Saturday, March 18, 2017

Why economists got Trump 100% wrong

Throughout the presidential race, journalists said Donald Trump had no chance of winning the nomination (see "Trump the Press"), and then no chance of winning the election (see "Trump the Establishment"). On Election Night, Nate Silver -- election forecaster to the media stars -- gave Trump only a 28% chance of winning.

Who told you months earlier we would elect President Trump?

That Little Old Blog Maker -- me.

But one other occupation (they are a trade, not a profession) also beclowned itself in this election.

Economists.

A poll of more than 70 macroeconomists found 75% believed Clinton -- a first lady turned senator turned Cabinet secretary -- knew more about economics than Trum, a Wharton-trained CEO who in 45 years turned his family business into a $10 billion international empire that employed 22,000 people in a wide range of enterprises.

Last March, Politico reported: "The Economist rates Trump presidency among its top 10 global risks."

Last June, the Wall Street Journal reported: "U.S. Economy Would Be ‘Diminished’ Under Trump’s Economic Plan, New Analysis Says."

And that very special combination of journalist and economist -- Nobel laureate Paul Krugman -- on Election Night said:
It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover?
Frankly, I find it hard to care much, even though this is my specialty. The disaster for America and the world has so many aspects that the economic ramifications are way down my list of things to fear.
Still, I guess people want an answer: If the question is when markets will recover, a first-pass answer is never.
Under any circumstances, putting an irresponsible, ignorant man who takes his advice from all the wrong people in charge of the nation with the world’s most important economy would be very bad news. What makes it especially bad right now, however, is the fundamentally fragile state much of the world is still in, eight years after the great financial crisis.
It’s true that we’ve been adding jobs at a pretty good pace and are quite close to full employment. But we’ve been doing O.K. only thanks to extremely low interest rates. There’s nothing wrong with that per se. But what if something bad happens and the economy needs a boost? The Fed and its counterparts abroad basically have very little room for further rate cuts, and therefore very little ability to respond to adverse events.
Now comes the mother of all adverse effects — and what it brings with it is a regime that will be ignorant of economic policy and hostile to any effort to make it work. Effective fiscal support for the Fed? Not a chance. In fact, you can bet that the Fed will lose its independence, and be bullied by cranks.
So we are very probably looking at a global recession, with no end in sight. I suppose we could get lucky somehow. But on economics, as on everything else, a terrible thing has just happened.
Since we elected President Trump, the stock market is up double digits, consumer confidence is higher than it ever was under the Marxist Obama regime, and factories are hiring again.

I have already authored the two aforementioned books on why the media got it wrong. I went beyond their living in a bubble, hiring the least talented, and serving their corporate interests.

But yes, it was mainly that bubble in which they lived, where they thought everything was going swimmingly in the United States under their hero, Obama. The only people who complained were the racists because they had to be racist because he was black and everything was going swimmingly for the United States.

Just ask the economists.

Who turned out to be the next-door neighbors to the journalists.

Which meant they too didn't know what they were talking about because they lived in Clueless Heights.

From Graham Summers, Chief Market Strategist, Phoenix Capital Research:
We have multiple generations of journalists who have ZERO experience engaging with those who run an actual business.
This is why NO ONE in the media gets Trump or the impact of his policies.
None of them have ever had to make payroll or create something from nothing. They’ve spent the last eight years literally kowtowing to a man who openly told the self-employed, “you didn’t build that.”
The same can be said for economists.
Time and again, you will see academics like Paul Krugman write op-eds suggesting that Trump is going to collapse the economy.
Krugman has never once had to actually run a business. His entire career has been one of writing the equivalent of glorified book reports for other people who write glorified book reports to read.
If you ran a McDonald's or plumbing business implementing anything Krugman claims, you’d be broke within six months. The man lives in a world of excel spreadsheets and faculty meetings, not the world of revenues and payroll.
Verdict: TRUE.

Krugman was an economic adviser to Enron.

If you voted for Trump expecting the economy to improve, you win.

If you did not, you still win -- and best of all, you never have to admit you were wrong. Nobody else is.

But you were wrong enough to be an economist.

Congratulations.



"Trump the Establishment" is now on Kindle.

"Trump the Establishment" is also available in paperback.

This is the sequel to "Trump the Press," which covered the nomination. The original -- "Trump the Press" -- is available on Kindle, or in paperback on Amazon.

