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How Big Of a “Hoax” Is That “Dirty Dossier”?

How Big Of a “Hoax” Is That “Dirty Dossier”?

 In the wake of the Atlantic story by Jeffrey Goldberg about President Trump reportedly referring to the dead Americans lying in the Aisne-Marne Cemetery near Paris as “losers”  and “suckers,” along with a lot of other embarrassing things for him, Trump has called Goldberg a “slimeball” and that that this report is another “hoax” like “the dirty dossier” of Steele, along with “Russia, Russia, Russia” also being a “hoax,” of course, despite the recent bipartisan Senate Intelligence Committee report further verifying that there was even more Russian interference in the 2016 election than the Mueller Report verified (105 meetings between Trump campaign officials and various Russians, with several of those officials then lying under oath about their contacts).

Of course, Trump is on tape calling the late John McCain a “loser” because he was captured by the Viet Cong during the Vietnam War. I thought when he said that it would be the end of this then primary campaign, but it barely budged him a notch, the first sign of how he could get away with outrageous statements and actions that would do in other politicians.  But his base viewed McCain as a “RINO” traitor to their cause, so it was OK to diss him hard.  But now this new report is hitting Trump hard, especially given the widespread reporting of polls showing active military members supporting Biden over him and reports of retired Marines who has Trump signs in their yards throwing them in the garbage. The dead at Aisne-Marne did not run against Trump in a primary or contest for control of the Republican Party.  They died in a crucial battle that stopped the final German effort to conquer  Paris in the WW I.

So Russia was not a hoax, but what about that infamous Steele dossier?  Of course for those who get all their news from Fox, where Trump is also having a problem with their national security reporter supporting some of the Goldberg article, referring to the Steele dossier as “dirty” is a regular button to push to make the faithful sit up and bark their support.  It is like “Benghazi,” something pounded on so often the faithful are fully indoctrinated that there is something there. About every other night Hannity reminds the suckers that it “has been completely discredited” and “was bought and paid for by Hillary Clinton.”

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Should We Fear A Reappearance Of Inflation?

Should We Fear A Reappearance Of Inflation?

 In today’s Washington Post Robert J. Samuelson has raised the possibility that the Federal Reserve may be setting the US up for a reappearance of inflation.  He invoked the 1960s and 1970s when supposedly the Fed allowed inflation to get out of control out of a supposedly misguided effort to bring down unemployment by allowing successive small increases in inflation. Supposedly the newly released report on changed Fed policies may be taking us back to those bad old days, even though for now RJS admits that inflation is low, with expectations of inflation only at 1.34%.  How worried should we be?

OK, I am not going to say that a resurgence of inflation is impossible.  I can imagine it possibly resurging, with such a development perhaps being associated with a sharp decline of the US dollar, perhaps associated with a turn from its use as a reserve currency.  I do not see that happening immediately, but there is theoretical literature that suggests that such an event could happen rather suddenly at some point.  If so, then maybe it could happen.  Is the new Fed policy likely to bring this on?

I suppose one reason to be concerned is that the supposedly new policy approach has been rather opaque.  I have had trouble getting a clear picture what the changes are in the policy. The main reports have been relatively undramatic, basically an idea that at least through the next year there will be no interest rate increases.  Probably a bigger deal is that the Fed might tolerate inflation higher than the 2% targeted rate.

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There Will Be No Postponing Social Security Taxes

There Will Be No Postponing Social Security Taxes

 Among the items that President Trump issued an “executive action” about three weeks ago was that for people earning less than around $104.000 per year, their fica taxes were to be postponed until Jan. 1, not cut, merely postponed, although Trump made noises that if he is reelected he will simply eliminate the fica tax entirely, although unclear how he plans to fund Social Security without it.

Anyway, Allan Sloan in the Washington Post reports that this initiative is now just completely dead in the water.  It has too many problems, too many opponents, and action on implementing it in the Treasury Department has simply stalled out, almost certainly for good due to all this.  Quite aside from people facing potentially huge fica tax bills in January due to four months of postponement, it apparently is very complicated to set this up, and would take many months to do so, involving businesses and the Treasury Dept. having to put in place all kinds of mechanisms to figure out exactly which people would get their taxes postponed and which would not.  A real killer is that businesses pretty much across the board have objected to this proposal, with this now official as 30 different such groups have called for the cessation of this effort through the US Chamber of Commerce.  This is just going nowhere.

This should be contrasted with the temporary fica tax cut that Obama had in place during 2011-2012. There are two large differences between that and what Trump has so incompetently proposed. One is that Obama had it pass through Congress, not be the result of a presidential directive or memo.  The other is that it was completely simple: all Social Security taxes stopped being collected for the period in question, not a system based on treating people differently based on their incomes and also not a postponement.  It was a straight cut, if only a temporary one.

