AI
Friday, March 29, 2019 1:47:49 AM
An A- for the U.S. Economy, but Failing Grades for Trump’s Policies
"hookrider, White House Analysis Finds Tariffs Will Hurt Growth, as Officials Insist Otherwise"
President Trump delivering the State of the Union at the Capitol in Washington, D.C., on Tuesday.CreditCreditDoug Mills/The New York Times
INSERT - Fact-checking President Trump’s 2019 State of the Union address
"Donald Trump has said 4210 false things as U.S. president"
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=146609425
By Justin Wolfers
Feb. 4, 2019
When President Trump delivered his State of the Union address on Tuesday, he could quite justifiably say that the state of the economy was good.
Unemployment is low, inflation is muted and growth has continued unabated for nearly 10 years. As a college professor, I’m often drawn to giving letter grades, and would give the United States economy an A-, with the potential for a better grade if the economic gains had been distributed more evenly.
But Mr. Trump controls economic policy, not the economy, and so a fairer report card would also assess his actual policies.
To provide a nonpartisan appraisal, I’ve reviewed surveys of about 50 leading economists .. http://www.igmchicago.org/igm-economic-experts-panel .. — liberals and conservatives — run by the University of Chicago. What is startling is that the economists are nearly unanimous in concluding that Mr. Trump’s policies are destructive. That is why many economists are uneasy about his presidency, even though the economy earns solid grades.
Trade Policy: F
Mr. Trump’s protectionist impulses place him squarely at odds with the economic wisdom that tariffs are harmful. Worse, by imposing tariffs on goods .. https://www.nytimes.com/2018/07/07/opinion/how-to-lose-a-trade-war.html?module=inline .. like aluminum and steel Mr. Trump’s trade policy has also damaged the competitiveness of American manufacturers. None of the economists taking part in the surveys .. http://www.igmchicago.org/surveys/steel-and-aluminum-tariffs .. agreed with the claim that these tariffs would “improve Americans’ welfare,” and all of them said global supply chains had made these tariffs more costly .. http://www.igmchicago.org/surveys/trade-disruptions .. than they would have been in the past.
The United States started a trade war with China and China quickly retaliated, raising tariffs on American-made goods. Mr. Trump also created needless uncertainty with his threat to rip up the North American Free Trade Agreement that binds the United States, Canada and Mexico. The threat yielded a substitute deal that market economists believe .. http://projects.wsj.com/econforecast/?standalone=1#e=1539204877455&qa=20181001002 .. will do little more than replicate the previous one, and it is unclear that Congress will pass it.
Criticism of Mr. Trump’s protectionist instincts is widespread. When he said on Twitter .. https://twitter.com/realDonaldTrump/status/1069970500535902208 .. that he was “Tariff Man,” financial markets tanked .. https://www.nytimes.com/2018/12/04/us/politics/trump-tariff-man-china-trade.html?module=inline . An analysis conducted by the president’s own Council of Economic Advisers has reportedly concluded .. https://www.nytimes.com/2018/06/07/us/politics/white-house-tariffs-growth.html?smid=tw-nytimes&smtyp=cur&module=inline .. that his tariffs will reduce economic growth. Even by Mr. Trump’s own preferred metric, the balance of trade, his policy has failed: The trade deficit has risen .. https://fred.stlouisfed.org/series/BOPGSTB .. to a 10-year high .. https://www.reuters.com/article/us-usa-economy/u-s-trade-deficit-hits-10-year-high-private-hiring-slows-idUSKBN1O51LQ .
Fiscal Policy: D-
The logic of fiscal policy is straightforward: In good times, the government should spend less, so that in bad times it can afford to spend more and tax less, helping to support an ailing economy. When private-sector demand falls, government picks up the slack.
On this score, Mr. Trump’s fiscal policy is a colossal failure. His signature achievement is a $1.5 trillion tax cut that provided stimulus when, arguably, it was least needed. As a result, the budget deficit .. https://www.cbo.gov/system/files/2019-01/54918-Outlook-VisualSummary.pdf .. is atypically high for a healthy economy, and rising government debt will make it hard for fiscal policy to provide a boost when the next downturn hits.