Autographed copies are available by writing me at DonSurber@GMail.com

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14 comments:

  1. The degree should be Economic Studies like all the other BS degrees.

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  2. Some leftists can mouth platitudes about economics, but almost none of them actually understand economics. You know it's bad when they couldn't get past day 1 of Econ 101 by not being able to understand "incentive."

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  3. Who believes Krugman (I mean really believes)?

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  4. They were simply trying to scare everybody into voting for Hillary. - Elric

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  5. "Under any circumstances, putting an irresponsible, ignorant man who takes his advice from all the wrong people in charge of the nation with the world’s most important economy would be very bad news. What makes it especially bad right now, however, is the fundamentally fragile state much of the world is still in, eight years after the great financial crisis."
    I say that this paragraph perfectly describes Paullie "The Beard" Krugman.

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  6. It reads like he's commenting on Obama.
    JC in NC.

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  7. And the worst kind of economist is the government economist, especially of the Obama soviet-socialist persuasion, which is why the recovery of the economy since the collapse of 2008-2009 was so pathetically slow...until the earthshaking election of DJT last November.

    Now, as DJT sets out his budget priorities, he has to deal with the Federal Reserve, which intends to increase interest rates step-by-step as the economy improves. The increased rates will greatly increase the cost of refinancing the country's $20T national debt. The carrying cost of the debt will be a drag on the president's budget, which means he will have to make some hard policy choices between popular entitlement programs and national security in an age of global terrorism. It will be a choice between Big Bird or Bombs and Bullets, one or the other, it cannot be both.

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  8. "Under any circumstances, putting an irresponsible, ignorant man who takes his advice from all the wrong people in charge of the nation with the world’s most important economy would be very bad news."

    A perfect description of Obungler who had no executive experience and the only thing he had ever run was his mouth. That is why eight years after the Great Recession the economy is still "fragile". Trump has already done more for the economy since he was elected, not inaugurated but elected, than Obumbler did in his 8 years in office. And every time I hear an economist or gummint official state that we are at "full employment" it makes me want to puke since they don't count the people who have given up looking for work. Unemployment in this country is closer to 10%.

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  9. Few economists and journalist seemed to ever venture outside of their offices and the bubble of their peers. I saw people wanting to go to work and earn a living, but everyone was told that we would never recover those jobs for we deplorables. I'm waiting for the robot that will fix a home's plumbing or keep a power plant online and the other things that keep our economy and industrial complex operating. Heck at 69 I went to Alberta, Canada to work in the oil fields; they couldn't find enough people in Canada experienced enough to do the work. Now with the Keystone pipeline being completed, Obama's bud, Warren Buffet, won't have a monopoly on mass transport of oil from Canada with his railroad. So sad.

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  10. Economics is not a science. It is one of the "social sciences" like anthropology, history, political science and sociology.

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  11. Macroeconomics is the snake oil of economics and is never right. It takes a high-level look at something and makes predictions. Tax coke in Philadelphia and we will raise x amount of dollars based on last years sales.

    Microeconomics tries to understand individual and entity behavior based on macro changes. Raise the tax on coke in Philadelphia. Who will buy coke in the town just over the border? Who will buy water? How many jobs will be lost because of the change? Still hard to predict the right amounts, but it expects behavior to change.

    No surprise the 70 macroeconomists were wrong. They are always wrong. And what idiots to think that Hillary Clinton, with ZERO business background understands economics more than a businessman with an MBA who has made his living on supply and demand.

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  12. What kind of a moron can consider a nation with ~90 million unemployed as "near full employment."

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  13. Economist are the poster children for Dunning-Kruger (or should that read Dumbass-Krugman?) effect.

    Here is a story from a few years ago that highlights the point:

    http://www.economist.com/blogs/dailychart/2011/06/oil-production-and-consumption

    Peak oil had arrived in 2011, once again. And the genius "smartest man evah to be President" advised us, in the face of fast rising energy prices, that we could not drill our way (increase the supply factor of the rule of prices) to lower energy prices because peak oil. Oh, and if we put air in our tires we can replace "all the oil they are talking about getting off of drilling".

    Where were the economist to object to Obama's nonsense that prices are determined solely by demand and demand?

    Frackers refused to listen to people like Obama "an irresponsible, ignorant man who takes his advice from all the wrong people (e.g. Krugman) in charge of the nation with the world’s most important economy" and went about increasing supply to the point it cut the price of gasoline in half by increasing supply.



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  14. Fracking gave the American public its biggest pay raise during the 8-year obozo debacle and clown show.

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