Posts Tagged ‘it’s the economy stupid’

Trump is talking about the economy. And he deserves credit… “The economy is booming,” CNN’s Jake Tapper said Sunday

November 6, 2018

A talking point has taken hold in the final hours of midterm election campaigning. The economy is booming, the story goes, but President Trump won’t talk about it at his massive rallies, preferring instead to dwell on illegal immigration, the caravan, and “fear.” Republicans, locked in tough re-election races, are tearing their hair out, panicked, at Trump’s refusal to emphasize the nation’s economic progress, which is their strongest campaign pitch.

The journalists and other political types who are repeating the talking point take as their text something Trump said Friday at a rally in Huntington, W.Va. “They all say speak about the economy, speak about the economy,” Trump told the crowd. “Well, we have the greatest economy in the history of our country, but sometimes it’s not as exciting to talk about the economy, right? Because we have a lot of other things to talk about.” From that flowed the assertion that Trump is not, in fact, talking about, or talking much about, the economy.

By Byron York
Washington Examiner

Image result for Trump in Macon, Georgia, photos

“The economy is booming,” CNN’s Jake Tapper said Sunday in an interview with Republican National Committee chairwoman Ronna McDaniel. “Unemployment is at a 49-year low. Annual wage growth topped three percent for the first time since 2009. But — and you knew there was a ‘but’ – the president’s closing message is not on that. It’s centered on scaring people about undocumented immigrants. Would you personally feel more comfortable if this closing argument was focusing more on the positive, on the achievements, instead of incendiary appeals that people should fear undocumented immigrants?”

[Related: Unemployment dips to 3.7 percent – lowest in nearly 50 years]

On NBC, Chuck Todd said, “I’ve got to show you what Donald Trump said about talking about the economy, though. It was something else. Take a listen to what he said about why he doesn’t talk about the economy…”

On ABC, Jonathan Karl said, “With a president presiding over an economy as good as this one, you would expect there to be almost a morning in America message, stay the course, the economy’s booming, let’s keep with this. But instead it is midnight in America in Trump’s campaign rallies. He is counting on fear and loathing to rally his base.” A moment later, ABC’s George Stephanopoulos added, “Let’s bring in Chris Christie, Republican, former governor of New Jersey, Trump ally as well. Address the – the argument that Jon Karl was making there. Is it wise to be focusing on this when you’ve got an economy going gangbusters?”

On CBS, John Dickerson said that McDaniel, the RNC chair, “wants to talk about the economy and the strong numbers. The president wants to talk about something else.”

Finally, on Fox, Chris Wallace said, in an interview with GOP Sen. Thom Tillis, “Senator, Republicans have a great story to tell in the economy, but the president doesn’t seem especially focused on that.”

And so on. Print articles made the same point, reinforcing still more repetitions of the talking point. But lost in it all was a question: Is the president really not talking about the economy? Is he focusing on illegal immigration and ignoring, or relatively ignoring, his own administration’s economic achievements? The place to look for an answer is not in the TV talk but in the videos and transcripts of the president’s actual stump speeches.

Look at three recent Trump appearances, the ones that served as the basis for all the weekend talk. First, there was Trump’s speech in Huntington, with the “not as exciting” quote that gave pundits a theme. Then there was a speech in Columbia, Missouri, and also one in Macon, Georgia.

Please see here to see how much of the Huntington speech Trump devoted to the economy and how much he devoted to illegal immigration. By my count, Trump spoke about 2,330 words on economic issues and about 1,640 words on illegal immigration. I’ve included the entire transcript, with economic passages highlighted in yellow and illegal immigration passages highlighted in blue, for you to judge for yourself.

Add the three speeches together, and Trump spent about 5,320 words on the economy versus about 4,730 words on illegal immigration. One can think that is too much of one thing, or not enough of the other, but where is the evidence that Trump is ignoring the economy to obsess about illegal immigration?

One note on classification. It can sometimes be hard, with the president’s speeches, to designate precisely which passages are about the economy, or which are about illegal immigration. Some are clear and easy to categorize. But what about when he talks about the need for more legal immigration to meet increased job demand due to the improving economy? Trump talked about that at some length in Columbia. Readers are free to quibble about how this or that passage has been characterized.


A final word on Trump’s speeches. As always, they are all over the place. He talks a bit about this or that, sidetracks himself onto something else, and then moves back to the original topic before sidetracking himself again. It’s a style that has proven extraordinarily successful with large and friendly audiences around the country. And of course, his speeches in Huntington, Columbia, and Macon were not only about the economy and illegal immigration. As one can see from the transcripts, Trump spent much, if not most, of his time on other topics altogether: on the Brett Kavanaugh nomination, on military and veterans’ issues, on foreign affairs, on the local candidates, and other topics.

