By Anatole Kaletsky, a member of the governing board of the Institute for New Economic Thinking and the founder and Chairman of GaveKal Dragonomics. Originally published at the Institute for New Economic Thinking website
Donald Trump’s inauguration as the 45th president of the United States is widely seen as the beginning of the end of the post-1945 capitalist order that became globally dominant after the Cold War’s end. But is it possible that Trumpism is actually the end of the beginning? Could Trump’s victory mark the end of a period of post-crisis confusion, when the economic model that failed in 2008 was finally recognized as irretrievably broken, and the start of a new phase of global capitalism, when a new approach to economic management gradually evolves?
If history is any guide, the near-collapse of the global financial system in 2008 was always likely to be reflected – after a lag of five years or so – in challenges to existing political institutions and prevailing economic ideology. As I have recently explained – and described in greater detail in my 2010 book Capitalism 4.0– this was the sequence of events that followed previous systemic crises of global capitalism: liberal imperialism followed the 1840s revolutions; Keynesianism followed the Great Depression of the 1930s; and Thatcher-Reagan market fundamentalism followed the Great Inflation of the 1970s. Could Trumpism – understood as a lagged response to the 2008 crisis – herald the emergence of a new capitalist regime?
This question can be divided into three parts: Can Trump’s economic policies work? Will his administration’s economic program be politically sustainable? And what impact might Trumpism have on economic thinking and attitudes to capitalism around the world?
Trickle-Down Redux
On the first of these issues, a few Project Syndicate commentators see some grounds for hope, but most are deeply pessimistic, a stance epitomized by Nobel laureate Joseph Stiglitz. “There really is no silver lining to the cloud that now hangs over the US and the world,” he argues. “The only way Trump will square his promises of higher infrastructure and defense spending with large tax cuts and deficit reduction is a heavy dose of what used to be called voodoo economics.” For Stiglitz, Trump represents a re-enactment of the Reagan era’s socially regressive trickle-down economics, but with the addition of two further lethal ingredients – a trade war with China and a loss of access to health care for millions.
The political consequences, Stiglitz believes, will be disastrous. Experience shows that this trickle-down “story does not end well for Trump’s angry, displaced Rust Belt voters,” who will be tempted to seek even more aggressively for scapegoats once they realize how profoundly Trump has betrayed their interests.
Simon Johnson of MIT Sloan and the Peterson Institute for International Economics reaches a similar conclusion. Trump’s economic-policy priorities are reflected in his proposed cabinet, which represents a dramatic shift to outright “oligarchy: direct control of the state by people with substantial private economic power,” says Johnson. “Trump seems determined to lower income taxes for high-income Americans, as well as to reduce capital-gains tax (mostly paid by the well-off) and nearly eliminate corporate taxes (again, disproportionately benefiting the richest).”
Focusing on the politics of the new administration’s plans, Johnson, a former International Monetary Fund chief economist, notes that Trump leads “a coalition of businesspeople who wrongly believe that protectionism is a good way to help the economy” and “market fundamentalists” who are determined to cut taxes. To consolidate this coalition, the market fundamentalists are embracing protectionism, justifying Trump’s proposed import tariffs as a way to pay for slashing corporate taxes. Tariffs, however, are equivalent to increasing the sales tax. Thus, the result will be to “deflect attention from the essentials of their policy: lower taxes for the oligarchs,” paid for by “higher taxes – not to mention significant losses of high-paying jobs” (as a result of protectionism) – “for almost everyone else.”
Unlike Johnson, Harvard University’s Martin Feldstein, who served as Chairman of President Ronald Reagan’s Council of Economic Advisers, welcomes the prospect of a reduction in top marginal tax rates. President Barack Obama’s policies, Feldstein argues, continued an unhealthy “shift in the tax burden to those with the highest income levels” since the Reagan era.
But while Feldstein favors broadening the tax base away from the richest Americans in a “revenue-neutral way,” he is skeptical about Trump’s signature promises of higher wages, more “middle class” jobs, and stronger economic growth. The “economy has essentially reached full employment, with the unemployment rate at 4.9% in October,” he notes. The tighter labor market has in turn caused consumer prices to “rise 2.2% over the past year, up from 1.9% a year earlier,” while “production workers’ wages rose 2.4%.” Given real wage growth and rising inflation, he sees “no reason to seek an increase in aggregate demand at this time.”
Strange Hopes
As Feldstein’s skepticism demonstrates, Project Syndicate commentators’ views of Trumponomics do not fall neatly along ideological lines. Indeed, the Harvard development economist Dani Rodrik, certainly no market fundamentalist, finds reason for hope in Trump’s opposition to “free trade” deals laden with provisions that have nothing to do with trade. As he puts it, “Adam Smith and David Ricardo would turn over in their graves if they read the Trans-Pacific Partnership,” with the special preferences it offers specific industries and vested interests, and other newer trade agreements that Trump has denounced. All of them “incorporate rules on intellectual property, capital flows, and investment protections that are mainly designed to generate and preserve profits for financial institutions and multinational enterprises at the expense of other legitimate policy goals.”
Thus, while Rodrik deplores Trump’s demagogic politics and his “nonsensical” claims about many of his policies, he hopes that Trump’s election will arrest a trend of hyper-globalization that has been moving faster than can be economically justified. “Economists have long known that market failures – including poorly functioning labor markets, credit market imperfections, knowledge or environmental externalities, and monopolies – can interfere with reaping gains from trade,” he points out. And yet they “have consistently minimized” globalization’s capacity to “deepen societal cleavages, exacerbate distributional problems, and undermine domestic social bargains” – all outcomes that “directly affected communities in the United States.”
The Keynesian economic historian Robert Skidelsky sees other positive features in Trump’s policy ideas – and even in his economic philosophy. “Trump’s protectionism harks back to an older American tradition of a high-wage, job-rich manufacturing [economy that] has foundered with globalization,” Skidelsky says, and even “Trump’s isolationism is a populist way of saying that the US needs to withdraw from commitments which it has neither the power nor the will to honor.”
Most important of all, says Skidelsky, Trump’s proposal of an “$800 billion-$1 trillion program of infrastructure investment,” a “massive corporate-tax cut,” and “a pledge to maintain welfare entitlements” adds up to “a modern form of Keynesian fiscal policy.” As such, Trumpism amounts to a “head-on challenge to the neoliberal obsession with deficits and debt reduction, and to reliance on quantitative easing as the sole – and now exhausted – demand-management tool.”
