Walled Aly, the NYT and “the wreckage of 2016”

It’s been something of a problem to decide which newspaper to read each morning while in Europe, and after quite a bit of trial and error, I have locked onto The New York Times. It is American politics that is the most important at the moment, and it does turn out that it does not seem to matter which of the British papers I choose, none of them are any better. They are all filled with the same kind of deceit, trying to ease the pain among the left, and looking to find whatever vulnerabilities there are in Trump as president.

The NYT has ended up the least painful to read since it is so consistent in its idiocies. Nothing in it ever does anything but fill me with disgust at what seems to be some kind of competition to find the most ridiculous means to discredit the election, but after a while you get used to it. What they are doing is, of course, not just dangerous but downright evil since the very processes of a democratic system depend on the general acceptance of the processes in which our political leaders are chosen. The left has no uses for such established processes except to the extent that they are able to place their people into positions of power. One article after another has been about how the electoral system is broken, written by one cretin after another.

So imagine my surprise when I opened the editorial page for Friday’s paper (on the continent the papers are always a day late) and in the feature position was an article on “Voting should be mandatory” written by none other than Waleed Aly, “columnist and broadcaster and a politics lecturer at Monash University”. Bottoms of barrels don’t get scraped any more thoroughly than this. He starts:

When you survey the wreckage of 2016, it’s easy to forget that the most seismic democratic events were brought about by minorities.

Only 37 percent of eligible Britons voted to leave the European Union. The case is even clearer in the American election, which Donald J. Trump won despite having persuaded only a quarter of the American electorate to support him. Mr. Trump triumphed in a low-turnout election.

The probability that the US will adopt compulsory voting is zero to the hundredth decimal point. What is important is that NYT readers can now sagely nod their heads and agree that, on the evidence of the 2016 election, the system has “handed power to someone whose plan was to keep turnout low, hoping to appeal to an impassioned minority rather than a nation at large”.

But you do wonder whether Aly volunteered to write this article, or whether the editorial board sought out someone who could write these inanities for them and lit on the most reliable person on the left in a country with compulsory voting. They therefore chose Waleed as the bunny to put this article together, helping to convince his fellow political fools on the left in the US that the American voting system is broken and that DJT is not really their legitimate president after all.

The inauguration timetable in Australia

The inauguration takes place in the early afternoon of the 20th of January in the US but will occur in Australia in the early hours of January 21st. Here is the Australian timetable.

Saturday, 1:00am AEDT

The President-elect attends a morning worship service.

Saturday, 1:30am AEDT

The Inaugural Swearing-in Ceremony begins. The crowd will be entertained by performers until the President-elect arrives.

Saturday, 2:30am AEDT

President-elect Trump heads to the White House for a meeting with soon-to-be former President Barack Obama. From there, they head to the swearing-in ceremony at the US Capitol together.

Saturday, 3:45am AEDT

Incoming vice-president Mike Pence takes his oath of office.

Saturday, 4:00am AEDT

Which is noon (local time), at which point the term of the new administration officially begins. Mr Trump will step up and take the oath of office, administered by the Chief Justice of the United States, John Roberts.

I do solemnly swear (or affirm) that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States.

Saturday, 4:10am AEDT

President Donald Trump’s Inaugural Address.

Saturday, 5:00am AEDT

After the conclusion of the inaugural ceremony, Barack Obama and Vice-President Joe Biden (as well as their families) will be escorted out by the new President and Vice-President.

Saturday, 5:30am AEDT

An Inaugural Luncheon organised by the Joint Congressional Committee on Inaugural Ceremonies.

Saturday, 6:30am AEDT

After lunch, President Trump and Vice-President Pence lead the Inaugural Parade along Pennsylvania Avenue to the White House.

Saturday, 11:00am AEDT

The day finishes with Inaugural Balls held across Washington.

The tragedy of modern macroeconomics

The cross-post from Richard Holden begins as follows:

Economists did not predict the financial crisis of 2007, nor did we predict that advent of secular stagnation that has followed. Those events have shaken the economic and political world. Our theories need work. Maybe a lot of work.

Recessions are naturally occurring phenomena which always come as a surprise, but on the second half of his statement, let me take you back to what I published in Quadrant in February 2009 and which I had written the previous December.

Just as the causes of this downturn cannot be charted through a Keynesian demand-deficiency model, neither can the solution. The world’s economies are not suffering from a lack of demand, and the right policy response is not a demand stimulus. Increased public sector spending will only add to the market confusions that already exist.

What is potentially catastrophic would be to try to spend our way to recovery. The recession that will follow will be deep, prolonged and potentially take years to overcome.

This has been exactly what has followed the stimulus and it should not be a surprise although among economists it is. And this is not “secular stagnation”. This is the full-on consequence of following a Keynesian approach to recovery. Just because economists no longer understand the crucial importance of value-adding activity doesn’t mean it has stopped being essential to recovery. It has only meant that modern economists have no idea what is going on.