Mr. Trump might argue that the point of the tax cut wasn’t to provide a short-term stimulus, but rather to promote long-term economic growth. However, economists say that it will fail to do that, too. In a survey .. http://www.igmchicago.org/surveys/tax-reform-2 .. before the bill was passed, all but one expert said the tax cut wouldn’t lead gross domestic product “to be substantially higher a decade from now.” Darrell Duffie, the lone dissenter, said it would boost growth, but he added that “whether the overall tax plan is distributionally fair is another matter.”
The problem, according to Daron Acemoglu, a prominent macroeconomist, is that while “simplification of the tax code could be beneficial,” that effect would most likely be “more than offset by its highly regressive nature.” Recent data support this pessimism, as the much-promised investment boom the tax cut was supposed to deliver appears not to have materialized.
It is worth noting that the one part of Mr. Trump’s platform that received a strong endorsement from economists .. http://www.igmchicago.org/surveys/infrastructure-spending .. — his promise of infrastructure spending — has languished, despite the possibility of bipartisan support.
---
As Krugman reminds us in, Democrats, Debt and Double Standards .. https://investorshub.advfn.com/boards/read_msg.aspx?message_id=146793523 ..
in times of such ultra-low low interest rates concern re more debt is diminished somewhat as long as the added is spent on investment such as infrastructure, or healthcare.
On something more long-term worthwhile than corporate tax cuts for big corporations which went mainly for stock buy-backs, so basically to enrich the top 1%.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=146795315
---
Monetary Policy: C
For a president, monetary policy should be simple: Appoint good people, and let the Federal Reserve do its job. Mr. Trump has got half of this right. Jerome Powell, his pick for Fed chairman, has so far proven to be adept. In a recent survey .. http://projects.wsj.com/econforecast/?standalone=1#e=1544648531021&qa=20181201001 , 43 percent of economists gave Mr. Powell’s leadership an A, and 51 percent gave him a B (with the remaining 6 percent giving him a C). Mr. Trump’s other Fed appointments have been mainstream, yielding a cast of policymakers that Jeb Bush might have appointed had he been elected president.
But Mr. Trump has dragged down his grade in this category by meddling in ways that have needlessly complicated the Fed’s job. Most industrialized countries, including the United States, have generally insulated monetary policy from political pressure, believing that such independence helps policymakers deliver low and stable inflation. Yet Mr. Trump has repeatedly .. https://twitter.com/realDonaldTrump/status/1075001077576151041 .. criticized .. https://twitter.com/realDonaldTrump/status/1077231267559755776 .. Mr. Powell for not setting interest rates lower, and has reportedly raised .. https://www.nytimes.com/2018/12/24/us/politics/trump-renews-attack-on-fed-as-mnuchin-tries-to-calm-markets.html?module=inline .. the possibility of firing him. The president is playing a self-defeating game, because he is making it harder for Mr. Powell to deliver low rates without appearing to have been bullied by Mr. Trump.
Deciphering a Puzzle
Mr. Trump isn’t just pushing against one or two threads of economic consensus. Instead, his program is an almost complete repudiation of the orthodoxies endorsed by Democratic and Republican economists.
Put the pieces together, and all of this presents a puzzle: If economic policy is so bad, why is the economy doing so well?
Subscribe to With Interest
Catch up and prep for the week ahead with this newsletter of the most important business insights, delivered Sundays.
Perhaps it reflects good luck rather than good judgment. Mr. Trump’s luck was to inherit an economy that had been on a steadily improving glide path since around 2010. Charting nearly any economic statistic shows that today’s economic strength represents a continuation of that trend.
Even if Mr. Trump doesn’t deserve credit for this trajectory, he should get some credit for not knocking the economy off this path. Unless, of course, the real explanation is that the president doesn’t have much effect .. https://www.nytimes.com/2017/01/17/upshot/presidents-have-less-power-over-the-economy-than-you-might-think.html?module=inline .. on economic outcomes.