By reopening debate on such previously taboo issues, Skidelsky concludes, “Trumpism could be a solution to the crisis of liberalism, not a portent of its disintegration.” If so, “liberals should not turn away in disgust and despair, but rather engage with Trumpism’s positive potential.” Trump’s “proposals need to be interrogated and refined,” according to Skidelsky, “not dismissed as ignorant ravings.”
In a similar vein, Kenneth Rogoff cautions against letting disapproval of Trump’s politics overwhelm economic judgment. Trump’s fiscal stimulus and emphasis on deregulation will boost demand in the classic Keynesian manner and are already making some business leaders “ecstatic.” While deregulation will not necessarily “improve the average American’s wellbeing,” and his tax proposals will “disproportionately benefit the rich,” they could make the US economy “move significantly faster, at least for a while.” That’s why “it’s wise to remember that you don’t have to be a nice guy to get the economy going,” Rogoff concludes. “In many ways, Germany was as successful as America at using stimulus to lift the economy out of the Great Depression.”
In my own initial reaction to Trump’s victory, I identified five possible economic benefits that could partly offset the obvious risks of higher interest rates, trade wars, an over-valued dollar, and the regressive distributional effects justifiably criticized by Stiglitz, Johnson, and Rogoff. The most important are the promise of a strong Keynesian growth stimulus, an easing of over-zealous financial regulations that locked many households out of mortgage markets, and some sensible tax reforms, particularly those aimed at encouraging profit repatriation by US companies and broadening the tax base.
Born to Lose
Trump’s success or failure as President may depend less on the evolution of macroeconomic variables such as growth, employment, wages, and tax rates than on the underlying socioeconomic forces that powered his campaign. In considering such forces, some Project Syndicate commentators focus on income inequality, while others emphasize cultural and demographic factors. But all conclude that, as a political program, Trumpism is unlikely to be a viable creation.
If widening inequality and declining middle-class incomes were the main causes of America’s populist revolt, Trumpism will ultimately aggravate, not ameliorate, these grievances. “Real (inflation-adjusted) wages at the bottom of the income distribution are roughly where they were 60 years ago,” Stiglitz noted shortly before the election. “So it is no surprise that Trump finds a large, receptive audience when he says the state of the economy is rotten.”
And yet, for two generations, Stiglitz continues, Democrats and Republicans alike insisted that “trade and financial liberalization” – the key reforms underpinning globalization – “would ensure prosperity for all.” Little wonder, then, that voters “whose standard of living has stagnated or declined” concluded that “America’s political leaders either didn’t know what they were talking about or were lying (or both).”
The dilemma for Trump, Stiglitz maintains, is that while he clearly benefited from “the widespread anger stemming from that loss of trust in government,” his policies will not assuage it. “Surely, another dose of trickle-down economics of the kind he promises, with tax cuts aimed almost entirely at rich Americans and corporations, would produce results no better than the last time they were tried.”
Robert Johnson, President of the Institute for New Economic Thinking, offers another reason why Trump voters aggrieved by widening inequalities of wealth and power are in for a rude awakening. It was no accident, Johnson observes, that during the party primaries, only Trump and Senator Bernie Sanders on the Democratic side “set their sights squarely on what mattered most to voters: a political economy in which elected officials strongly promoted a broad-based prosperity that included them.”
The other candidates, “constrained by a system that makes it extremely difficult to fund a credible political campaign without catering slavishly to the wealthiest sliver of American society,” simply couldn’t go there. “That system invited rebellion,” Johnson argues, “and Trump and Sanders – by self-financing and grassroots fundraising, respectively – were ideally positioned to lead one.”
Now Trump “will need to devise remedies to the social, economic, and political problems that he has described,” Johnson continues. “But to do that, he will have to work within the same ‘rigged’ system that he ran against, and he will have to craft policies that are actually feasible and will have a positive effect on Americans’ lives.” And, because Trump’s fiscal expansion will “again disproportionately benefit the wealthy, without trickling down to the rest of Americans,” disillusionment will set in.
But what if income inequality is not the main reason why swaths of middle-class voters rejected traditional party politics and turned to Trump? What if, as Michael Sandel, the Harvard political philosopher, argues, voters’ “grievances are about social esteem, not only about wages and jobs”?
Edmund Phelps, another Nobel laureate economist, cites data supporting Sandel’s hypothesis. “In fact, since 1970, aggregate labor compensation (wages plus fringe benefits) has grown only a little more slowly than aggregate profits have,” Phelps notes, while “average wage growth at the bottom of the income scale has not slowed relative to the ‘middle class.’” On the other hand, “the average hourly compensation of private-sector workers (production and non-supervisory employees) has grown far more slowly than that of everyone else.” Middle-income white, working-class men in non-supervisory production jobs have suffered the biggest losses.
These are also the workers who have dropped out of the labor force most rapidly, and are most likely to succumb to poor health, suicide, and drug dependence. “These men,” as Phelps puts it, “have lost the opportunity to do meaningful work, and to feel a sense of agency; and they have been deprived of a space where they can prosper, by gaining the satisfaction of succeeding at something, and grow in a self-fulfilling vocation.”
This is, of course, precisely the demographic group that secured Trump’s victory in the battleground industrial states of Iowa, Michigan, Ohio, Pennsylvania, and Wisconsin. Phelps believes that economic opportunities for manual workers in such regions can be restored only if productivity growth is boosted in manufacturing industries by “opening up competition, not just cutting back regulations.” He notes, however, that Trump’s policies of trade protectionism, political “bullying” to preserve existing employment, and tax cuts geared to large corporations are more likely to stifle innovation than to promote it.
The French economist Jean Pisani-Ferry reaches a similar conclusion from a different perspective. Noting that “the past suddenly seems to have much more appeal than the future,” not just in the US, but also in Britain, France, and many other advanced and emerging countries, Pisani-Ferry proposes four explanations: weak economic growth, widening income inequality, technological change that eliminates manual employment, plus a fourth, less familiar factor:
The new inequality has a politically salient spatial dimension. Educated, professionally successful people increasingly marry and live close to one another, mostly in large, prosperous metropolitan areas. Those left out also marry and live close to one another, mostly in depressed areas or small towns. [As a result], US counties won by Trump account for just 36% of GDP, whereas those won by Hillary Clinton account for 64%. Massive spatial inequality creates large communities of people with no future, where the prevailing aspiration can only be to turn back the clock.