So the bottom line is, a look at Trump’s speeches does not support the idea that they are “centered on scaring people about undocumented immigrants” or that the president “doesn’t talk about the economy.” Certainly a critic could say he spends too much time on one topic or the other. But as Trump himself said, there are a lot of things to talk about. And that is what he is doing.



European stocks ahead at open on US election day (“It’s the economy, stupid.”)

November 6, 2018

Europe’s top stock markets rose at the start of trading on Tuesday, with investors on tenterhooks as the United States heads to the polls in midterm elections.

In initial deals, London’s benchmark FTSE 100 index inched 0.1 percent higher to stand at 7,112.61 points.

In the eurozone, Frankfurt’s DAX 30 gained 0.2 percent to 11,518.17 points and the Paris CAC 40 also added 0.2 percent to 5,110.80 compared with Monday’s closing levels.

Tuesday’s US vote is widely seen as a referendum on President Donald Trump’s performance since taking the White House.


Most experts expect the Democrats would win the House of Representatives, while the Republican party would hold onto control of the Senate, dealers said.



155,965,000 Employed in June: 11th Record-Setter Under Trump

August 3, 2018

Following last month’s strong employment report, the numbers released on Friday were even better in some respects.

The Labor Department’s Bureau of Labor Statistics says a record 155,965,000 people were employed in July, the 11th record-breaker since President Trump took office 19 months ago.

“Our economy is soaring. Our jobs are booming. Factories are pouring back into our country, they coming from all over the world. We are defending our workers,” President Trump told a campaign rally in Pennsylvania on Thursday.

BLS said the economy added 157,000 jobs in July (compared with a revised 248,000 in June).

The unemployment rate edged down to 3.9 percent, as the number of employed people reached new heights, and the number of unemployed persons declined by 284,000 to 6,280,000 in July.

Among the major worker groups, the unemployment rates for adult men (3.4 percent) and Whites (3.4 percent) declined in July. The jobless rates for adult women (3.7 percent), teenagers (13.1 percent), Blacks (6.6 percent), and Asians (3.1 percent), showed little or no change over the month. The unemployment rate for Hispanics hit a record low of 4.5 percent, down from last month’s record 4.6 percent.

The labor force participation rate, at 62.9 percent in July, was unchanged over the month and over the year.

In July, average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $27.05. Over the year, average hourly earnings have increased by 71 cents, or 2.7 percent.

In July, the nation’s civilian noninstitutionalized population, consisting of all people age 16 or older who were not in the military or an institution, reached 257,843,000. Of those, 162,245,000 participated in the labor force by either holding a job or actively seeking one.

The 162,245,000 who participated in the labor force equaled 62.9 percent of the 257,843,000 civilian noninstitutionalized population, the same as last month’s 62.9 percent.

Labor force participation outlook

In its 2018 Long-Term Budget Outlook, the Congressional Budget Office said it has slightly raised its projection of the labor force participation rate since last year.

CBO now projects that the rate of labor force participation will decline from 62.8 percent in 2018 to 61.0 percent in 2028 and to 59.5 percent in 2048. The aging of the population is the most important factor driving down the overall participation rate over the next 30 years, CBO said.

Because older people tend to participate in the labor force at lower rates than younger people, the aging of the population is expected to significantly dampen the rate of participation over the next 30 years. The share of people over the age of 65 is projected to increase from 16 percent in 2018 to 22 percent in 2048, and the share of the population ages 20 to 64 is expected to decline from 59 percent to 55 percent during that 30-year period.

CBO noted that three trends are putting downward pressure on the participation rate:

— Men of the generations that followed the baby boomers tend to participate in the labor force at lower rates than male baby boomers did at the same age. (The participation of women from generations following the baby boomers has remained relatively constant.)

— The share of people receiving federal disability benefits is generally projected to continue to rise, and people who receive such benefits are less likely to work.

— The marriage rate is projected to continue to fall, especially among men, and unmarried men tend to participate in the labor force at lower rates than married men.

CBO expects those forces to be mostly offset by two trends:

— As the population becomes more educated, labor participation rates are expected to increase because workers with more education tend to participate in the labor force at higher rates than do people with less education.

— Second, increasing longevity is expected to lead people to continue working to increasingly older ages.

BLS noted that the change in total nonfarm payroll employment for May was revised up from +244,000 to +268,000, and the change for June was revised up from +213,000 to +248,000. With these revisions, employment gains in May and June combined were 59,000 more than previously reported.


“It’s the economy, stupid.”

— James Carville

Image result for James carville, photos

James Carville with Bill Clinton in 1999 at the White House. Credit Mario Tama/Agence France-Presse

Trump tested his power in last night’s primaries — and won

June 13, 2018


Photo: Chip Somodevilla/Getty Images

Republicans saw a trend continue in South Carolina, where an incumbent who opposed President Trump lost his primary just one week after an incumbent congresswoman in Alabama, who was critical of the president, was forced into a runoff.

