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20 января, 22:18

Paul Krugman: Donald the Unready

The Trump administration's readiness and fitness for office: Donald the Unready, by Paul Krugman, NY Times: Betsy DeVos, whom Donald Trump has nominated as education secretary, doesn’t know basic education terms, doesn’t know about federal statutes governing special education, but...

20 января, 12:45

Инвестиционный архивариус смарт лаба от 20.01.2017

Предыдущие выпуски доступны в моем профиле в разделе избранное. Рубрика выходит по пт. Авторы текущей недели: Владимир Ш, Дрозд73, Пол Кругман, Елисеев, Амиготрейдер, Никола, Севен ny5, Кашин, Онегин, Морозова, Григорий, Малышок, МВлад, Ята smart-lab.ru/blog/374878.php — Взгляд на саратовский НПЗ от Владимира Ш smart-lab.ru/blog/374846.php — обратный выкуп акций МТС. Дрозд73 smart-lab.ru/blog/374841.php — самые инновационные экономики мира от Полу Кругмана smart-lab.ru/blog/374797.php — страхование ИИС. Валентин Елисеев smart-lab.ru/blog/374774.php — о важности планирования. Амиготрейдер smart-lab.ru/blog/374733.php — дивиденды компаний США. Никола smart-lab.ru/blog/374699.php — IPO детского мира. Севен NY5 smart-lab.ru/blog/374682.php — миллионы на ИИС. Кашин smart-lab.ru/blog/374658.php — перспективы РФ на 2 года. Онегин smart-lab.ru/blog/374438.php — дивиденды 2017. Лариса Морозова smart-lab.ru/blog/374377.php — инвестиции Григория от Григория smart-lab.ru/blog/374240.php — Малышок продолжает делаеть жены богатой smart-lab.ru/blog/374233.php — закон убывающей доходности. МВлад smart-lab.ru/blog/375100.php — оценка акций по P/B. Ята.

19 января, 18:52

Obama To The Exit

Nostalgia rises quickly and easily. We need it – we want it. The Orangutan is entering the White House; he will be there for at least four years. Nothing ever will be the same again. Americans are trained to look forward. Many now are looking backwards for comfort and consolation – if not reassurance. Rose colored glasses are in great demand. The tall, elegant figure; the manifest intelligence; the calm voice. The sanity. A rosy tint seems right and appropriate. Why, then, has the Obama reign left such an emptiness? Why does it feel so ephemeral with the big O riding high in the saddle? We may not want to consider these questions. They should be posed, however, and we have an obligation to try to answer them. Wasn’t it just yesterday that Barack Obama surfed an historic wave of acclaim into the White House? So much was expected; so little materialized. It seems that he never really unpacked his bags, set himself a direction, and went after concrete goals with conviction and political acumen. Did he act as president of the United States ― or, was he content simply with presiding as president – being president? Most campaign pledges were quickly abandoned or, in some critical areas, reversed. Remember “transparency,” restoring our privacy rights from government surveillance, curbing the “war on terror,’ nuclear disarmament, closing Guantanamo, talk with the Iranians, cracking down on the special interests and ending the revolving door from Washington to the private corridors of power, strengthening trade unions, protecting Social Security and Medicare in their present form? What actually happened makes dispiriting reading. From foreign affairs to domestic matters and economic management to civil liberties, the record is bleak.  MYTH-MAKING  In the light of this sorry record, it is astounding to observe the orchestrated campaign to foster a mythic narrative that emphases the remarkable accomplishments of Barack Obama. Paul Krugman pronounces him “one of the most consequential – and successful – Presidents in American history.”  The New York Times pronounces that “his achievements have been remarkable.”  A flurry of books are appearing that exalt his far-sighted statesmanship, skillful diplomacy, and tempered idealism in conducting the nation’s foreign relations. They are praised to the sky by luminaries in academia, the media and among public “intellectuals.”  The confected image combines the wisdom of Marcus Aurelius, the talents of Talleyrand, the integrity of George Marshall, and the mastery of Bismarck.  This hagiographical narrative is directly and abundantly contradicted by all unbiased accounts of decision-making within the White House by Gates, by Woodward, by Susskind, and by Obama’s own revealing interviews with journalists. By any reasonable standard, Obama’s foreign policy has been disjointed in process, incoherent in conception, and maladroit in execution. The collapse of American position across the region from Syria to Turkey to Palestine is making that transparent. Obama’s fecklessness in foreign affairs was highlighted by John Kerry’s forthright condemnation of Israeli attitude toward Palestine and its arrogance toward Washington last week. The speech stated the obvious. To have any effect, it should have been given eight years ago. Certainly, after Netanyahu’s public humiliation of Obama before Congress. The only purpose it serves now is to balance his verbal record. What is this? Hallucination? Coveted access to the Inner Sanctum of power - now, of course, foreclosed? Democratic Party loyalty? Reverse racism? Or, something more subtle. Those most active in the campaign of secular beatification of Barack Obama are self-declared members of the nation’s enlightened community of liberal thinkers. They have identified with one of their own, a true-blue Ivy Leaguer. They seem to have an abiding faith in American virtue and the country’s capacity to demonstrate it which they attach to Obama’s persona.  Is that the belief in being part of a unique, historic project for humankind that sustains their own self-identity and self-esteem? In this sense, they occupy fantasy worlds different in vision but similar in psychology to those other inhabitants of fictional worlds of American exceptionalism: the neo-cons, the uber-patriots, and believers in a Providential mission for America. Or it may simply reflect the truth that in today’s America nearly everyone has a need for heroes.  Yet, plausible candidates are scarce to non-existent. So we manufacture them out of whatever flawed material is available.* At times like this, reality is too complicated for enlightened opinion to bear. Perhaps the most stunning evidence of the liberals’ unsettled state of mind is provided by Matt Taibbi. He is the most hard-headed, perceptive and instinctively skeptical commentator on madcap America out there. Yet, he too is finding near heroic qualities of virtue and statesmanship in Obama. Taibbi writes: Donald Trump may have won the White House, but he will never be a man like his predecessor, whose personal example will now only shine more brightly with the passage of time. At a time when a lot of Americans feel like they have little to be proud of, we should think about our outgoing president, whose humanity and greatness are probably only just now coming into true focus. Humanity? Ask the maimed and destitute of Yemen about that – those surviving the U.S. manufactured cluster bombs rained on them by Saudi planes that depend on American Intelligence and air refueling, to strike their human targets. Ask the Gazans. Ask the Afghan villagers.  Ask those who live – and die – in Sirte, Misrata, Tripoli and Benghazi. Ask the victims of al-Qaeda in Syria whom he has tacitly armed. Closer to home: ask the women and children herded into immigrant deportation centers where they are abused by their for-profit overseers. Ask those who suffered – even died – because Obama’s administration did nothing to stop the price-gouging on prescription drugs. Ask the hundreds of thousands imprisoned, their lives ruined, by stop-and-frisk policies that Obama never denounced. 4 million “stops+” in NYC alone. (About which Taibbi himself wrote graphically in DIVIDE: AMERICAN INJUSTICE). Ask the millions of foreclosed and dispossessed ignored by his administration. Ask the 8- and 9-year-old children of immigrant farm workers who do stoop labor in the fields and orchards due to a loophole in federal law that Obama made no effort to close. Ask Chelsea Manning who was imprisoned at Quantico in conditions that were “cruel, inhuman and degrading,” (Juan E. Mendez, United Nations Special Rapporteur on torture). Ask the dedicated school teachers vilified by Obama and his henchman Arne Duncan in the cause of privatization of public education. Ask the struggling students strangled by debt and ripped off by for-profit colleges whom Obama and Duncan refused to unburden while cutting deals with the crooks who bilked them and were permitted to put millions in public money into their pockets. Ask them all whether well-cut $1,000 suits and a gracious manner provide adequate compensation for the pain inflicted. Ask whether the fact that he is emotionally more stable than the Orangutan alleviates that pain. Obama’s words are noble and inspiring. His deeds tell quite a different tale. A President is not a shiny new appliance that spruces up your kitchen in way that makes you feel good even if it keeps breaking down. Greatness is not in appearance. That surface appearance is what we grasp onto in a desperate craving for something positive is the ultimate commentary on how far we have sunk as a polity, as a democracy, as a country. SUMMARY Barack Obama, indeed, is an historic figure. His tenure in the White House marks the American republic’s transmutation from the civil society evolved over the 20th century ― reifying many of its founding ideals, into its caricature. A capitalist system with a social conscience infused with an egalitarian ethos has degenerated into a plutocracy. That has skewed and compromised our democracy in ways that institutionalize the new order. Internationally, the mindless Global War On Terror has sullied the United States’ unique image, diminished our ability to act as a positive force in the world, and redounded domestically to encroach seriously on our civil liberties. All of these trends were well established when Obama took office.  His conduct has confirmed them, strengthened them and ensured the permanency of the transformation. The crucial moment was his Inauguration. By happenstance, the two great thrusts that were remaking the country had been exposed for the menace that they were. The financial collapse vividly demonstrated the pernicious consequences of predatory capitalism grounded on the fatally flawed doctrines of market fundamentalism. Its supposedly granitic intellectual foundations were in truth a conglomerate of dogmas. Its logically compelling policy prescriptions a method for enriching the few and ensconcing the authority of their propagators. Barack Obama, the intellectual, never questioned these falsities. Barack Obama, the President, perpetuated them. He spoke – once – of those who “gamed the system.” He could not see that the game was the system – and it still is. Early on, he told a group of financial moguls that “I am the only thing that stands between you and the pitchforks.” They need not have worried. He saw his primary duty as protecting them and disarming the “mob.” In strictly political terms, that proved disastrous. The Democrats suffered their worst Congressional defeat in history and were nearly wiped out in the state houses in 2010. And let us remember that it was Obama personally who slung around the party’s neck the three albatrosses of Rahm Emanuel, Bill Daley and Debbie Wasserman-Schultz. Abandoned and dispirited, the country’s simmering discontented found a home in the Tea Party and then in Donald Trump’s psycho-drama. Nor did Obama ever address frontally how “vulture Capitalism” has drastically redistributed national wealth – until it became a coda to an administration that had failed to pay it heed. The transfer upwards in the income pyramid of $1 – 2 trillion within little more than a generation via rigged markets, lax enforcement by the federal government and illicit conduct makes the wealth extraction by the five Mafia families look like petty pickpocketing. It, too, continues unabated. Indeed, it has accelerated since 2008. The Iraq fiasco similarly had demonstrated the dire effects of a global strategy aimed at consolidating an American pseudo-imperium by coercion. Advocates and promoters of these movements had the intellectual ground cut out from under them. Their incompetence, too, was glaringly exposed. They had lost the mandate of the country.  Obama, thereby, was presented with an epochal opportunity to set the nation back on a course of collective social decency at home and prudent idealism abroad. He never recognized it. Instead, the net effect of his combined sins of commission and omission has been to reinvigorate and to render impervious to reform the very forces that had brought us low. It is said that Franklin Roosevelt saved American capitalism. Barack Obama has been the savior of vulture capitalism. In the country’s external relations, he has reaffirmed and reinforced all of the core precepts that underlay the Bush push for permanent global supremacy. Finally, he has provided legal foundation for the National Security state whose egregious violations of venerable principles of our civil liberties have ushered in the post-Constitutional America.  One may judge all or any of these actions as laudable. One may rationalize them in terms of implacable opposition. That is an inherent right. It is unacceptable, though, to distort or to amend the record in order to perpetuate the new-found myth of Obama as the godfather to a progressive era.  Barack Obama’s trademark was his above-the-fray, we’re all in this together attitude. He eschewed partisanship – not as a practical strategy but as a principle. Obama never understood that an effective president must also act as leader of his party in order to accomplish anything – since opposition from the other side is integral to democratic politics. This was imperative in an era when the Republicans had dedicated themselves as a bloc to reject all of his proposals and initiatives in an effort to undermine his legitimacy as president. Yet, it was an approach that was wholly alien to him as a politician and as a person.  The net result was that by the summer of 2016, Obama had become an irrelevancy insofar as the election was concerned. A brief flurry of campaigning in the last days of Clinton’s doomed bid for the White House confirmed that sad truth. He could not even get out the black vote for her. His ineffectualness was understandable. The argument that she would carry on his legacy meant little when that legacy was undefinable – other than being the first person of color to hold the presidency. Within a few days of the Orangutan’s victory, Obama was slipping back into his preferred role of national hand-holder. He bent over backwards to offer a benediction for the man whose views and manners were an affront to the most elementary standards of decency. Here are his words of reassurance: He has won. He’s going to be the next president and regardless of what experience or assumptions he brought to the office, this office has a way of waking you up….And some of his gifts that obviously allowed him to execute one of the biggest political upsets in history, those are ones that hopefully he will put to good use on behalf of all the American people. He later conjured the vision of an America “whose best days are still ahead of us.” There is no reason to believe that any of this is true.  Moreover, to the extent that the Orangutan’s outrages can be restrained, it will require the implacable opposition of the Democrats. Yet, Obama has not the slightest intention of acting as the titular leader of the Democratic Party – a role incumbent on a former president whose party has lost the White House. The very idea is foreign to him. It is all about Barack Obama – that is how it’s been since Day One. On November 8, American democracy and the country at large suffered a grievous blow from which it may never recover. The paramount cause was Hillary Clinton; the main proximate cause was James Comey. The critical facilitating element was Obama’s tenure in office. However one might weigh the balances of pluses and minuses on other counts, this eclipses all else by a wide margin – it is Obama’s legacy. -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