In the face of these multifaceted socioeconomic problems, Pisani-Ferry believes that “a sensible agenda must simultaneously address its macroeconomic, educational, distributional, and spatial dimensions.” There is no evidence that Trump’s policy proposals can achieve anything of this kind. On the contrary, whereas Skidelsky cites Trump’s promise not to cut welfare entitlements, congressional Republicans are intent on doing just that. With Trump’s support and encouragement, they have already begun dismantling Obama’s signature health-care reform, the Affordable Care Act, with nothing to replace it – a move that the Congressional Budget Office recently estimated will cause the number of uninsured to rise by 18 million in the first year alone.
Capitalism 4.1?
All of this leads, finally, to the question of how Trump’s presidency is likely to shape global economic thinking and the future of capitalism. Phelps offers a grim prognosis. “American innovation first began declining or narrowing as far back as the late 1960s,” he notes, owing to “a corporatist ideology that permeated all levels of government.” True, “Silicon Valley created new industries and improved the pace of innovation for a short time”; but now “it, too, has run up against diminishing returns.”
Phelps sees the solution in a restoration of the “individualist ideology upon which capitalism thrives” and a revival of America’s “innovative spirit – the love of imagining, exploring, experimenting and creating.” But this, he believes, is not Trump’s agenda. Trump “has rarely mentioned innovation,” Phelps observes, “and his team is considering a dangerous approach that could actually undermine it”: an increase in government intervention, curbs on trade and competition, and “an expansion of corporatist policy the likes of which have not been seen since the fascist German and Italian economies of the 1930s.” But any policy serving to “protect incumbents and block newcomers” will most likely “drive a silver spike into the heart of the innovation process.”
I am more optimistic about the outlook, at least in the very long term. As I wrote last March: “Capitalism is an evolutionary system that responds to crises by radically transforming both economic relations and political institutions. The message of today’s populist revolts is that politicians must tear up their pre-crisis rulebooks and encourage a revolution in economic thinking.”
Trump represents a comprehensive rejection of the economic thinking that has dominated the world for a generation. Shaping the new economic thinking will be the most important challenge for both economists and politicians in the years ahead. In my view, the defining feature of each successive transformation of global capitalism has been a shift in the boundary between economics and politics, and between faith in market forces and reliance on government intervention.
Yoon Young-kwan, a former South Korean foreign minister, makes a similar point. “We are at an interregnum,” Yoon writes. “Populism, nationalism, and xenophobia float on the surface of a larger sea change: a fundamental shift worldwide in the relationship between the state and the market.” Reconciling these two domains of activity “is the central concern of political economy today, just as it was for Adam Smith in the eighteenth century, Friedrich List and Karl Marx in the nineteenth century, and John Maynard Keynes and Friedrich von Hayek in their long debate on the topic through the middle decades of the twentieth century.”
And, indeed, Trump is merely the most acute symptom of a global phenomenon. “Social and political discontent,” Yoon rightly notes, “will continue to bubble up around the world until we return the state-market relationship to a healthy equilibrium.”
The Trump presidency, like anti-establishment upheavals in Europe and elsewhere, will force the entire world to start asking fundamental questions about how the relationship between markets and governments in the next phase of global capitalism should evolve. Under Trump, US economic policies in the next four years are very unlikely to provide the right answer; but his administration may at least show the world what not to do.
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Yves, are you a Soros stooge? Cross posting from the Soros funded INET? /s
I am getting a bit tired of the assumption that everything ever touched by Soros money is de facto tainted.
I’m not as optimistic as the author here. Even if Trump does get any fiscal stimulus past the GOP deficit hawks I expect the FED to stomp all over it with rate hikes. Especially since anyone Trump appoints would be likely to be a hawk too.
Failing that, blowing up the deficit might trigger ALEC to make the last 6 states call for a constitutional convention to pass their balanced budget amendment, The GOP has trifecta’s in the states they need to do it. Of course I don’t expect that would be ratified any time within Trumps first term but even getting close to calling for the convention might make him back off on deficit spending.
The last thing the GOP politicians want is a balanced budget amendment, so there’s that.
Whether they can hold off the pitchforks from below is another question.
I suggest you become better informed.
Soros provided the initial funding but other sources have now put in way more money than Soros.
And even when he was the biggest funder he didn’t have any role in what INET did. Soros hates economists because they didn’t take his reflexivity idea seriously and INET is run by academic economists. He provided the money only because he got his arm twisted. I’ve seen him bitch IN PERSON that he wasn’t happy about what he had done.
So INET lets him be on some panels and give some speeches at INET conferences…which pretty much only attendees see. That’s about all he gets out of it.
An excellent article. Captures pretty much all the nuances of recent events. I’ve not seen such a comprehensive summary before.
At the risk of dragging Brexit into this mix (which I can just about get away with since the piece describes the, as it puts it, antiestablishment upheavals in Europe), Brexit was an inevitable problem which was bound to arise. Consider that the EU (technically speaking its forerunner the Treaty of Paris’ European Iron and Steel Community) was founded with the notion that by preventing economic rivalries and fostering cooperative Capitalism between the historic major European powers, you would forestall political conflicts and thus inhibit military ones too.
But once the EU became not an economic project but mutated into a political one, politics — as it always does — tramples on economics. And now, Britain has (seemingly — as Yves’ piece yesterday explained at length) decided that it is willing to lose out economically to settle its own internal political battle and the EU has responded in kind with a strategy of placing the preeminence of its political end-game above the ideal of economic cooperation these political conflicts will get retrofitted onto economic ones.
It is all starting to look a lot like the Treaty of Versailles. Everyone is entrenching animosities, intentionally oblivious to the implications of how these will play out in the real world. I can’t speak for the national moods of France or Germany, but I can say with absolutely no doubt what a country filled with 10 million Daily Mail, Daily Express and Sun readers will want to do with 1 million Polish people plus another 2 million other EU country of origin immigrants if — as certain contingents of the Tory party will do once they get the bit between their teeth, they don’t call it the Nasty Party for nothing — the EU gets the the blame for an economic impact on the U.K. post-Brexit.
The veneer of civilization is a thin one. The wellbeing and security of 3 million people, who have a legal right to remain in the U.K. which is safeguarded by a mere piece of paper that is sustained only by political willpower — willpower which is receding if not outright abandoned — is being gambled with, if this results in (however nicely it is packaged) what will essentially be forced repatriations then old animosities which are not too far beneath the surface won’t take long to reappear.
Trade wars have a nasty habit of not staying just on the battlefield of trade.
