Relevant and even prescient commentary on news, politics and the economy.

Trump And The Fed

by Barkley Rosser originally published at Econospeak, “Trump and the Fed”

It may be way too soon to say anything sensible about what Trump thinks about the Fed or will do  about it, but as the first person to have publicly called for appointing Janet Yellen as Chair (back in 2009), I figure I am more situated to stick my neck out to say something, especially when it looks like what is coming is a big contradictory mess.For the moment the Fed seems to be laying low, having made almost no change in policy or projections as reported by the diligent …Tim Duy.  They remain open to maybe tightening after March if the employment report improves notably, but otherwise seem to be on a “steady as you goes” path for the moment, doing almost nothing.  This on top of a letter from Congressman McHenry demanding they stop cooperating with any international banking entities until Trump  makes appropriate appointments.  And Tim adds a comment on a recent column by former Fed gov Kevin Warsh, who indulged in criticizing the Fed by demanding that it follow policies it is already following.  In this latest post Duy suggests that perhaps Warsh is running for Fed Chair, which means one has to appear to criticize Fed policy, even if one is not really.  Which raises the question of what Trump will do.

Let us start with something that hardly anybody has noticed, but is just taken for granted: that Trump almost certainly will not reappoint Janet Yellen as Chair.  This just seems to follow from his general attitude that all incumbents are no good, and especially anybody appointed by Obama, except for FBI Director Comey.  Why she is no good is not immediately obvious, and in fact several times over the last two years he praised  her “low interest rate policies” noting that as an old real estate developer he has always been a fan of such policies.  However, in June of this past year when the Fed did not raise the fed funds target rate, he denounced her personally and the Fed more generally for not doing so, charging that their failure to do so was part of a plot to goose the economy in an effort to help elect Hillary Clinton. Given that rhetoric it seems unlikely that he would reappoint her, although it could still come to pass that if when her term comes up next year markets seem to like her as well as GOP commentators, he could change his mind.

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A thought for Sunday: No, Trump isn’t imploding — but the opposition is broad and intense

by New Deal democrat

A thought for Sunday: No, Trump isn’t imploding — but the opposition is broad and intense

My post from two weeks ago, “No, Trump isn’t Imploding” got picked up by a few other sites within the past few days, and I wanted to follow up because we have a fuller picture of public opinion now.

Basically, Trump still isn’t imploding. He is holding his base. In fact, there is a little economic evidence that they are putting their wallets where their mouths have been. BUT, on the other hand, the opposition to Trump is revealing itself as broad-based and intense, in a way that hasn’t been seen in America since at least the 1960s (if not the 1930s or 1860s).

Here’s Gallup’s Presidential approval polling through yesterday:

Three weeks after the start of his Presidency, Trump’s last approval rating was 41%, down from 45% on his Inauguration Day. He has been between 41% and 43% for the last two weeks.

That’s simply not an implosion.  And his GOP base stands behind his controversial Executive Decrees.  For example, here’s the breakdown on support for his Muslim exclusion decree:


While Democrats are almost universally opposed, the support by GOPers is similarly almost universal.

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Meanwhile, back in Ireland

We’ve gotten to another point where it’s hard for me to turn on the TV. I know this will have to change, but for now I’ll go back to one of my favorite topics, the fate of Ireland under austerity.

As I suggested might happen, Ireland in its 2015-2016 immigration statistical year (May-April) was finally able to end its net emigration. According to the Central Statistical Office’s August report, 3100 more people came to Ireland than left during 2015-2016. This was the first time since 2008-2009 that Ireland had net in-migration. Still, among the Irish themselves, net emigration continued in 2015-2016, with 10,700 more leaving than returning.

The unemployment rate declined again from Q3 2015 to Q3 2016, from from 9.3% to 8.0%. The monthly unemployment rate for January 2017 dropped to 7.1%. And yet…

While Q3 2016 employment increased by 57,500 to 2,040,500, this remains 5.6% below its Q1 2008 peak of 2,160,681. Things are finally getting better, but Ireland is still not all the way back.

By contrast, currency-devaluing, banker-jailing Iceland long ago passed its old employment peak (create your own table), which was 181,900 in August 2008. Employment reached a low point of 163,900 in February 2011, first surpassed the old peak in February 2015 (182,900), and in December 2016 stood at 194,400, or 6.9% above the pre-crisis peak.

Oh, and Iceland’s unemployment rate? A seasonally adjusted 2.9% in December 2016, and only 2.6% without seasonal adjustment.

Maybe one day we’ll talk about the Celtic Tiger again. But Ireland, hamstrung by its inability to devalue and by harsh austerity measures, shows lingering weakness, masked by emigration, to this day. Iceland, by contrast, is the one looking like a Nordic Tiger.

Cross-posted from  Middle Class Political Economist.