Why this matters: The president is becoming a one-man litmus test for Republicans all over the country, proving the GOP has little room for an agenda or ideas that don’t align with his.

Be smart: This isn’t all that surprising. President Trump has an 87% approval rating with Republicans (the second highest since George W. Bush after 9/11). We’ve seen Republicans across the country shift their loyalty to him and away from the party itself.

South Carolina

The Trump factor: The Republican incumbent in South Carolina’s 1st district, Mark Sanford, has criticized President Trump for his tariffs, his behavior, and he’s called on him to release his tax returns. His lack of loyalty to the president ended his congressional career.

  • The president tweeted his support for Sanford’s challenger Katie Arrington just hours before the polls closed. Sanford lost his primary for re-election just one week after Martha Roby — a Republican representative in Alabama — was forced into a runoff after she was tagged as disloyal to Trump. (Roby criticized him after the “Access Hollywood” tape was released during the 2016 election.)

Governor’s race: Henry McMaster, a Republican candidate running for governor, was the first statewide elected official to endorse Trump in 2016, which went a long way: President Trump weighed in twice for him on Twitter.

  • He didn’t make the 50% threshold, so he’s heading to a runoff on June 26, but expect the president to renew his support then.


Democrats look poised to keep their blue wave washing over Virginia after last night’s primaries. Strong Democratic women candidates were nominated in the state’s four most vulnerable GOP-held districts (2nd, 6th, 7th and 10th) and a controversial conservative candidate was nominated for U.S. Senate.

  • Why it matters: Women have been outperforming in Democratic primaries across the country, and they dominated in last year’s elections, with women winning 11 of the 15 state legislature seats Democrats flipped. Overall, Democrats swept Virginia in the 2017 elections for governor and state legislature.
  • GOP Rep. Barbara Comstock will face Jennifer Wexton in Virginia’s 10th district. The real warning sign here is that Comstock, a two-term incumbent, couldn’t prevent her random Republican challenger from getting nearly 40% of the vote.

Virginia’s GOP Senate primary is already giving Republicans a headache. Controversial candidate Corey Stewart won; he’ll face Democratic Sen. Tim Kaine in November.

  • Just look at what Republicans are saying. The state’s former Republican lieutenant governor said he was “extremely disappointed” in Stewart’s victory. “Every time I think things can’t get worse they do, and there is no end in sight,” he tweeted.
  • “Stewart will bring down the entire ticket,” a national Democratic source told Richmond Times-Dispatch reporter Patrick Wilson.
  • The Cook Political Report’s Dave Wasserman predicts Stewart’s victory will weaken Republicans’ chances in four House races across the state.

The bottom line: The two most powerful forces in this year’s midterm elections so far are women and President Trump.

There will be no Trump collapse

June 6, 2018

I’ve tried everything to avoid thinking about the next election — family travel, yard work, crossword puzzles. But now it’s only five months away, barely longer than the gestation period of a North American beaver, or the Stanley Cup playoffs. November can’t be avoided any longer.

In this climate of political frenzy, anyone who tries to predict the outcome must be either deluded or clairvoyant. Yet we’re close enough, perhaps, to see some key features of the battlefield. For instance:

There will be no Trump collapse.

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From the moment late in 2016 when Hillary Clinton’s formless, themeless, listless campaign handed the White House to Donald Trump (assisted by Comrade Putin), Democrats have been counting on the reckless, heedless, careless novice to return the favor. Rather than melt down, though, President Trump is gaining strength.

After a rocky start, the president has cut himself loose from the highly unpopular Congress to create a clear account of his unusual reign, which he repeats with unflagging discipline. He’s a rulebreaker who gets results, and the enemies of change are conspiring to stop him. This is a polarizing message, indeed. But Trump appears to understand that popularity and unpopularity aren’t necessarily opposites. They can be partners: Emotion runs both ways.

By David Von Drehle
The Washinton Post

Since Trump found his footing and lasered in on this message, his political fortunes have brightened considerably. Last December, the RealClearPolitics rolling average of presidential approval polls showed him underwater by a dangerous 21 percentage points. Nearly 60 percent of Americans disapproved of the president’s performance, while his approval rating sagged into the 30s.

But look what’s happened since. Despite a stalled stock market, and with the Republican agenda dead in the water, Trump’s numbers have popped to the surface. His approval rating has risen from a dismal 37 percent to 44 percent — not bad in this sour age. (At the same point in his presidency, Barack Obama had fallen to 46 percent approval on his way down to 44.)

Meanwhile, the gap between Trump’s approval and disapproval numbers has narrowed significantly, from 21 points to eight. Admittedly, that’s a pretty solid eight-point deficit; the intensity of opposition to Trump is unusually high. But his command of the GOP going into the midterm is complete. According to Gallup polling, Trump enjoys greater Republican loyalty than any president of the post-World War II era other than George W. Bush after 9/11.

