America a mission in the world — to spread democracy and freedom. It gave us an attitude of welcome and graciousness, to embrace the huddled masses yearning to breathe free and to give them the scope by which to realize their powers.

But now the myth has been battered. It’s been bruised by an educational system that doesn’t teach civilizational history or real American history but instead a shapeless multiculturalism. It’s been bruised by an intellectual culture that can’t imagine providence. It’s been bruised by people on the left who are uncomfortable with patriotism and people on the right who are uncomfortable with the federal government that is necessary to lead our project.

The myth has been bruised, too, by the humiliations of Iraq and the financial crisis. By a cultural elite that ignored the plight of the working class and thus broke faith with the basic solidarity that binds a nation.

And so along come men like Donald Trump and Stephen Bannon with a countermyth. Their myth is an alien myth, frankly a Russian myth. It holds, as Russian reactionaries hold, that deep in the heartland are the pure folk who embody the pure soul of the country — who endure the suffering and make the bread. But the pure peasant soul is threatened. It is threatened by the cosmopolitan elites and by the corruption of foreign influence.

The true American myth is dynamic and universal — embracing strangers and seizing possibilities. The Russian myth that Trump and Bannon have injected into the national bloodstream is static and insular. It is about building walls, staying put. Their country is bound by its nostalgia, not its common future.

The odd thing is that the Trump-Bannon myth is winning. The policies that emanate from it are surprisingly popular. The refugee ban has a lot of support. Closing off trade is popular. Building the wall is a winning issue.

The Trump and Bannon anschluss has exposed the hollowness of our patriotism. It has exposed how attenuated our vision of national greatness has become and how easy it was for Trump and Bannon to replace a youthful vision of American greatness with a reactionary, alien one.

We are in the midst of a great war of national identity. We thought we were in an ideological battle against radical Islam, but we are really fighting the national myths spread by Trump, Bannon, Putin, Le Pen and Farage.

We can argue about immigration and trade and foreign policy, but nothing will be right until we restore and revive the meaning of America. Are we still the purpose-driven experiment Lincoln described and Emma Lazarus wrote about: assigned by providence to spread democracy and prosperity; to welcome the stranger; to be brother and sister to the whole human race; and to look after one another because we are all important in this common project?

Or are we just another nation, hunkered down in a fearful world?

He’s become a national disgrace.  Here’s what “chickenlover” from Massachusetts had to say to him:

“”The odd thing is that the Trump-Bannon myth is winning.”
And do you know why this myth is winning? It is the result of relentless, non-stop barrage of anti-science, anti-intellectualism, anti-immigrants, anti-common sense that has been spewing from Fox News for the past two decades. It is the result of pundits like you who have been pushing the GOP agenda over the same period. It is the result of the GOP which has been unwilling to challenge this downward trend. Where were you when Obama was delegitimized from day one by Mitch McConnell and his pals? No wonder the Trump-Bannon myth is winning.
Unfortunately, even though you helped make it, we all own it now. Why, for that matter, even in this column you write, “That American myth was embraced and lived out by everybody from Washington to Lincoln to Roosevelt to Reagan.” Why do you stop at Reagan? You are still unwilling to include Obama as part of that rich American tradition. Why? Obama saved the American economy that was ravaged and savaged by his predecessor. He saved the auto industry. Don’t you remember?
If you as a scholar and a pundit do not see the need to include Obama in that list, why do you expect the average American will? Little wonder the Trump-Bannon myth is winning.”

Net up we have Mr. Cohen:

Let’s imagine for a moment Rex Tillerson, the newly installed secretary of state, awakening to this tweet from President Trump about an important American ally:

“Do you believe it? The Obama administration agreed to take thousands of illegal immigrants from Australia. Why? I will study this dumb deal!”

First, the “illegal immigrants” are in fact desperate people fleeing conflict whose status as refugees has in most cases been officially recognized. Second, as refugees, they have the right, under the Geneva Conventions, of which the United States is a signatory, to be treated “without discrimination as to race, religion or country of origin.” Third, the “thousands” are in fact about 1,250 of the 2,500 men, women and children who, for more than three years now, have been marooned on two remote South Pacific islands, Manus and Nauru, in appalling conditions that have seen suicide, deaths through negligence, a killing, and relentless mental abuse. Fourth, this “dumb deal” reflects the pressing Australian interest in finding a way out of its predicament with the refugees and the American interest in strengthening its Australian alliance at a time when United States Marines are rotating through Darwin and China is flexing its muscles in the South China Sea. Fifth, diplomacy is about identifying shared interests; it stands no chance when the tweeted tantrums of a tempestuous president constitute Washington’s highest-level communications with a world held in America-first contempt.