19 января, 11:06

Links for 01-19-17

The Illusions Driving Up US Asset Prices - Robert Shiller Health Care Fundamentals - Paul Krugman Key Measures Show Inflation close to 2% in December - Calculated Risk Revolving Doors in the Private Sector - ProMarket The Single Market was...

19 января, 03:00

Does A Rogue Deep State Have Trump's Back?

Submitted by Charles Hugh-Smith via OfTwoMinds blog, Rather than being the bad guys, as per the usual Liberal world-view, the Armed Forces may well play a key role in reducing the utterly toxic influence of neocon-neoliberals within the Deep State. Suddenly everybody is referring to the Deep State, typically without offering much of a definition. The general definition is the unelected government that continues making and implementing policy regardless of who is in elected office. I have been writing about this structure for 10 years and studying it from the outside for 40 years. Back in 2007, I called it the Elite Maintaining and Extending Global Dominance, which is a more concise description of the structure than Deep State. Going to War with the Political Elite You Have (May 14, 2007). I've used this simplified chart to explain the basic structure of the Deep State, which is the complex network of state-funded and/or controlled institutions, agencies, foundations, university research projects, media ties, etc. The key point here is you can't separate these network nodes: you cannot separate DARPA, the national labs (nukes, energy, etc.), the National Science Foundation, DoD (Department of Defense), the National Security State (alphabet soup of intelligence/black budget agencies: CIA, NSA, DIA, etc.), Silicon Valley and the research universities: they are all tied together by funding, information flows, personnel and a thousand other connections. For the past few years, I have been suggesting there is a profound split in the Deep State that is not just about power or ideology, but about the nature and future of National Security: in other words, what policies and priorities are actually weakening or threatening the long-term security of the United States? I have proposed that there are progressive elements within the sprawling Deep State that view the dominant neocon-neoliberal agenda of the past 24 years as a disaster for the long-term security of the U.S. and its global interests (a.k.a. the Imperial Project). There are also elements within the Deep State that view Wall Street's dominance as a threat to America's security and global interests. (This is not to say that American-based banks and corporations aren't essential parts of the Imperial Project; it's more about the question of who is controlling whom.) So let's dig in by noting that the warmongers in the Deep State are civilians, not military. It's popular among so-called Liberals (the vast majority of whom did not serve nor do they have offspring in uniform--that's fallen to the disenfranchised and the working class) to see the military as a permanent source of warmongering. (It's remarkably easy to send other people's children off to war, while your own little darlings have cush jobs in Wall Street, foundations, think tanks, academia, government agencies, etc.) These misguided souls are ignoring that it's civilians who order the military to go into harm's way, not the other way around. The neocons who have waged permanent war as policy are virtually all civilians, few of whom served in the U.S. armed forces and none of whom (to my knowledge) have actual combat experience. These civilian neocons were busily sacking and/or discrediting critics of their warmongering within the U.S. military all through the Iraqi debacle. now that we got that straightened out--active-duty service personnel have borne the brunt of civilian planned, ordered and executed warmongering--let's move on to the split between the civilian Central Intelligence Agency (CIA) and the DoD (Department of Defense) intelligence and special ops agencies: DIA, Army Intelligence, Navy Intelligence, etc. Though we have to be careful not to paint a very large agency with one brush, it's fair to say that the civilian leadership of the CIA (and of its proxies and crony agencies) has long loved to "play army". The CIA has its own drone (a.k.a. Murder, Inc.) division, as well as its own special ops ("play army" Special Forces), and a hawkish mentality that civilians reckon is "play army special forces" (mostly from films, in which the CIA's role is carefully managed by the CIA itself: How the CIA Hoodwinked Hollywood (The Atlantic) Meanwhile, it's not exactly a secret that when it comes to actual combat operations and warfighting, the CIA's in-theater intelligence is either useless, misleading or false. This is the result of a number of institutional failings of the CIA, number one of which is the high degree of politicization within its ranks and organizational structure. The CIA's reliance on "analysis" rather than human agents (there's a lot of acronyms for all these, if you find proliferating acronyms of interest), and while some from-30,000-feet analysis can be useful, it's just as often catastrophically wrong. We can fruitfully revisit the Bay of Pigs disaster, the result of warmongering civilians in the CIA convincing incoming President Kennedy that the planned invasion would free Cuba of Castro's rule in short order. There are many other examples, including the failure to grasp Saddam's willingness to invade Kuwait, given the mixed signals he was receiving from U.S. State Department personnel. Simply put, if you are actually prosecuting a war, then you turn to the services' own intelligence agencies to help with actual combat operations, not the CIA. This is of course a sort of gossip, and reading between the lines of public information; nobody is going to state this directly in writing. As I have noted before: If you want documented evidence of this split in the Deep State--sorry, it doesn't work that way. Nobody in the higher echelons of the Deep State is going to leak anything about the low-intensity war being waged because the one thing everyone agrees on is the Deep State's dirty laundry must be kept private. As a result, the split is visible only by carefully reading between the lines, by examining who is being placed in positions of control in the Trump Administration, and reading the tea leaves of who is "retiring" (i.e. being fired) or quitting, which agencies are suddenly being reorganized, and the appearance of dissenting views in journals that serve as public conduits for Deep State narratives. Many so-called Liberals are alarmed by the number of military officers Trump has appointed. Once you realize it's the neocon civilians who have promoted and led one disastrous military intervention (either with U.S. Armed Forces or proxies managed by the CIA) after another, then you understand Trump's appointments appear to be a decisive break from the civilian warmongers who've run the nation into the ground. If you doubt this analysis, please consider the unprecedentedly politicized (and pathetically childish) comments by outgoing CIA director Brennan against an incoming president. Even if you can't stand Trump, please document another instance in which the CIA director went off on an incoming president-- and this after the CIA spewed a blatant misinformation campaign claiming a hacked Democratic Party email account constituted a successful Russian effort to influence the U.S. election--a surreal absurdity. Let me translate for you: our chosen Insider lost the election; how dare you! A number of observers are wondering if the CIA and its Deep State allies and cronies will work out a way to evict Trump from office or perhaps arrange a "lone gunman" or other "accident" to befall him. The roots of such speculations stretch back to Dallas, November 1963, when a "long gunman" with ties to the CIA and various CIA proxies assassinated President Kennedy, an avowed foe of the CIA. Setting aside the shelfloads of books on the topic, both those defending the "lone gunman" thesis and those contesting it, the unprecedented extremes of institutionally organized and executed anti-Trump campaigns is worthy of our attention. Given my thesis of a profound disunity in the Deep State, and the emergence of a progressive element hostile to neocons and neoliberalism (including Wall Street), then it's not much of a stretch to speculate that this rogue Deep State opposed to neocon-neoliberalism has Trump's back, as a new administration is pretty much the only hope to rid the nation's top echelons of the neocon-neoliberal policies that have driven the U.S. into the ground. Rather than being the bad guys, as per the usual Liberal world-view, the Armed Forces may well play a key role in reducing the utterly toxic influence of neocon-neoliberals within the Deep State. If you have wondered why academics like Paul Krugman and the CIA are on the same page, it's because they are simply facets of the same structure. Krugman is a vocal neoliberal, the CIA is vocally neocon: two sides of the same coin. I invite you to study the chart above with an open mind, and ponder the possibility that the Deep State is not monolithic, but deeply divided along the fault lines of Wall-Street-Neocons-Neoliberals and the progressive elements that rightly view the dominant neocon-neoliberals as a threat to U.S. national security, U.S. global interests and world peace. We can speculate that some of these progressive elements view Trump with disdain for all the same reasons those outside the Deep State disdain him, but their decision tree is simple: if you want to rid America's Deep State of toxic neocon-neoliberalism before it destroys the nation, you hold your nose and go with Trump because he's the only hope you have.