Yes to your conclusion, and also to your Versailles analogy. Guess we’ll all have to reread Maynard Keynes’ Economic Consequences of the Peace.
Or maybe revise and reissue it, since it’s out of copyright now: Economic Consequences of Trump-May.
So extending your analogy would that mean the militarism of the past 16 years is comparable to the madness of World War 1? For some of us it will be enough if Trump retreats from the mindset of imperial competition through military means. His economic ideas may be nonsensical, but is there any solution short of a massive crash and restructuring–the thing that wasn’t allowed to happen in 2008? Michael Hudson says the right approach is a huge debt jubilee which seems unlikely from any of the political factions on the horizon at the moment. Perhaps what Americans are really saying with Trump is that it’s time to retreat behind our oceanic walls and ride it out. The other nations may even welcome an end to our clumsy attempts to run the world.
I don’t think we’re there just yet, but I do believe that Hillary and the neocon crowd that just exited the State Department were ready to bring things to that sort of imperialist head. Having said that, Trump’s policies need to be played out further to see exactly where they’re going, and whether further escalation can be avoided. Policy toward China is not looking auspicious. And if there is to be a defusing of tensions with Russia, a circle needs to be squared with Trump’s tough line toward Iran, which is an ally of Russia as well as Syria, and which is actively opposing Daesh. Accomodating this balance will require an exceptionally delicate foreign policy indeed, and delicacy is not the first characteristic that comes to mind for Donald.
What deluded nonsense this article is. Capitalism’s fail is baked into the cake as certainly as that of its feudal and slave system antecedents. The question is, for how long more will it limp on? “Capitalism 4.1” What crap. More like “lizard brain 4.1” or “Greed 4.1”. There is no silver bullet. Let’s stop talking falsely now and face the reality. Matt Taibbi put it bluntly:
I urge everyone to read Morris Berman’s Why America Failed. He concludes that anyone with a brain who has the possibility to leave America should. From Dr. Berman’s blog:
People need to stop daydreaming about reforming the system and prepare for inevitable collapse.
Exactly. Absent the willingness to manage a somewhat orderly contraction, collapse will be the only alternative. Coming very very soon.
I stopped reading this article when the author claimed over zealous regulation has locked people out of the mortgage market. I work with Realtors and loan officers everyday who put people with 580 credit scores and less than $1,000 in the bank into homes (and mortgages). Access to credit and a return to predatory credit are two very different things. I agree with you that the collapse is inevitable and thinking otherwise is likely delusional.
I dunno. It already collapsed. Can the collapse collapse? And the collapsed collapse collapse? What a silly question – of course it can. ;-)
valid!
Sure, and then we will reach the digital internet singularity where all transactions are frictionless, virtual reality is reality and capitalism can expand forever as long we have enough electricity to maintain the illusion.
I, too, see the delusion in the article. Trump is not in power in order to help those poor unemployed white men who elected him; he is in power to put his authoritarian ideas into practice. The discussion should not be about capitalism and economists but about the loss of Truth which will finally kill democracy.
Maybe philosophers have more wide-ranging ideas than either capitalists or economists (who may be the same thing). Here’s a radio program that discusses the idea that authoritarianism becomes possible when truth no longer matters.
Leave America and go where?
The turbulence is global.
I picked Uruguay. Firstly it is in the Southern Hemisphere and secondly I hope it is small enough to be overlooked. Fortunately, I only expect to live another 15 years…
I worried that if I stayed in the United States I would commit suicide within a few years and I was already getting stoned before work and drinking heavily afterwards.
Good choice! Uruguay is moving toward energy independence through wind and solar facilities. These folks understand climate change and the need to be free of the oil cartel.
An interesting and lively culture there.
Agreed, a high income country to boot. My only problem is Uruguayan barbecues are too slow a process, when the meat is ready, I’m already drunk.
A big reason, but not the only reason, that the turbulence is global is the post WW2 project to make a global economy into the mirror image of an idealized American economy.
Taibbi put it bluntly:
“Trump is the perfect modern American. He’s a human consumption machine with no attention span, no self-control, no beliefs and no hobbies outside of sex, spending, eating and talking about himself.”
Correction: He’s the perfect modern capitalist.
“America” is salvageable, but it is clearly going to take a social revolution. So I say stick around.
You need to add “working”. It’s up for debate what that actually entails for him. But buildings just don’t make themselves and developers have to spend a certain amount of time bossing people around.
“The only way Trump will square his promises of higher infrastructure and defense spending with large tax cuts and deficit reduction is a heavy dose of what used to be called voodoo economics.”
My sentiments exactly: not only as to the Reagan administration’s “$200 billion deficits as far as the eye can see,” but also Bill Clinton’s 1992 campaign promising social benefits, deficit reduction AND a middle-class tax cut. It couldn’t be done. Instead of a middle-class tax cut, the nation’s first retroactive tax hike was enacted in 1993.
As a big government war socialist party, Republicans will let the deficit rip to finance their promises of domestic infrastructure PLUS a cornucopia of arms spending. Deficits will easily average a trillion a year during the Trump presidency.
Inflation has been quiescent for so long that it’s not even on the radar screen of worries. But it’s likely that strong fiscal stimulus is the catalyst needed to activate QE’s mountain of idle bank reserves. With the Fed’s balance sheet having quintupled in the past decade, inflation could flashover with a sickening whoosh.
Infrastructure spending CAN have a positive return, provided it’s not bridges to nowhere and paving river banks as they do on Planet Japan. Whereas piling more armaments onto America’s bloated military empire is certainly value subtraction. Roughly, let’s call it a wash.
What does that give us? Eight years of sub 3 percent growth (including a nasty recession early on), $30 trillion in federal debt, and a shot at double digit inflation. This does not end well.
As a big government war socialist party, Republicans will let the deficit rip to finance their promises of domestic infrastructure PLUS a cornucopia of arms spending. Deficits will easily average a trillion a year during the Trump presidency.
And the resulting deficits will be used to destroy any remnants of the New Deal. “Drown the baby in the bathtub” revisited. Berman’s right, time to get out of here before they imprison us all. For our “own good” of course.
Commercial banks (the owners of reserves, deposited at the Fed) can neither lend reserves to, nor spend them into, the nonbank private sector.
Because the nonbank private sector does not have accounts at the Fed.
Thus any fears of trillions of dollars in reserves eventually leading to inflation are simply misplaced. Excess spending may sometimes lead to inflation but reserves cannot be spent for acquisition of goods and services.