Democrats have a mammoth task on their hands.

Trump’s utter domination of the political debate — he programs the news with his Twittering thumbs — has made it easy to forget the rest of the story. From state legislatures to governor’s mansions, from one end of Pennsylvania Avenue to the other, Democrats enter this election from the bottom of a deep, deep hole.

And their Plan A for escaping the hole, a big Blue Wave that will lift Democrats from coast to coast, may already have crested far out at sea. Looking again at the polling averages on RealClearPolitics, we see that Democrats enjoyed a sturdy 13-point advantage over Republicans in December among voters asked which party they favored to run Congress. That edge has ebbed to a mere 3.2 points.

On the other hand, Democrats have been overperforming.

From Virginia to Arizona to Alabama, Democratic voters in the Trump era have turned out in droves for off-year and special elections. Districts that Trump won by double-digits in 2016 have been turned into nail-biters thanks to his intensely energized opposition. And there is no shortage of enthusiastic Democratic flag-bearers: Their primaries are so stocked with fresh-faced newcomers that they might as well be auditions for “The Voice.”

What Democrats don’t have, not yet anyway (and time is running out), is a message. The deep philosophical rifts that Sen. Bernie Sanders (I-Vt.) exploited in his surprisingly strong challenge to Clinton’s coronation two years ago have not healed. Minority Leader Nancy Pelosi’s (D-Calif.) grip on the reins of the House Democrats is tight but lifeless.

What looked like a winning message last winter — “not Trump” — appears less potent today. The president has set the bar for himself so low that if November comes and he hasn’t been frog-marched from the Oval Office in handcuffs, and hasn’t rendered the Earth a glowing nuclear ember, a sizable number of Americans will judge him a success.


It’s the economy, stupid.

Politics, like comedy, is all about timing, and Trump’s has been exquisite. Years of unprecedented pump-priming by the Federal Reserve have finally produced optimism about a (relative) gusher of economic growth, especially with unemployment rates falling and consumer confidence up. Congressional Republicans have further juiced things with a huge tax cut and massive deficit spending.

Dark clouds appear on the horizon. Rising oil prices. A looming trade war. And always, the wild card named Robert S. Mueller III.

But for now, the president’s political forecast is partly sunny.

Donald Trump’s State of the Union: Will his speech reflect reality?

January 28, 2018
The 5 topics Trump will cover in his SOTU speech

President Trump will give his next State of the Union speech on Jan. 30 and this year’s theme is “building a safe, strong, and proud America,” according to a senior administration official who briefed reporters about the speech.

  • It will focus on 5 topics: Jobs/the economy, infrastructure, trade, immigration and national security. The administration official also said Trump will make the case for more bipartisanship in Congress.
  • Trump’s guests will reflect these topics, including people who benefited from tax reform and someone who can put “a face to the opioid crisis,” per the official.


The Independent

Donald Trump’s State of the Union: When is it, what will he say and does it reflect the true state of America?

The President is expected to talk about the economy and investment – if he sticks to the teleprompter

By Alexandra WiltsAndrew Buncombe Washington DC

When President Donald Trump delivered his first address to US Congress – it was technically not termed a State of the Union speech because he had only been on the job for five weeks.

He largely stuck to the script, claimed his election victory had been a “rebellion” of the people and outraged many by announcing the establishment of a body to help alleged victims of immigrant crime – the Victims of Immigration Crime Engagement. “We are providing a voice to those who have been ignored by our media, and silenced by special interests,” he said.

Eleven long months later, Mr Trump has been President for a year, believes he has delivered on many of his electoral promises, and considers himself to be a victim of “fake” media coverage and Special Prosecutor Robert Mueller’s “witch hunt” into possible collusion between the Trump campaign and Russia during the 2016 presidential election.

Heading back from a very exciting two days in Davos, Switzerland. Speech on America’s economic revival was well received. Many of the people I met will be investing in the U.S.A.!

A senior administration official told reporters that when Mr Trump speaks at 9pm EST on Tuesday night, laying out future plans and reflecting on his first year in office, he will be “speaking from the heart”.

That official, who declined to be named, said the President will discuss jobs and the economy, infrastructure, immigration, trade and national security.

Experts say that with a booming stock market and low unemployment rate that he inherited from his predecessor – and following a recent corporate tax cut that has resulted in a number of firms announcing new hirings, new projects and bonuses – Mr Trump will start by claiming victory for the resilience of the US economy.

“It’s the economy, stupid. He’s got a story to tell,” said Larry Sabato, professor of politics at the University of Virginia, referring to the now legendary advice strategist James Carville offered Democrat Bill Clinton in 1992 as he challenged President George HW Bush.

