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Damnable Diatribes on the Monstrous Macroecomic Mess Maelstrom

Being born on November 9th, I will get the end of this campaign for my birthday (tough luck Josh Barro of course this also means that I couldn’t vote in 1978 the year I turned 18 (but neither could J Barro so there)).

It also means that my astrological sign is scorpio, which is relevant to this post.

The humiliation of contemporary macroeconomics has become extremely acute. Leading macroeconomist Paul Romer ruthlessly mocked his own approximate field of study.

Now Daniel Drezner wrote in the Washington Post

The state of macroeconomics is not good

If you think international relations theory has problems, let me introduce you to the most influential and problematic subfield of economics.

Pwnd. Sick burn. I mean to be mocked by a fellow macroeconomist is bad, but for an professor of international releations to look down on macroeconomics with pity is humiliating.

I am afraid to check my horoscope. I expect it will read

Scorpio: Reading The Washington Post today will cause you to both laugh out loud and curse the day you chose your idiotic career (but mostly laugh).

Yes I just equated the scientific values of international relations theory, modern macroeconomics, and astrology.

The point of this post (if any) is that this isn’t new. Back in the 80s I entered an inner sanctum of economics — the NBER main office at 1050 Mass Avenue. This was a tiny researc on one floor of a medium sized building which had the right to host NSF grants & so was drowning in money. Many of the few offices had eminent occupants including Paul Krugman & Larry Summers. There was a main entrance but, after hours research assistants and such entered by side doors. Immediately after entering one, we saw a desk displaying a poster which claimed to illustrate an astrological model of the business cycle. It was used by one of the resident labor economists who had a very 21st century view of the scientific status of macroeconomics.

Brad DeLong also worked there and said in 1983 or so that he had decided not to concentrate in macroeconomics, because he thought the field had entered a blind alley where it would be stuck for decades. Thus he both denounced and displayed rational expectations.

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Did Trump backdate his charity’s $25,000 check to Pam Bondi’s PAC by four days? Or was it sent, as Bondi AND Trump now say, in response to Bondi’s phone solicitation of a donation from Trump made (according now to Bondi herself) not weeks before the Orlando Sentinel reported that Bondi’s office was considering joining a fraud lawsuit against Trump U. but instead—coincidentally, of course—only a few days before the Sentinel reporter phoned Bondi’s office and inquired about the office’s plans regarding that lawsuit?

Last night I clicked on the NYT website and saw a prominently-featured article by Kevin Sack and Steve Eder titled “New Records Shed Light on Donald Trump’s $25,000 Gift to Florida Official.”  The article lays out a sequence of events concerning Trump’s charity’s Sept. 2013 check to Florida AG Pam Bondi’s 2014-reelection-campaign PAC.

The check, it was reported earlier in various news articles in the last three months arrived at the PAC four days after an article was published in the Orlando Sentinel reporting that Bondi’s office was considering joining a lawsuit** filed two weeks earlier by New York AG Eric Schneiderman alleging concerted fraud by Trump University and Trump Institute victimizing a significant number of New Yorkers.  The fraud also victimized a number of Floridians.

Most of the news reports on this came earlier this month after it was reported that nonprofit Trump Foundation had paid a $2,500 fine to the IRS for violating tax law concerning the political donation.  It hadn’t been of sufficient importance to the political news media and punditry to give these reports real attention, partly, I think, because it hadn’t been of sufficient important to Hillary Clinton to mention this and drive it home in public statements; only news about the content of this or that Clinton email, especially if it tied in, however trivially, with the Clinton Foundation, could (and did) attain news-media-frenzy/inundation-of-coverage status.

And Clinton and her campaign didn’t think to have Clinton herself educate the public about this or anything else about Trump if it didn’t already come out of Trump’s mouth or his Twitter feed.  Anything about Trump that Trump wanted hidden managed to be hidden almost completely from most of the public that doesn’t read the Washington Post or the New York Times.  Or the Orlando Sentinel.  And Clinton was fine with that, apparently.  Or fine enough not to make an issue of any of it, since Trump himself wasn’t talking about it.

But here’s something that those news reports from earlier this month reported, concerning the timing of a phone call from Bondi to Trump, reported initially back in June when the story first broke nationally (for roughly three minutes), in which she solicited a campaign donation from him, according to Bondi herself.  And it conflicts materially, as AGs would say (“material” and “materially” are big in legalese), with what Bondi is now saying was the timeline.

