A Battle of Economic Nitwits–Aren’t We Blessed
So the presidential race is set. God help us.
The “Democratic” Party, which never ceases to tell us its dedication to “saving ‘our’ democracy [sic]” selected the voteless wonder, Kamala Harris after unceremoniously defenestrating Joe Biden. Donald Trump steamrolled everyone in the Republican primaries, and literally dodged a bullet, to run against her. So November, here we come.
Harris has been, shall we say, coy in her policy proposals. Not only voteless, she’s been interview-less since she was anointed. She has given one economic policy speech which even media partisans (but I repeat myself) found pathetic.
On the right, the speech gave rise to accusations that Harris is a socialist, or indeed a Marxist/communist. I disagree.
Her father, from whom she is obviously estranged, is indeed a hardcore Marxist. But one who has engaged in serious thought and scholarship–as much as I disagree with it. Harris, on the other had, has a lazy, California left perspective devoid of any evidence of serious thought beyond “what can I say to advance my political ambitions and get money from leftist donors.”
The element of her policy speech that triggered the cries of “commie” was a lazy, hazy proposal to implement a federal ban on “price gouging” for groceries. Though to illustrate how thoughtless her embrace of this proposal is, she didn’t say “price gouging”–she said “price gauging,” whatever that is.
Critics called this a price control policy. If only. It’s nothing as comprehensive as the 1971 Nixon Wage and Price Control disaster. It’s more along the lines of Gerald Ford’s WIN–Whip Inflation Now–buttons, mere rhetorical gas.
The proposal is clearly the result of a poll and focus group-driven process. People are pissed about high prices. The prices they are most pissed about are for food and groceries. But it is absurd to think of setting the price of the over 30,000 items that most supermarkets carry, and many people are sympathetic to the idea that corporations cause high prices, so Harris proposes to delegate to some part of the federal blob–probably the FTC–to go after stores that price gouge, although that term is not defined.
How this would work in practice, given the fact that there are over 45,000 supermarkets, again each carrying over 30,000 items, is hard to figure out. Any attempt by the FTC to enforce would be completely arbitrary. The antithesis of a rule of law, which for all its economic defects, a legislated system of price controls would have in its favor.
But this policy proposal is purely political grandstanding and I am sure Harris has no plans actually to follow through on it. She has to pretend to do something about inflation. And she expects you to pretend along with her.
The most disturbing part of the proposal is the theory of inflation underlying it. “Corporate greed.” Which apparently follows some sort of Markov regime switching process, with corporations being ungreedy during some periods, like the Great Moderation, and then randomly switching to greed mode in, oh about January, 2021. Such a mentality bodes ill for coherent anti-inflation policies.
Other elements of Harris’ speech were similarly poll-driven, counterproductive pablum. Housing prices are too damn high! So give people money to buy houses! Which, of course will drive up housing prices, meaning that the main beneficiaries will not be the target (“first time homebuyers”) but current homeowners. Harris did say some things about reducing restrictions that inhibit supply, but these are local matters that the federal government can do little about.
The housing fetish is also disturbing because it represents a reversion to the kinds of policies that brought on the Great Financial Crisis.
Relatedly, she criticized the purchases of large numbers of homes by Black Rock and the like. This is also a popular theme, on both left and alt-right. But as I wrote some years ago, this criticism fails to answer the fundamental question of why this phenomenon is happening. I continue to maintain that it is almost certainly the result of post-GFC changes to the banking and mortgage credit markets that were designed to prevent a recurrence of the proliferation of mortgage credit that was at the epicenter of the GFC, policies that raised financing costs to individuals more than to the Black Rocks of the world. Meaning that to counter this trend it would be necessary to unwind those changes and party like it’s 2005.
Harris has also apparently embraced some of the worst Biden/Democrat policy proposals, notably raising the capital gains tax and imposing taxes on unrealized gains for some wealthy individuals. Capital taxes are horribly inefficient, and actually fall predominately on labor: higher capital taxes, less capital, less productive labor, lower wages.
The unrealized gains tax is truly demented, a nightmare to implement, a recipe for gaming (with highly distortive effects on capital allocation), a godsend to tax accountants, and likely unconstitutional. Other than that, it’s great.
Given her track record it takes little imagination to understand that if elected hers would a policy of economic Californication. What a disaster that would be.
Not that Donald Trump gladdens this economist’s heart. For the most part, he is as economically clueless as Harris. The main difference, and this is not a good thing, is that he holds his cracked views with conviction.
