Stuff from the NY papers and an analogy re the state of the economy

November 5th, 2016 at 9:25 am

There’s a good editorial in today’s NYT on Trump’s hyper-negative take on the economy versus what’s going on in the actual economy.

I made similar points in yesterday’s Daily News, bemoaning the extent to which facts are on the run in this election cycle.

[BTW, a small fact check between these two pieces: according the BLS data I’m looking at, the last time average hourly wages were up as much as last month’s 2.8% was June ’09, not 2008. Though now that I think of it, the NYT may just mean you have to go back to 2008 for the last time you saw an increase of that magnitude in Oct (a weird way to look at it, IMHO).]

Here’s an analogy. Think of the US economy as a patient in the hospital still recovering from a terrible illness that befell her at the end of the last decade. She’s very much on the mend, though not all better by a long shot. But she’s up and around, and the treatment, while too slow acting, is demonstrably effective.

Then, this…um…unorthodox surgeon named Trump comes in and declares that, far from recovering, the patient is sicker than ever. The treating physicians show him the medical data, all of which support their diagnosis of improvement, but he doesn’t even look at it. He declares that she must go back into the operating room, where he will remove her liver, replace her brain, and switch her left arm with her right arm.

The medical staff quakes in horror. Sure, they say, we should be thinking hard about ways to speed her recovery. After all, she’s been healing for an awfully long time and still isn’t all better. But to ignore her vital signs and radically intervene would be malpractice!

Have a nice weekend…

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One comment in reply to "Stuff from the NY papers and an analogy re the state of the economy"

  1. Smith says:

    There are good points about fact reporting, inequality, and candidates, which would lead responsible citizens to choose Clinton over Trump. But facts, inequality, and candidates don’t really explain Trump’s traction. That has more to do with the failure of the Democrats who held the executive office for eight years, and the country’s desire for change. The best one can say about Democrats is that they failed politically, they failed to gain support of the country for their programs and so Republicans were able to effectively block needed measures. Our government works only when leaders are able to gain the public support. But Democrats never ran on a referendum of policy. No midterm candidate, nor Obama in 2012, ever said a vote for me is a vote for more stimulus and deficit spending, or vote for me, the tax the rich candidate, or lets make Obamacare the most important issue and stake the election on it’s popularity.
    These are facts too:
    “U.S. economy grew at 2.9% rate in third quarter, strongest pace in two years” Friday, October 28, 2016, 9:31
    “Even with the acceleration in the third quarter, economists believe growth for the entire year will be a lackluster 1.6%”
    “This recovery from the deep 2007-2009 recession has been the weakest in the post-World War II period, with growth averaging just 2.1% over the past seven years.”

    Half the country wants less immigration and globalization, yet the Democrats want more. But it’s very hard to see any economic benefit or justification for increased immigration or globalization. A good case can actually be made for policies that lead to less of both, but implemented in a more enlightened manner, resulting in reduced exploitation of immigrants and the global labor force.

    As for inequality, the Republicans are not shy about supporting inequality. Trump makes no apologies for his wealth and programs to reduce taxes on the rich. He promotes them as job creators. Democrats support less inequality in theory but have no plan to redress the huge imbalance created since 1980, a 20% shift in share of national income to the top 10%. See figure 1 and figure 2. (worth a second look)
    To take a realistic example: A national minimum to $15/hour would shift about 1% of income, or about $180 billion/year (i’ve done the math). Clinton’s goal of $12/hour reduces that shift to about $54 billion or about 1/4 of 1%. Clinton’s goal of an additional 5% tax on the 1% would shift another 1%, worthwhile. But that still leaves 90% of the American people $3.5 trillion dollars per year* short of where they were in 1980.
    *caculated from (20% – 1% -.25%) * $18 trillion GDP