OPINION: It’s the economists, stupid


Posted at Jan 19 2017 01:56 AM

Nobel prize economist Joseph Stiglitz, speaking on behalf of other Nobel winners said, “There is a broad consensus that the kind of policies our president-elect has proposed are among the policies that will not work.” 
However, Rich Miller of Bloomberg observes that “such disapproval is likely to fall on deaf ears” anyway. Trump rode to victory without a single word of advice from PhD economists, only hunches from very rich businessmen about what works—for them and their likes. 
“Trump pledged to accelerate growth and create millions of well-paid jobs through more government spending and less taxes,” as well as fewer regulations of the kind that would stop a repeat of the 2008-2009 global financial crises which was triggered by a worldwide bank robbery pulled off by the world’s big banks—an inside job.
Trump also wants to renegotiate trade deals like NAFTA, which anyway Mexico found to be useless. While Columbia Professor Edmund Phelps said that “singling out individual companies for abuse or praise,” as Trump has been doing, “could end up discouraging newcomers with innovative ideas.” The abuse signals “don’t go there;” the praise signals, “don’t go where a favored company is ahead of you” and has caught the president’s loving eye. Trump’s plans for big tax cuts while increasing spending “runs the risk of an explosion of public debt and a serious loss of confidence and a deep recession,” said Phelps. There you go, killing three American birds with one stupid stone. 
Other presidents ran big budget deficits and depended on foreign buyers of U.S. debt to do so, another economist observed. But “Trumps America First policy will discourage foreigners from buying more U.S. debt.” 
Angus Deaton of Princeton said that was “he was less worried about the American economy than about international relations, particularly when it comes to China—which is facing economic difficulties at home” which China will try to deflect by getting more aggressive abroad. 
Twenty years ago, Clinton told his presidential rival, “It’s the economy, stupid.” The pro-business Economist editorialized that Clinton is right: the economy is the main political issue. But it added that when it comes to the economy one should listen only to economists and never to businessmen, who know something about making money but nothing about economies—least of all the part of the economy where they are raking it in at the expense of the entire economy. In short, a great part of governing countries and economies cannot be left to gut instinct or business savvy.

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