Indeed, the Harvard development economist Dani Rodrik, certainly no market fundamentalist, finds reason for hope in Trump’s opposition to “free trade” deals laden with provisions that have nothing to do with trade. As he puts it, “Adam Smith and David Ricardo would turn over in their graves if they read the Trans-Pacific Partnership,” with the special preferences it offers specific industries and vested interests, and other newer trade agreements that Trump has denounced. All of them “incorporate rules on intellectual property, capital flows, and investment protections that are mainly designed to generate and preserve profits for financial institutions and multinational enterprises at the expense of other legitimate policy goals.”
….
And yet, for two generations, Stiglitz continues, Democrats and Republicans alike insisted that “trade and financial liberalization” – the key reforms underpinning globalization – “would ensure prosperity for all.” Little wonder, then, that voters “whose standard of living has stagnated or declined” concluded that “America’s political leaders either didn’t know what they were talking about or were lying (or both).”
…..
The other candidates, “constrained by a system that makes it extremely difficult to fund a credible political campaign without catering slavishly to the wealthiest sliver of American society,” simply couldn’t go there. “That system invited rebellion,” Johnson argues, “and Trump and Sanders – by self-financing and grassroots fundraising, respectively – were ideally positioned to lead one.”
—–
The new inequality has a politically salient spatial dimension. Educated, professionally successful people increasingly marry and live close to one another, mostly in large, prosperous metropolitan areas. Those left out also marry and live close to one another, mostly in depressed areas or small towns. [As a result], US counties won by Trump account for just 36% of GDP, whereas those won by Hillary Clinton account for 64%. Massive spatial inequality creates large communities of people with no future, where the prevailing aspiration can only be to turn back the clock.
=========================================================================
“Massive spatial inequality creates large communities of people with no future…”
I would note that not everyone in cities is doing well. And just like economists used to imply how great trade is for EVERYbody, why do economists imply cities are prosperous for EVERYone when it is so F*CKING obvious that they are not??? My cynicsense tells me it is a neoliberlism defense mechanism….
“…where the prevailing aspiration can only be to turn back the clock.”
I can remember when the share of gross domestic income was more evenly divided between labor and the 1%…..
https://fred.stlouisfed.org/series/W270RE1A156NBEA
And I can remember, in the land of the free, that one was free to feed the homeless without getting arrested. Deregulation is only for the wealthy.
And now we have a new modern meme that inequality will be automation’s faults. But of course, we will not be able to take any action that would counter the income inequality enhancing properties of automation, because THAT WOULD BE TURNING BACK THE CLOCK.
Just like we can’t discuss CLASS, because race is the big problem, which conveniently can NEVER be solved by throwing money at the problem….
Man, these guys are good….(at deflecting outrage at the true ways they screw you)
It is a natural evolution from the first agricultural communities, to city states, to larger regions, to nations with the final stage being globalization.
At each stage the elites go to war to steal the land, property and wealth of other villages, city states, regions and nations.
When you get to globalization who can the elites ransack?
Those lower down the scale.
Let’s lower taxes on ourselves, remove welfare states and create an immense global workforce to drive down wages.
2014 – “85 richest people as wealthy as poorest half of the world”
2016 – “Richest 62 people as wealthy as half of world’s population”
2017 – World’s eight richest people have same wealth as poorest 50%
What a plan.
The US electorate weren’t so keen on the plan and, as the Democrats had taken Bernie out of the race, Trump was the only alternative for change.
Right on!
When societies hit their limits to growth, the elites want to keep on growing their wealth. So they start eating their own, i.e., turning many of their own people into slaves, serfs, or low-wage workers of some sort, in addition to over exploiting natural resources. But eventually the social compact fractures, erupting in civil war, external war, an economic crisis, or something similar. Which we are very close to this right now, having already entered the stage of political civil war. Just read Peter Turchin.
Viewed another way, when economic growth is strong, then usually enough trickles down to keep the poor in line. But when growth falters, so does trickle down economics. This is essentially what Piketty demonstrated.
Are we smart enough as a society to learn from history? With a time lag of course, but by then it could be too late.
It is a natural evolution from the first agricultural communities, to city states, to larger regions, to nations with the final stage being globalization.
At each stage the elites go to war to steal the land, property and wealth of other villages, city states, regions and nations.
When you get to globalization who can the elites ransack?
Those lower down the scale.
Let’s lower taxes on ourselves, remove welfare states and create an immense global workforce to drive down wages.
2014 – “85 richest people as wealthy as poorest half of the world”
2016 – “Richest 62 people as wealthy as half of world’s population”
2017 – World’s eight richest people have same wealth as poorest 50%
What a plan.
The US electorate are not keen on the plan and Trump is the only option for change as the Democrats took Bernie out of the race.
Good article on the whole, but this sort of spiritualism really needs to be brought down to earth. Isn’t it clear that there are a bundle of specific measures that might fuel both innovation and investment? One rubric would be the end of shareholder value fetishism, replaced with committed productive investment. Make finanzkapital have a stake in what it peddles (I’m recalling Yves’ noting in Econned how in years past white-shoe investment types would retain a stake in their corporate creations.) Bring back Regulation Q. And so on.
The basic point is that we have to ask whether capitalism as it now exists can correct its tendency to divorce profits from useful production and job generation. I’m afraid that Trump, by his (apparent) lack of deference towards corporations and his cobbling together an industrial policy of sorts, is stealing the show. E.g. the Fight for 15 is certainly worth supporting, but it still essentially respects capitalist prerogative as regards to investment in and structuring work. Trump is willing to challenge that to some degree. One of our objections here to IdPol is the way that it hypertrophies “mutual recognition” or somesuch in interpersonal terms but then goes mute and deferential when it comes to mutual recognition in more material terms. Trump plays to that lack.
He’s nicked my idea, I came up with it ages ago.
I can’t believe anyone else has had the intelligence to notice (only joking).
The better more concise version (if I do say so myself and I do)
Show me a version of Capitalism that hasn’t failed.
We need to recognise that we have been through many versions of Capitalism and they all fail as this version is failing now.
As John Kenneth Galbraith points out in “The Affluent Society” there is always a desperate attempt to hold onto the “conventional wisdom” that those at the top have invested so much time and effort in.
The death throes of each system are maintained for as long as feasible until it is almost impossible for anyone to believe that the current system can work.
A new system comes along with promises that everything will be much better, and it is, for a decade or two.