---
That one posted earlier here -
ForReal, putting aside Trump's claim that global warning is a Chinese hoax and his pulling out of the Paris
agreement; putting aside his putting more Americans into a no healthcare insurance position; and putting aside
his delaying the implementation of added sanctions against Russia for months after they were passed in Congress
(that certainly smells of going soft on Russia); and putting aside Pruitt's EPA environmental neglect - and his latest -
EPA's Pruitt unveils controversial limits to scientific research
[...]
Presidents Have Less Power Over the Economy Than You Might Think
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=140290102
---
The more frightening explanation is that the downside of Mr. Trump’s policies are yet to become evident. The chaos of his administration’s policy process has created uncertainty and probably scared off some investors, although their absence is difficult to measure. In addition, Mr. Trump’s unfunded tax cuts are creating a debt that future generations will have to repay. And by undermining the Fed’s independence, he may have made it less effective at fighting inflation.
That’s not all.
Cutting regulations in the financial sector may help big banks today, but it could increase the chances of future financial crises. Eliminating environmental regulations has probably improved results for some businesses while speeding climate change. And while impeding immigration may have reduced competition for jobs, many economists .. http://www.igmchicago.org/surveys/immigration .. worry that in the longer run, reducing the number of immigrants will lead to less innovation and growth.
Of course, I should admit a final possibility: Perhaps Mr. Trump has got it right, and the economists have gotten it all wrong. As a card-carrying economist, I don’t believe this, but it seems that, in equal measure, Mr. Trump doesn’t believe what economists say, either.
Justin Wolfers is a professor of economics and public policy at the University of Michigan. Follow him on Twitter: @justinwolfers.
https://www.nytimes.com/2019/02/04/business/us-economy-trump-taxes-trade.html
See also:
... The bond market is flashing its biggest recession sign since before the financial crisis
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=147865949
Larry Kudlow's Favorite Recession Indicator Crashes Into Inversion
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=147759260
Obama Saved Us From a Great Depression
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=147007597
ForReal, As a conservative, I despair at Republicans' support for Trump. His vision is not conservatism
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=147198246
THE 6 ESSENTIAL CONS THAT DEFINE TRUMP'S SUCCESS
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=147080054
Krugman puts Schultz through the Grinder
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=146449153
Two charts demolish the notion that immigrants here illegally commit more crime
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=146157935
"hookrider, White House Analysis Finds Tariffs Will Hurt Growth, as Officials Insist Otherwise"
President Trump delivering the State of the Union at the Capitol in Washington, D.C., on Tuesday.CreditCreditDoug Mills/The New York Times
INSERT - Fact-checking President Trump’s 2019 State of the Union address
"Donald Trump has said 4210 false things as U.S. president"
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=146609425
By Justin Wolfers
Feb. 4, 2019
When President Trump delivered his State of the Union address on Tuesday, he could quite justifiably say that the state of the economy was good.
Unemployment is low, inflation is muted and growth has continued unabated for nearly 10 years. As a college professor, I’m often drawn to giving letter grades, and would give the United States economy an A-, with the potential for a better grade if the economic gains had been distributed more evenly.
But Mr. Trump controls economic policy, not the economy, and so a fairer report card would also assess his actual policies.
To provide a nonpartisan appraisal, I’ve reviewed surveys of about 50 leading economists .. http://www.igmchicago.org/igm-economic-experts-panel .. — liberals and conservatives — run by the University of Chicago. What is startling is that the economists are nearly unanimous in concluding that Mr. Trump’s policies are destructive. That is why many economists are uneasy about his presidency, even though the economy earns solid grades.
Trade Policy: F
Mr. Trump’s protectionist impulses place him squarely at odds with the economic wisdom that tariffs are harmful. Worse, by imposing tariffs on goods .. https://www.nytimes.com/2018/07/07/opinion/how-to-lose-a-trade-war.html?module=inline .. like aluminum and steel Mr. Trump’s trade policy has also damaged the competitiveness of American manufacturers. None of the economists taking part in the surveys .. http://www.igmchicago.org/surveys/steel-and-aluminum-tariffs .. agreed with the claim that these tariffs would “improve Americans’ welfare,” and all of them said global supply chains had made these tariffs more costly .. http://www.igmchicago.org/surveys/trade-disruptions .. than they would have been in the past.