In the reports earlier this month, Bondi was saying that her phone solicitation of Trump occurred several weeks before the Sentinel article was published on Sept. 13, 2013, reporting that “saying that Ms. Bondi’s office would ‘determine whether Florida should join the multi­state case.’”  If I recall correctly, one article quoted Bondi or her spokesperson as placing the timing of the phone call as sometime in July.

In any event, Bondi was saying earlier this month that her phone solicitation of Trump was part of a midsummer series of routine campaign solicitations to wealthy Republicans who lived mostly or largely in Florida (as Trump does), and that therefore she could not reasonably be said to have been trying to extort a donation from Trump, whose foundation’s check arrived at her PAC four days after the Sentinel article was published.

But now Bondi is claiming, according to the Sack and Eder article (which no longer is anywhere on the Times’ opening online page, best as I could tell, even though it was published online only last night and appears on the front page of today’s paper), that her phone call to Trump actually occurred in … late summer 2013, although no precise date is offered.  And that Bondi—and Trump—are now saying that Trump’s foundation’s check indeed was sent in response to Bondi’s phone solicitation.

But, not to worry, folks.  The Times story reports that the foundation’s check, signed by Donald J. Trump—is he the foundation’s treasurer?—is dated Sept. 8, 2013.  The article includes a photocopy of the front and back of the check.

That’s right; the check arrived four days after the Sentinel article was published, but it was dated four days before the article was published.*

The Sack and Eder article, however, reports that the Sentinel reporter first contacted Bondi’s office by phone on August 29, 2013 to inquire whether her office would be joining the New York case on behalf of 23 Floridians who had filed fraud complaints with that office, one filed after Bondi assumed office in January 2011, the others during her immediate predecessor’s term.  And that the phone call set off a series of internal inquiries resulting in a response to the reporter from Bondi’s communications director, to whom the reporter had placed the call, saying that “We are currently reviewing the allegations in the New York complaint.”

Sack and Eder detail what occurred:

It was Aug. 29, 2013, an unremarkable day inside Florida’s whitewashed Capitol, and a typically sweltering one outside among the mossbearded oaks and sabal palms. Around 3:45 p.m., Jennifer Meale, the communications director for Attorney General Pam Bondi, fielded a seemingly routine call from a financial reporter for The Orlando Sentinel. The attorney general of New York had recently filed a lawsuit against Donald J. Trump alleging fraud in the marketing of Trump University’s real estate and wealth­building seminars. Had Florida ever conducted its own investigation, the reporter asked.

The call set off an exchange of emails between Ms. Meale and top lawyers in the office. She learned that 23 complaints about Trump­related education enterprises had been filed before Ms. Bondi became attorney general in 2011, and one since. They had never generated a formal investigation, she wrote the reporter, but added, “We are currently reviewing the allegations in the New York complaint.”

The Sentinel’s report, which was published on Sept. 13, 2013, paraphrased Ms. Meale’s response and took it a step further, saying that Ms. Bondi’s office would “determine whether Florida should join the multi­state case.”

Four days later, a check for $25,000 from the Donald J. Trump Foundation landed in the Tampa office of a political action committee that had been formed to support Ms. Bondi’s 2014 election. In mid­-October, her office announced that it would not be acting on the Trump University complaints.

The proximate timing of the Sentinel article and Mr. Trump’s donation, and suspicions of a quid pro quo, have driven a narrative that has dogged Mr. Trump and Ms. Bondi for three years. It has intensified during Mr. Trump’s presidential campaign, peaking this month with the filing of ethics complaints, calls for a federal investigation by editorial boards and Democrats in Congress, and a new investigation of Mr. Trump’s foundation by New York regulators.

But documents obtained this week by The New York Times, including a copy of Mr. Trump’s check, at least partly undercut that timeline. Although the check was received by Ms. Bondi’s committee four days after the Sentinel report, and was recorded as such in her financial disclosure filings, it was actually dated and signed by Mr. Trump four days before the article appeared.

The check’s date does not categorically demonstrate that Mr. Trump was not seeking to influence Ms. Bondi, a fellow Republican. Even as he has denied trying to do so in this instance, he has boasted brazenly and repeatedly during his presidential campaign that he has made copious campaign contributions over the past two decades, including to Hillary Clinton and other Democrats, in order to buy access and consideration for his business dealings. Politicians in Florida, which Mr. Trump considers his second home, have been among his leading beneficiaries.

An analysis of public records shows he has contributed at least $375,000 to state and federal candidates and political committees here since 1995, accounting for 19 percent of the roughly $2 million he has given to campaigns nationwide, other than his own. Although not unprecedented, his $25,000 gift to And Justice for All, the committee supporting Ms. Bondi, is among his largest.