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The Scale Of Trump’s Yemen Botch

by Barkley Rosser                (originally published at Econospeak)

The Scale Of Trump’s Yemen Botch

It is  becoming clear that the scale of the botch by Donald Trump in Yemen in his first effort at a foreign military action is much greater than .first reported, as reported by Juan Cole.   Right from the start we heard that people in the military were complaining about poor vetting of intel and how there was more military resistance than expected, with one American dying and three getting injured.  There was the embarrassment of a bunch of civilians getting killed, with the latest estimate of those now as high possibly as 30. On top of this we had the absurdity of the whole thing being decided mostly over a dinner with Steve Bannon and Jared Kushner the main parties to it, although supposedly SecDef Mattis signed off on it, followed by the bizarre business of Trump not even going to the Situation Room for this his first military outing.  Maybe he thought that since there were so many pictures of Obama there, and even with Hillary, that this is not something he wanted to do.

Of course there was pushback from the Trumpisti over this, claiming that the whole thing had been planned by Obama, who had just not  quite had enough time (or maybe even guts) to finally sign off on it, and furthermore that some bad leaders of the target group, Al Qaeda in the Arabian Peninsula (AQAP), were killed.  The latter may be true, although as Juan Cole reports, the main target of the raid, AQAP leader Qassim al-Rimini, was not killed and has since put out an audio publicly mocking Trump.

But now Cole further reports (as have others) that Obama had apparently not decided to do the raid. It was long planned, but it was not just a matter of waiting for more intel.  They thought it was not a wise effort, and indeed it has not turned out well.

On top of that, now the Yemeni government led by Mansour Hadi that the US and Saudi Arabia support has just forbidden the US from engaging in any further ground military assaults.  Oh.  Cole suggests that aside from the matter of civilian casualties, there is the matter of Trump’s insulting Muslim immigration ban, which Cole reports has the leaders of this US-backed Yemeni government “disgusted.”  Oh.

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Four measures of wage growth: prospects for further meaningful wage growth are dimming

by New Deal democrat

Four measures of wage growth: prospects for further meaningful wage growth are dimming

In the last several years, I have written a number of posts documenting the stagnation in average and median wages, followed by their improvement due to the steep decline in gas prices, for example here and here.  Since bottoming a year ago, gas prices have turned positive YoY, most recently up about 25%. Q4 2016 data on wages has been released, giving us a chance to take an updated look.
We have a variety of economic data series to track both average and median wages:

Let’s start with nominal wages.  The first graph below shows the YoY% growth in each of the four measures:

While each is noisy, the overall trends are clear. First, in this cycle as in the last, wage growth declined coming out of recessions, then rose as the expansion continued.  Second, secularly there has been an undeniable slowdown in wage growth, which was 4-6% in the late 1990s peak, 3-4% at the 2000s peak, and so far in this expansion is no better than 2-3%.  I believe this is in part due to how weak the employment situation was for so long into this expansion, but also secularly due to shifts in bargaining power, as employers learn over time that employees can be retained with lower and lower annual increases in compensation.
Next, let’s zoom in on the last 5 years:

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A thought for Sunday: of heartlessness, confidence and conviction

by New Deal democrat
A thought for Sunday: of heartlessness, confidence and conviction

First of all, let me join in full in the following from Calculated Risk:

These are not normal times, and I can’t just post economic data and remain silent on other issues.
Mr. Trump’s executive order is un-American, not Christian, and hopefully unconstitutional. This is a shameful act and no good person can remain silent.

I believe that the sheer heartlessness of Trump’s Order is a feature, not a bug.  It is designed for maximum media coverage in order to show his supporters that he is delivering on his promises.

It is likely that in a longer timeframe this will backfire, as the cruelty of separating families, turning away children, and refusing entry to people who already had legal permission to live here via visas and even green cards, turns people against Trump and his enablers.

Once upon a time, for academic reasons I read the same book that Trump was rumored to have by his bedside in NYC: the english translation of the full text of Adolf Hitler’s speeches. Hitler’s argument for getting ordinary Germans to go along with his extreme anti-Semitic agenda was masterful. It went in essence like this: “I know that there are a very few good Jews, and you may know a few of them.  But the vast majority of Jews, who you don’t know, are evil.  In order to get rid of the vast majority of evil Jews, we have to sweep up a few of the good ones. So don’t worry, we will take care of it.”  By getting people to overlook their own experience with Jews they knew, he prevailed.

In contrast – for example – gay rights triumphed when enough people knew gays in their ordinary lives, and realized that they were no different from anybody else. So they were unable to see any valid reason to discriminate against them.

This ban is much more like the second situation than the first. Hitler argued that he might have to inflict hardship on a few good people in order (allegedly) to get to the mass of bad apples.  Trump is inflicting a lot of harm on a mass of good people in order (allegedly) to get to a few bad apples

And we haven’t even gotten to the point yet when the same heartlessness is going to be inflicted on DREAMers.