The United States started a trade war with China and China quickly retaliated, raising tariffs on American-made goods. Mr. Trump also created needless uncertainty with his threat to rip up the North American Free Trade Agreement that binds the United States, Canada and Mexico. The threat yielded a substitute deal that market economists believe .. http://projects.wsj.com/econforecast/?standalone=1#e=1539204877455&qa=20181001002 .. will do little more than replicate the previous one, and it is unclear that Congress will pass it.
Criticism of Mr. Trump’s protectionist instincts is widespread. When he said on Twitter .. https://twitter.com/realDonaldTrump/status/1069970500535902208 .. that he was “Tariff Man,” financial markets tanked .. https://www.nytimes.com/2018/12/04/us/politics/trump-tariff-man-china-trade.html?module=inline . An analysis conducted by the president’s own Council of Economic Advisers has reportedly concluded .. https://www.nytimes.com/2018/06/07/us/politics/white-house-tariffs-growth.html?smid=tw-nytimes&smtyp=cur&module=inline .. that his tariffs will reduce economic growth. Even by Mr. Trump’s own preferred metric, the balance of trade, his policy has failed: The trade deficit has risen .. https://fred.stlouisfed.org/series/BOPGSTB .. to a 10-year high .. https://www.reuters.com/article/us-usa-economy/u-s-trade-deficit-hits-10-year-high-private-hiring-slows-idUSKBN1O51LQ .
Fiscal Policy: D-
The logic of fiscal policy is straightforward: In good times, the government should spend less, so that in bad times it can afford to spend more and tax less, helping to support an ailing economy. When private-sector demand falls, government picks up the slack.
On this score, Mr. Trump’s fiscal policy is a colossal failure. His signature achievement is a $1.5 trillion tax cut that provided stimulus when, arguably, it was least needed. As a result, the budget deficit .. https://www.cbo.gov/system/files/2019-01/54918-Outlook-VisualSummary.pdf .. is atypically high for a healthy economy, and rising government debt will make it hard for fiscal policy to provide a boost when the next downturn hits.
Mr. Trump might argue that the point of the tax cut wasn’t to provide a short-term stimulus, but rather to promote long-term economic growth. However, economists say that it will fail to do that, too. In a survey .. http://www.igmchicago.org/surveys/tax-reform-2 .. before the bill was passed, all but one expert said the tax cut wouldn’t lead gross domestic product “to be substantially higher a decade from now.” Darrell Duffie, the lone dissenter, said it would boost growth, but he added that “whether the overall tax plan is distributionally fair is another matter.”
The problem, according to Daron Acemoglu, a prominent macroeconomist, is that while “simplification of the tax code could be beneficial,” that effect would most likely be “more than offset by its highly regressive nature.” Recent data support this pessimism, as the much-promised investment boom the tax cut was supposed to deliver appears not to have materialized.
It is worth noting that the one part of Mr. Trump’s platform that received a strong endorsement from economists .. http://www.igmchicago.org/surveys/infrastructure-spending .. — his promise of infrastructure spending — has languished, despite the possibility of bipartisan support.
---
As Krugman reminds us in, Democrats, Debt and Double Standards .. https://investorshub.advfn.com/boards/read_msg.aspx?message_id=146793523 ..
in times of such ultra-low low interest rates concern re more debt is diminished somewhat as long as the added is spent on investment such as infrastructure, or healthcare.
On something more long-term worthwhile than corporate tax cuts for big corporations which went mainly for stock buy-backs, so basically to enrich the top 1%.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=146795315
---
Monetary Policy: C
For a president, monetary policy should be simple: Appoint good people, and let the Federal Reserve do its job. Mr. Trump has got half of this right. Jerome Powell, his pick for Fed chairman, has so far proven to be adept. In a recent survey .. http://projects.wsj.com/econforecast/?standalone=1#e=1544648531021&qa=20181201001 , 43 percent of economists gave Mr. Powell’s leadership an A, and 51 percent gave him a B (with the remaining 6 percent giving him a C). Mr. Trump’s other Fed appointments have been mainstream, yielding a cast of policymakers that Jeb Bush might have appointed had he been elected president.