On taxes you could say he is OK, except that these views are completely at odds with his insouciance on spending. Trump got the spending ball rolling that triggered the inflation that took off when Biden took office: Biden supersized what Trump had started. He has shown no signs of getting spending under control, and on entitlements in particular, has been a stalwart defender of the (unsustainable) status quo.
Trump’s views on tariffs–in particular his stupid belief that the incidence of a tax falls completely on the party upon whom it is levied–are embarrassing.
Trump’s only advantage over Harris–and it is not an immaterial one–is that he is averse to regulation and wants to roll back the federal bureaucracy (though good luck with that) whereas Cali Kamala loves the blob. Trump’s regulatory policies were pretty good (as Casey Mulligan has documented): Harris’ would be a disaster.
For me, that’s the tiebreaker in this battle of economic nitwits. Yay.
All meaning that the next 70 days will be devoid of any coherent debate on economic matters. Instead, the campaign will be the political equivalent of non-stop “yo mama” schoolyard rhetoric. Which will actually be more entertaining than watching these two talk economics, although each would probably be equally depressing.
In general, Trump policies are greatly superior. He has a great plan for increasing wages and lowering housing costs: mass deportations.
Comment by Krzys — August 27, 2024 @ 1:03 pm
SWP: I thought for sure you were going to insert a YouTube clip in this most excellent post of Jimmy McMillan “the rent is too damn high” candidate.
He scored his best numbers in 2010. You know why? Because the Rent Is Too Damn High! “….. Shhhh. you hear that? Somebody’s stomach just growled…”
PS, it was also one of SNL’s better political skits.
Comment by The Woodman — August 27, 2024 @ 1:57 pm
The war on fossil fuels has made energy expensive. Expensive energy means expensive production and transport. Expensive construction materials. Expensive food. Each step in the chain of delivery to the citizen adds expense.
Not only that, but a huge amount of treasure has been wasted on so-called renewables. Unreliables. Gigantic sums have been diverted from the middle class into the pockets of the already rich. Wind and solar farms are in fact subsidy farms. Their economic contribution is net negative. Their ultimate fate is to be a disposal nightmare.
How does all that play into inflation?
Trump is pro-fracking and pro fossil fuels. He’s also pro freedom of speech and thought, and anti medical mandates. Those who have met with him say he listens attentively and asks good questions. He’s also an American patriot. All positives.
Kamala Harris is none of those things, apart from being an incompetent ditz and a sock-puppet for the anti-Americans running things in DC.
These things make the choice in November blindingly clear (presuming an election actually takes place). And a Trump administration would be in much better hands than evidently allowed here.
Comment by Pat Frank — August 27, 2024 @ 3:39 pm
While I am a “free trader”, the real issue is that there is no such thing. Trump’s trade positions are mostly retaliatory. Why should we trade, freely, with countries that do not practice free trade with us? The only way to enforce trade fairness is to use sticks.
If Trump is again-elected (as opposed to reelected), he should embark on a whirlwind tour to create bilateral trade agreements with China, Japan, Korea, and many other countries. He did some of this in his first term. Make China etc agree to more favorable terms for US goods, especially agricultural products, in lieu of getting hit with tariff increases.
Comment by MARK — August 27, 2024 @ 8:09 pm
“Californication”: excellent, and so apt when Kamala is the topic.
I also liked “defenestration”; it reminded me of school history lessons and the First Defenestration of Prague.
As you might imagine it made us hope for tales of subsequent defenestrations. (Hint, hint.)
As for politicians and economics, our shiny new Labour government simultaneously pretends it’s found a 22 billion “black hole” in government finances while hosing money at its trade union paymasters.
Maybe that’s the key question in Political Economy: who is paying the politicians?
Comment by dearieme — August 28, 2024 @ 4:33 am
Best description yet of Ms. Harris 6 paragraphs in. She is truly “an empty suit”.
Comment by Donald Wolfe — August 28, 2024 @ 9:39 am
Hi Pat, how is this being “pro freedom of speech”? Can you explain it to us?
https://www.msnbc.com/deadline-white-house/deadline-legal-blog/trump-flag-burning-first-amendment-supreme-court-rcna168381
Comment by [email protected] — August 28, 2024 @ 9:40 am
I’ll go against inclination here and provide you an answer, libte.
The stars-and-stripes flag is a representation of the United States. Burning the flag amounts to a repudiation of loyalty to the United States, meaning of loyalty to the Constitution.
In my opinion, an American who burns the flag should be required to renew the oath of citizenship, overtly swearing loyalty to the Constitution.