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Worthy of debate

(Dan here)n There are all sorts of ideas about what is going on right now in the US, and many proposed opinions. Yves offers an opinion on the Women’s March itself, but I am watching both locally and state wide (MA) where the follow up is actually happening, what forms it takes, and who is involved. Perhaps others can add knowledge and experiences to date. Certainly Democratic party leaders at the national level are searching for responses. I am going to leave my own experiences in the comments…I think this time around involvement by newcomers and activists might persist and figure out how to keep this energy effective. On the other hand, the testing of dedication is yet to come.

Women Skeptical of the Women’s March

Posted on February 10, 2017 by Yves Smith

Yves here. I’m hoisting this discussion from Water Cooler the day before yesterday. It echoes other doubts raised about the Women’s March, such as the ones in the Counterpunch story, No Pink Woolly Caps for Me. Seasoned protestors point out that the track record of non-issue-oriented marches, no matter how large scale, is poor, and the status of this march as officially sanctioned (blanket media coverage when other marches of hundreds of thousands of people have been minimized, police not tricked out in their usual riot gear) also indicates that the officialdom does not see it as a threat to the status quo.

In addition, as the discussants point out below, the March organizers’ demands were vague and not internally consistent. The reality was that the march was against Trump, as opposed to for a concrete policy program.

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California farming and our food sources

From the New York Times comes this information on the nature of immigration in California.

Mr. Trump’s immigration policies could transform California’s Central Valley, a stretch of lowlands that extends from Sacramento to Bakersfield. Approximately 70 percent of all farm workers here are living in the United States illegally, according to researchers at University of California, Davis. The impact could reverberate throughout the valley’s precarious economy, where agriculture is by far the largest industry. With 6.5 million people living in the valley, the fields in this state bring in $35 billion a year and provide more of the nation’s food than any other state.

Now he worries that a Trump administration could mandate a Homeland Security Department program called E-verify, which was aimed at stopping the use of fraudulent documents. In all but a few states, the program is voluntary and only a small fraction of businesses use it.

Farmers here have faced a persistent labor shortage for years, in part because of increased policing at the border and the rising prices charged by smugglers who help people sneak across. The once-steady stream of people coming from rural towns in southern Mexico has nearly stopped entirely. The existing field workers are aging, and many of their children find higher-paying jobs outside agriculture.

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Trump Administration Plays Havoc with Education–and your tax dollars

by Linda Beale

Trump Administration Plays Havoc with Education–and your tax dollars

Betsy DeVos was confirmed as Secretary of Education in a Senate vote that had every Democratic Senator voting against her, along with two brave Republican Senators (Lisa Murkowski, Alaska; and Susan Collins, Maine).  Thanks to those no-voters who showed integrity.  Regrettably, the vote created a tie, broken in DeVos’s favor by Trump’s Veep, Mike Pence.  Note that the result is that Senators representing by far the vast majority of the American people voted AGAINST DeVos.

As a Michigander, I can tell you firsthand that this is a disastrous choice for the head of the most important Education agency in the country.  Betsy DeVos is just another one of Trump’s billionaire crony capitalists who are using service in the government–which  is supposed to be about service on behalf of We the People–as a way to funnel more money to their fellow crony capitalists through elimination of protective regulations, open exploitation of federal lands, and willful ignorance about the harm that their crony capitalist policies have done and will do to the economy.

ASIDE:  Check out, for example, Melania Trump’s new lawsuit claiming $150 million in damages from The Daily Mail because it’s article on the company she modeled nude for suggesting that the company was an ‘escort service’ cost her the “once-in-a-lifetime opportunity” to get rich off of her “multi-term” exposure to being the most photographed woman in the world–i.e., (not explicitly stated but clearly implied) her status as First Lady.

Betsy DeVos  is an heiress with billions who married into another crony capitalist family with billions.  The DeVos family has used its wealth to curry favor and influence in state and federal government.  IN particular, Betsy DeVos has been busy using her wealth to remake public education in Michigan in line with her own particular religious and crony-capitalist views on Michigan’s education.  She supports junk science including “intelligent design“, the pseudo-science replacement term for religious “creationism”, in an attempt to undo scientific support for evolution.   She has pushed charter schools on Detroit–blaming any education shortcomings on dedicated teachers and disadvantaged students in public schools that have been deprived of hundreds of millions of state dollars owed them while turning a blind eye to the abject failures of for-profit charter schools in which ‘management companies’ rip off taxpayer dollars to overpay executives without having to comply with any of the accountability measures that are pressed on public schools that are underfunded. 

Betsy DeVos knows nothing about public education, knows very little about the privatized charter schools she pushes, knows nothing about education law, and knows nothing about improving education in inner cities or poor rural areas.   What she does know is that she supports any way possible to take taxpayer money and give it to religious and other private schools to use without accountability to the public.

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In case you thought Trump was imploding . . .

by New Deal democrat

In case you thought Trump was imploding . . .

For those of you who may be cocooned in the liberal blogosphere, I’m afraid I must administer a cold slap in the face.

Here is the graph of Gallup’s Economic Confidence Survey from its inception nearly 10 years ago.  Notice that spike to new highs right at the end?

trump
Let’s zoom in for a closer look, as in the last 3 months:

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