But Mr. Trump has dragged down his grade in this category by meddling in ways that have needlessly complicated the Fed’s job. Most industrialized countries, including the United States, have generally insulated monetary policy from political pressure, believing that such independence helps policymakers deliver low and stable inflation. Yet Mr. Trump has repeatedly .. https://twitter.com/realDonaldTrump/status/1075001077576151041 .. criticized .. https://twitter.com/realDonaldTrump/status/1077231267559755776 .. Mr. Powell for not setting interest rates lower, and has reportedly raised .. https://www.nytimes.com/2018/12/24/us/politics/trump-renews-attack-on-fed-as-mnuchin-tries-to-calm-markets.html?module=inline .. the possibility of firing him. The president is playing a self-defeating game, because he is making it harder for Mr. Powell to deliver low rates without appearing to have been bullied by Mr. Trump.
Deciphering a Puzzle
Mr. Trump isn’t just pushing against one or two threads of economic consensus. Instead, his program is an almost complete repudiation of the orthodoxies endorsed by Democratic and Republican economists.
Put the pieces together, and all of this presents a puzzle: If economic policy is so bad, why is the economy doing so well?
Subscribe to With Interest
Catch up and prep for the week ahead with this newsletter of the most important business insights, delivered Sundays.
Perhaps it reflects good luck rather than good judgment. Mr. Trump’s luck was to inherit an economy that had been on a steadily improving glide path since around 2010. Charting nearly any economic statistic shows that today’s economic strength represents a continuation of that trend.
Even if Mr. Trump doesn’t deserve credit for this trajectory, he should get some credit for not knocking the economy off this path. Unless, of course, the real explanation is that the president doesn’t have much effect .. https://www.nytimes.com/2017/01/17/upshot/presidents-have-less-power-over-the-economy-than-you-might-think.html?module=inline .. on economic outcomes.
---
That one posted earlier here -
ForReal, putting aside Trump's claim that global warning is a Chinese hoax and his pulling out of the Paris
agreement; putting aside his putting more Americans into a no healthcare insurance position; and putting aside
his delaying the implementation of added sanctions against Russia for months after they were passed in Congress
(that certainly smells of going soft on Russia); and putting aside Pruitt's EPA environmental neglect - and his latest -
EPA's Pruitt unveils controversial limits to scientific research
[...]
Presidents Have Less Power Over the Economy Than You Might Think
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=140290102
---
The more frightening explanation is that the downside of Mr. Trump’s policies are yet to become evident. The chaos of his administration’s policy process has created uncertainty and probably scared off some investors, although their absence is difficult to measure. In addition, Mr. Trump’s unfunded tax cuts are creating a debt that future generations will have to repay. And by undermining the Fed’s independence, he may have made it less effective at fighting inflation.
That’s not all.
Cutting regulations in the financial sector may help big banks today, but it could increase the chances of future financial crises. Eliminating environmental regulations has probably improved results for some businesses while speeding climate change. And while impeding immigration may have reduced competition for jobs, many economists .. http://www.igmchicago.org/surveys/immigration .. worry that in the longer run, reducing the number of immigrants will lead to less innovation and growth.
Of course, I should admit a final possibility: Perhaps Mr. Trump has got it right, and the economists have gotten it all wrong. As a card-carrying economist, I don’t believe this, but it seems that, in equal measure, Mr. Trump doesn’t believe what economists say, either.
Justin Wolfers is a professor of economics and public policy at the University of Michigan. Follow him on Twitter: @justinwolfers.
https://www.nytimes.com/2019/02/04/business/us-economy-trump-taxes-trade.html
See also:
... The bond market is flashing its biggest recession sign since before the financial crisis
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=147865949
Larry Kudlow's Favorite Recession Indicator Crashes Into Inversion
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=147759260
Obama Saved Us From a Great Depression
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=147007597
ForReal, As a conservative, I despair at Republicans' support for Trump. His vision is not conservatism
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=147198246
THE 6 ESSENTIAL CONS THAT DEFINE TRUMP'S SUCCESS
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=147080054
Krugman puts Schultz through the Grinder
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=146449153
Two charts demolish the notion that immigrants here illegally commit more crime
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=146157935
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
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