Those who decline to renew the oath of loyalty to the Constitution have declined citizenship. People are free to give up their US citizenship, as they like. They are then free to emigrate elsewhere. No crime. No jail time. No censorship of speech.
It should merely be widely published that burning the flag will be recognized for what it is: a repudiation of loyalty to the Constitution.
To my mind, one should get three chances. The first two call for a visit by the INS and an opportunity to renew the oath of loyalty. Perhaps the oath-taking should be videoed and posted on the INS website. Then anyone who likes can see that the person who burned the flag has verified their oath of loyalty.
A third flag-burning by an American should be accepted as an insistent repudiation of loyalty. That person will surrender their passport, without any further penalty, and be given some time to freely make arrangements and emigrate to the country of their choice.
Freedom of speech. Take people at their word.
Comment by Pat Frank — August 28, 2024 @ 10:57 am
Your opinion is irrelevant here my dear Friend, flagburning is constitutes ‘symbolic speech’ and protected by the First Amendment. Therefore it is a Freedom of Speech issue, that DJT seeks to restrict!
Comment by [email protected] — August 28, 2024 @ 1:04 pm
Watching Trump attempt to explain anything economic is excruciating to watch. Give me root canal work any day of the week. Even his most ardent believers must be thinking the old man has lost it.
@1 In general, Trump policies are greatly superior. He has a great plan for increasing wages and lowering housing costs: mass deportations Like that is ever going to happen. I guess you thought Hillary was really going to jail back in 2016 too?
@2 Their ultimate fate is to be a disposal nightmare Why do you persist in spinning this myth? How are renewables any different from the plethora of industrial (or consumer) goods? (How do they stack up against nuclear?)
Comment by David Mercer — August 28, 2024 @ 1:36 pm
You asked for my view and I gave it. Your opinion on the matter is irrelevant.
“Symbolic speech,” whatever that is, doesn’t prevent flag burning from being a repudiation of loyalty to the Constitution. Any American is free to declare disloyalty. To believe them is to honor their speech. Then we wave bye-bye.
@David — Trump will cease the war against fossil fuels. That alone makes him toweringly preferable.
Comment by Pat Frank — August 28, 2024 @ 2:57 pm
@9 David — I didn’t realize your comment about energy was directed to me.
Solar and wind are intermittent. When the sun doesn’t shine or the wind doesn’t blow, they produce nothing. Sometimes both states co-occur. Both need spinning back-up to provide energy when they do not. Chemical energy batteries are not an option and will never be an option.
Solar and wind power alone cannot provide the power to manufacture more solar and wind installations. They parasitize the fossil fuel economy.
Nuclear energy is fine.
Comment by Pat Frank — August 28, 2024 @ 3:25 pm
‘She is truly “an empty suit”.’ Have a care, old fruit: I read that as “empty slut”.
“Nuclear energy is fine.” It might be a great deal finer if the world dropped the LNT hypothesis that is used for calculating the risks of low doses of radiation. I dare say it would make nuclear plants cheaper (and faster to build) and it would certainly reduce the cost of decommissioning.
The hypothesis was first adopted, as far as I can see, because (i) data were sparse and the engineers and physicists needed to assume something, and (ii) because a linear hypothesis seemed natural in an era of graph paper, ruler, and pencil.
Comment by dearieme — August 28, 2024 @ 3:49 pm
@11 – it’s not my view, it’s the U.S. Supreme Court’s view of what is considered Freedom of Speech.
My point was, you cannot be a ‘pro-freedom of speech and thought’ candidate (your words) and at the same be in favor of restricting Freedom of Speech (here, in the context of the constitutionally protected right to burn the American flag).
Bonne nuit, ma petite fleur de lotus.
Comment by [email protected] — August 28, 2024 @ 7:00 pm
@14 libte, Burning the flag is a repudiation of loyalty. US citizenship is under the jurisdiction of the Executive, not the courts. The Supreme Court can say what it likes. If the President decides that burning the flag is a repudiation of loyalty (which it is), then legal consequence follows.
There is no Constitutional right to burn the flag. You won’t find it there.
In fact the rights of US citizens are not granted by the Constitution. They are inherent to the individual. The Constitution merely lists the powers granted to government, by the people. All other rights are retained.
Comment by Pat Frank — August 28, 2024 @ 10:07 pm
You have a poor understanding of the way this country works, my friend. The president has no right to single handedly decide that burning the flag will have legal consequences.