What is more, when Mr. Trump wrote that check, he still theoretically had reason to be concerned that Florida’s attorney general could become a player in the legal assault on Trump University. Through 2010, when the company ceased operations, Florida had been one of the most lucrative markets for his unaccredited for­profit school. It ranked second among states in purchases, with 950 transactions, and third in sales, at $3.3 million, according to an analysis of sales data revealed in court filings.

The lawsuit by New York’s Democratic attorney general, Eric T. Schneiderman, which was announced on Aug. 25, 2013 — two weeks before Mr. Trump wrote the check to And Justice for All on Sept. 9 — did not cite allegations from consumers in Florida. But news organizations had reported as early as 2010 that the attorneys general of Florida and Texas had fielded complaints from consumers who had paid up to $35,000 for Mr. Trump’s seminars and mentoring programs. His contribution, therefore, could have been a pre­emptive investment to discourage Ms. Bondi from joining the New York case.

And then the coup de grace paragraphs of today’s Times article:

Brian Ballard, Mr. Trump’s lobbyist in Florida, said it was “ridiculous” to think his client sought to buy off Ms. Bondi. “I’m the Trump Organization lobbyist, and he has never, ever brought up Trump University with me,” he said. “It wasn’t something of concern to him. With Donald Trump, if a friend calls up and says, ‘Listen, I’m running for XYZ, could you help me?’ his instinct is to say yes. That’s all it was.”

Yet, even those who doubt anything nefarious between Mr. Trump and Ms. Bondi acknowledge that they bear blame for the intensifying focus on the appearance of a conflict. For his part, Mr. Trump fanned the embers by sending the contribution from his nonprofit foundation, which cannot under federal law make political donations.

When questions arose this year, he agreed to refund $25,000 to the foundation from his personal account and pay a $2,500 penalty to the Internal Revenue Service. Trump officials have called the mix­-up an inadvertent error by his staff. Ms. Bondi, meanwhile, has failed to explain why she accepted Mr. Trump’s check even after learning that her office was examining the New York case against Trump University. Six months later, she allowed him to host a $3,000­-per­-head fund­raiser for her at his Mar­a-­Lago Club in Palm Beach. Mr. Trump attended the event, which records indicate raised at least $50,000.

No, on second thought I think maybe this is the coup de grace in the article:

Now, with the revelation of the date on Mr. Trump’s check — which came in a release of correspondence by Mr. Schneiderman — it appears that Mr. Trump and Ms. Bondi had in their possession a piece of favorable evidence that they bewilderingly failed to disclose.

“All these things come together in a way that if you don’t unpack the whole thing, the unspoken implications coalesce to create this great suspicion,” said Mac Stipanovich, a longtime Florida Republican strategist and lobbyist who disdains Mr. Trump and has never worked with Ms. Bondi. “The optics are terrible even though there is not a shred of evidence that Pam Bondi solicited a bribe or that Donald Trump provided one.”

Mr. Trump and Ms. Bondi have said they share a long friendship, but the origins of it are not apparent. Ms. Bondi, who declined requests for an interview, initially backed former Gov. Jeb Bush of Florida for president. After he withdrew from the race, she endorsed Mr. Trump the day before Florida’s March 15 primary, snubbing the state’s other favorite son, Senator Marco Rubio.

The only woman currently holding statewide elected office in Florida, she has since become an enthusiastic Trump surrogate. Ms. Bondi became a conservative darling in 2010 when, as an assistant state attorney, she won her post in her first campaign of any kind. Her political future is unclear as she faces a two­-term limit and has said she will not run for governor in 2018.

It was in late summer 2013, as her re­election campaign was gearing up, that Ms. Bondi called Mr. Trump to solicit the donation, aides to both of them have said; they have declined to provide a precise date. Records show that Mr. Trump had already donated $500 to Ms. Bondi’s campaign on July 15.

His daughter Ivanka Trump donated another $500 on Sept. 10. The Texas attorney general’s office, then under Greg Abbott, a Republican, had also decided in 2010 not to act on complaints against Trump University when it left the state. Mr. Trump later donated $35,000 to Mr. Abbott’s successful 2014 campaign for governor. Mr. Abbott’s office has denied there was any connection. No other attorneys general have joined Mr. Schneiderman’s litigation.