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An Increasing Anomaly In The US Balance Of Payments

An Increasing Anomaly In The US Balance Of Payments

 On Econbrowser Menzie Chinn has posted about an increase in the scale of US international net indebtedenss. Since the late 1980s the US has been a net debtor internationally, borrowing more from abroad then we are lending and investing there.  The increase in this net indebtedness has noticeably accelerated since our current POTUS took office, and especially this year.  The size of that net indebtedness has gone from about 40% of US GDP to somewhat more than 55%, a pretty substantial increase, given that we have been in this condition for over three decades and in three years by more than a third.  The fiscal stimulus of this year has definitely been overwhelmingly financed by foreign borrowing.

This increase in net indebtedness highlights a longstanding anomaly that now looks even more anomalous.  Even though the US has been a net debtor for over three decades, it has remained a positive net earner on capital income arising from all those international capital movements in and out of the US.  This is mostly measured by the primary income part of the international capital account, which last year was in surplus at a bit over $60 billion.  What is more curious is that this does not seem to have changed much at all over the last five years, some slight changes here and there, but mostly unchanged.  I confess to being mystified as to how an increase in net indebtedness by more than a third has led to essentially no change in the capital income payments situation.

 

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Remembering The Bombing Of Sterling Hall A Half Century Ago

Remembering The Bombing Of Sterling Hall A Half Century Ago

 A half-century ago at 3:42 AM on Monday, August 24, 1970, the New Year’s Gang set off an ammonium nitrate bomb in the back of a Ford pickup truck next to Sterling Hall on the University of Wisconsin-Madison campus.  They were aiming it at the Army Mathematics Research Center, then directed by my later father, J. Barkley Rosser [Sr.]. However, they were notoriously the Gang That Could Not Bomb Straight and hit the physics department instead, killing a physics post-doc, Robert Fassnacht, and injuring several other people, as well damaging buildings even blocks away, aside from the major damage to Sterling Hall itself.

Of the gang, three would eventually be apprehended and serve time in jail: the two Armstrong brothers from the east side of Madison, sons of an Oscar Mayer plant worker, Karl, the group’s leader who was caught first and served seven years, and his younger brother, Dwight, who served three years and is no longer alive, with David Fine of Baltimore also serving three years.  The fourth member, Leo Burt, remains at large.

Last October I wrote an 8-page essay reminiscing about the bombing that contains details both representing my peculiar perspective as well as some tidbits not widely public information.  I am willing to send it to anybody who requests it of me.  It contains six parts.

The first and longest part is about my relations with my parents, with a lot of information specifically about my late father.  We respected each other personally, but disagreed politically, although I never approved of violence and thus severely disapproved of the bombing, as well as some personal mistreatment my parents experienced.

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Whining About Lack Of Academic Leadership

Whining About Lack Of Academic Leadership

 At my so-called university named for the fourth president, the slave-owning “Father of the Constitution.”  No, I am not going to talk about the racism issue, which there is some effort to deal with on campus, notably in renaming three buildings named for Confederate figures, with our Provost originally from South Africa speaking reasonably intelligently about that issue.

No, we had our annual general faculty meeting to begin the year, classes supposedly beginning on Wednesday, supposedly a mixture of live and online, although likely to go totally online any minute as Eastern Mennonite University also in Harrisonburg just went totally online and delayed student move-in due to an outbreak of the virus, and Facebook is full of photos of our students partying without masks and packed together on balconies. We will not be far behind on that one.

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The UAE-Israel Deal

The UAE-Israel Deal

 Several days ago the United Arab Emirates (UAE) and Israel have agreed to have diplomatic relations, with this being the third Arab nation to officially recognize Israel, following Egypt in 1979 and Jordan in 1994. President Trump and his supporters are claiming that this is a great breakthrough to world peace, with Jared Kushner supposedly the key player on the American side.  But most observers think that this is an exaggeration, to put it mildly.  The standard summary is that this deal is a win-win-win-lose: a win for the US, UAE, and Israel, but a lose for the Palestinians.

Let me give the Trump people, including even the usually incompetent Jared Kushner, some credit.  They have managed to achieve only a handful of international agreements.  And given the long and difficult relationship between Israel and the Arab nations, it must be recognized that making such an agreement is difficult, so they deserve some congratulations, even if this is far less than what they claimed they were going to achieve, which was supposed to be a much broader agreement. But given the administration’s strong tilt to Israel from the beginning, supporting moving the US embassy to Jerusalem, recognizing the annexation of the Golan Heights, and supporting a plan that would countenance annexation of territories in the West Bank, it is unsurprising that the Palestinians simply withdrew from any negotiations being pushed by the Trump administration. There simply was not going to be that more general agreement.