The notion must cross Tillerson’s mind that Trump’s inaccurate tweet is needless provocation of a friend; that simultaneously infuriating Asian and European allies may not be smart; and that his task will be a thankless one as Trump’s White House coterie hatches seat-of-the-pants policy and leaves his already restive State Department to deal with weighty issues in Luxembourg and the Solomon Islands.

Let’s further imagine that all this passes through Tillerson’s head before he grabs the Washington Post and discovers that Trump has taken his Australia bashing further. He has hung up on Australian Prime Minister Malcolm Turnbull after telling him it’s his “worst call by far” with world leaders (behind Vladimir Putin, of course), and accused Turnbull of preparing to send the next “Boston bombers” America’s way.

At which point Tillerson must really be wondering — as is the rest of the world after two weeks of fast-tracked chaos from Trump. The president wants to run the United States like his business, with scant accountability and contempt for rules. Fine, except that bankruptcy is the worst conceivable outcome for a business whereas nuclear war is the worst conceivable outcome for America and all of humanity. Trump is in way over his skis.

From the pointless, counterproductive, prejudice-reeking temporary ban on immigration from seven mainly Muslim countries to a botched Navy SEAL raid on Al Qaeda in Yemen, the same traits of haste and imprudence have been apparent. Trump is a propagator of mayhem at the head of a TV- and Twitter-driven movement whose goal is to circumvent democratic institutions through the exercise of hypnotic and disorienting power. He is only incidentally the president.

That is already clear, as is the fact that Trump’s embrace of Putin was not some weird whim but reflected a fundamental alignment of values around bigotry, racism, homophobia, anti-intellectualism, calculated religious absolutism, 21st-century big-data autocracy and hatred of the media. The president therefore feels more “allied” with Russia than with America’s European allies, whose values run counter to his.

“The worst deal ever” — as Trump put it according to the Washington Post — was signed in September in New York by Anne C. Richard, the former U.S. assistant secretary of state for population, refugees and migration, and Rachel Noble, deputy secretary of Australia’s department of immigration. It was kept secret, however, until Nov. 12, four days after the election, because refugees, particularly Muslims from the Middle East, were such a sensitive issue in the campaign.

“We really want to mothball these places,” Richard recalls Australian officials telling her, referring to Manus and Nauru. They have become an acute embarrassment to Australia. The United States got help with some national security issues in return, as well as Australian commitments to take more refugees from Central America.

Poor Turnbull who’s white and conservative and might therefore have thought he could get on the right side of Trump. No way! Many of the refugees are Iranians persecuted by the Islamic Republic. There’s no surer way to drive the president to paroxysms than to suggest he extend a hand to Muslims, signed accords between allies notwithstanding.

I went to Manus last year with the photographer Ashley Gilbertson to see the suffering. It’s not easy to get in; Australia does not want prying eyes. I met a young Iranian, Benham Satah, who has a college degree in English and has languished there since Aug. 27, 2013. His roommate, another Iranian called Reza Barati, was killed by a local mob in 2014.

“Sometimes I cut myself,” Satah told me, “so that I can see my blood and remember, oh yes! I am alive.”

It is grotesque and offensive for Trump to dismiss these stranded, mistreated human beings as “Boston bombers.” Muslim equals terrorist is an idea that sullies America.

What refugees like Satah want by an overwhelming majority is not more violence but the dignity that comes with a job, a roof over their heads and decent schooling for their children. Vetting to enter the United States takes at least 18 to 24 months — one reason nobody from Manus or Nauru has moved yet despite Australian hopes they’d all be scooped up by a C-130. The vetting is already “extreme” — Trump’s word.

For Australia, Trump’s insults should be an incentive to do the right thing. The refugee deal now looks near worthless. Shut down the foul Manus and Nauru operations. Bring these people, who have suffered and been bounced around enough, to Australia. Close this chapter that recalls the darkest moments of Australian history. Cut loose from Trump’s doomsday prejudice and give Tillerson inspiration to be brave.

And now we get to Prof. Krugman:

For the past couple of months, thoughtful people have been quietly worrying that the Trump administration might get us into a foreign policy crisis, maybe even a war.

Partly this worry reflected Donald Trump’s addiction to bombast and swagger, which plays fine in Breitbart and on Fox News but doesn’t go down well with foreign governments. But it also reflected a cold view of the incentives the new administration would face: as working-class voters began to realize that candidate Trump’s promises about jobs and health care were insincere, foreign distractions would look increasingly attractive.

The most likely flash point seemed to be China, the subject of much Trumpist tough talk, where disputes over islands in the South China Sea could easily turn into shooting incidents.

But the war with China will, it seems, have to wait. First comes Australia. And Mexico. And Iran. And the European Union. (But never Russia.)

And while there may be an element of cynical calculation in some of the administration’s crisismongering, this is looking less and less like a political strategy and more and more like a psychological syndrome.