The Times, of course, can’t explicitly suggest in a news article that Trump may have backdated by a week of so that check from his foundation to place its issuance to a barely-comfortable and conveniently clairvoyant four days before publication of the Sentinel article.  But it can, well, intimate it, by, say, saying:

Now, with the revelation of the date on Mr. Trump’s check — which came in a release of correspondence by Mr. Schneiderman — it appears that Mr. Trump and Ms. Bondi had in their possession a piece of favorable evidence that they bewilderingly failed to disclose.

But accepting the date of that check as accurate, the date coupled with the Aug. 29 2013 date in which the Sentinel reporter first contacted Bondi’s office—and the admission now by both Bondi and Trump that Bondi’s phone solicitation to him came not in July and not several weeks before the article was published but a couple of weeks before it was published and likely after the Sentinel reporter first inquired to her office about whether that office might join the New York lawsuit filed two weeks earlier.

A phone inquiry likely prompted by a call to the business reporter by one of the complainants to the Florida AG’s office upon learning of the New York AG’s lawsuit.  I mean—donchathink?

Which highlights three things: One, that Trump habitually pays to silence government officials and private individuals about his scams—including possibly some bank-loan scams that were never investigated for what they sure sound like they were.  Why weren’t these investigated?

Another is how perfect an example of what Elizabeth Warren and Bernie Sanders have made so central to their political messages: that the economic and legal systems are rigged by people and industries that sponsor political campaigns, not on issues but of candidates including officials running for reelection or higher office.

And finally, this: Why is it that Republican AGs—the self-styled champions of the working class—in the states in which the largest numbers of fraud complaints against Trump U. and Trump Institute unconcerned about the complaints?  But all the way back in 2013 the New York state AG, unlike, say, Bondi and Abbott, a member of the elite—was?

I don’t expect the questions I’ve raised here, including in that last paragraph, to be mentioned by pundits or by Clinton, since they don’t involve anything that Trump has said or tweeted within the last 24 hours (or ever), and they have nothing to do with racism, xenophobia, misogyny, anti-gay sentiment—or foreign affairs.  And therefore since moderate Republicans, to the extent that they care at all, are fine with the issues I’ve discussed.

Still, on the remote chance that Clinton and some pundits could actually draw attention to them, I hope that someone who matters reads this post.  Although I won’t hold my breath, because I want to be alive to continue posting about this kind of stuff.

Even if ignored.


*Sentence corrected 9/16 at 9:20 a.m.  The cut-and-paste error, in which the clause after the comma was the same as the clause before the comma, was evident.

** Link added 9/16 at 10:00 a.m.

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Harvard surveyed their Alumni and guess what they found?

So some econ out of Harvard is shocked about what he found regarding our economy.  It’s a government problem.  The government is just not responding (read that: not doing anything).

Americans no longer trust their political leaders, and political polarization has increased dramatically. Americans are increasingly frustrated with the U.S. political system.

The political system is no longer delivering good results for the average American. Numerous indicators point to failure to compromise and deliver practical solutions to the nation’s problems. Political polarization has especially made it harder to build consensus on sensible economic policies that address key U.S. weaknesses.

The solution:  Cut the corporate tax and balance the fed budget.

The Eight-Point Plan consists of the following policy recommendations: simplify the corporate tax code with lower statutory rates and no loopholes; move to a territorial tax system like all other leading nations’; ease the immigration of highly-skilled individuals; aggressively address distortions and abuses in the international trading system; improve logistics, communications, and energy infrastructure; simplify and streamline regulation; create a sustainable federal budget, including reform to entitlements; and responsibly develop America’s unconventional energy advantage.

What did you expect from the conservative mind?  OK, they do want to do more than cut the corp rate:

Consensus corporate tax reforms include reducing the statutory rate by at least 10 percentage points, moving to a territorial tax regime, and limiting the tax-free treatment of pass-through entities for business income. The transition to a territorial regime should be complete, not half-hearted via the inclusion of an alternative minimum tax on foreign income.

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“Kremlin: Obama’s Trump criticism anti-Russian, won’t foster better ties”

Wow, I don’t know quite what to say here but this is an honest to God headline from Reuter’s Kremlin: Obama’s Trump criticism anti-Russian, won’t foster better ties
Now we can take it as given that none of Obama, Trump or even the Russians are responsible for writing Reuter’s headlines. So I leave it to AB commenters to see if THAT is a fair representation of THIS:

The Kremlin said on Wednesday it viewed U.S. President Barack Obama’s recent statements on Republican presidential candidate Donald Trump as anti-Russian and said they were unlikely to improve fragile relations between Russia and the United States.