“Most people have no idea how much a president influences the economy, but Trump will take 100 per cent of the credit for the good news – of that we can be sure. It’s all due to business confidence in him, and his tax-cutting, and his regulation-busting.”

He added: “Yes, those are a part of the story, but the economy was in great shape during Obama’s final year. Trump will never admit that. He’ll create a reality that his base will swallow hook, line, and sinker. Trump is ‘making America great again’.”

When Mr Trump spoke a year ago, many of his opponents and Hillary Clinton supporters, still licking their wounds from her surprise defeat, may have doubted he would make it this far. While Mr Trump had not yet fired FBI Director James Comey – a decision that would ultimately lead to the appointment of Mr Mueller – he had got rid of his national security adviser, Michael Flynn, after learning he had lied about contact with Russian officials.

Furthermore, questions were already being asked about his campaign advisers’ possible links to Russia, about his refusal to speak out against Vladimir Putin, and the “unpresidential” nature of much of his discourse and actions. In short, many believed it would only be a short time before Republicans turned against him and the House of Representatives started impeachment proceedings.

Yet a year after he took office, Mr Trump appears to be in a much stronger position. While his approval ratings remain at a historic low, his support among his base and Republicans more generally remains solid.

Following his success in getting conservative judge Neil Gorsuch confirmed to the Supreme Court, cracking down on immigration and signing into law the biggest tax-cut for three decades, many Republicans believe he has delivered on a lot of their wishes.

“According to his supporters he’s had several major accomplishments,” said Jeanne Zaino, a political scientist at New York’s Iona College.

“The Supreme Court nomination, the tax reform bill, booming economy/Wall St and jobs numbers, and the little discussed but critical roll back of Obama era regulations to an extent that no one expected.”

Officials said that during his speech – which will be shown on major television and cable networks, as well as the White House’s own website – Mr Trump will refer to what he sees as the benefits of reducing the corporate tax rate from 35 per cent to 21 per cent.

Mr Trump will also reiterate his commitment to fair and reciprocal trade deals. Just this past week, the President for the first time reopened the door to the possibility of the US rejoining the Trans-Pacific Partnership – almost exactly a year after he withdrew the country from the landmark 12-nation trade pact.

The administration is also currently negotiating the North American Free Trade Agreement (Nafta), which Mr Trump has made clear that he can still rip up if the US does not reach what he considers to be a better deal with Canada and Mexico.

The speech, which will get a formal Democratic response from congressman Joe Kennedy, will come a day after the White House is due to deliver its “legislative framework” for an immigration bill to Congress.

It is reported that the plan proposes a path to citizenship for up to 1.8m immigrants who were brought to the US illegally as children – so-called “Dreamers” – while also calling for restrictions on immigration and $25bn (£18bn) for border security. The proposal is likely to face a large amount of opposition from Democrats, some of whom are expected to boycott Mr Trump’s address.

If Mr Trump sticks to the teleprompter, or the speech his aides have hammered out for him, the nation may get few headlines on Tuesday night. But after a year in which racism, immigration, sexual abuse of women and gender inequality have made up much of the public conversation, will Mr Trump dare dive into any of these areas?

Two weeks ago, Mr Trump triggered global outcry when it emerged he had referred to Haiti and African nations as “s***hole” countries.

“If I could have one wish, it would be for him to say he will open the path for immigration, without the need for a wall and without using the Dreamers as political pawns,” said Veronica Arreola, an Illinois-based academic and gender expert.

From health care to economic justice to civil rights, the Democratic agenda stands in powerful contrast to President Trump’s broken promises to American families. Deeply honored to be chosen to deliver the response to the State of the Union next week. Stay tuned for updates!

Professor Terri Givens, an academic focusing on politics and immigration at California’s Menlo College, said she was certain Mr Trump would tout the economy and claim success for it. She said she doubted he would dive into cultural issues.

Yet she said she hoped the President, fresh from his speech in Davos, would say something reassuring to America’s traditional allies, many of which have been left uncertain and anxious by his past remarks – his attacks on Nato, his strident “America First” position and his decision to unilaterally withdraw the US from the Paris accord on climate change.

Another issue many will be watching for is whether Mr Trump will refer to the ongoing probe into his campaign’s possible collusion with Russia. This week it was reported the President last summer had sought to fire Mr Mueller, only to be talked out of it by a White House lawyer.

Mr Trump has dismissed the report as “fake news”. And there remains the possibility that he could use Tuesday night’s speech to take a dig at either the investigation or the media, or both.

In 1974, President Richard Nixon was almost at the end of his State of the Union address when he asked to offer “a personal word” about “the so-called Watergate affair”.

“I believe the time has come to bring that investigation and the other investigations of this matter to an end,” the Republican said, referring to House and Senate investigations into his conduct. “One year of Watergate is enough.”