The rest of Holden’s post tries to get at the point via a critique of modern monetary policy – of which there is no greater critic than I am – that Say’s Law makes straightforward. He crosses correctly over to the real side of the economy to show that you can pour out all the money you like, but if there is no real value-adding activity to support it, you cannot make a recovery happen.

The problem with modern monetary theory is that, in short, there is only a finite amount of real economic resources that can be extracted through seigniorage (the difference between the face value of physical money and its production costs). Or, to quote the late, great Zvi Griliches: “one can only get so much lemon juice out of a lemon.”

It is understanding the overlap between the monetary side of the economy and the real side that is without doubt among the major issues in getting many of these things right. This is covered in Chapters 16 and 17 of the second edition of my Free Market Economics, which I began to write at the end of 2008 to explain why a Keynesian stimulus can never work. It is Say’s Law – uniquely discussed in this book and found nowhere else in all of modern economic literature! – that explains how these things work. Every economist understood this before 1936. Now almost no one does. This is the tragedy of modern macroeconomic theory which only makes things worse every time it is applied.

Almost gone

uninstalling-obama

Listening to Obama’s last press conference. Such a windbag! Future generations are going to wonder where his reputation for being a great speaker came from. One platitude after another. If you didn’t know his record, if you didn’t know what he has actually done over the past eight years, you might even conclude he’d be an all right president. But we do know what he’s done. Cannot wait to see him gone.

FOLLOWED BY: Been watching on the BBC. The very next show is about Donald Trump who apparently thinks of himself as some kind of comic book character – Batman or Superman or something. Anyway, it’s about Trump, Putin and the “secret dossier”. Is it fact or fiction or some of both, they ask. We still don’t know. The entire story is right now, even while I’m watching, being treated as something we still need to wait on further evidence. We have even been shown a supposed tape of some businessman being taped in bed with some woman, presumably not his wife. And now they are interviewing some “Russian gangster” about this association with Trump in Moscow. Now the interviewer is in Washington looking more deeply at the evidence. And on it goes, but enough for me. What a contrast between the two stories! What a world we are about to enter. Do they know they are lying? No doubt, but they could not care less.

Standard errors of sub-standard theory

Apparently, Trump has almost entirely overlooked economists for any of the major posts which has led to this article: Economists Contemplate Life on the Outs. The President-Elect does not seem to value economists very highly, which the following reaction might help you understand why.

“Donald Trump doesn’t matter,” Yale’s Robert Shiller, the outgoing president of the American Economic Association and a winner of the 2013 Nobel Memorial Prize in Economic Sciences, said during a discussion of the long-run prospects for the economy. “He’ll only be here for four years and he’s gone.” Shiller later admitted that could be wishful thinking: “I’m a natural optimist, so I don’t want to speculate on how bad things could get.”

But the response that truly made me laugh is this where, to translate, economists are said to be perfectly aware how bad things might go but focus on the most likely outcomes even though improbable seriously bad events often occur instead. Here it is in their own words:

In their academic research, the more [economists] know about something, the more they emphasize their standard errors. The closer you get to the op-ed page or policy advising, the standard errors shrink down to nothing. You look at the predictions that economists made about what would happen with Brexit, what would happen with the election of Trump, what would happen with the downgrade of U.S. debt, etc., and a lot of those were appallingly wrong. I think we need to do a better job conveying some of our uncertainty, some of the standard errors around what we do.

The real story is that they don’t have a clue since they have been following standard macro with its emphasis on aggregate demand for eighty years. Shunting these people to the side is one more example of Trump’s good judgment. If he really does cut spending and cut regulations and only spends public money on what genuinely adds value, he will be doing pretty well most of what needs to be done. But having said that, I do note that the adjustment process may – may – lead through a relatively steep valley before things finally begin to improve. And now that I have covered all possibilities, we can sit back and see what actually happens.

Are the media really this clueless?

If the insight of the media into all things is as penetrating as their insight into Trump’s attitude to the traditional media, these people are as stupid a bunch as I have ever seen. This is from The New York Times even: Trump Team Considers Moving Press Corps, Alarming Reporters. He is not thinking of excluding these left-wing clowns, but increasing the competition.

Sean Spicer, the incoming White House press secretary, issued a statement on Sunday that did not address the issue of a dedicated work space. “While no decisions have been made, there is enormous interest in covering Donald Trump,” he wrote. “The current briefing room only has 49 seats, so we have looked at rooms within the White House to conduct briefings that have additional capacity.”

Do they really think they are the soul of objectivity, that there is no other perspective on events other than their own? Do they really think that Trump feels he can trust them to report accurately and without bias? I only go to the traditional media to find out what the left thinks about policy and events, and thus to find out the sensation de jour. I go to everyone else to find out what is actually going on and for a proper perspective on policy. It is to everyone else that Trump intends to provide room for them to report.