Obama on Tuesday strongly criticized Trump for praising Russian President Vladimir Putin and for appearing on a TV channel, RT, funded by the Russian government.

“Unfortunately, we see continued displays of often hard-core Russophobia,” Kremlin spokesman Dmitry Peskov, commenting on Obama’s intervention, told a conference call with reporters. “We can only express regret in this regard.

“This rhetoric, which is being formulated in electoral campaign style … is unlikely to help fledgling fragile attempts to build at least some sort of mutual trust.”

Seems to me that Donnie’s surrogates have, in the immortal words of Desi to Lucy on “I Love Lucy” : “You got some ‘splaining to do!” Because if we trust the translation we have the Kremlin warning Obama off their boy poodle The Donald. As the kids say: WTF?

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The real, timely "real median household income" just stood up: Sentier Research

by New Deal democrat

The real, timely “real median household income” just stood up: Sentier Research

In April of this year, I wrote a piece entitled “Would the real real median household income please stand up?” discussing three separate measures from the Census Bureau, the BLS, and private think tank Sentier Research.

By now you have probably already read elsewhere that yesterday the Census Bureau reported that real median household income rose 5.2% in 2015 — the biggest annual increase since the 1960s.  Here are the opening two paragraphs of the report, that pretty much say it all:

  • household income in the United States was $56,516 in 2015, an increase in real terms of 5.2 percent from the 2014 median of $53,718. This is the first annual increase in median household income since 2007, the year before the most recent recession.
  • In 2015, real median household income was 1.6 percent lower than in 2007, the year before the most recent recession, and 2.4 percent lower than the median household income peak that occurred in 1999. (The difference between the 2007 to 2015 and 1999 to 2015 percentage changes was not statistically significant.)

The problem is, this report is so tardy as to already be outdated.  After all, it is only issued once a year, so we just learned about the 2015 average — but we are already only 3 1/2 months away from 2017!
A similar problem afflicts a second measure of median income, from the Consumer Spending Survey, which is released only once a year in April of the next year.  Pew Research wrote about the 2014 results just a couple of weeks before the 2015 report was issued, and here is what they found:

Two weeks later the 2015 report showed the biggest increase in years (but Pew has not updated their story):

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Kellyanne Conway Says Trump Lied About Not Having High Cholesterol, High Blood Pressure, and Chronic Gastroenterological Disorder

AND THE TRUMP CAMPAIGN IS VERY GOOD AT DECEIVING PEOPLE: Trump campaign manager Kellyanne Conway has this to say on CNN about whether Trump will release his health records:

“As far as I can see, there are two major party candidates running for president and only one of them has pneumonia and lied about it….He won’t be releasing the fact that he had pneumonia for two days and lied about it.”

It’s true that Clinton was too slow to release her pneumonia diagnosis, but that is not tantamount to “lying” about it, and once again, that letter that Trump’s doctor wrote in five minutes was nothing more than a bad joke.

— Greg Sargent, The Washington Post, this morning

Well, now we know why Trump is refusing to release his medical records: He doesn’t want his campaign manager to have to acknowledge that he lied about his specific health problems.  Including the gastroenterological one that his longtime doctor, Harold Bornstein, M.D., a gastroenterologist—he of letter-writing fame—has been treating him for.

Seriously, folks.  Kellyanne Conway is consistenntly ridiculous.  She thinks she’s just so very clever at misdirection.  And the media seems to agree.

But they’re wrong.  Let’s have a show of hands here; how many of you are deceived by Conway’s statement into thinking that a failure to announce a transitory illness—walking pneumonia, in this instance—means she told the public that she doesn’t have pneumonia?

Clinton said her cough was caused by allergies, before she knew it was caused by pneumonia.

A hallmark of Conway’s modus operandi is responding in a quick sentence to an inerviewer’s specific question about Trump and, without pausing, segue clumsily into some statement about Clinton or Obama or Obamacare or the like that she claims is what the news media really should be concerned about.

Trump himself is the antithesis of transparent, but his campaign manager is the very essence of it.

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Mission Accomplished! (Wow. Thank you, Matea Gold.)

In, I’m guessing, four or five posts here at AB in the six weeks or so, since hedge fund billionaires Robert Mercer and his daughter Rebekah Mercer were profiled in two or three articles because they’re providing substantial funding to Trump’s campaign and for the last few months have served as his puppeteers—steering both his campaign and his fiscal and regulatory policy plans (and therefore whom he will nominate to the federal bench and to the relevant slew of administrative agency officials)—I’ve pleaded for some real attention to this from political news and commentary journalists.