Capitalism mark 1 – Unfettered Capitalism
Crashed and burned in 1929 with a global recession in the 1930s.
The New Deal and Keynesian ideas promised a bright new world.
Capitalism mark 2 – Keynesian Capitalism
Ended with stagflation in the 1970s.
Market led Capitalism ideas promised a bright new world.
Capitalism mark 3 – Unfettered Capitalism (Part 2 – Market led Capitalism)
Crashed and burned in 2008 with a global recession in the 2010s.
It has followed the same path as Unfettered Capitalism (Mark 1).
1920s/2000s – high inequality, high banker pay, low regulation, low taxes for the wealthy, robber barons (CEOs), reckless bankers, globalisation phase
1929/2008 – Wall Street crash
1930s/2010s – Global recession, currency wars, rising nationalism and extremism
Unfettered Capitalism has a catastrophic failure mode and dressing it up in the Emperor’s New Clothes of supply side economics didn’t make a blind bit of difference.
We’ve done Neo-Keynesian stimulus.
After eight years of pumping trillions into the top of the economic pyramid, banks, and waiting for it to trickle down. It didn’t work, hardly anything trickled down.
The powers that be are now for Keynesian stimulus.
Carry out infrastructure projects that create jobs and wages which will be spent into the economy and trickle up (pumping money into the bottom of the economic pyramid).
A new brush sweeps clean, the old ideologues stuck in their old failed ways must go.
Looking at the date of his book, maybe he had the idea first.
Rats.
Politics is the same as it always was.
You get one lot in that mess it up and then you get the other lot in.
Sometimes leaders take a while to mess it up and they get more than one term, e.g. Blair and Thatcher.
The idea of neo-liberalism was to put the economy first and it’s ended up in secular stagnation. How badly could it possibly fail?
Let’s get that lot out and get a new lot in.
Confusing the matter by referring to populists is hiding the harsh reality of the total failure of the old order.
If you want to stay in power, do a good job. That’s all there is to it.
The old order wanted to maintain the failed status quo, Trump offered an alternative.
You have to have solutions ready when it comes to election, dissecting things now matters not a jot.
Why didn’t the Democrats come up with solutions when it mattered?
None of the scenarios presented, positive or negative, address the notion that Trump is an economic illiterate. A quick and easy example is his claim that a 20% tax on goods imported from Mexico to the U.S. is a mechanism that will make Mexico “pay” for his proposed wall. Judging from what is there on the page in “The Art of the Deal,” his work habits are, to put it charitably, unstructured. He doesn’t seem to be a person who thinks deeply, or perhaps at all, about economics. (Then again, I’m sure some will see that as a plus…)
Trump graduating from Wharton is as improbable as G. W. Bush graduating from Hahhhhhvid Business School.
As G.W. memorably quipped about one of his professors, “He wrote a book. I read one.“
Both came from wealthy families. They didn’t have to be that bright.
They were probably admitted because some development officer saw a major gift opportunity.
I’m still trying to figure out why anyone believes that a guy with such a record of business failures, and leaving others holding the bag for them, is some kind of financial genius?
Maybe that’s a plus. Successful businessmen have usually made terrible presidents.
Well, he seems to have failed all the way to the top. So I’m more puzzled with your puzzlement.
I suspect, when it comes to personal knowledge of theoretical economic treatises, Trump echoes Louis B. Meyer
And, moreover to paraphrase another attributed Meyer quote, when people start talking about economics, Trump reaches for his Profit and Loss accounts.
Think you mean Mayer, the last M in MGM.
Ah, yes, Louis B. Mayer certainly was no state Supreme Court justice! (although that would have been fun to watch…)
To get economics working you need to remove its grand corruption.
The early Classical Economists soon started to cause problems for the elites by noting the mechanisms by which they were maintained in luxury and leisure and how they were essentially parasites on the economic system.
Adam Smith observed early basic capitalism in the 18th century:
“The Labour and time of the poor is in civilised countries sacrificed to the maintaining of the rich in ease and luxury. The Landlord is maintained in idleness and luxury by the labour of his tenants. The moneyed man is supported by his extractions from the industrious merchant and the needy who are obliged to support him in ease by a return for the use of his money. But every savage has the full fruits of his own labours; there are no landlords, no usurers and no tax gatherers.”
Adam Smith saw landlords, usurers (bankers) and Government taxes as equally parasitic, all raising the cost of doing business.
He sees the lazy people at the top living off “unearned” income from their land and capital.
He sees the trickle up of Capitalism:
1) Those with excess capital collect rent and interest.
2) Those with insufficient capital pay rent and interest.
Where did trickle down come from?
We assumed the system trickled down, lowered taxes on the wealthy and inequality soared.
He differentiates between “earned” and “unearned” income.
Taxes should fall on “unearned” income to keep taxes off the productive side of capitalism that have to be paid by business.
Taxes on “unearned” income should be used to provide low cost housing, healthcare, education and other services. This keeps the cost of living down and allows employers to pay internationally competitive wages.
Obviously, this needs to be binned as it highlights the parasitic nature of the rentier, idle rich.
This is what they do, they come up with neoclassical economics and it’s what we use today.
The distinction between “earned” and “unearned” income disappears and the once separate areas of “capital” and “land” are conflated.
The landlords and usurers are now just productive members of society and not parasites riding on the back of other people’s hard work.
Most of the UK now dreams of giving up work and living off the “unearned” income from a BTL portfolio, extracting the “earned” income of generation rent.
The UK dream is to be like the idle rich, rentier, living off “unearned” income and doing nothing productive.
Rentiers are go.
What about “economic democracy?” Pipedream or Viable Alternative?
I always hoped that there might be something to it. Probaby quixotic, I know.
http://www.luc.edu/faculty/dschwei/economicdemocracy.pdf
DAVID SCHWEICKART:
There is a reason a high corporate tax rate would foster innovation. If “profit-taking” is taxed heavily (say, capital gains profits), then there is a strong incentive to keep the money in the business, where they are not taxed – for example, by setting up an advanced R&D division with money that would otherwise have faced a high tax rate if handed out as bonuses and dividends. Isn’t that how things worked in the U.S. in the post-war era, when the top income bracket tax rate was something over 80%? People would rather re-invest profits business development and R&D than have them taxed at such rates. Hence, you had large well-financed corporate R&D centers like Bell Labs pushing innovation.
