After Math

It’s clear to me that very few public servants understand economics and what is good for the citizens of the US regarding economics.

Look at the deficit as a % of the budget not GDP. Let’s look at the growth of the debt vs the deficit and or surplus during Republican and Democrat. Surplus should retire debt, deficit should increase it. Perhaps look at per capita numbers.

“The headline item I note is that the employment-to-population ratio is now at 58.1%, down from 58.5% in March and below its previous 58.2% trough of December 2009. July 1983–a time when American feminism was only halfway born–was the last time we saw an employment-to-population ratio this low:” – From Brad Delongs blog post

A Trump Phenomena Theory

This is pure speculation on my part as I am unable to perform the research necessary to support this argument. Nonetheless, here it is:

One day Donald Trump had a thought resembling one of the following:

“What can I do to top off this incredible life I have had?” or,

“I am awesome! But something is missing in my life. What can I do?” or,

“I need to leave a legacy for my children that will help them continue to build the Trump empire. What can that be?”

Whatever the question, he then concluded “I shall run for president.”

He and/or his advisors knew he could not be successful on a moderate platform. He knew he couldn’t match wits with, or intellectually stand with, his opponents. A moderate platform (Left or Right) aimed at improving the inevitable move of the US and other countries to a global culture and economy would not get him elected.

Almost like a company seeking a niche to gain market share, Trump needed to find a large enough group of people that, if he could mobilize them, would get him elected. This group or niche could not be very intelligent and it had to be large. It just so happens he found it. It was the radical right.

He was successful. He found a large group of citizens that have a majority of these characteristics:

  • Xenophobic
  • Down-trodden and/or disenfranchised
  • High school education only, maybe some trade school
  • Lacking in communication skills. Trump can’t speak (i.e. expressing coherent ideas with supported facts) and they like that. They call it speaking frankly.
  • Lacking in critical thinking skills (thinking that building a wall will somehow make them safe or improve their standard of living.)
  • Scared (thinking that they need more protection in some way from terrorists.)
  • Paranoid (believing there is a higher likelihood of a terrorist attack than there is.)
  • Religious (which in itself is full of errors in thinking and most often shows a lack of critical thinking.)
  • Misdirecting their frustration at not having adequate real income growth over the past 20 years as something Trump can fix. He can’t even speak well.
  • Get their news from Facebook and Fox.
  • Believe pride is a virtue.

It was his wealth that gave him the opportunity to run for president. And so he found a large, alienated group and tailor made his platform and antics to win them over.

Unfortunately it seems this Trump-targeted group believes that because Trump won, it is their time. As they send out speakers to preach their gospel they are forgetting that there are a majority of Americans that voted against Trump. These Americans also believe the radical right’s polemics are anathema to peace and prosperity.

Reading Tyler Cowen’s  America’s Placebo President today inspired me to think about this. Dr. Cowen and many others who have written about Trump try to explain why the group voted for Trump or worse yet, why America voted for Trump. It seems to me that it is only because he targeted them and pushed their buttons. Trump said whatever he thought would rile them up and get them to the polls.

I believe this addresses the reasons why most pundits thought he could not win. They were not aware of the size of this group of Americans to whom Trump was pandering. I also believe it is an error by the media and others to think that America elected Trump. America did not. It was a subset of America and a minority at that.




Being a late 70’s trained Keynesian I really enjoy the way Dierdre McCloskey starts her sentence:

“In equilibrium”–a phrase with resonance in bourgeois economics similar to “God Willing” in Abrahamic religions–…………..

It always brings a smile.  You can find this on page 456 of The Bourgeois Virtues (2006 The University of Chicago Press) where she discusses consumerism. Even though the text has been out since 2006, I’m just getting to it.

Excellent Treatise on the Ego or Reactive Mind

In Psychoanalysis the Ego is defined as the part of the psychic apparatus that experiences and reacts to the outside world and thus mediates between the primitive drives of the id and the demands of the social and physical environment. My usage is somewhat more relaxed and is simply that part of the mind that reacts without thinking or, thinks fast. Daniel Kahneman the Nobel Prize winning Psychologist and Behavioral Economist has written a wonderful book on that very subject entitled Thinking, Fast and Slow

I have just finished this exhaustive volume. An invaluable treatise on what others have called the “reactive mind”, fight-or-flight response; that part of our mind that “moves” first. Not only does Kahneman give study after study that illuminates the workings of our “fast thinking” mind or Ego, he gives us ways to counteract the biases inherent in our quick reactions. He calls the antidote essentially  “thinking slow”.