He declared that he had “no intention whatever of ever walking away from the job that the people elected me to do.”  Mr Nixon resigned seven months later.

Understanding the Trump Show

December 27, 2017

After tax reform, we might have to rethink how America gets things done.

President Trump sits next to the tax-reform bill after signing it into law in the Oval Office, Dec. 22.
President Trump sits next to the tax-reform bill after signing it into law in the Oval Office, Dec. 22. PHOTO: MIKE THEILER/BLOOMBERG NEWS

For this viewer, the meaning of the Trump show began to change with last week’s tax bill. Donald Trump normalizes nothing new and outré in our politics after all. He is but an effective parody of the politicians we have, and have long had.

We are also learning something about the relationship, in our age, between the political show and movement, however fitful, on the nation’s business.

Republicans’ performance at last week’s White House in celebration of the party-line tax bill may have been bombastic and obsequious, but the party placed its bet on a growing economy. The show, however odd, exploited the party’s star attraction, Mr. Trump, whom the cable channels can’t resist, to push out the message to America “good things are happening.”

Every bit as hysterical, excessive and embarrassing was the countershow put on by Democrats. But they put themselves on the side of bad things happening. Nancy Pelosi, Chuck Schumer and their junior shadows danced around the maypole, lighted candles, burned effigies—in hope that you will lose your job in 2018, see your hours cut, or fail to get an expected raise.

This probably is an ill-advised bet by Democrats. The world’s major economies are in a synchronized upswing. The world’s central banks are using the window to withdraw their histrionic and destabilizing monetary accommodations of the past decade. To the extent that “it’s the economy, stupid” still trumps, the GOP will benefit.

Democratic economists are reworking their “secular stagnation” models to say the Trump program is leading not to faster growth but higher inflation. They are likely to be disappointed. The Trump economy—which we’ve maintained since before Election Day is the economy you get when you take President Obama’s foot off its neck—seems predisposed to remain benign through next year’s congressional election.

Republicans and Democrats, including Barack Obama, have long said our corporate tax system was dysfunctional and needed to be fixed. The rest of the tax bill may be anticlimactic, but it broadens the standard deduction, cuts rates a bit, and slightly reduces itemized deductions, those corrupt and corrupting schemes by which Washington rewards you for redirecting your income to various lobbying interests (including state and local government).

From the Trump show we are getting steps in the direction of “good government” as that term has traditionally and reliably been understood for decades. And unless 250 years of economic thought is ready to be junked, increasing the after-tax return on business investment will lead to more investment.

How different would a Democratic party-line tax bill have been? Probably not much different on the corporate side, unless you think the difference between 21% and 28% is vast and telling. On the personal side, Democrats would likely have focused on trimming back different deductions (for the rich!), but would likely have made it up to voters with a larger standard deduction and lower rates just as Republicans did.

It took three Reagan tax bills and five years before we got the bipartisan 1986 tax reform. If that history is borne out a second time, then last week’s victory will be a down payment on better things to come. This could be another way the Trump show, if it creates successes that both parties eventually want to own, teaches us something mysterious about what is required to move our country ahead now.

Incentives matter, and in this business of incentives not all is coming up roses, however.

The Harvey Weinstein phenomenon, we submit, is really a Trump phenomenon. The country has seen sex-abuse scandals before. It was the spectacle of Mr. Trump’s election that turned blue-state America, from which most of the recent scandals stem, toward genuine repentance and then toward indiscriminate intolerance of male sexual aggression in any form.

Unfortunately, when we stipulate that all accusations must be believed, we guarantee not only the lodging of more allegations, but more false allegations. A few months ago Mike Pence was mocked for his practice of never meeting or dining alone with a woman who is not his wife. Now every man in blue America will have to adopt such a policy as insurance against a malicious allegation.

But one thing has come into focus. At the beginning of 2017, it was impossible to figure out how the Hulu production of “The Handmaid’s Tale,” about a dystopian future in which consensual, nonprocreative sex is all but outlawed, became in the minds of so many liberal commentators symbolic of the age of Trump. Now it starts to make sense.

Fed Raises Key Interest Rate, Citing Strengthening Economy

December 14, 2016

The widely expected decision moves the Fed’s benchmark rate to a range between 0.5 percent and 0.75 percent, still a very low level by historical standards.

In announcing the decision, which followed a two-day meeting of the Fed’s policy-making committee, the central bank gave little indication that the election of Donald J. Trump has altered its economic outlook. The Fed said it still expected a slow economic expansion, and it still expected to continue a slow march toward higher rates. Fed officials said they expected to raise rates three times in 2017.

“My colleagues and I are recognizing the considerable progress the economy has made,” Janet L. Yellen, the Fed chairwoman, said at a news conference after the announcement. “We expect the economy will continue to perform well.”