Another issue is the infrastructure plan. The most illogical and bizarre claim from the Trump administration has to do with their infrastructure finance proposal, from the “America First Energy Plan”:
We must take advantage of the estimated $50 trillion in untapped shale, oil, and natural gas reserves, especially those on federal lands that the American people own. We will use the revenues from energy production to rebuild our roads, schools, bridges and public infrastructure. – Trump’s unserious ‘America First’ energy plan, SacBee
This is ludicrous. First, global demand for fossil fuels seems to have peaked while renewable energy demand is rising, and countries like China with advanced renewable energy manufacturing will be the global leaders in the new energy trade. Second, that $50 trillion number is someone’s magic fantasy number. Third, where do the government revenues come into it? Massive tax increases on fossil fuel production? Nationalization of the oil & gas industry, Chavez-style? The only response to this plan that makes any sense is uncontrollable laughter, it’s got to be among the most foolish proposals ever put forth.
Thus, the whole infrastructure plan seems to be dead on arrival. Perhaps the plan is to get investment banks to finance it, in exchange for privatization of public services like roads and the water infrastructure? Toll roads and Bechtel-in-Bolivia water services? And people in impoverished Rust Belt and rural South states are supposed to be able to cough up extra cash for higher fees, then?
Trump’s trade policies could plausibly benefit American workers, and stepping away from the foreign policy regime change agendas of the Bush-Obama years is a good idea (after blowing trillions in Iraq), but his domestic economic plans seem like a recipe for disaster, Project Third World America.
I tend to agree with a lot of this. I’d give Trump the benefit of a doubt, but I have little doubt about Republican priorities and policy. Trump is no Republican, he might be the head of their party at the moment but his policy preference runs opposite to the “starve the beast” mentality and dedication to eliminating the government as a means of support (safety net).
Whether Trump can force the GOP into his policy direction remains to be seen. As noted by the author, the GOP establishment IS the failed system that Trump ran successfully against. They are funded by wealthy corporate donors who are heavily invested in the status quo of milking the citizens for all they are worth and moving on to the next market.
What that leaves is an opening for the Dems, if they can pull together a Sanders level equivalent to run in 2020. The socially retrograde policies of conservatives will spark a major backlash by 2020 but only a non-corporatist Dem will be able to capitalize on it.
The real power play is between the corporatist GOP and populist Trump. Who wins those battles will determine how things shake out in 2020.
“What that leaves is an opening for the Dems, if they can pull together a Sanders level equivalent to run in 2020.”
There is no equivalent to Sanders in the Democrat Party or probably anywhere else, for just one reason: he could not be bought, and everybody knew it, and had known it for at least the last 25 years.
You don’t, uhm, “pull together” someone like that.
I’m tired of all this Trump creating a favorable dynamic for progressivism talk. It’s also a dynamic for further authoritarianism.
Meanwhile, the population will suffer.
At least the Dems have a faction receptive to this stuff. But no, they’re the real enemy.
Indeed. The trouble is, it’s only a faction. And a marginalized one at that. And what about the other, dominant faction? To handwave them away is like me saying my last meal was balanced, contained elements of the major food groups in the appropriate proportions and wasn’t too calorie loaded. Oh, except for that pesky cake faction.
Unfortunately, to make that reasoning work, you need equivalency between Trump and mainstream Dems. But maybe you prefer to dine exclusively on cake. The Repugs are a poor tool choice for reforming Dems.
Because they will do it themselves? Seriously?
I enjoyed this summary. Is it the beginning of the end or is it the end of the beginning? That sounded like the world’s dumbest question until it began to sink in. The Tea Party was prolly the end of the beginning – because it was definitely all over but the shouting by then. So what is it now? It looks like all hands on deck to me because all the fake social structures and dialogs are crumbling. Not good. Must fix. The most salient tidbit above was a casual reference to the discontent in all the little flyover towns in America. Little town malaise. Remember, mercantilism turned the world into Rimland v. Inland a century ago. But society is a different animal now – it demands a minimum of shared wealth and well being. And here we are. My inclination would be to begin with all those little towns. Let each town council guide the town. One solution after another as they build their own synergy. It could be the foundation of a green revolution.
Phelps sees the solution in a restoration of the “individualist ideology upon which capitalism thrives” and a revival of America’s “innovative spirit – the love of imagining, exploring, experimenting and creating.” But this, he believes, is not Trump’s agenda. Trump “has rarely mentioned innovation,”
Well, even a stopped clock is right twice a day. Dems love throwing around the word “innovation” assuming that it’s the kind of aspirational gibberish that their white, hip, professional constituency wants to hear. No mistaking the target audience with meaningless tech talk. The rest of us deserve our stagnant salaries and lousy benefits because we just can’t get with the program. My current attempt at innovation is getting babies to buy their own groceries on amazon.
If they really want innovative people free to take risks, the first step would untie health insurance from jobs. Single payer for all.
So much to ponder, so much to dissect and quibble over. I wonder what kind of capitalism they’re talking about when saying
Phelps sees the solution in a restoration of the “individualist ideology upon which capitalism thrives” and a revival of America’s “innovative spirit – the love of imagining, exploring, experimenting and creating.”
Certainly not the kind favored by Wall Street whose guiding MO is to basically destroy innovation by destroying competition by fostering as much M&A activity as possible.
While I’m sure a revitalized anti trust regime is not on Trump’s radar, who knows? As much as it’s fashionable to despise him, I hold out a glimmer of optimism that Trump as a businessman who, unlike academics and consultants, is generally focused on bottom lines and getting things done, will try one approach after another until he finds one that works. By “works” it may mean more people loving him as much as he loves himself, or it may mean “making America great again” or, again, who knows?
At least Trump doesn’t seem to be burdened by the hobgoblin of consistency, and it’s possible that, unlike our recent presidents, he won’t keep insisting that the ideas he’s been spoon fed by his chosen coteries of experts are right, results notwithstanding. Once things appear to not be working, Trump is more likely to jettison the any of his current “best people”, blame them for everything and insist that whatever new approach he’s gonna adapt was what he advocated all along.
At least Trump doesn’t seem to be burdened by the hobgoblin of consistency, and it’s possible that, unlike our recent presidents, he won’t keep insisting that the ideas he’s been spoon fed by his chosen coteries of experts are right, results notwithstanding. Once things appear to not be working, Trump is more likely to jettison the any of his current “best people”, blame them for everything and insist that whatever new approach he’s gonna adapt was what he advocated all along.