The Australian confrontation has gotten the most press, probably because it’s so weirdly gratuitous. Australia is, after all, arguably America’s most faithful friend in the whole world, a nation that has fought by our side again and again. We will, of course, have disputes, as any two nations will, but nothing that should disturb the strength of our alliance — especially because Australia is one of the countries we will need to rely on if there is a confrontation with China.

But this is the age of Trump: In a call with Malcolm Turnbull, Australia’s prime minister, the U.S. president boasted about his election victory and complained about an existing agreement to take some of the refugees Australia has been holding, accusing Mr. Turnbull of sending us the “next Boston bombers.” Then he abruptly ended the conversation after only 25 minutes.

Well, at least Mr. Trump didn’t threaten to invade Australia. In his conversation with President Enrique Peña Nieto of Mexico, however, he did just that. According to The Associated Press, he told our neighbor’s democratically elected leader: “You have a bunch of bad hombres down there. You aren’t doing enough to stop them. I think your military is scared. Our military isn’t, so I just might send them down to take care of it.”

White House sources are now claiming that this threat — remember, the U.S. has in fact invaded Mexico in the past, and the Mexicans have not forgotten — was a lighthearted joke. If you believe that, I have a Mexico-paid-for border wall to sell you.

The blowups with Mexico and Australia have overshadowed a more conventional war of words with Iran, which tested a missile on Sunday. This was definitely a provocation. But the White House warning that it was “putting Iran on notice” raises the question, notice of what? Given the way the administration has been alienating our allies, tighter sanctions aren’t going to happen. Are we ready for a war?

There was also a curious contrast between the response to Iran and the response to another, more serious provocation: Russia’s escalation of its proxy war in Ukraine. Senator John McCain called on the president to help Ukraine. Strangely, however, the White House has said nothing at all about Russia’s actions. This is getting a bit obvious, isn’t it?

Oh, and one more thing: Peter Navarro, head of Mr. Trump’s new National Trade Council, accused Germany of exploiting the United States with an undervalued currency. There’s an interesting economics discussion to be had here, but government officials aren’t supposed to make that sort of accusation unless they’re prepared to fight a trade war. Are they?

I doubt it. In fact, this administration doesn’t seem prepared on any front. Mr. Trump’s confrontational phone calls, in particular, don’t sound like the working out of an economic or even political strategy — cunning schemers don’t waste time boasting about their election victories and whining about media reports on crowd sizes.

No, what we’re hearing sounds like a man who is out of his depth and out of control, who can’t even pretend to master his feelings of personal insecurity. His first two weeks in office have been utter chaos, and things just keep getting worse — perhaps because he responds to each debacle with a desperate attempt to change the subject that only leads to a fresh debacle.

America and the world can’t take much more of this. Think about it: If you had an employee behaving this way, you’d immediately remove him from any position of responsibility and strongly suggest that he seek counseling. And this guy is commander in chief of the world’s most powerful military.

Thanks, Comey.

Krugman’s blog, 2/1/17

February 2, 2017

There was one post yesterday, “Germany, the Euro, and Currency Manipulation:”


IMF

Peter Navarro, the closest thing Trump has to an economic guru, made some waves by accusing Germany of being a currency manipulator and suggesting that both the shadow Deutsche mark and the euro are undervalued. Leaving aside the dubious notion that this is a good target of US economic diplomacy, is he right?

Yes and no. Unfortunately, the “no” part is what’s relevant to the US.

Yes, Germany in effect has an undervalued currency relative to what it would have without the euro. The figure shows German prices (GDP deflator) relative to Spain (which I take to represent Southern Europe in general) since the euro was created. There was a large real depreciation during the euro’s good years, when Spain had massive capital inflows and an inflationary boom. This has only been partly reversed, despite an incredible depression in Spain. Why? Because wages are downward sticky, and Germany has refused to support the kind of monetary and fiscal stimulus that would raise overall euro area inflation, which remains stuck at far too low a level.

So the euro system has kept Germany undervalued, on a sustained basis, against its neighbors.

But does this mean that the euro as a whole is undervalued against the dollar? Probably not. The euro is weak because investors see poor investment opportunities in Europe, to an important extent because of bad demography, and better opportunities in the U.S.. The travails of the euro system may add to poor European perceptions. But there’s no clear relationship between the problems of Germany’s role within the euro and questions of the relationship between the euro and other currencies.

And may I say, what is the purpose of having someone connected to the U.S. government say this? Are we going to pressure the ECB to adopt tighter monetary policy? I sure hope not. Are we egging on a breakup of the euro? It sure sounds like it — but that is not, not, something the US government should be doing. What would we say if Chinese officials seemed to be talking up a US financial crisis? (It would, of course, be OK with Trump if the Russians did it.)

So yes, Navarro has a point about Germany’s role within the euro. And if he were unconnected with the Bannon administration, he would be free to make it. But in the current context, this is grossly irresponsible.