Donald Trump is the Tom Brady of politics

It’s five in the morning where I am, but am up and watching the Patriots v the Texans. I do indeed like Boston which is why I am preparing for a wrecked day tomorrow, even though we are in Copenhagen just for the weekend. But it’s the Boston QB that I like to watch, and this is not even remotely because he is one of the few people in sport to say a good word about the president-elect.

In fact, it is very hard to find a good word said about him anywhere. But among those who do, it turns out, is Tony Abbott who has put out a statement on RESPONDING TO THE TRUMP PRESIDENCY that was published in The Oz. I have no idea whether this is much noted back home, but it does seem a useful addition to the debate. The great fear on the left is not that Trump will fail but that he will succeed. At least here there is recognition on how he might and what we might learn from Trump’s approach:

In just a few days Donald Trump will become President of the United States and leader of the free world. It’s high time for people everywhere to stop lamenting the rise of Trump and to start responding to it. If he does what he has said he would – and we have to assume he’ll try – economic policy here in Australia will need to respond fast. It will be a good opportunity for the government not just to talk about agility but actually to be agile.

There is as much to worry about what Trump does on the economy as there is to hope. But if he does succeed, and he really might, he will re-write the policy agenda for a generation to come.

Might mention that with five minutes to go in the game, Boston has not just an impossible lead, but is beating the spread. I can only hope Trump does as well.

How do you prevail against this?

img_2242

The Deep State – what I have called the progressive internationalists – are doing all they can to hobble and destroy Trump even before he enters the White House. This article on The Deep State Strikes Back: The Permanent Campaign Against Donald Trump gets right to the heart of the issue.

Getting most of what I know from the net, and being used to the relatively balanced Australian press, the above front page has been quite a revelation. It is not just that the story is discussed, but driven towards the reader. It is from The Daily Mail as well, which is towards the right of the spectrum and yet, there you are. If you are just someone who takes the news, and the balance of what matters and what does not from the paper you go to if you want to know the football scores, you cannot but be affected. The “sex scandal” is assumed to be true, it is presented as having come from a reputable source that being an “Ex-MI6 officer”, and it is something that must inevitably tend to diminish Trump’s credibility since whatever you might think of the story, you know it is now part of the mythology.

The process is depraved. But when I think that half of Americans are sorry to see Obama leave, it is hard to see Trump prevailing into the long-term. He is of a different cut, he is personally disgusted by the values his enemies display, and he has been warned that these enemies exist, which are all positive. But we will have four years of relentless negativity about Trump, some of which will stick and some of which will not, but all of it will take its toll.

Then there was The New York Times this morning (although yesterday’s paper). Not as sensationalist as The Daily Mail but even more one dimensional. The story on the front page is titled “Blackmail in Russia didn’t die with Soviets” and comes with the sub-head “Kremlin has long history of using compromising material to discredit foes”. I suppose that’s true, but the presumption throughout the paper is that there is something to the story even though there is nothing in it other than some insane fantasy. So we continue inside with “From salacious dossier to political crisis””, “President-elect concedes Russia’s interference in American election”, “A Manchurian candidate” (with the highlight quote “The onus is on the president-elect to prove he’s not Putin’s puppet”) and “Trump takes aim at news media”. There is also “Ode to Obama” with its highlight quote, “You don’t know what you’ve got till it’s gone”. Truly only a Donald Trump has any chance to maintain his balance in such an environment, but it will be very hard going on the evidence I have just seen.

Millennial incomes are much lower

They voted for him and love him still, but this is the reality Obama has wrought: American millennials paid 20% lower salaries than baby boomers at same age, report reveals:

Americans ages 25 to 34 make 20% less money than baby boomers did at the same age, according to a study released Friday.

Millennials were found to be making about $40,581 in 2013. By comparison, young people in the same age group brought in $50,910 in 1989, according to a new analysis of Federal Reserve data by the advocacy group Young Invincibles. . . .

The report’s other findings were just as grim. When baby boomers were young, they owned more homes and had amassed assets worth twice as much as young people of today. . . .

In all, the figures present a dire picture for the 75 million millennials struggling for their piece of the American Dream.

“These findings uncover that millennials have been set back significantly, by not just the Great Recession but by decades-long financial trends, resulting in major generational declines in financial security between millennials and baby boomers when they were the same age,” said Tom Allison, deputy director of policy and research for Young Invincibles.

Most older people have a stock of assets they accumulated under a different more productive economic system which obscure the underlying economic trends. It is those starting out in life who are at the hard edge of reality. The West is poorer, and if you would like my one-line explanation of why that it, it is because governments are relentlessly dissipating our wealth on non-productive forms of expenditure, which naturally includes all of the massive welfare expenditures that bring votes but no economic growth.