It really only seems to be ideologues who are insistent on sailing the ship onto the rocks over and over again for reasons of their ideology. Is it stupidity or malice though? I don’t see any other explanations and I’m really tired of rule by stupid and/or malicious ideologues.
Worse, every conversation about our current crisis veers off into the abstract almost immediately. I feel like we need referees standing by asking out loud at every turn, “And this benefits the average person in a tangible way exactly how?” At it’s essence this crisis is not an abstraction, it is tangible and this point needs to be hammered into to people’s heads as many times as necessary to drive the point home.
Look. Capitalism only works when it can exploit slave labor. Herr Trump and his oligarchical cabinet are Exhibit A.
Thanks for this post. Interesting points. I think the author is right on some points and wrong on some points, but is at least addressing the economic points rationally. This is more worthwhile reading than the MSM’s juvenile, content-free hysteria. Many of the GOP pols are trying as hard as Dem pols to delegitimize Trump out of fear of any change to the current system that serves them well.
Muddling through and common decency are underrated. I have no thirst for collapse, convulsion, transformation or utopia finally.
We should treat foreigners in their lands and immigrants to this land respectfully. We should treat women respectfully.
We should stop devoting so much of our wealth and our industrial policy to wars and armaments — a topic oddly missing from the article.
We should halt the excessive greed and resource misapplication of Wall Street.
We should insist on regulations that help put the real costs into market prices.
We should oppose the growing power of the most wealthy.
We should insist on health care for all.
Trump/Repub establishment (they are ruling together) are on the wrong side of all these issues. You have to look at their rule through the twisted mirror of utopian dreams to see “possible hopeful signs.”
Destruction oppression and hatefulness is just destruction oppression and hatefulness. It is not the forerunner of peace or fairness. Those goals are only achieved (and not always achieved) through dogged decency.
Less amusing than visions of glory. But if you stray from common decency, no matter your ultimate goal or strategy, you are lost.
And that is why any support or excuses made for Trump are foolish. Trump lacks any common decency.
Anyone can see that if the person is willing to look.
“We should halt the excessive greed and resource misapplication of Wall Street.
We should insist on regulations that help put the real costs into market prices.
We should oppose the growing power of the most wealthy.
We should insist on health care for all.”
I agree.
And how do we do that thru the neoliberal Dem estab, that is on board with these neoliberal economic abuses?
We cannot succeed in one fell swoop. As I have written several times, the Blue Dog leadership (and the associated staff and network of pollsters, fundraisers, and NGO and corporate lobbyists) are a huge problem. They are smug spiteful and corrupt and stupid in ways they do not even understand.
First and foremost, they must be intimidated with what they fear — losing elections. We need a handful of credible primary challengers. That means organizing starting now. Even if you see a charm offensive praising progressive causes, stay focused. Need scalps before you will truly be taken seriously.
In the interim, many pols and associates will strike progressive poses to get tactical advantage if they see some. Convince them by making s lot of noise. Not just phone calls. Demonstrate at hearings. Swarm personal offices. Be THERE. I guarantee that gets noticed.
And start raising hell with the feckless NGOs.
Be decent. Be nonviolent. But be loud and be THERE.
At least this article does not ignore the concept that more of what caused economic inequality in the first place [tax cuts for the wealthy] will only make it worse not better. Donald Trump is incredibly brave or extremely stupid. He is breaking the rice bowls of the globalists’ middlemen who’ve controlled the USA since 1992. He is keeping his promises to those who voted for him but at the same time he acts as if conservative talk radio agitprop is the gospel. Corporate media has him sighted. He has only a short time to change the course of the nation and the economy to the better by massively spending on infrastructure. The paid middlemen of both parties will hobble him. They need one justification to invoke the 25th Amendment to sideline his Presidency.
Sometimes things are nothing more than they seem.
Trump is just a billionaire conmancaught up in a frenzy of being famous. He has a lot of far right prejudices, and he wants to be proved right.
The Repub establishment will use him, and his hate-filled platitudes when it suits them
Not an adherent of cyclical theories of history. “Capitalism is an evolutionary system that responds to crises by radically transforming both economic relations and political institutions.”
Then please explain how it is that the leading capitalist state, the United States, has maintained the same basic political and state institutions for 240 years? Where is the “radical transformation” here?
The truth is that the United States is an ancien regime in the process of failure. Trump is not only obviously symptomatic, but could ring in a new, more palpable phase of rot and decay.
We need a radical reconstruction of our material social life. Trumpism is all about doubling down on the same old crap.
Kidding yourself on this is no different from trading Obama’s hopium for a belly full of Trump’s toxic vodka and steaks. My advice is stay away from big picture think pieces until a pattern becomes clear. Trump is the hairball coughed up by a dysfunctional political and economic system. In that sense he is and is not an “accident”. IOW we are still at a pure conjuncture that can flip for a multitude of reasons.
Rogoff, seriously?
Not to put to fine a point on it but not too long ago he was preaching the austerity gospel and cheering Romney/Ryan’s opposition to Kyensianism. Has he turned over a new lead (sarcasm), or is he just bending with the winds as he always has?
Either way I find the fact that he is cited here reason to doubt this not trust it.
The Trump appointments and actions taken so far suggest little or nothing of what might be deemed policy or a “new phase of global capitalism”. Trump promised he was going to investigate/indict Hillary … and then he wasn’t. Trump promised infrastructure investment … and then that investment began to morph into to public-private ventures (unless that’s changed in recent Trump pronouncements — I don’t track what Trump tweets.) Many of Trump’s cabinet appointees have openly disagreed with Trump positions. Trump’s seeming desire to decommit from and start no more foreign wars and his appointment of Exxon to Secretary of State suggests of a softening of the U.S. hard position against Russia — while our Spook Industrial Complex continues to blare its Cold War nonsense with what seems little pushback from Trump — and Trump makes noises about the Iran nuclear treaty and provokes China militarily and economically. Trump and the Republican Congress is dismantling Obamacare — without a replacement. Trump shutdown the TPP — but we have nothing to indicate what kind of one-on-one trade deals he might work out. He saved a few jobs for a nice bit of publicity but who can look at his jaw-bone approach as an adequate tool for keeping jobs here and bringing jobs back — whatever that really means. So far, nothing has clarified the relationship between Trump and the rest of the political apparatus in Washington.
I can’t read these tea leaves — can the economists and politicos — many of the same economists and politicos whose crystal balls proved as accurate as magic eight balls for predicting and understanding the direction of our future — read a pattern in the Trump presidency given the currently available information?