Archive

March 27th, 2016

Cruz seeks economic wisdom in the wrong place

    "Some people look at subprime lending and see evil. I look at subprime lending and I see the American dream in action."

    - former Sen. Phil Gramm, Nov. 16, 2008

    The reason I bring up the former senator from Texas is that Gramm has been brought on as a senior economic adviser to Republican presidential candidate Ted Cruz.

    This isn't a promising development for Cruz, or the prospect that should he become president he will come up with sensible policies to address the U.S.'s economic challenges. Why do I say that? Because of what happened in the 1990s and early 2000s when the U.S. listened to Gramm.

    But first, a more recent trip down memory lane. Gramm, remember, was brought on as an adviser to the presidential campaign of John McCain in 2008. As the economy was stumbling that summer, Gramm said:

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March 26th

The number that tells us the economy might be doomed

    Here is a math problem for the Federal Reserve: What is 3.25 minus 5?

    The answer, despite what you might think, isn't -1.75. It's that it doesn't matter what it is as long as it's much less than zero. Why is that? Because, as we'll get to in a minute, this tells us where interest rates are probably going to end up the next time there's a recession. But that can't be too far into negative territory. People, after all, would just turn their bank deposits that were losing money into cash that wasn't if interest rates got down to, say, negative 2 percent or so. That means that if the economy "needs" rates that are even more negative than the Fed can give it that the Fed will have to promise not to raise them for a long time or print money to buy bonds with instead. These things work, but not quite as well as good, old-fashioned interest rate cuts, which is why we'd like to avoid having to use them if at all possible.

    We might not avoid them, though, if the Fed keeps doing what it's doing.

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Understanding the economic squeeze on millennials

    Did rich countries like the U.S. betray the millennial generation -- the people born in the 1980s through the early 2000s? Some make that claim. For example, a report in the Guardian discusses how high unemployment, sluggish income gains and student-loan debt have hit young people in Western countries hard.

    While these hardships are real, most of them don't constitute a betrayal. In general, governments don't try to do things that raise unemployment and lower incomes. Sometimes they inadvertently make mistakes -- for example, austerity in some European economies has probably been a big unforced error -- but even then, they are simply being misguided, not malevolent. Even the student-loan debacle was probably a result of government attempts to raise incomes by encouraging kids to educate themselves.

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A party in disarray looks to 2020

    Breaking News: The Republican Party's in complete disarray. It would be funny, watching them implode, were it not so sad. Today, Republicans just can't get their story straight, especially on the question of who should decide the future of the party -- the people or the professionals.

    On the one hand, when it comes to selecting a nominee for president, Republican leaders say: We can't let the people decide, because it looks more and more like they might actually choose Donald Trump. We have to hold an open convention, so party leaders can decide who, other than Trump, will lead the party.

    Yet, on the other hand, when it comes to selecting a Supreme Court nominee, Republicans argue just the opposite: We can't let the president decide, because he only has nine months left in office. First, we must let the people decide who will be the next president. Then, just to entangle themselves further, some Republicans suggest: We must let the people decide, UNLESS they elect either Hillary Clinton or Bernie Sanders -- in which case we won't let the people decide, after all, we'll settle for President Obama's man.

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Why Trump is winning: His supporters think America is failing whites

    Donald Trump continued stomping towards the GOP nomination with a big win in Arizona Tuesday night, which will stir more anxiety among GOP elites who worry that his strategy of courting white backlash could drive away minority voters, helping unleash an electoral bloodbath up and down the ticket. Paul Ryan is gave a speech today decrying the "tone" in our politics that will likely hint at criticism of Trump along these lines.

    But what if Trump's efforts to court white backlash constitute one of the essential ingredients of his success among Republican voters?

    A new analysis of Washington Post/ABC News polling strongly suggests this may be the case. A Post/ABC national poll this month asked: "Which of these do you think is a bigger problem in this country -- blacks and Hispanics losing out because of preferences for whites, or whites losing out because of preferences for blacks and Hispanics?"

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The court fight is about democracy

    There's a reason beyond garden-variety partisanship that Senate Republicans resist even holding hearings on President Obama's nomination of Merrick Garland to the Supreme Court. Their gambit evades a full and open debate over the conservative judicial agenda, which is to use the high court in an aggressive and political way to reverse decades of progressive legislation.

    The central irony here: The very conservatives who use "judicial activism" as a battering ram against liberals are now the aggressive judicial activists. It's precisely because Garland's record reveals him to be a devout practitioner of judicial restraint that an intellectually frank dialogue over his nomination would be so dangerous to the right. It would expose the radicalism of their jurisprudence.

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Trump's personality is hands-down unpresidential

    Oh, those hands. Donald Trump holds them out, regards them, waves them for everyone in the gleaming conference room to see. How surreal is this? We are talking NATO, the Senkaku Islands, nuclear proliferation ... and hands.

    "My hands are fine," Trump says. "You know, my hands are normal. Slightly large, actually. In fact, I buy a slightly smaller than large glove, OK?"

    Is this really happening? "Surreal" may not capture the utter weirdness of the moment. We are talking hand size -- and other size -- with the Republican front-runner. For president.

    The topic, admittedly, has been broached not by Trump but by the otherwise cerebral editor of The Washington Post's editorial page, Fred Hiatt. "You are smart and you went to a good school," Hiatt says.

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Question of 2016: What makes America great

    In two months on the road covering the 2016 presidential primaries, I've seen the U.S. going through something of an identity crisis, after decades of dominance. The candidates are talking about what the voters are thinking about: What does it mean for America to be great?

    To a traveler, America's greatness is revealed in simple, visual ways. Everywhere, even in sparse rural areas, there's a healthy bustle of activity. Americans get up early, and they find it hard to keep still. At a Florida intersection, I watched a man expertly juggle a mattress-store sign to attract customers. He might hold the sign for minimum wage, but that's not why he juggles it.

    The whole country is never in repose; an energy runs through it that you won't find anywhere else, and a sense of constant, habitual competition is ever-present. This is the biggest economy in the world, and it feels like it. It feels like a great nation.

    To the presidential candidates, however, the issue of greatness is debatable.

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Trump immigration attack begins in Brussels

    Here we go again.

    Speaking on NBC's Today show shortly after deadly terrorist attacks in Brussels, Donald Trump said the U.S. should "close up our borders until we figure out what's going on."

    The Trumpian rhetoric is now familiar: His proposal is both shockingly aggressive -- it was accompanied by another call to "expand" American law to permit the torture of terrorism suspects -- and intentionally, impossibly vague. Across the muddy terrain of statecraft in an age of stateless terrorism, "figure out what's going on" is not exactly a sure marker.

    Yet as a warning to Hillary Clinton of what awaits her in a general election, Trump's message couldn't have been clearer. Earlier this month, Clinton allowed herself to be pushed into a position on border security that she can't sustain in the general election. With Trump poised to strike, she will have to backpedal.

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Trump gets another pass for his rambling

    Donald Trump gave an interview to The Washington Post's editorial board on Monday. He also was interviewed by CNN's Wolf Blitzer.

    Neither went well.

    I gave my reaction to his incoherent CNN interview on Twitter ("Trump on Iraq is ... babbling incoherently"), so I'll focus on The Washington Post session, which was, if anything, even worse. Here's a sample, with The Post's Fred Hiatt pressing him on his proposed ban on Muslims coming into the U.S.:

    HIATT: How would you identify people to keep them out of this country?

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