19 января, 00:18

China trade has been a boon to the US, China, and the world., by Scott Sumner

Here's Ryan Avent: ECONOMISTS are realising that they have got some things about trade wrong in the past. Just because trade can make everyone better off, doesn't mean it will, for instance (at least without some help from politicians). That new research, and this year's political ructions, are generating some reflection on these issues among economists is a good thing. But it is important to maintain one's perspective. Tim Duy has not done that, I think, in this stemwinder of a post on the effects of American trade policy. He quotes Noah Smith, who says: [I]n the 1990s and 2000s, the U.S opened its markets to Chinese goods, first with Most Favored Nation trading status, and then by supporting China's accession to the WTO. The resulting competition from cheap Chinese goods contributed to vast inequality in the United States, reversing many of the employment gains of the 1990s and holding down U.S. wages. But this sacrifice on the part of 90% of the American populace enabled China to lift its enormous population out of abject poverty and become a middle-income country. And then writes: Was this "fair" trade? I think not. Let me suggest this narrative: Sometime during the Clinton Administration, it was decided that an economically strong China was good for both the globe and the U.S. Fair enough. To enable that outcome, U.S. policy deliberately sacrificed manufacturing workers on the theory that a.) the marginal global benefit from the job gain to a Chinese worker exceeded the marginal global cost from a lost US manufacturing job, b.) the U.S. was shifting toward a service sector economy anyway and needed to reposition its workforce accordingly and c.) the transition costs of shifting workers across sectors in the U.S. were minimal. Before closing: I don't know how to fix this either. But I don't absolve the policy community from their role in this disaster. I think you can easily tell a story that this was one big policy experiment gone terribly wrong. I think Mr Duy is getting the story wrong in a few important ways.I'm not too happy with the way Ryan frames the issue. The first sentence seems to imply that economists didn't understand the second sentence of his post. But virtually every EC101 textbook published in the past 50 years tells students that trade benefits the US overall, but that specific groups in import-competing industries are hurt by trade. That's not a new insight. Otherwise I think Avent's post is excellent, and well worth reading. My only other quibble is that I think the Smith/Duy posts are much weaker than even Ryan suggests, for reasons I'll discuss below: 1. Much of the recent discussion, including posts by Noah Smith, are based on a misinterpretation of research by Autor, Card and Hanson, which I discussed in multiple posts. Autor, et al, provide cross-sectional evidence that areas of the US that were most affected by competition from China did relatively poorly. Many people (including, at times, the authors) misinterpreted that finding as suggesting that the overall impact on the US was negative. But you cannot draw macroeconomic conclusions from a cross-sectional study. They showed that areas most impacted by China trade did relatively poorly (a finding I accept) but their study told us nothing about the macroeconomic impact. It would be like trying to draw macro conclusions about fiscal multipliers by looking at state level multiplier effects. Monetary offset anyone? 2. At times, Autor seems to suggest that China trade might have hurt the US by boosting our trade deficit. First, it's not clear that China trade does boost our trade deficit (which is based on saving and investment flows), but let's suppose it did. What then? Here it might be worth comparing the US to the Eurozone, which has a massive current account surplus, far larger than China's surplus. I did so in this post, and found that Europe has experienced almost exactly the same sort of decline in manufacturing jobs as the US. So trade deficits don't seem to be the culprit. 3. But it's even worse. Their study looked at data from 1990-2007, when the US was not at the zero bound. Paul Krugman pointed out that monetary offset would have been expected to apply during this period, and thus that the Fed would, as a first approximation, expand monetary policy enough to offset any job losses from falling AD due to trade deficits. Just to be clear, I'm not saying China trade might not have produced some net job loss---one can tell stories where workers losing jobs in manufacturing aren't able to find jobs in the service sector because of a lack of skills, and hence the natural rate of unemployment rises. But the natural rate has not risen. A better story is that somehow China has contributed to workers simply exiting the labor force, and not even looking for jobs. Maybe, but as we'll see, China is probably not the right target, even if that theory is true. 4. I wonder why there is so much focus on China. It's true that about 20% of our imports come from China, but about 80% come from other areas. About 20% of our imports come from Europe, and a much higher figure from NAFTA (Canada plus Mexico). Are Chinese exports particularly toxic? The best argument in favor of that proposition is that Chinese exports were unusually fast growing, and thus unusually disruptive. I agree. But there are many other arguments that cut in exactly the opposite direction: a. The goods we buy from Europe and NAFTA tend to be goods that we would otherwise produce at home, like cars and other sophisticated manufactured goods. In contrast, the goods we buy from China are often goods that would otherwise have been bought from other countries in East Asia, and elsewhere. This is not always true, but it's certainly true on average. When China opened up to the world, lots of production shifted from the so-called Asian "Tiger economies" to Mainland China. There is no way that industries like clothing, shoes and toys were going to stay in America. If we did not buy these goods from China, we could have bought them from other Asian countries. Today that's probably even true of more sophisticated goods like laptop computers and iPhones. b. Also keep in mind that China is often simply an intermediary. The important components might be made in Korea or Taiwan, and then sent to China for assembly. The data may show massive growth in imports from China, but the actual value added in China may be much less than the official growth figures. But then how to explain the rapid growth in trade? c. China's entry into the world economy occurred just as technology like container ships was dramatically reducing the cost of trade, and boosting trade as a share of global GDP. Some of the fast growth in Chinese exports over the past few decades would have instead come from other East Asian countries, or even Mexico, if China has stayed a closed economy. In other words, correlation does not prove causation. How much was trade liberalization, and how much was cheaper trade costs? d. China's exports to America were rising very fast even before the trade reforms such as WTO, which Tim Duy refers to. I'm not disputing that the reforms boosted trade further. But only a portion of the effects found by Autor, et al can be attributed to the WTO, a big part is simply the fact that China had a huge comparative advantage in lots of industries, and the cost of trade was falling fast. Now lets suppose that all of the preceding arguments made above, and also by Krugman are wrong. And not just a little bit wrong, but 100% wrong. Just how bad might China trade actually be? What's the worst case? Start with the fact that we imported $466 billion from China in 2015, about 2.5% of GDP. I'm not going to argue that 2.5% of GDP is a small number, it's not. But can that possibly be all cost? Wouldn't you want to at a minimum look at our exports to China (I view that as a cost, BTW, but mercantilists often see it as a benefit)? More importantly what about all the goods we get from China? Walmart and Target stores are a cornucopia overflowing with Chinese goods, which provide great benefits to Americans living on modest incomes. Surely that counts for something, indeed quite a lot. I'd say it means the US is a net gainer from trade, but let's say I'm wrong. And let's continue to assume that all of my preceding arguments are utterly without any merit. You are still left with 2.5% of GDP, minus any benefits you attribute to exports to China, minus the undeniably vast benefit to consumers from access to Chinese goods. That's is, 2.5% of GDP minus a number that is almost certainly quite large. Now contrast that with the rhetoric in the Smith and Duy quotes. Smith refers to a sacrifice by 90% of Americans. Where does this number come from? Well over 80% of Americans are in the service sector. Many others are in construction or export industries. When coal miners or policemen or fireman or teachers or construction workers or Boeing employees or nurses or cashiers go shopping at Walmart, and load up on Chinese goods, precisely how are these groups being devastated by China? I don't get it. Smith seems to be assuming that everything that has gone wrong in America since 1990 is due to China. OK, that's hyperbole, but isn't the 90% figure he cites equally exaggerated? In other posts I've pointed out that in industries like steel and coal the vast majority of job loss is due to technology, not trade. And of the modest part of job loss that is due to trade, only a modest part of that is due to trade with China (particularly if you keep your eye on value added, and China's role in a global supply chain that often starts in other East Asian countries.) And I'd say the same about Tim Duy's remarks. I believe the China trade is a good thing. The China growth story since 1980 is literally the best thing that has ever happened on the last 4.6 billion years on planet Earth, and China's opening up to foreign trade is an important part of that story, albeit far from the whole story. (It might be helpful here to think of the worst thing that has ever happened, and then imagine its exact opposite.) The cost to America would have to be mind-bogglingly large in order for this not to have been a wise policy, even if our role in China's growth were modest (which it was.). I share the view of most economists that the US has actually benefited from China trade. But even if there had been a small net loss, how could it possible be set against the obviously vast benefits to extremely poor Chinese from global trade? Ryan Avent's post is well worth reading, but if anything I believe he understates how far off base Smith and Duy are in this case. To summarize: 1. The problem isn't trade, it's automation. 2. If trade is a small part of the problem, it's not China: it's the other 80% of exporters. 3. If China imports are a tiny part of the problem it mostly reflects deeper changes in East Asian supply chains, and nothing specific about China. 4. And only a small part of that tiny part of the problem is the WTO, a lot of it is cheaper shipping costs and China's powerful comparative advantage in many industries. 5. Chinese goods are a huge boon to low income Americans. 6. If trade really did boost inequality, the way to fix that is with redistribution and/or weaker IP laws, not protectionism. 7. The argument for protectionism is exactly the same as the argument for Ludditism. It hurts society overall, but helps certain groups hard hit by change. Is that what we want? Do policies that make America poorer also make America great again? I got into blogging in 2009 because I was upset about how monetary policy errors were devastating working class Americans. I'd be really upset if I thought the China complaints were true. But no one (including Autor, et al) has given me a scintilla of evidence for the sweeping claims being made. PS. There are many more arguments to be made. Those struggling coal towns in West Virginia would be hurt by protectionism against China. Those struggling lumber areas of Oregon (Duy's home state) would also be hurt, as we export both coal and lumber to China. The more you drill down into the details, the weaker the argument against trade becomes. Construction in the US would be hurt as well, as I>S by exactly the amount of our current account deficit. PPS. EU exports to the US are slightly below China's, but if you add in exports from Switzerland, and other non-EU countries, then Europe's exports would be about the same as China's. (18 COMMENTS)

