Trump's Economic Program: What Should It Be

No one denies that there are better and worse ways to spend money. The point is that even just giving people money to spend is better than nothing when the economy is not operating at full capacity. Digging and filling holes isn't productive, but it gets people money so that they can go spend it, which induces those who have the capacity to provide goods or services to then do so, when people with money to spend on them were lacking beforehand. The digging and filling of holes of course can just be sidetracked, and you can just give people the money outright.

It would be better if there were specific projects available that not only let you put people to work so they can then spend money to induce others to provide good and services they have the capacity to provide but no inducement to beforehand, but also were valuable undertakings themselves and could go toward improving future economic performance on a structural level. But even if you're not doing this, when the economy is not operating at full capacity just giving people money is better than nothing.

When Trump's talked about infrastructure he's framed in both in terms of improving America's physical capital and also putting people to work.

Oh goody - it's time for econotrolling

http://noahpinionblog.blogspot.com/2012/09/econotrolls-illustrated-bestiary.html (Which one are you? Post-Keynesian here)



Well, in the terminology of A Christmas Story , in politics you are either a Bully, a Toady, or a Victim. Austrians try hard to present themselves as Victims, but honestly they are close to being Toadies. The party in power until a few days ago -- the Neo-Liberals, are for all practical purposes Hayek's MPS (esp. those relying on Friedman and Monetarism), have pretty much ruled the roost since Volcker. Yes, a purist Austrian would deploy a no-true-scotsman argument against Monetarism (Hayek in Practice, rather than Mises in Theory). But Mises in Theory is Classical Liberalism and he himself says it was only tried for 75 years in the 19th century, and not since. There is zero chance of Capitalism today ('the world as we know it') returning to Classical Liberalism.

Among the sects of economists with actual or potential power, they are but synonyms for the political faction they represent:

Neo-Liberalism of the Clinton variety -- the News Keynsians (Blanchard, Summers and Delong, Yellen)
Neo-Conservatives of the McCain/Romney variety -- the New Keynsian Mankiw; *possibly* some influence from Lucas but that's theoretical and not practical
Trumpism -- this is where it gets interested. Ask me in a year after I've looked at what happened to the Kalecki Income Relation (an accounting relation, so you believe in it whether you believe y ou do or not)

No one but recently had actual power-- the Old Keynesians like Krugman. They've been out of power since the Nixon era, and are further from power than the purist Austrians -- so beating them is beating a dead horse; the same might be said, by the back door, for the Institutionalists and even MMTers, like the younger Galbraith.

No one but recently had actual power -- the Friedmanites, Monetarists, and Supply Siders - these informed New Keynesianism and are near kin to the Lucas faction, who have inherited the whole Freshwater/Chicago thing, which was another name for the institutional arm of the Hayek/MPS Masters of the Universe.

When Pepe Escobar talks about the dalangs and the Masters of the Universe and the Vulcans and what not, it's important to understand he means (heretical, non-purist) Austrians. Austrians without Austria? Self-hating Austrians?

"Ditch digging" is sort of a straw man, since Keynes proposes infrastructure spending as a better alternative, while suggesting that ditch digging would be better than nothing.

I think Trump's practical experience as a salesman and businessman, along with the experience of growing up during America's postwar economic expansion, is precisely what drives his affinity for Keynesian policies. He knows Keynesian policies are popular, so he was always going to campaign on them. His business as a developer involved borrowing and spending lots of money with the expectation that there'd be enough demand and sales to make his operation profitable. His casinos in Atlantic City depended on maximizing the churn of lower-middle and working class people coming into his casinos with cash to burn. As a practical, sales oriented guy, he's more directly attuned to the demand side of the economy than the economists and financial types that dominate American policymaking are. This would also explain his dislike for Reagan's economic policies, since Reagan discarded the Keynesianism that had guided American economic policymaking in the postwar period.

It's not just the fiscal expansion via infrastructure and military spending - Trump has also expressed support for social spending. He was pretty adamant during the campaign about not touching Social Security and Medicare for example. He also seems to support more government healthcare spending in general. And his promises to cut taxes for the middle class and reduce the trade deficit are standard Keynesian policies. Trade deficits represent a "demand leakage" in the Keynesian framework that lead to recessions and depressions and make fiscal policy more difficult and less effective, and trade surpluses are regarded as a stimulus to the economy. At the minimum, balanced trade is pursued.

Now how Keynesian his policies will actually be in their implementation remains to be seen, especially since the GOP dominated Congress and some of his advisors will likely be a countervailing force.

On the subject of the Multiplier, I'd try a moar sophisticated and recent source:

http://dl4a.org/uploads/pdf/Monetary+Economics+-+Lavoie+Godley.pdf [ PDF!]

Wynne Godley and Marc Lavoie's Monetary Economics .

Import substitution re-industrialization and smashing the bubble machine. Everything else is "how".

Here is a current assessment

https://www.socialeurope.eu/2017/04...ralism-camouflaged-anti-globalization-circus/

As Trump gets his balls twisted and realizes he has to compromise with others in government rather than try to do everything unilaterally I suppose that characterization will look pretty accurate to basic bitch eurotrash center leftists.

Edit: Also

YouTube: https://www.youtube.com/embed/iqW7lhRxea0

Calling western leaders in government and industry worse things than dumb (sinister, dishonest, evil) would have resulted in the JFK treatment or him otherwise losing the election. You don't talk like that when your vote depends on normies and your success on cooperation from people already in power.

I feel like we're spoiled children whose expectations Trump inflated with his rhetoric, and now that he has to play ball (which anyone who accomplishes anything surely must) we're quick to forget his efforts and modest success in his short time in office. That being said he is human and will make mistakes, like trusting his progressive democrat Soros protégé son in law.