Or rather, he could try, but the defendant would naturally say that this is a constitutionally protected activity, and the court system would take the same view based on Texas v. Johnson, 491 U.S. 397 (1989).
Happy to help!
Comment by [email protected] — August 29, 2024 @ 7:32 am
Court decisions can be overturned.
The Executive is co-equal to the Supreme Court. In expression of Constitutional powers of the Executive, the Supreme Court has no authority over the actions of the president.
Authority over citizenship rests with the Executive, not with the courts. Congress has authority over law. Change the law, change the Supreme Court reasoning.
Texas versus Johnson was a 5-4 decision. Sufficient in law but hardly definitive.
Americans are free to repudiate citizenship. It is not an abrogation of free speech to note that vacating loyalty to the Constitution is a repudiation of citizenship. As the Supreme Court did not recognize that fact in their decision, their reasoning is deficient. It may be corrected in the future, when the valid argument is presented to the court.
Recall that in the US, sovereignty rests with the people, not with the government. Your strained reasoning notwithstanding.
Comment by Pat Frank — August 29, 2024 @ 1:19 pm
As is often the case, the dissenting opinion of Texas v Johnson is worth considering. Also Halter v. Nebraska 1907. You might think as settled, as political position flag burning will always be a “hot potato”.
Rehnquist in dissent,
The American flag, then, throughout more than 200 years of our history, has come to be the visible symbol embodying our Nation. It does not represent the views of any particular political party, and it does not represent any particular political philosophy. The flag is not simply another “idea” or “point of view” competing for recognition in the marketplace of ideas. Millions and millions of Americans regard it with an almost mystical reverence regardless of what sort of social, political, or philosophical beliefs they may have. I cannot agree that the First Amendment invalidates the Act of Congress, and the laws of 48 of the 50 States, which make criminal the public burning of the flag.
Comment by The Pilot — August 29, 2024 @ 4:23 pm
“Millions and millions of Americans regard it with an almost mystical reverence” What a bunch of pagans. Still, it’s not quite a graven image, is it?
Comment by dearieme — August 29, 2024 @ 5:01 pm
It’s the Union Jack of America, dearieme.
Men died under the Union Jack to defend the liberty of the English and of England. Those men are owed a debt by the living. Slavery was actively terminated under the Union Jack. The Union Jack represents a history of Enlightenment, native to England and nearly absent from the rest of the world.
An Englishman who doesn’t reverence that flag holds England in contempt.
So it is with the Stars and Stripes in America.
I have no patience for fashionably arch cynicism.
@The Pilot: thank-you.
Comment by Pat Frank — August 29, 2024 @ 5:32 pm
Then, I do wonder, how do you all feel about all these Trump / star sprangled banner hybrid flags? (here just one of million examples – https://www.dispatch.com/gcdn/presto/2023/03/26/USAT/ada31dfd-7fed-4784-9479-fa0ce33ca63a-XXX_Trump_Rally_in_Waco_SED_006.JPG)
Comment by [email protected] — August 29, 2024 @ 6:00 pm
@libte,
Don’t think much of those stupid flags, as I don’t much all the other stupid designs supporting favored political poses. See Rehnquist, the flag should remain one of the few sacred symbols here. Too much is profane now.
Comment by The Pilot — August 29, 2024 @ 7:40 pm
A jolly good flag, the Union Jack, but I’ve never met anyone who treats it with “mystical reverence”. Indeed, I strongly object to the way our recent politicians have taken to posing in front of it, copying the US practice with the S & S. It reeks of insincerity. Bah humbug.
I speak as someone who has carried the Union Jack at Armistice Day parades. Carry it, yes. Revere it; don’t be silly.
Comment by dearieme — August 30, 2024 @ 5:34 am
Also, at the risk of stating obvious, the Union Jack represents the United Kingdom, not England (as Pat Frank suggests).
Comment by [email protected] — August 30, 2024 @ 11:46 am
Love the piece especially ‘coy’ (shades of sexy kitten), ‘a poll and focus group-driven process’ and ‘grandstanding’ (I’d have gone for showboating). Prof, very nicely written. Congrats!
Come on, guys. “Housing prices are too damn high!”
The best ever clip on the topic comes from Used Cars, Kurt Russell vs Jimmy Carter. If you don’t know it, enjoy! If you do know it, well enjoy it again. It’ll bring tears of joy ..
https://youtu.be/C3HvrvADp2A
I suppose we need a movie about dueling realtors blowing up each other’s million dollar houses in Silicon Valley to bring stuff up to date.
Comment by Simple Simon — September 1, 2024 @ 11:50 am