17 января, 15:47

Procrastinating on January 17, 2017

**Over at [Equitable Growth](http://EquitableGrowth.org): Must- and Should-Reads:** * **Kenneth Arrow et al.:** (2004): [Are We Consuming Too Much?](https://www.aeaweb.org/articles?id=10.1257/0895330042162377): "We consider two criteria for the possible excessiveness (or insufficiency) of current consumption... * **Christoph Lakner and Branko Milanovic** (2013): [Global Income Distribution: From the Fall of the Berlin Wall to the...

16 января, 22:15

Paul Krugman: With All Due Disrespect

People are saying that Donald Trump is an illegitimate president: With All Due Disrespect, by Paul Krugman, NY Times: As a young man, Congressman John Lewis, who represents most of Atlanta, literally put his life on the line in pursuit...

16 января, 19:00

The Deportation Army Economic Stimulus Plan

To be an effective president you must lead with an efficiency that produces multiple winners, minimizes costs, solves multiple problems at the same time, and unites politicians across the political spectrum.  This results in government policy that is not only most beneficial to the people, but is also cost effective AND (above all else) realistic in that it wins the support of both political parties, making such policy a reality.  Luckily, I have such an idea/policy that I believe will be of realistic and utmost benefit to the American people:The Deportation Army Economic Stimulus Plan.At first you may have many questions about this seemingly controversial plan."Wouldn't the democrats be against deportation?""What does deportation have to do with economic stimulus?""Why would we need an army to do this?"and"Won't this cost money?"But fear not, for I, with my SAEG (TM) have thought it all through.  And once I explain, you'll see why having a Deportation Army is in the best interests of everyone and is budget revenue positive.First, a huge problem we have in the country is the number of unemployed and underemployed males.  The "Underemployment Rate" is currently at 9.2% for everyone, but this "mancession" as it was called disproportionately affected males.  You also throw in the fact that women now make "99.76%" of college students, young men face an unemployment rate of 4.6% while women enjoy an unemployment rate of 4.3%.  This says nothing of men who have given up hope, leaving the labor force forever resulting in the lowest labor force participation rates ever recorded.  In short there are millions of men either unemployed, underemployed, or just staying at home playing video games because they've given up hope there's a job for them out there somewhere.Thankfully, the Deportation Army Economic Stimulus Plan is also a JOBS PLAN for men.  We cannot investigate, round up, and deport illegals with the current staffing levels of the border patrol.  But by creating a 2.5 million man deportation army, not only will be be able to deport all the illegal aliens in the country, but we will be able to offer jobs to all those men unfortunate enough to be either unemployed or underemployed.This leads to the second benefit of the Deportation Army Economic Stimulus Plan - jobs growth, and therefore economic growth.  Assuming 2.5 million FTE jobs created at a (very conservatively estimated) $15 minimum wage, that would bring an additional $75 BILLION to the US economy EVERY YEAR!  But it gets better than that!  Because if we very securely affix our lips to Keynes's ass, the magical wonders of the "multiplier effect" will cause much more stimulus.  Using the savings rate of 5.5% as a proxy for the "marginal propensity to save" (and don't worry if you don't understand this economic jargon.  It's only for really smart people like Paul Krugman to understand), the REAL total economic effect would be $1.4 TRILLION.  That's a full 7.5% in IMMEDIATE economic growth on our current $18.7 trillion GDP PER YEAR!Which leads to the third reason the Deportation Army Economic Stimulus Plan is a great idea.The democrats will LOVE IT!Understand while democrats love illegal aliens for a multitude of reasons, they love Keynesian economics more.  Why any chance they get to spend more money on broken window fallacies, they can't trip over themselves quickly enough to vote our children into debt and rich people's money away.  Of course, spending it on deporting their illegal voter base away may seem a deal breaker, but when you whet their appetite with the 18x's multiplier effect today's savings rate provides they and their economist policy wonks won't be able to help themselves!  They'll vote for it immediately!And finally, four.  Whereas Nancy Pelosi was right that welfare checks were the best thing to get an economy growing, and Paul Krugman was also right that we should just print off a ton of money, that is condescending to all their constituents and congregational members (of the Chuch of Keynes).  It implies they're lazy, just don't want to work, or have given up hope when they couldn't land a job at Intel with their Masters in Puppetry Studies.The Deportation Army Economic Stimulus Plan gives its participants PRIDE because it gives them jobs.  We know everybody who collects welfare, TANF, WIC, SS disability, and Section 8 are all fully aware and ashamed of their parasitic nature and want nothing more than to become contributing members of society.  Why absolutely NONE of them have lived off of the taxpayers for generations, and when they're on the government dole, they want nothing more than to get off.  That's why the pride in having a job is just as an important psychological benefit as the paycheck that comes with it is financial.So contact your congressman today!  Tell them you support The Deportation Army Economic Stimulus Plan and want them to vote for it!  It's sound government policy that has bi-partisan support and is guaranteed to get our economy booming again!PS - If you don't support The Deportation Army Economic Stimulus Plan you're racist. _____________________________________________PodcastAsshole ConsultingYouTubeTwitterBooksAmazon AffiliateHHR4HM7ZPMV3

16 января, 16:13

Current Links

**Must-Reads:** * **Kenneth Arrow et al.:** (2004): [Are We Consuming Too Much?](https://www.aeaweb.org/articles?id=10.1257/0895330042162377): "We consider two criteria for the possible excessiveness (or insufficiency) of current consumption... * **Luigi Zingales**: _[Donald Trump’s Economic Policies: Pro-Business, Not Pro-Market][]_: "Trump is eliminating lobbyists by putting them in charge of all departments... * **Gillian Tett**:...

16 января, 15:44

Gold Lower Before Trump Presidency – Strong Gains Akin To After Obama Inauguration?