The decision was taken by a unanimous vote of the 10 members of the Federal Open Market Committee, the first time in recent months the Fed has acted by consensus. The Fed is holding rates at low levels to support economic growth by encouraging borrowing and risk-taking. The committee’s statement said it judged that the economy still needed help.

The Fed’s economic outlook was essentially unchanged from the last round of forecasts in September. Fed officials continued to predict the economy would expand at an annual rate of about 2 percent for the next few years. They expect little further decline in the unemployment rate, which stood at 4.6 percent in November. Inflation, meanwhile, is expected to reach 2 percent — the pace the Fed regards as healthy — and then stay there.

It is a Goldilocks forecast. Not too hot, not too cold — just right.

Fed officials predicted they would raise the Fed’s benchmark rate a little more quickly in the coming years, reaching 2.1 percent by the end of 2018. In September they had predicted that it would reach 1.9 percent by the end of 2018. The new projections, however, still reflected a significantly slower pace of increase than Fed officials predicted last December, when they expected the benchmark rate to reach 3.3 percent by the end of 2018.

The combination of steady growth and faster rate increases implies that Fed officials expect to offset a modest increase in fiscal stimulus.

Janet L. Yellen, the chairwoman of the Federal Reserve.CreditBrendan Smialowski/Agence France-Presse — Getty Images

The November elections have complicated the Fed’s outlook. Republicans will control the White House and both chambers of Congress next year, setting the stage for significant changes in fiscal policy after years of gridlock.

Mr. Trump has promised to increase economic growth through measures like tax cuts and infrastructure spending.

The Fed has said that it expected to slowly increase its benchmark rate so long as the economy continues its own slow-and-steady expansion. If Republicans succeed in invigorating economic growth, however, the Fed is likely to raise rates more quickly. The greater the stimulus, the faster interest rates are likely to rise.

“Your expectation should depend very little on what you think that the F.O.M.C. is thinking and very much on your view of Trump policies and their macro effects,” said Jon Faust, an economist at Johns Hopkins University and a former adviser to Ms. Yellen. “Don’t focus on the Fed. As James Carville regularly reminded the other Clinton on the campaign trail: It’s the economy, stupid.”

Philippines President Duterte is Making Investors Nervous — Strongman could end up weakening his country

September 17, 2016


“There is a group of people who could kill someone and not go to jail.”

“He’s obviously eager to take China’s money.”

The Economist

 The new president may undo the economic gains of recent years
Sep 17th 2016 | MANILA | From the print edition
UNDER Rodrigo Duterte, the president of the Philippines since late June, things have a habit of spiralling out of control. First came his campaign against the drug trade, which has led to the killing of almost 3,000 suspected dealers by police and unknown assailants, without even a nod at due process. In less than three months, he has presided over three-quarters as many extrajudicial killings as there were lynchings of black people in America between 1877 and 1950.
When Barack Obama expressed concern about the killings, Mr Duterte called him a “son of a whore”. America’s president tried to shrug off the insult. But Mr Duterte took the row to a new level this week, calling for American special forces to leave the southern island of Mindanao, where they have been training Filipino troops fighting several long insurgencies. “For as long as we stay with America,” he said, brandishing a picture of an atrocity committed by American soldiers more than a century ago, “we will never have peace”.
On September 13th he told his defence secretary to buy weapons from Russia and China rather than America, hitherto the Philippines’ closest ally, and the source of hundreds of millions of dollars in military aid each year. He also said the navy would no longer patrol the South China Sea alongside American vessels. This reversal is all the more surprising given America’s huge popularity in the Philippines.
In other words, Mr Duterte is not just crass and brutal; he is alarmingly volatile. He has little experience of national politics, let alone international affairs, having been mayor of Davao, a city of 1.5m or so, since 1988 (apart from a brief stint as vice-mayor to his daughter and three years as a congressman). Since becoming president, he has threatened to withdraw from the United Nations and to declare martial law.
He idolises Ferdinand Marcos, a former dictator who did impose martial law. He says he wants to give Marcos a hero’s burial in Manila.
All this, naturally, frightens both local and foreign investors and threatens to undermine the Philippines’ newly acquired status as South-East Asia’s economic star.
The Philippine economy grew by 7% in the second quarter, year-on-year, roughly double the long-run rate, and faster than China, let alone most other countries in the region. Unemployment, at 5.4%, has been falling steadily.
The population is young and English-speaking, and a booming service sector is keeping more educated Filipinos from seeking their fortunes abroad. This burgeoning middle class—along with growing remittances from Filipinos abroad—anchors strong domestic consumption.

During the six-year term of Mr Duterte’s predecessor, Benigno Aquino, the Philippine stock market boomed. Foreign direct investment tripled between 2009, the year before Mr Aquino took office, and 2015 (see chart).Mr Duterte thus took over a country that was doing very well economically. His campaign focused not on abstractions such as foreign investment and the proper strategic balance between China and America, but on quotidian concerns: crime, traffic, corruption.