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The End Of Special Fiscal Stimulus

The End Of Special Fiscal Stimulus

 A week ago a two week long negotiation between Dem Congress people, Nancy Pelosi from the House and Chuck Schumer from the Senate and Treasury Secretary Steve Mnuchin, who cut deals with Pelosi and Schumer three times earlier this year, but now Trump’s Chief of Staff, former Freedom Caucus leader in the House, Mark Meadows, notorious for only destroying deals and never making any. And in this case, all the reporting is that a week ago he “blew up” the negotiations, taking a hard line on orders from Trump. So, where are we at now?

For starters yesterday the Senate adjourned until after Labor Day. So, the market expectations that a deal will be cut soon are a joke. There will be no deal anytime soon, and maybe never. Many things have run out, whose impact has not fully arrived: end of extra unemployment, end of PPP assistance for small businesses, end of no evictions, and several other things.

Yes, there have been vague noises in the past week about restarting the negotiations, but they went nowhere.  Dems indicated that they were willing to compromise on many issues.  To pick a big symbolic one has to do with the total spending level.  Going into this the Dems were pushing $3+ trillion and the GOP was pushing $1 trillion. Gosh, looks like $ 2 trillion would be an obvious compromise, and the Dems have publicly indicated they would be willing to go to that, but, no, Meadows held the hard-line, and, along with some other issues, such as a roughly $800 billion difference over state and local aid, which is clearly the largest chunk of this stalemate. As it is, Meadows left town and the Senate has gone on leave until after Labor Day.  No deal.

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Donald J. Harris And His Daughter Kamala Harris

Donald J. Harris And His Daughter Kamala Harris

 Now the Democratic candidate for Vice President of the United States, a historic pick, no matter what one thinks of her, and I know quite a few people on the left and Dems more generally who are not fans of hers, although many observers think she may be the strongest VP candidate for Biden to beat Trump and Pence, and I am looking forward to her tearing current VP Pence to shreds in their debate.

Anyway, as I have noted a few times before here, I have come to realize how old I am because I know the parents of people running for president, and one of those happens to be the father of the now-selected Dem VP nominee, Kamala Harris, who was running for prez before she strategically pulled out early back in January, now an obviously smart move (and I do think she is plenty smart, whatever else one thinks of her).  I have never met her, but I know her dad, Don Harris quite well, although I have not seen him for some time now.

I first met Don in 1968 when he arrived at the University of Wisconsin-Madison where I was in my senior year as an undergrad. I took Development Economics from him, and he had a serious influence on my thinking.  He was the first faculty member I had encountered who took Marx seriously.  Like his friend Joan Robinson, he is not a Marxist, seeing too many problems with Marxian theory. But he took Marx seriously and had us read people who had Marxist perspectives on colonialism and imperialism and how these issues affected poorer less developed nations.

Later as a grad student there I would take Advanced Macroeconomic Theory from him, and he was even on my committee briefly before he left for Stanford in 1972, where he was on the faculty until retiring in 1998.  He is still alive, and I think 82 years old, or so.  He did a lot of advising for the UN as well as the government of his home nation, Jamaica.

 

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“Executive Order” Versus “Executive Action” Such As A Memorandum

“Executive Order” Versus “Executive Action” Such As A Memorandum

 Most of the news media has reported that President Donald J. Trump has signed four “executive orders” involving extending unemployment benefits at a $400 rate, deferring (or ending?) payroll taxes for Social Security (opposed by both parties in Congress), extending a ban on evicting renters, and extending student loan deferments.  An important detail not mentioned in most reports that of these three of them are not actual orders but rather memoranda, which can count as “actions,” that essentially implore others to do something that requires Congressional action in order to be done, basically the first two of these, or is already happening (deferment of student loans, although this is complicated).  Only one of them is an actual order that must be followed, the one regarding evicting renters, although all this order does is to make HUD “consider” extending the ban on evicting renters.  The order itself does not actually do it.  In short, these orders amount to a campaign list of wannabe actions, no actual real actions.

This is all obviously the brainchild of the incompetent and brainless Chief of Staff, Mark Meadows, who is apparently incapable of making any deals and totally focused on the reelection campaign.  So he “blew up” the two-week negotiations with Congressional leaders by most accounts by making rigid demands.  I am not going into details, but there were obvious compromises available, just to pick one on the total size of the relief package.  The Dems were proposing $3 trillion based on what the House passed months ago while the White House and some GOPs held to $1 trillion. Reportedly the Dems offered the obvious compromise of $2 trillion, but that was blocked by Meadows who simply made demands and warned if they were not accepted, Trump would issue “executive orders” to do what he wants.  But, as careful analysis shows, only one of these is ab actual order and even the one that is an order that only orders a department to consider doing something.

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