I like his proposal to rebuild the infrastructure of the USA, replace Obamacare with affordable, universal health care.
I even like his policy on trade: force the foreign sector to run deficits by imposing tariffs on them, while at the same time, ramping up domestic output and employment.
All good.
However, on some other economic things he's really misinformed.
Look at these comments...
“I think there are times for us to refinance debt with longer term, we owe so much money,” Trump said.
“I am the king of debt, I love playing with it, but now we’re talking about something very, very fragile,” he said.
“If we raise interest rates and if the dollar starts getting too strong, we’ll have some very major problems.”
“I have nothing against Janet Yellen whatsoever, she’s very capable person. But she’s not a Republican,” Trump said. “When her time is up I would most likely replace because of the fact it would be appropriate.
“I love the concept of a strong dollar, but when you look at the havoc that a strong dollar causes ... it sounds better to have a strong dollar than it actually is.”
So he thinks we borrow from someone and we have to "lock in" low rates, long term, to "save."
He thinks high rates makes the dollar strong. It's in fact the opposite.
He thinks it's better to have a weak currency. It's the opposite, at least if a nation desires a high standard of living.
He wants to politicize the Fed by putting a Republican even though he admits that Janet Yellen is capable and he likes her policies. He says, "It's just that, it wouldn't be appropriate."
As you can see, he's got some work to do. Especially on the refinancing the debt stuff. Hey, maybe he can just ask his new Republican Fed Chairman to set rates at zero all along the curve. There ya go!
8 comments:
"I like Trump." Then you've got a mission to bring him up to speed on how the money system really works!
He will be the next president. As long as he cares about the public purpose (however he defines it) his economic policy will be fine I think. He is not going to pay down the debt or do something extraordinarily stupid. Let's face it, Sanders had the best advisor from MMT point of view, yet he never announced that debt is not a problem. MMT is very marginal, you cannot expect ordinary people to have any clue yet the orinaries are your voters.
Try this, be a Mike Norman who is running for president on Trmp's platform. You know you are going to stay out of White House if you say something like: taxes don't fund governmment spending. what would you say about the debt instead?
Trump is a Tweeter: It's time for MMTers to chime in on Twitter when he makes these misstatements, but not with the usual nitpicking about the finer points like you find among seasoned MMTers, just simple basic principles like a country is not like state or individual, private debt is more dangerous than national debt, etc. Don't overwhelm him with jargon like MMTers usually do.
Bernie or Trump or whoever, if they get it, they don't even have to go all MMT on the country and explain operations. It goes like this…
Question:
"What do you say to people who say your policies will massively increase the national debt?"
Response:
"Look, people are so silly about this. The national debt hasn't been retired since Andrew Jackson in 1835. That's a hundred and eighty years ago. A hundred and eighty years! What the point? Country's don't pay back national debts. They always continue to grow into the future just like ours has for the last 180 years. It's not an issue. Anyone who says otherwise is lying to you."
Something like that opens up the can of worms without even saying a thing about MMT or currency issuers.
No. The National Debt represents the sum total of the balance of payments deficits that the US has accrued since Bretton Woods was abandoned. The goal is to return to a fixed exchange rate system that is acceptable to the major powers.
Trump is saying this because the national debt will ultimately be part of an IMF restructuring program and redenominated in Special Drawing Rights, which will be the reserve currency of the world's countries and what will be used for foreign exchange. The debt will be restructured in such a way that both China and America are happy and that currency parity is more or less achieved.
Bretton Woods is coming back. In time, forex trading will be banned just as it was prior to the Nixon Shock.
Trump is here on the stage to lead the way, fooling Nationalists into believing he is serving them when he is really completing the final step of a One World Government.
Mike,
You're poisoning your brand by publicly associating with the Donald. Stick with persuading your audience about the virtues of MMT. I also suggest that Tom stick with MMT and forget all the Russian stuff.
Richard
aI also suggest that Tom stick with MMT and forget all the Russian stuff.
Anyone who trades internationally that hasn't acted on the "Russian stuff" I have been putting up has left money on the table.
Goldman didn't miss it, btw.
Even if one only trades domestically in the US, it's pretty clear that weapons manufacturers are going to be doing very well as long as this situation lasts with Russia and China.
I leaving drawing the market conclusions to readers.
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