Archive for the ‘Political Economy’ Category

remembering economist William Baumol

Monday, May 22nd, 2017

British economist Diane Coyle (born 1961) praises the work of William Baumol, who passed away on the 4th of May, aged 95, and laments that they no longer make economists like him. (more…)

Microsoft and the ransomware attack

Wednesday, May 17th, 2017

Microsoft’s behaviour is outrageous. My next computer will be a Mac. Microsoft XP was an excellent operating system, one that I miss, but has now been made totally obsolete. I assume that Apple will continue to service its software for Mac without prohibitive charges. (more…)

The Economist interviews Donald Trump

Saturday, May 13th, 2017

The Economist has deposited, online, a complete transcript of their interview with Donald Trump. Here is the part that refers to the question of Mr Trump’s release of his tax returns.

Mr President, can I just try you on a deal-making question? If you do need Democratic support for your tax plan, your ideal tax plan, and the price of that the Democrats say is for you to release your tax returns, would you do that?

I don’t know. That’s a very interesting question. I doubt it. I doubt it. Because they’re not going to…nobody cares about my tax return except for the reporters. Oh, at some point I’ll release them. Maybe I’ll release them after I’m finished because I’m very proud of them actually. I did a good job.

Hope Hicks [White House director of strategic communication]: Once the audit is over.

President Trump: I might release them after I’m out of office.


President Trump: By the way, so as you know I’m under routine audit, so they’re not going to be done. But you know, at a certain point, that’s something I will consider. But I would never consider it as part of a deal.

Right, got that.

I would never do it. That would be…I think that would be unfair to the deal. It would be disrespectful of the importance of this deal. Because the only people that find that important are the reporters.

Well, the Democrats say it’s important.

Well, don’t forget I got elected without it. Somebody said, “Oh but you have to do it,” I said, “Look where I am”. I was, you know, I was out front, I was asked that question, every debate, I said, you know, I’m under routine audit.

Mr Mnuchin: And the president’s financial disclosure has been longer than any…

President Trump: Plus my financial disclosure is 104 pages.

Ms Hicks: I think when people say that that makes it about the president and the politics versus the people, which is what we’re focused on.

President Trump: Right.

The Economist, “Transcript: Interview with Donald Trump“, 11 May 2017.

Read the full transcript at the link above, on trade, immigration and tax reform, and weep. The conversation took place on May 4th, 2017.


boardroom capitalism in Trump’s White House

Friday, May 12th, 2017

A leader in this week’s Economist magazine describes Donald Trump’s economic policies as “boardroom capitalism”, an approach “born of a mindset where deals have winners and losers and where canny negotiators confound abstract principles”. (more…)

the next Watergate?

Thursday, May 11th, 2017

Elaine Kamarck, a political scientist at Brookings, has posted an interesting blog on the possible fallout from Trump’s sudden firing of the Director of the FBI. (more…)

after the French election

Monday, May 8th, 2017

Emmanuel Macron was victorious in the French presidential election, but now he must govern. This will not be easy.  As FT columnist Gideon Rachman warns, “The chances of failure are quite high.”

If Mr Macron succeeds, the forces of nationalism and political extremism — represented in France by his defeated opponent, Marine Le Pen — will suffer a setback around the world. But if he fails, populism, nationalism and protectionism will soon be resurgent.

For while Mr Macron can savour a crushing victory over Ms Le Pen, he also knows that 35 per cent of French voters have just voted for a far-right candidate. The cumulative vote for extremists of the far left and the far right in the first round of the presidential election was closer to 50 per cent. That means that almost half of French voters want to smash “the system”.

Gideon Rachman, “Why Emmanuel Macron matters to the whole world“, Financial Times, 8 May 2017 (gated paywall).

crony capitalism threatens liberal democracy

Saturday, May 6th, 2017

We live in difficult times. Edward Luce, the FT’s chief US columnist, provides us with this thought for the weekend.

The US was born with slavery and women had no voice. But faith in the march towards “a more perfect union” is hard to sustain after President Trump’s election. Washington chose to be a modest statesman when the laurel was his for the taking. Trump, on the other hand, is a self-promoter without peer.

