Trump picks Kudlow. I am going to make a fortune.

Tom put it correctly a short while ago when he called it a descent into farce.

Larry Kudlow is a moron, there's no two ways to put it.

From his goofy "Free market capitalism is the best path to prosperity," chants to his jingoistic, "King Dollar" slogan, the guy is a quack.

Kudlow got everything wrong in the crash.

1) He predicted hyperinflation from the Fed's monetary policies.
2) He said the dollar would crash. (Also from the Fed's policies.)
3) He said that interest rates were going to skyrocket because "creditors" wouldn't "lend" to us anymore.

I will say this about him, though...the guy seems to have nine lives. He was Chief Economist at Bear Stearns, but got fired because he was a coke addict.

Then he bounced around and eventually got hired by CNBC. They gave him a show which got canceled because of lousy ratings, but they kept him on and still paid him a 7-figure salary.

Now this.

The guy is a joke. He is supply-side zombie. A fool.

One thing I can tell you: he's going to pump up inflation like crazy with more tax cuts. And rates WILL skyrocket this time as the Fed reacts and then hikes and hikes and hikes.

Oh, Mr. King Dollar? He will end up crashing the dollar even faster than Trump has been able to do so far.

I'm gonna make a fortune.

Not a day goes by where Trump doesn't show that he's got no idea what he is doing.

Trump's economic plan is ridiculous

Trump's economic plan is ridiculous. Cut corporate taxes. Cut estate taxes. Moratorium on financial sector regulation. 

Well, of the $2.8 trillion in taxes that the Federal gov't collected last year, corporate taxes amounted to $380 billion or, 13%. Not a lot. Estate taxes were $1.4 billion. That's five-one-hundredths of one percent of the total taxes collected. Do these really need to be cut more? 

By far the largest share of taxes, $2.2 trillion, came from employment and withholding taxes. That's FICA, etc. That's paid by wage earners--working people. How about a tax cut for them, Mr. Trump? Like you promised when you first started your campaign. 

And as far as that moratorium on financial regulation, that's just what we need, right? Let the financial sector loose to play its casino games that almost destroyed the entire global economy. I am finding it harder and harder to support Trump. He's really stupid.

Paul Krugman — 'Breaking Greece'

It's political, not economic.

I would say rather, breaking Greek workers and setting an example for the EZ and world. Neoliberal globalization and all that.

Economist’s View
Paul Krugman: 'Breaking Greece'
Mark Thoma | Professor of Economics, University of Oregon

Brad Delong — Must-Read: Invictus: Red State, Blue State: Kansas and Washington

Kansas going down the tubes due to imposition of voodoo economics (ht Poppy Bush), while Seattle is prospering after raising the minimum wage. Explain that away, Greg Mankiw.

WCEG — The Equitablog
Must-Read: Invictus: Red State, Blue State: Kansas and Washington
Brad Delong

Matias Vernengo — World Bank thinks contraction in developing countries is good

More neoliberal nonsense from the World Bank.

Potential GDP, which given Okun's Law imply a certain level of unemployment and connect the concept with the other neoclassical standard assumption of a natural rate of unemployment, are quite low in many developing countries if you believe the World Bank.
These are, in the World Bank's view, of course, supply side constraints that are not affected in any way by demand forces, even if the evidence in favor of the accelerator, which suggests that capacity adjusts to demand, is overwhelming.

Naked Keynesianism
World Bank thinks contraction in developing countries is good\Naked Keynesianism
Matias Vernengo | Associate Professor of Economics, University of Utah

Marshall Auerback, Stephanie Kelton and L. Randall Wray — A Plan for All the Detroits Out There

MMT to the rescue. Pass it on.

Note that this plan is based on job guarantee but not the MMT JG in that compensation would be indexed so that the real wage would remain constant against inflation.

New Economic Perspectives
A Plan for All the Detroits Out There
Marshall Auerback, Stephanie Kelton and L. Randall Wray

Lars Syll — Is employment all a question of incentives?

A couple of years ago – in connection with being awarded The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for 2011 – Thomas Sargent, in an interview with Swedish Television, declared that workers ought to be prepared for having low unemployment compensations in order to get the right incentives to search for jobs.This old mercantilist idea has very little support in research, since it has turned out to be exceedingly difficult to really get clear cut results of causality on the issue....

What is needed more than anything else in these times is stimulus and economic policies that increase effective demand.

On a societal level wage cuts only increase the risk of more people getting unemployed. To think that that one can solve economic crisis in this way is a turning back to those faulty economic theories and policies that John Maynard Keynes conlusively showed to be wrong already in the 1930s. It was theories and policies that made millions of people all over the world unemployed.

Lars P. Syll's Blog
Is employment all a question of incentives?
Lars P. Syll | Profess, Malmo University

Bill Mitchell — Unemployment and inflation – Part 1

Tomorrow the Labour Force data comes out in Australia and I will obviously be analysing that. Regular readers will note that of late I have been using Thursday and Friday to update you on the progress of our Modern Monetary Theory (MMT) text-book, which I am writing in liaison with my colleague and friend, Randy Wray. We are trying to get it completed for use in second-semester 2013 and so I am spending more time on it to meet that expectation. So today – it is text-book day given tomorrow we will be talking about how bad the labour market is (unless I am pleasantly surprised and the data is better than I expect). Today, I am moving on to develop the material on unemployment and inflation.



Chapter 12 – Unemployment and Inflation

12.1 Introduction

[Note: the Chapter order has been a juggled a little. This was formerly going to be Chapter 11 but we will probably take the Keynes and the Classics material out of this chapter and run it as a stand-alone Chapter 11 or even 10 - decisions are still to be taken]

In this Chapter, we will introduce the concept of inflation and discuss various approaches that seek to explain it. We will differentiate between inflationary pressures that arise from nominal demand (spending) growth outstripping the real capacity of the economy to react to it with output responses and, inflation that may arise from supply shocks – such as a rise in an imported raw material (for example, oil).

The first type of inflation has been termed demand-pull because excess nominal demand (relative to real output capacity) pulls up the price level. Sometimes you will encounter the expression “too much money chasing to few goods” as a crude simplification of this type of inflation.

The public debate about whether expansionary fiscal policy causes inflation, which we will deal with specifically in Chapters 13 and 19, are also predicated on the claims that fiscal stimulus runs the danger of causing the economy to overheat.

The second type of inflation is termed cost-push inflation because it originates from the costs of production increasing and pushing up the price level. We will learn that the mechanisms through which the supply shocks manifest as inflation are different to those that operate under demand-pull inflation.

However, both forms of inflation can be understood within a general framework whereby different claimants on real GDP and national income struggle to assert their aspirations. In this sense, we cast inflation within the general distributional struggle or conflict, that is elemental in capitalist economies, between workers seeking to maintain and achieve a higher real wage and firms seeking to maintain and expand their profit rate.

In other words, we situate the problem of inflation as being intrinsic to the conflictual relations between workers and capital, which are mediated by government. This mediation varies over the course of history and in more recent times has been biased towards protecting the interests of capital, particularly financial capital, at the expense of workers’ real wage aspirations. We will consider the consequences of that policy stance in this Chapter.

Bill Mitchell — billy blog
Unemployment and inflation – Part 1
Bill Mitchell

Nick Rowe — Living in a demand-side world

Nick does some autobiography.

Read it at Worthwhile Canadian Initiative
Living in a demand-side world
by Nick Rowe | Professor of Economics, Carleton University, Ottawa