And from Clinton and her campaign.

It’s finally happening.  Clicking on the Washington Post site just now and seeing as featured article Matea Gold’s piece there today titled “The rise of GOP mega-donor Rebekah Mercer” had the feel of an out-of-body experience.  I couldn’t believe it.

As I’ve said repeatedly in my references to this duo, their capture of the Trump campaign and fiscal and regulatory policy plans explains why so few Establishment Republicans (Paul Ryan, for example) are renouncing support of Trump.

Also as I’ve said repeatedly, all Clinton has to do to win the Rust Belt (and, I believe probably Florida, Nevada, Iowa and New Hampshire, too) is run a few ads apprising the public that Trump indeed has billionaire puppeteers—two of them.  And exactly who they are and what they want.  And where and how they live.

Clinton’s obsessive focus on Trump’s two most obviously scary traits—his dangerousness in foreign-policy matters and his alt-right mania—have been, in my opinion foreseeably, insufficient.  Everyone already knows these things about Trump, which is why so many independents and moderate Republicans won’t vote for him.  Incessantly reminding Republicans and independents of this, and repeatedly saying that these aspects of Trumpism isn’t traditionally Republican, gains her nothing, or close to nothing.

And presumably it was her fear of losing Republican support that caused her and her campaign to remain silent—throughout the summer and well into September—about Trump’s puppet-puppeteer relationship with billionaire far-right donors, and these two billionaire far-right and alt-right donors in particular.  Wouldn’t wanna risk causing Meg Whitman to rescind her support for Clinton, I guess.

But now, finally, ridiculously belatedly … no more. I’m guessing that Gold’s piece today was prompted by a very legitimate request from the Clinton campaign.  How legitimate?  Can anyone really say in good faith that the public is not entitled to learn of this information through in-your-face political news media attention?

I’m thrilled.  And I also want to say this: My main sources of news are the New York Times and the Washington Post; I have online subscriptions to both.  And throughout this campaign season, dating back to the truly wonderful coverage of the Sanders campaign by the Post’s John Wagner and certainly continuing through the general-election campaign to date, the Post’s straight political and political-analysis reportage has been excellent, and the Times’ has been, in my opinion, subpar.

In any event, I sure welcome a finally-enlightened Clinton campaign.  And some real news emphasis on the Mercers.  Normally, when I read a commentary or a statement by a major pol, or some such, that appears to reflect a recent AB post of mine, I joke here that, say, “Obama reads Angry Bear!”, or the like.  But this time I think maybe my posts here imploring Clinton and the news/commentary media to tell the public, very loudly, about the Mercers and their puppet/puppeteer role in the Trump campaign and what that would mean in a Trump administration.

I mean, who knows?  Clinton’s taking a few (very entitled) sick days right now and maybe has happened upon this awesome blog called Angry Bear.  If so, she should take up a related suggestion of mine: asking rhetorically what the Mercers think about Citizens United.

And about Citizens United.  Which the Mercers apparently fund (as they do Brietbart).  And whose founder and president for the past 16 years is now, at their suggestion, Trump’s deputy campaign manager.  As a native Rust Belter I’m sorta thinkin’ that maybe some on-the-fence voters in the upper Midwest would like to know that.  So tell them, Hillary Clinton.

Tell. Them.

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Monthly Movements of Core Inflation

Here is a graph from FRED showing monthly percentage movements of core inflation. (link to data)


There used to be ranges that core inflation moved within. The monthly change either hit the maximum of that range or the minimum with some breakout movements in between. Monthly movements made sense by looking at 12-month moving averages.

Since about the year 2000, the visible ranges have disappeared. The monthly movements are more free-form. Thus monthly core inflation numbers should be more accurate now. However, there is still noise in the movements which belie that prices are sticky and should not change so erratically.

The best way to view monthly inflation numbers is with “Annualized” moving averages as Tim Duy does. Here is an example from Tim Duy.


Look at the time period from mid-2010 to mid-2011. You see large positive monthly movements in the second half of 2010 but the 12-month moving average was rising much more slowly.  In the first half of 2011, inflation was coming down, but the 12-month moving average was still rising and kept rising until mid-2011. So the noisy monthly movements were designed to keep the 12-month moving average on a steadily rising trend.

Discerning the correct and steady trend of core inflation is the key.

Back in the early 80’s, my undergrad teacher would use an 18-month moving average. But if we knew which monthly moving average is being manipulated on a monthly basis, we would understand each monthly change better.


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