I read it twice right away to really let it sink in. It’s that good!

Economics and Unpleasant Truths

I enjoyed this snippet from an essay by Arnold Kling of GMU here:

As economists, we remind people of some unpleasant truths. Such unpleasant truths are deserving of respect, even if not all economists are.

One unpleasant truth is that resources are finite. As individuals, we would each like unlimited access to medical services without having to pay for them. But economists will point out that this is not possible, and instead hard choices must be made. It would be easier to make health policy if resources were not finite, and people are understandably resentful when the consequences of finite resources are spelled out.

Another unpleasant truth is that the “intention heuristic” does not work on a large scale. The “intention heuristic” is to judge the morality of a policy by its intentions, without regard to its consequences. Instead, an economist will point out that a higher minimum wage might harm low-skilled workers, even though the intention is the opposite. It would be a lot easier to assess policy if the “intention heuristic” were reliable, and people are understandably resentful when the problems with that heuristic are exposed.

When research is widely read, there are likely to be enough reviewers with different points of view to ensure that flawed analysis is subject to criticism.

The theory that economists were corrupted by special interests is an example of the “intention heuristic.” It suggests that economics failed to prevent the financial crisis because of bad intentions on the part of economists. With better intentions we would reach a wiser consensus.

Economics and the Death Penalty

I commented on an interesting post by Scott Lemieux reviewing Charles Lane’s article on the death penalty here. The post discusses the Norwegian mass murderer Anders Breivik’s case and whether Norway’s lack of a death penalty and a relatively short sentence is a problem.

I am against the death penalty and my reasoning is based on the economic principle of “perfect information”. My comment on the blog was:

“I oppose the death penalty because we can’t always be sure the person did the crime or did it in a manner that led to the court’s sentencing. If we had perfect information of all crimes and motives then no problem; we could setup objective death penalty sentencing rules and carry them out confidently.

Since we don’t have perfect information, we let everyone live because prison is an experience of life. With death, all experience of life ends for the person and, morally, I can’t do that without perfect information and that will never be.”

In our normal economic daily lives we incur costs in our transactions due to imperfect information (among other things). A lack of perfect information is one reason why our markets don’t always produce the most efficient outcomes. Executing the wrong person or for the wrong reason as a cost of imperfect information (no matter how improbable) is unacceptable.


Big Think on Invisible Children

Big Think says:

What’s the Big Idea?

One criticism of the video is that it uses social media to advocate for armed conflict. Foreign Policy‘s Michael Wilkers says it is extremely dangerous to essentially sell a foreign intervention in a reductive and highly-produced video (apparently that sort of thing must be left to more sanctioned media). The biggest criticism of Invisible Children comes from a blog called Visible Children which accuses the non-profit of spending too much money on awareness efforts and not enough on the ground in Uganda. What do you think? Can the video have a multiplier effect on funding given the incredible success it has had?

I commented:

Michael Wilkers is towing the old coward’s line; “best not get involved, it could be dangerous.” Its a global community now and we are a part of it. Invisible Children is trying to get someone to bring Kony to justice to save the children. The ICC wants him and Invisible Children would like anyone to bring him in. It is the best effort I have seen to bring these Central African criminals into the world’s awareness and hopefully into court. We can look the other way or we can do something. A little bit of money every month from everyone will bring in some great bounty hunters. It’s that simple.

I love it, some tough bounty hunters should get together and create a Kickstarter-like  project (the Kickstarter Vig is too high for charity work). When they bring in Kony, all contributors to the project should get a finger painting from a Ugandan child.

It doesn’t have to be direct services or direct aid because we really don’t know who the good guys are. We do know though, that Kony is a bad guy. Building awareness is the key and someone will bring Kony down (most likely his own men).

It will raise my spirit tremendously if we save the children of Central Africa this year by bringing down the LRA!