Gold Lower Before Trump Presidency – Strong Gains Akin To After Obama Inauguration Gold prices have had a good start to 2017 and has made gains in the majority of currencies, building on the strong gains seen in 2016. So far in 2017, gold is 3.5% higher in dollars, 2.3% higher in euros and 4% higher in sterling. Gold Annual Returns During First Four Years Of Obama Presidency - Goldprice.org Increasing nerves regarding the Trump Presidency likely account for some of the gains. Although the fundamentals of the gold market remain strong even were Trump not becoming President of the United State of America. A backdrop of financial repression and global currency debasement involving ultra loose monetary policies and near negative interest rates, a push for cashless society, a still massively indebted U.S. and global economy and still very fragile banking systems all bodes well for gold prices in the coming years - not too mention positive supply demand fundamental that is peak gold. Trump is icing on the cake in this regard. While it is always best to fade short term noise about breaking news and the latest market developments, ignoring Trump in the White House as an investor is very much a case of trying to ignore a giant white elephant in a very small room. We should indeed ignore the short term noise of the Trump inauguration next week - although it is set to be compelling box office viewing! However, it would be imprudent to ignore the likely impact of four years of the Trump Presidency on markets and particularly the gold market. On Wednesday past, we had just a little taste of this when his press conference led to turmoil and massive volatility in markets and gold rising on safe haven demand to over $1,200 per ounce. Trump's extraordinary press conference this week highlighted the risks facing markets. Geo-political risk in terms of his ongoing war with U.S. intelligence agencies, increasing tensions with Russia, China, the EU, Mexico and other nations and the real risk of trade, currency and actual wars. Warnings about the likely impact of the Trump Presidency on markets should be considered carefully - especially in the light of the "irrational exuberance" that continues to be seen on U.S. markets with 'Dow 20,000' a breadth away and valuations suggesting another massive bubble with all the risks that entails to pensions and investments. Indeed, there is a strong argument for becoming more cautious and conservative and reducing allocations to risk assets such as stocks and bonds and increasing allocations to gold. We believe that gold is likely to perform as well in the first four years of the Trump Presidency as it did in the first four years of the Obama Presidency. Past performance is no guarantee of future returns and all the usual caveats that apply in this regard. However, we believe that the over used "perfect storm" is brewing for gold and it will likely outperform risk assets in the coming years. So how did gold prices perform during the first four years of Obama's Presidency? It is hard to believe but President Obama took his oath of office and made his inauguration address 8 years ago next week – on January 20th, 2009. Gold prices closed on Obama's inauguration day at $857.25 per ounce (and silver at $11.34 per ounce). Sentiment towards gold was poor as gold prices had "peaked" at near $1,000 per ounce in March 2008. Subsequently gold had fallen as low as near $700 per ounce in late 2008, correcting lower after the very strong gains seen in the previous years and especially in 2007  and early 2008, at the outset of the global financial crisis. In dollar terms, gold had risen by 20% in 2005, by 23% in 2006 and by 31% in 2007. It began 2008 with further gains - rising from just below $900 per ounce to near $1,000 per ounce in early 2008, prior to the period of correction and consolidation in the rest of 2008. So gold had risen relentlessly and had more than doubled in value from near $450 per ounce at the start of 2005 to near $1,000 per ounce in March 2008. Most "experts" including Nouriel Roubini and Paul Krugman were out in force at this time, simplistically declaring gold a risky 'bubble' and discouraging investors from diversifying their portfolios and having an allocation to safe haven gold. There was also a consensus and great 'hope' that Obama would clean up Wall Street and put the heavily indebted U.S. economy on a more sustainable financial and economic path - something which never happened. It was against this backdrop that Obama came to power. Gold was unloved and derided by Wall Street and the financial pundits and languished at $857 per ounce (see chart). Gold in US Dollars – January 2009 to January 2010 (Bloomberg) One month later, gold had risen to $992.90/oz and silver to $14.44/oz. Thus, in just the 30 days subsequent to Obama's inauguration, gold surged nearly 16% and silver surged by over 27%. Exactly 12 months later on January 20th, 2010, gold had risen to $1,111.05/oz for a gain of nearly 30% in the first year after Obama’s inauguration. In the following 12 months, silver had risen to $17.88/oz for a gain of 57.6% in the first year after President Obama’s inauguration. A similar performance in the coming month would see gold rise from $1,200/oz to $1,392/oz.A similar performance in the coming year would see gold rise from $1,200/oz to $1,555/oz. We caution that these returns subsequent to Obama’s first inauguration are interesting statistics and should not be used as a trading tool. In and of themselves solely they are somewhat meaningless. Conclusion Past performance is no guarantee of future returns - especially over short time horizons. However, over the long term, history including market history does tend to, to paraphrase Marc Twain, if not repeat then at least rhyme. This is the case with monetary history - every single fiat currency has ultimately collapsed as have the economies using those fiat currencies. Given the fact that the U.S. monetary and fiscal position is much worse now than it was 8 years ago - the taboo (for now) U.S. national debt has grown massively - it seems very likely that we will see similar gains for gold in the coming months and years. On January 20, 2009, when Obama was sworn in, the debt was $10.626 trillion. Today it's about to reach $20 trillion - at $19.957 trillion. Obama added an incredible $9 trillion to the national debt, more than any other President. Another inconvenient truth ignored by the same experts that continue to either ignore gold or not cover it in a balanced, fact, evidence based manner. We have long stated that we believe gold will reach a record inflation adjusted high over $2,500/oz and we see that as likely during the first four years of the Trump Presidency. However, gold's primary function is as a diversification, financial insurance and a hedge against geo-political, systemic and of course monetary risks - all of which abound as we head into the Trump years. KNOWLEDGE IS POWER For your perusal, below are in order of downloads our most popular guides in 2016: 10 Important Points To Consider Before You Buy Gold 7 Real Risks To Your Gold Ownership Essential Guide To Storing Gold In Switzerland Essential Guide To Storing Gold In Singapore Essential Guide to Tax Free Gold Sovereigns Please share our research with family, friends and colleagues who you think would benefit from being informed by it. Gold and Silver Bullion - News and Commentary Gold dips from seven-week high on dollar strength (Reuters.com) Gold Surges Above $1,200 as Details-Shy Trump Weighing on Dollar (Bloomberg.com) European elections at risk to aggressive cyber attack threats: EU security commissioner (CNBC.com) New 'Ring of Steel' planned for London Square Mile (BBC.com) Italian banking crisis moves on to Unicredit’s €13bn cash call (IrishTimes.com) Gold Only Safe Haven From Politicians Meddling and Bashing Central-Banks (Bloomberg.com) Stocks are getting crushed by gold in 2017 (MarketWatch.com) You can get inflation anywhere if you try hard enough - Stepek (MoneyWeek.com) US Will Devalue Debt and Devalue Dollar - Rick Rule (Youtube.com) Gold swaps by BIS exploded in 2016 from nothing to record level (Gata.org) Gold Prices (LBMA AM) 13 Jan: USD 1,196.35, GBP 978.85 & EUR 1,123.25 per ounce12 Jan: USD 1,206.65, GBP 984.39 & EUR 1,135.82 per ounce11 Jan: USD 1,187.55, GBP 979.25 & EUR 1,128.41 per ounce10 Jan: USD 1,183.20, GBP 974.60 & EUR 1,118.12 per ounce09 Jan: USD 1,176.10, GBP 968.75 & EUR 1,118.59 per ounce06 Jan: USD 1,178.00, GBP 951.35 & EUR 1,112.27 per ounce05 Jan: USD 1,173.05, GBP 953.55 & EUR 1,116.16 per ounce04 Jan: USD 1,165.90, GBP 949.98 & EUR 1,117.40 per ounce03 Jan: USD 1,148.65, GBP 935.12 & EUR 1,103.28 per ounce Silver Prices (LBMA) 13 Jan: USD 16.76, GBP 13.76 & EUR 15.74 per ounce12 Jan: USD 16.91, GBP 13.77 & EUR 15.87 per ounce11 Jan: USD 16.79, GBP 13.84 & EUR 15.96 per ounce10 Jan: USD 16.66, GBP 13.73 & EUR 15.76 per ounce09 Jan: USD 16.52, GBP 13.57 & EUR 15.69 per ounce06 Jan: USD 16.45, GBP 13.30 & EUR 15.54 per ounce05 Jan: USD 16.59, GBP 13.47 & EUR 15.80 per ounce04 Jan: USD 16.42, GBP 13.36 & EUR 15.74 per ounce03 Jan: USD 15.95, GBP 12.97 & EUR 15.34 per ounce Recent Market Updates - Gold Rallies To $1,207 After Trump Press Conference Shambles- Prince Owned Land and Gold Bars Worth $800,000- Gold Price In GBP Up 4% On Brexit and UK Risks- 2016 Past is 2017 Prologue- Gold Gains In All Currencies In 2016 – 9% In USD, 13% In EUR and Surges 31.5% In GBP- Trump’s Twitter “140 Characters” To Push Gold To $1,600/oz in 2017?- 2017 – The Year of Banana Skin- US: Five Must Gold See Charts – Gold Miners Are “Running Out” of Gold- Royal Mint And CME Make A Mint On The Blockchain?- China Gold and Precious Metals Summit 2016 – GoldCore Presentation- Trumpenstein ! Who Created Him and Why?- Bail-Ins Coming? World’s Oldest Bank “Survival Rests On Savers”- Fed’s “Fool Me…”, Silver Suppression, Euro Contagion In 2017? www.GoldCore.com

16 января, 06:18

Procrastinating on January 16, 2017

**Over at [Equitable Growth](http://EquitableGrowth.org): Must- and Should-Reads:** * **Matthew Yglesias**: _[Obama to Working Class Trump Voters: You Played Yourselves][]_: "'If every economic issue is framed as a struggle between a hardworking white middle class and undeserving minorities'... * **Manu Saadia**: _[Why Peter Thiel Fears “Star Trek”][]_: "Asked... whether he was...