After admitting that economic policy was not his strong suit, he promised to “employ the economic minds of the country” and leave it to them. His advisers duly released a sensible ten-point plan for the economy: it emphasised macroeconomic stability, improved infrastructure, reduced red tape and a more straightforward and predictable system of land ownership.

Mr Duterte has also promised to focus on rural development and tourism. Workers’ advocates are pleased with his promise to crack down on “contractualisation”, whereby employers hire labour from third-party suppliers on short-term contracts to avoid paying benefits. Internet in the Philippines is slow and expensive; Mr Duterte has warned the incumbent telecoms firms to improve service or face foreign competition.

Unfortunately, Mr Duterte’s love of lynching and his propensity to slander the mothers of foreign dignitaries are making investors nervous. This month the American Chamber of Commerce warned that the anti-drug campaign was calling into question the government’s commitment to the rule of law.

One financial adviser says that since Mr Duterte took over, investors are demanding a higher risk premium to hold Philippine assets. As Guenter Taus, who heads the European Chamber of Commerce in the Philippines, puts it, “A lot of people are hesitant to put their money into the Philippines at this point.”

Residents carried the body of a suspected drug dealer killed by unidentified gunmen in Manila on Sept. 14. Mr. Duterte’s violent crackdown on drugs and crime has left almost 3,000 people dead since he came to office, according to police.
Residents carried the body of a suspected drug dealer killed by unidentified gunmen in Manila on Sept. 14. Mr. Duterte’s violent crackdown on drugs and crime has left almost 3,000 people dead since he came to office, according to police. PHOTO: NOEL CELIS/AGENCE FRANCE-PRESSE/GETTY IMAGES

Mr Duterte’s critics fear that the drug trade will only subside temporarily, but the damage done to democratic institutions will linger. The police freely admit that drug syndicates have taken advantage of Mr Duterte’s green light to kill rivals or potential informants. Police impunity makes many nervous: one longtime foreign resident of Manila says he has started to hear fellow expats talk about leaving.

He worries that an off-duty policeman could take issue with something he did, shoot him and get away scot-free. “This didn’t happen under Aquino,” he says. “You didn’t feel there was a group of people who could kill someone and not go to jail.”

Local businessmen worry that the president might simply denounce their firms as transgressors in some respect, without producing any evidence. Mr Duterte, after all, did something similar when he published a list of officials he accused of being drug dealers. By the same token, Mr Duterte singled out Roberto Ongpin, the chairman of an online-gambling company, as an example of a businessman with undue political influence. Shares in Mr Ongpin’s company promptly plunged more than 50%; Mr Ongpin resigned a day later, and promised to sell his stake in the firm. “Everyone is scared,” says one corporate bigwig. “None of the big business groups will stand up to him. They’re all afraid their businesses will be taken away.”

A similar uncertainty hangs over Mr Duterte’s foreign policy. He seems to be inclined to strengthen the Philippines’ ties with China, at the expense of its alliance with America. During the campaign he criticised his predecessor’s frosty relations with China. The two governments are said to be preparing for bilateral talks—something that has not happened since 2013, when Mr Aquino’s government took a territorial dispute with China to an international tribunal. Shortly after Mr Duterte took office, the tribunal ruled in the Philippines’ favour, but he seems reluctant to press the point.

During the campaign Mr Duterte mused about the dispute with China over Scarborough Shoal, a rich fishing ground in the South China Sea, “Build me a train around Mindanao, build me a train from Manila to Bicol…I’ll shut up.” He also admitted that an anonymous Chinese donor had paid for some of his political ads. His reticence with China is all the more striking given his otherwise belligerent rhetoric and swaggering persona.

Of course, it is not clear that Mr Duterte will be able to strike a deal with China, or even that he will continue to pursue the diplomatic volte-face he seems to be contemplating. The optimistic view sees Mr Duterte as more bluster than substance. His chief of police claimed this week that the anti-drug campaign had reduced the supply of illegal drugs by 90%. That claim may allow him to declare victory and stir up some new furore, even as his advisers soldier on with the mundane business of government. Optimists speculate that if he follows through on his pledges to improve infrastructure and boost rural development, he might even leave the Philippines in a better condition than he found it.

The pessimistic view sees Mr Duterte continuing to lose friends and alienate people. He picks fights with America, with business, with the other branches of government. China exploits his weakness, increasing its military presence around Scarborough Shoal without building any railway lines in Mindanao. Investors stay away, and growth declines. The strongman ends up weakening his country. In the Philippines, sadly, that is a familiar story.


Why Are So many Ships left With Unpaid Crew? — It’s the economy stupid — Global economic trun-down

August 29, 2016

Mon Aug 29, 2016 3:58am EDT