Of course, Trump and his counterparts in Europe, did not cause the crisis of democratic liberalism. They are a symptom. …. Almost a quarter of America’s white working classes who voted for Barack Obama in 2008 switched to Trump in 2016. Had they, in Hillary Clinton’s unfortunate word, suddenly turned “deplorable”? Or were they driven by a desire to blow up a system that had routinely blamed them for their plight? …. The Clintons have earned $235m in speaking fees since Bill Clinton left office — much of it from the same Wall Street banks who foreclosed on so many middle class homes. Within weeks of leaving office Obama accepted a $400,000 fee for a speech to a Wall Street firm — the same as the president’s salary. In the age of Trump, the appetite for Obama’s thoughts is likely to grow. But his fees are an all-too familiar monetisation of public office. The median US income only regained its pre-recession level at the end of Obama’s term in 2015. It is still below where it was at the turn of this century. Meanwhile, almost half of Americans now describe themselves as “lower class” — up from a third in 2000.

Edward Luce, “The siege of western liberalism“, Financial Times, 6 May 2017 (gated paywall).

Mr Luce’s latest book is The Retreat of Western Liberalism (Atlantic Monthly Press,2017).

On this deplorable subject, see also this recent post.


Martin Wolf on Trump’s pluto-populism

Wednesday, May 3rd, 2017

This week, the Financial Times published one of Martin Wolf’s classic Wednesday columns; it is clear, concise, elegant and insightful. Access to Martin’s columns is the main reason that I subscribe to the FT. (Intelligent readers, with interesting comments, is another reason.)

The first 100 days of Donald Trump’s presidency have brought some good news and some bad news. The good news is that, albeit chaotically, he is governing more as an orthodox post-Reagan Republican than most expected. The bad news is that he is governing more as an orthodox Republican than most expected. ….

The idea of rebuilding US infrastructure has faded. The trade protectionism looks halfhearted. But deregulation is still an objective. So is tax reform, with the familiar combination of unfunded giveaways and magical thinking on deficits. Mr Trump’s policies look ever more like Reagan’s, but from a more unfavourable starting point. ….

Mr Trump won the nomination by promising to be a different sort of Republican. He is not. What he has achieved is to make the “bait and switch” yet more obvious. Post-Reagan Republicans reached out to the base by campaigning on cultural issues, while legislating for the upper 1 per cent. That is “pluto-populism”. Mr Trump added infrastructure spending, trade protectionism and support for Medicare and social security. But he too plans to deliver for the top 1 per cent.

Martin Wolf, “Donald Trump’s pluto-populism laid bare“, Financial Times, 3 May 2017 (gated paywall).

There are already more than 90 comments from readers. I haven’t read all of them, but those I read, without exception, were positive. This comment, posted 3 hours ago by “Hillel the Elder”, is worth sharing:

In 2016 my friends warned me that if a majority voted for Hillary Clinton, the White House would be a den of nepotism and political hacks, the Executive Branch would be awash in billionaires and Wall Street bankers promoting policies disadvantaging “real” Americans, Obamacare would be enshrined and secure, and we’d be putting out fires with our service men and women worldwide. Well, a majority voted for Hillary Clinton and that’s exactly what happened.


ending poverty in China

Tuesday, May 2nd, 2017

Elimination of poverty is no easy task. Even if the state obtains adequate resources for the project, there remains the problem of transferring income to those living in abject poverty.

In China, the targeting of relief for the poor is improving, but is still fraught with incompetence and fraud. As a result, there are huge errors of inclusion (benefits that go to the non-poor) and exclusion (the poor who receive no benefits). (more…)

tax holidays and US offshore cash

Sunday, April 30th, 2017

US treasury secretary Steven Mnuchin expects his tax holiday for offshore earnings to encourage repatriation of trillions of dollars, spurring investment in plants and equipment. He ignores, however, the fact that about half of this money is already in the USA, often invested in US treasury bills.  (more…)