14 января, 22:54

Infrastructure Delusions

Paul Krugman: Ben Bernanke has a longish post about fiscal policy in the Caligula Trump era. It’s not the most entertaining read; perhaps because of the political fraughtness of the moment, Bernanke has reverted a bit to Fedspeak. But there’s...

14 января, 22:03

Без заголовка

**Must-Read:** I believe Paul Krugman is right here. It looks as though Donald Trump's preferences are having very little effect on the policies of his own administration: **Paul Krugman**: _[Infrastructure Delusions][]_: "There will be no significant public investment program... [Infrastructure Delusions]: http://krugman.blogs.nytimes.com/2017/01/14/infrastructure-delusions/?_r=0 >...Congressional Republicans have no interest in such a...

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14 января, 20:27

We Are Getting Worried About Paul Krugman

When a delicate snowflake is suddenly faced with a perceived reality so devastating as to be an existential crisis, the mind's reaction to dealing with this cognitive dissonance can be disabling for some. Certainly for The New York Times' flip-flopping, hate-mongering, fact-twisting, Keynesian poster-boy Paul Krugman it appears coping with "no" is not going well and his tirade last night in Twitter has us gravely concerned for his mental stability, which is ironic given how he began yesterday... Trump may be corrupt, but he's also mentally unstable. Thanks, Comey https://t.co/gs451Ixlvc — Paul Krugman (@paulkrugman) January 13, 2017 But that was followed quickly by a six-tweet-rant nothing short of what we would expect from a dejected five-year-old who just got denied another scoop of ice cream... Why won't Team Trump even *pretend* to stand up to Putin? The obsequiousness had people wondering even before the dossier pic.twitter.com/b10uhQfrTX — Paul Krugman (@paulkrugman) January 13, 2017 So much to worry about right now; so let me add to the pile. I suspect that we'll soon see massive rage on the part of Trump supporters 1/ — Paul Krugman (@paulkrugman) January 13, 2017 Why? I don't see many saying this, but anti-intellectualism was a big part of the movement: you smug liberals think we're stupid? Hah! 2/ — Paul Krugman (@paulkrugman) January 13, 2017 Now imagine the reaction when it becomes clear that they were snookered. Not only did they vote to strip themselves of health care 3/ — Paul Krugman (@paulkrugman) January 13, 2017 because they believed the assurances of an obvious fraudster, but Mr. Make America Great Again is a witting or unwitting foreign agent 4/ — Paul Krugman (@paulkrugman) January 13, 2017 I guess some will say "Gosh, I made a big mistake". But many will lash out even harder at those know-it-alls who, um, were actually right 5/ — Paul Krugman (@paulkrugman) January 13, 2017 Krugman once again blames the ignorance of the deplorable masses (who just don't get what a "fraudster" Trump is) in shunning him and his "know-it-alls", but he has been heading down this hill of manic-depressive lashing out for weeks now having recently suggested Trump will unleash a 9/11-style attack to legitimize his presidency. Is he hoping to maintain a groundswell of "well, if he is not hitler... he must be worse" thoughts among those so easily led? Still, coming from a man who has prognosticated alien invasions as a global economic growth engine, we are not sure if he is mental situation is improving or deteriorating. We wish him well.

14 января, 14:16

Текст: Липовый популизм Дональда Трампа ( Пол Кругман )

Недавняя статья в Washington Post по поводу Польши, где сейчас, заручившись серьезной поддержкой общества, правит правая антиинтеллектуальная, шовинистская партия, бросает в дрожь тех из нас, кого беспокоит, что трампизм и впрямь может означать конец демократии в США. Сторонники партии «Закон и справедливость» (ЗиС) в Польше действительно очень походили на белых активистов рабочего класса, поддержавших Дональда Трампа. Так поведут ли американцев тем же путем?  Есть важное отличие, которое заключается в некоторой американской исключительности, если хотите. Европейские популистские партии являются на самом деле популистскими. Они проводят политику, которая действительно помогает рабочим, но только если эти рабочие относятся к правильной этнической группе. Как кто-...

14 января, 00:50

Weekend Reading: Anticipation

Submitted by Lance Roberts via RealInvestmentAdvice.com, Over the past couple of weeks, the market has continued to remain overbought, extended and exuberant on “hopes” that Trump’s policies will be the ointment to cure the economy’s ills. As noted yesterday, exuberance has exploded in everything from consumer to investor to business optimism. The explosion of optimism is interesting given the consistent diatribe over the last few years about how well the economy was performing under the previous administration. This is the equivalent of a company’s stock price surging when the previous CEO is replaced which doesn’t speak well of his “legacy of performance.”  The question now is whether or not “hopes” will translate into “reality.” Interestingly, since the beginning of the year, the rush to pile into “Trump Trades” has quickly evaporated as transaction volumes have plunged as “anticipation” has turned into “wait and see.”  It is worth noting that previous, when transaction volumes have plunged to such low levels, the markets were generally at an inflection point of a correctionary process. With the markets currently extremely overbought and extended, the reality of a “sell the inauguration” trade is possible. In the end, “anticipation” of better outcomes is one thing when it comes to the financial markets and your money, however, “reality” is quite another. Here is what I am reading this weekend. Fed, Economy & Trump Yellen-Trump & The Coming Recession by James Rickards via Daily Reckoning Slow Fade Of Jobs Growth by James Picerno via Capital Spectator Goldman Sachs: 3 Things To Wreck The Economy by Lucinda Shen via Fortune A Case For Trump’s Import Tariff by Stephen Moore via The Washington Times Trump Should Embrace Free Trade by Robert Zoellick via Washington Post Trump’s Job Jawing: Good Politics, Bad Policy by Robert Samuelson via RCM Krugman Turns Hawkish W/GOP In “Da House” by Kevin Williamson via National Review Growing Economy & Deficits by Paul Krugman via NYT Infrastructure Spending May Not Boost Growth by Mihir Sharma via Bloomberg Don’t Expect Bond Vigilantes To Do Fed’s Work by Caroline Baum via MarketWatch Trump Can’t Repeal Economic Laws by Joseph Stiglitz via Project Syndicate Trump’s Protectionist Plan Nothing New by Alexia Campbell via The Atlantic Wall Street, Fed Have Stacked The Deck by David Smick via American Conservative Markets Corporate Bond Market: Binge Borrowing by Danielle DiMartino-Booth via Money Strong Nomi Prins: More Corporate Defaults In 2017 by Craig Wilson via Daily Reckoning Trump Oil Trade & $100/bbl Oil by Kirk Spano via MarketWatch Wall Street Hates “Volcker Rule,” Will Trump Kill It by Matt Egan via CNBC Will Inauguration Mark A Top? by William Watts via MarketWatch Bull-Turned-Bear – Lee See Trump Danger by Jeff Cox via CNBC 4-Reasons Trump Rally Has No Legs by Jake Weber via Forbes Prudent Things For Investors To Do by Nigam Arora via MarketWatch Why You Should Be Wary Of Junk Bonds by John Coumarianos via WSJ Why 2.6% Is More Important Than 20,000 by Bill Gross via Janus Capital If You Bought Trump Rumor, Sell The News by Mark Hulbert via MarketWatch The Case For Remaining Invested by Goldman Sachs The Invisible Stock Market Correction by Michael Kahn via Barron’s Interesting Reads Financial Stress Rings In New Year by Center For Retirement Research Death Spiral Of Sears To Bankruptcy’s Edge by Hayley Peterson via BI American’s Blowing It With Debt by John Pelletier via USA Today Fair Share? Top 400 vs Bottom 50% by Mark Perry via AEI 7 Ages Of Retirement That Matter by Matt Carey via Forbes How Trump Could Create A Financial Crisis by Matt O’Brien via Wonkblog Why Millennials Aren’t Afraid Of Socialism via Julia Mead via The Nation Facts Every Retiree Should Know About Annuities by Matthew Frankel via Motley Fool Suddenly, Homes Sale Agreements Are Falling Apart by Patrick Clark via Bloomberg Trump Makes Jobs Error During Presser by Steve Liesman via CNBC What Really Caused The Housing Crisis by Mark Thoma via CBS MoneyWatch Animal Spirits by Ed Yardeni via Yardeni Research BofA Warns Consumer Spending Tumbled by Tyler Durden via ZeroHedge 4-Reasons Fiscal Policy Won’t Restart Business Cycle by Tyler Durden via ZeroHedge Why Home Builders Can’t Meet Demand by Aaron Layman via AaronLayman.com Economic Risk Of Ignoring Arithmetic by John Hussman via Hussman Funds Are Oil Speculators About To Get Lit Up Again by Dana Lyons via Tumblr Might Want To Prepare Your Portfolio by Jesse Felder via The Felder Report “Stock market bubbles don’t appear out of thin air. They have a basis in reality. But that reality is distorted by misconception” ? George Soros

13 января, 22:45

Paul Krugman: Donald Trump’s Medical Delusions

Repeal and hope to blame the Democrats: Donald Trump’s Medical Delusions, by Paul Krugman, NY Times: ...Some Republicans appear to be realizing that their long con on Obamacare has reached its limit. Chanting “repeal and replace” may have worked as...

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10 декабря 2013, 22:28

Почему должны расти зарплаты

Наступила пора развлечений – или, во всяком случае, пора провести время в торговых центрах. Также, по традиции, это время подумать о положении тех, кому повезло меньше – например, о человеке по другую сторону кассы. оследние несколько десятилетий были трудными для многих американских рабочих, но особенно тяжело пришлось людям, занятым в розничной торговле – это категория, включающая продавцов Walmart и сотрудников McDonald’s. Несмотря на остаточное действие финансового кризиса, Америка сейчас гораздо богаче, чем 40 лет назад. Однако зарплата неруководящего персонала в розничной торговле, скорректированная с учетом инфляции сократилась почти на 30% с 1973 г. Так можно ли как-то помочь этим рабочим, многим из которых, чтобы накормить семью, нужны продуктовые карточки (при условии, что они смогут их получить), и многие из которых зависят от программы Medicaid (опять же при условии доступа к ней) для получения необходимого медицинского обслуживания? Да. Мы можем сохранить и расширить продуктовые карточки, а не сокращать программу, как этого хотят Республиканцы. Мы можем обеспечить успешное проведение реформ в сфере здравоохранения, несмотря на попытки правых подорвать процесс реализации программы. И мы можем повысить минимальную зарплату. Для начала - несколько фактов. Несмотря на увеличение минимальной, национальной, зарплаты несколько лет назад, она все же остается очень низкой по историческим меркам, значительно отставая от инфляции и средних уровней зарплаты. Кто же получает этот небольшой минимум? По большому счету, это мужчины или женщины, работающие на кассе: почти 60% американских рабочих, получающих минимальную зарплату, занимаются продажей продуктов питания или оказанием сопутствующих услуг. Между прочим, это значит, что один из аргументов, часто выдвигаемых против повышения зарплат - угроза конкуренции со стороны иностранных компаний – в данном случае не убедителен: американцы не поедут в Китай за гамбургерами и картошкой фри. Тем не менее, даже если международная конкуренция – не проблема, можем ли на самом деле помочь рабочим, просто законодательно установив более высокую зарплату? Не нарушает ли это закон спроса и предложения? Не поразят ли нас боги рынка невидимой рукой? Но есть множество свидетельств того, что происходит при повышении минимальной зарплаты. И результат является положительным: повышение минимальной зарплаты мало влияет, или совсем не влияет, на занятость, при этом значительно увеличивает доходы рабочих. Важно понять, насколько можно доверять таким доказательствам. Обычно экономическому анализу препятствует отсутствие контролируемых экспериментов. Например, мы можем увидеть, что случилось с американской экономикой после внедрения стимулов, предложенных Обамой, но мы не можем оценить состояние альтернативной вселенной, в которой не было стимулов, и не можем сравнить результаты. Однако существуют примеры, когда один штат поднимал минимальную зарплату, а другой нет. Если бы что-то подтверждало значительное негативное влияние повышения минимальной зарплаты на сферу занятости, подобный результат был бы очевиден при сравнении штатов. Но этого не произошло. Так что повышение минимальной зарплаты помогло бы низкооплачиваемым рабочим, без особых негативных последствий. И мы говорим о большом числе людей. В начале этого года Институт экономической политики подсчитал, что повышение минимальной национальной зарплаты с 7,25 доллара до 10,10 доллара принесло бы пользу 30 миллионам рабочих. Большинство получило бы непосредственную выгоду, поскольку сейчас они зарабатывают менее 10,10 доллара в час; а остальные получили бы косвенную выгоду, так как их оплата на самом деле привязана к минимуму – например, управляющие магазинов быстрого питания, получающие немного (но только немного) больше, работников, которыми они руководят. Сейчас многие экономисты испытывают неприязнь ко всему, что связано с установлением цен, даже при наличии положительных последствий. Некоторые из этих скептиков выступают против всего, что помогло бы низкооплачиваемым рабочим. Другие утверждают, что мы должны обеспечить субсидии и расширить программу E.I.T.C. (налоговый зачет за заработанный доход), которая, в сущности, оказывает значительную помощь малообеспеченным семьям. Между прочим, я полностью за расширение программы E.I.T.C. Но, оказывается, существуют веские причины рассматривать минимальную зарплату и E.I.T.C. как дополнение друг к другу, а не замену. Следует увеличить и то, и другое. К сожалению, учитывая политическую реальность, нет никаких шансов, что Конгресс примет закон об увеличении помощи работающему бедному населению. С другой стороны, минимальная зарплата может быть повышена благодаря огромной государственной поддержке. Эта поддержка исходит не только от Демократов или даже самовыдвиженцев; за повышение выступает подавляющее большинство Республиканцев (57%) и консерваторы (59%). Словом, повышение минимальной зарплаты помогло бы многим американцам, и, соответственно, американской экономике. Пол Кругман Подготовлено Forexpf.ru по материалам New York Times

12 ноября 2013, 19:58

Бернанке, не Кругман

Пол Кругман предложил вниманию читателей свою лекцию (с двумя моделями ) о роли политики обменного курса и наличия собственной валюты во время кризиса. Он настаивает на том, что спекулятивный кризис доверия практически не возможен в развитых странах с плавающим валютным курсом. Эту ситуацию он противопоставляет "греческим" кризисам в странах еврозоны, повторяя свои обобщения о природе кризиса в странах валютного союза. На доброжелательных ирландцев повторение пройденного большого впечатления не произвело.  Одним из важных элементов в рассказе Кругмана является хорошо знакомая роль правительственных и частных займов в собственной валюте, а не иностранной. Ничего нового для знакомых с "первородным грехом" в экономике и тех, кто слыхал о работах Кармен Рейхарт с коллегами про "боязнь плавания" и "неожиданные астановки"... В дополнение к лекции, за последние недели Кругман разместил в своем блоге серию записей с атаками на Германию, защитой Франции и критикой ЕЦБ с евробюрократами. Большинство из этих нападок повторяют тезисы 2-3-4-х летней давности. Как будто бы за это время мы не узнали ничего нового. Версию о том, что кризис в еврозоне был вызван потерей конкурентоспособности стран периферии в пользу Германии, мы обсуждали в начале 2010 здесь, и потом часто (начиная с немцы против немцев). С тех пор ко многим экономистам пришло понимание природы кризиса в Латвии, затем в Ирландии, затем в Италии и Испании.  Как здесь уже записано, огромным, хотя и запоздалым, ударом по позициям Кругмана была недавняя статья Бланшара о кризисе в Латвии. Благодаря внимательному изучению опыта этих стран, понимание кризиса в еврозоне стало намного более глубоким. На версию о потере конкурентоспособности теперь приходится, быть может, процентов 10-20 его объяснения :), и она теперь годится разве что для лекции в сельском клубе... Лекция Бернанке (там же, интересно) о кризисе как классическом набеге на финансовый сектор и панике на финансовых рынках, важна для понимания уроков кризиса в США, в еврозоне и Великобритании.  В еврозоне эти моменты были особенно важны, потому что банки там были слабее, и механизмы защиты от паники были институцуионально не проработанными. Рассмотрение еврозоны Кругманом как одной страны граничит с профанацией анализа.  Ожидать от правительства Германии действий не в интересах экономики своей страны, а в интересах экономики Греции или Испании, мне кажется верхом наивности. Конечно, валютный союз накладывает дополнительные обязательства на правительства еврозоны, и за время кризиса они обсуждались, менялись, кодифицировались. Но национальные правительства там пока никто не отменял, и избирают партию Меркель граждане Германии, а не кругманы. Критика Кругманом денежно-кредитной политики ЕЦБ, как мне кажется, тоже несправедлива, но об этом лучше черкнуть отдельно. Большинству, наверное, давно не интересно разбираться в уже разобранном, но Кармен Рейнхарт не поленилась указать нобелевскому лауреату на его ошибочные комментарии к картинке про Великобританию. А о том, что "греческий кризис" был только в Греции, что еврозона не страна, похожая на США, и что банковский кризис в еврозоне многим отличался от механики кризисов в других странах, никто уже блогеру не жаждет рассказывать... Офтопик: Своими грубыми нападками, часто выходящими далеко за рамки приличий, Кругман удобен тем, кому выгодно атаковать ЕЦБ, Европейскую комиссию и антикризисную политику в Европе.  С одной стороны, Кругмана нельзя игнорировать, потому что блогер-экономист пользуется популярностью и авторитетом среди читателей и многих коллег. С другой стороны, отвечать ему грубостями не каждый захочет и не каждый может себе это позволить. Поэтому европейцы пытаются отвечать взвешенными заметками, как Бути и Падоан здесь и, в ответ Кругману, здесь.  Или как только что тужился сделать один из бывших лидеров ЕЦБ Смаги в заметке "Аскетизм и тупость" :) Народная мудрость: "Против лома нет приема, если нет другого лома".  Для ответа Кругману, наверное, нужен евро-Ильвес с большой командой неглупых экономистов :) Рогофф и Рейнхарт, как мне кажется, лучше других защищались от гадких наездов Кругмана. По крайней мере в среде профессионалов им удалось поставить Кругмана на место. Но в популярном сознании Рогофф и Рейнхарт все равно подозреваются в тяжких грехах.  Утешение атакуемых Кругманом в том, что люди, принимающие решения по антикризисной политике, слушают не Кругмана, а его оппонентов. И народ, который свои правительства избирает, этих людей поддерживает.

26 апреля 2013, 12:44

Странглия, Мервин Кинг и Сергей Игнатьев

На графике ВВП Великобритании (картинка из свежайшей речи одного из лидеров Банка Англии, там другие есть). Красным показан докризисный тренд, а синим жизнь. Вчера все с напряжением ждали, объявят ли народу об уже ТРЕТЬЕЙ по счету рецессии, но бог миловал и объявили о небольшом росте в первом квартале. Почему нет роста в любимом россиянами Лондонграде и его окрестностях?Кругман, ДеЛонг и другие уверяют своих читателей, что это из-за бюджетной консолидации бюджетного аскетизма, как в России.  Они видят на этой картинке ошибку в статье Рейнхарт-Рогофф 2010 года, и письмо о бюджетной дисциплине, которое в феврале 2010 года подписал Кеннет Рогофф вместе с другими экономистами. Статья и письмо подтолкнули правительство Камерона на ужасную экономическую политику и лишили британцев благосостояния, измеряемого разницей между красной революционной линией и синей, преступной. Чтобы убедиться, что красная линия является для Кругмана и ДеЛонга критерием успеха, желающие могут почитать свежую заметку ДеЛонга про США или поискать его и Кругмана многочисленные атаки на Великобританию, а про Латвию с Эстонией я лучше промолчу.Вопрос на засыпку про бюджетный аскетизм упирается в Великобританию по ряду причин.  У страны своя валюта, которая, как постоянно повторяет Кругман и Ко. необходима для успеха.  С начала кризиса фунт стерлингов подешевел процентов на 20-25, что, по мнению Кругмана, должно было привести с скачку экспорта.  Инфляция была намного выше 2%, к чему тоже призывали Кругман и другие экономисты.  Много чего было в Великобритании в кризисные годы. А роста не было и пока нет.  Поэтому для Кругмана, ДеЛонга и их единомышленников  главным виновником преступления должен быть бюджетный аскетизм.  В Великобритании, по их мнению, нужен был значительный бюджетный стимул, достаточный для быстрого возвращения к красной черте.  На всякий случай напомню сразу, что дефицит бюджета в Странглии на автомате сразу скакнул к 10-11% ВВП (картинка).  Этого, по мнению борцов с бюджетным аскетизмом, было мало, надо было гораздо больше. По мнению Кругмана, инвесторы бы этого совсем не испугались, потому что никакой "Волшебницы доверие" нет (добавим от себя следствие: нет и "Волшебницы Недоверие").  Вот свежая заметка ДеЛонга, где он обвиняет Камерона и "правых" экономистов в попытке реализовать в Великобритании "стимилирующее сокращение" дефицита бюджета а ля Алесина.Как и в случае российских дебатов о замедлении роста, за более объективным мнением я обратился к уходящему руководителю центрального банка - Банка Англии - Мервину Кингу, коллеге Сергея Игнатьева. В своей январской речи Кинг подробно рассказывал о диагнозе, лечении и будущем экономики Великобритании.  Речь советую почитать. В отличие от Банка России, британцы публикуют речи своих руководителей, чтобы каждый желающий не гадал, какие у них мысли, а мог прочитать речь и поглазеть на иллюстрации к ней и даже почитать указанную дополнительную литературу.Кинг сразу же напомнил слушателям об избыточном докризисном энтузиазме:Much of this reflects the inevitable correction of exuberance on the part of borrowers and lenders, the conditions for which were created by the failure to tackle the global imbalances that left most major countries with unsustainable exchange rates, unsustainable paths of consumption, saving and borrowing, and unsustainably low long-term real interest rates.Затем отметил три фактора, сдерживающих рост, некоторые из них внутренние, некоторые внешние. Не буду пересказывать, но среди них упомянуты цены на еду и энергию.  Системный финансовый кризис привел к нарушениям в банковском секторе, толкнул банки к осторожности и затруднил доступ к кредиту, особенно для мелких и средних предприятий. Но среди причин анемичного роста у Кинга нет даже намека на излишний бюджетный аскетизм.  Единственное упоминание о бюджетной политике во всей речи сводится к ограничениям в ее использовании из-за большого госдолга:In many countries, including the UK, fiscal policy is constrained by the size of government indebtedness, and monetary policy has come to be seen as the only game in town.Нет бюджетного стимулирования и среди нескольких рецептов лечения (помимо денежно-кредитной политики КуЕ). Рецепта три, включая укрепление банков, увеличение экономического потенциала за счет структурных реформ и (все еще надежда на)  восстановление еврозоны и слабый фунт стерлингов/экспорт:What are those other policies? They come under three headings: restoring confidence in our banks, reforms to raise the future potential supply of our economy, and changes in the world economy and exchange rates.Этот диагноз, рецепты лечения и прогноз мы услышали от одного из сотен британских экономистов, которые в свое время в открытом письме возмутились преступным бюджетным аскетизмом Маргарет Тэтчер :). Кто-нибудь наверняка скажет мне, что старик Кинг кривит душой, что не хочет осложнять жизнь правительству Камерона. Но ведь он пожилой уже человек, ему нечего терять, кроме своего доброго имени. Не боится же он требовать значительного дополнительного увеличения акционерного капитала у всесильных банков, которые могли бы его подкармливать в старости. Неужели Кинг промолчал бы, если бы действительно верил во вред бюджетной дисциплины?Что такое ужасное делает правительство Великобритании, какой такой особый аскетизм в Лондонграде?  Смотрим еще раз на сокращение дефицита, ожидаемое в разных странах за три года 2011-2013, и видим, что у британцев сокращение дефицита очень похоже на небольшое сокращение в других странах, как у Франции или Бельгии, и меньше, чем в США, не говоря уже о больных еврозоны Испании, Ирландии и Ко., которым Кругман, кстати, тоже раньше регулярно предлагал активнее стимулировать экономику дополнительными бюджетными расходами (?!).Можно допустить, что сейчас, когда инвесторы успокоились после испуга 2008-2011 гг., британцы могли бы сокращать дефицит чуть медленнее, как это может себе теперь легко позволить Эстония или Латвия. Сейчас, а не в 2010, когда инвесторы, включая Билла Гросса, буквально тряслись от страха. И американцы могли бы сейчас дать слабину. Но надо же быть реалистами. К красной линии они бы все равно долго не вернулись. И Кругман с ДеЛонгом все равно будут ругать всех и вся во всю силу своих легких.  Никакого чрезмерного аскетизма в Великобритании нет, просто не нашли там вовремя сланцевый газ, банковский сектор там побольше и еврозона поближе. Разница между Великобританией и США еще и в том, что в Америке нет никаких бюджетных планов, а есть секвестр, знакомый нам по предкризисным 1990м. Там правит политический паралич. Планы же британцев известны заранее, и за выполнением планов уже давно следят специально обученные независимые люди в Офисе бюджетной ответственности, как и учил реалист Кеннет Рогофф.ДОП: Пока я кропал и выдергивал из интернета чужие мысли и картинки, появился пользительный пост zhu_s...Как я уже заметил в тексте, мы не можем ознакомиться с речью Сергея Игнатьева о причинах замедления роста российской экономики и посмотреть на познавательные картинки-иллюстрации к его увлекательному рассказу.  Но у нас есть zhu_s, который думает и пишет на эту важную для экономической политики тему.

28 февраля 2013, 20:13

Стимулирование или спад? МАКРОЭКОНОМИКА РЕЦЕССИИ

ДЕЛОНГ: Период между 1985 и 2007 – период «Великого Спокойствия» - Фед Резерв и Правительство США с одной стороны на Западе, а центральные банки и финансовые институты Евросоюза на востоке Атлантического океана обеспечили устойчивое макроэкономическое окружение в рамках которого частный бизнес сектор, рабочие и инвесторы могли реализовывать свои экономические устремления. В США в годовом выражении прирост номинального ВВП опускался ниже 4% только 3 раза в эти годы и превышал 7% только 2 раза в течение 22 лет, уровень потребительской инфляции был выше 5% 3 раза и падал ниже 2%  только 2 раза в течение этих 22 лет, а уровень занятости взрослого населения (отношение числа занятых к общей численности взрослого населения) колебался в границах 60-64%. Западная Европа переживала примерно такой же период «Великого Спокойствия» с низкой инфляцией, плавным ростом и снижающейся безработицей. Как говорил Роберт Лукас в эти спокойные годы: «проблема предотвращения депрессии была решена». Далее в 2008-2009-м гг. уровень прироста номинального ВВП в США рухнул к -3% - неожиданное значительное снижение для любого, кто ожидает «Великого Спокойствия» с прежним уровнем роста расходов, потребительская инфляция ушла в отрицательную зону (-2%), а занятость населения упала с 63% до 58-59%. В Западной Европе изначально рецессия была слабее, но последующая ситуация на рынке труда оказалась более разочаровывающей, так что в настоящий момент чистое снижение к тренду производства и занятости в Западной Европе превышает аналогичные показатели в США. Проблема предотвращения депрессии и её излечения не была решена. В этом контексте мы собрались обсудить следующие четыре вопроса: Может ли политика ФРС, ЕЦБ, государственных органов адоптироваться так, чтобы в короткие сроки вернуть уровень занятости к значениям которые мы в течение 1985-2007 считали «нормальными», а темпы роста занятости к уровням Рейгановского бума 1982-1989 гг.? Если может, какой должна быть эта политика? Если может, является ли эта политика приемлемой? Как ваше мнение на вопросы 1-3 отличается от мнения 6 лет назад?  Карло Коттарелли из Международного валютного фонда.