Трамповская неопределённость

Jan 9, 2017 Joseph E. Stiglitz

НЬЮ-ЙОРК – Каждый январь я пытаюсь сделать прогноз на предстоящий год. Известно, что экономические прогнозы – трудная задача, но, несмотря на справедливость желания Гарри Трумэна найти «одностороннего» экономиста (который не мог бы сказать «с другой стороны»), мой опыт в этой сфере вызывает доверие.

В предыдущие годы я верно предсказывал, что из-за отсутствия мощных бюджетных стимулов (которые не ожидались ни в Европе, ни в США) восстановление после Великой рецессии 2008 года окажется медленным. Составляя эти прогнозы, я больше полагался на анализ базовых экономических сил, чем на сложные эконометрические модели.

Например, в начале 2016 года казалось очевидным, что с дефицитом совокупного глобального спроса, который наблюдался на протяжении последних нескольких лет, вряд ли произойдут сильные изменения. Исходя из этого, я полагал, что те, кто прогнозируют более сильные темпы восстановления экономики, смотрят на мир через розовые очки. События в экономике развивались во многом именно так, как и я ожидал.

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Joseph E. Stiglitz

Writing for PS since 2001
308 Commentaries

Joseph E. Stiglitz, a Nobel laureate in economics and University Professor at Columbia University, is a former chief economist of the World Bank (1997-2000), chair of the US President’s Council of Economic Advisers, and co-chair of the High-Level Commission on Carbon Prices. He is a member of the Independent Commission for the Reform of International Corporate Taxation and was lead author of the 1995 IPCC Climate Assessment.

The Great Malaise Continues PS OnPoint
James Gourley/ZumaPress
Subscriber Exclusive

The Great Malaise Continues

Joseph E. Stiglitz traces the roots of economic stagnation in much of the world – and sees little improvement ahead.

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Trump’s Gathering Trade War Economics
Johannes Eisele/AFP/Getty Images

Trump’s Gathering Trade War

Stephen S. Roach foresees disaster in the incoming administration's evident intention to squeeze China.

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0 Comments on this paragraph, 53 Comments on this article

Francesco de Agazio Jun 19, 2017

I know could be utopic in view of reality and trade cruelty, at the end of accounts and numbers, giving life or death to many people, many kind of ethinicity groups, aroud the world, especially the most exploited, not only in Africa, as well as all over the world, where humanity is in need. A lack of common emotions coming from old instinct and inspirations, as the one, illustred on your precious words and thinking, Mr. Stiglitz; homogenizing realities among many countries. Also due to the political status and necessity of predominace of each representant in office, that should be for the time, or others time in case of next election. It will depend on the Job, understood as ammount od cumulation and aggregation, what will create dependence over expansion based on consumption, even of goods producted or transformed, as infrastructures, or services on their total motion.

We gained rooted definition on that kind of mechanisms, dynamisms, when we affirm a product of reality: need war on trade in order to become active, motre productive and many others redundant terms in definition of the needing of War, to move it.

While we lost another kind of views over finantial economies, that we turned utopic and hipocrital in recent days. Sharing knowledge in order to alla Human Kjnd benefit of it. How, sharing overricheness, super wealth, that alone is depressed, unable to live in a sustainable way, even can reach, will wake up bad emotions, from bad behaviours, moved and feeded on watching alien super wealth as overrichness, redundantely justified by the need in cumulation.

Prevision are almost predictable in general view and general economic prospect, because we never think about good manner and good behaviour coming from many leaders at same time.

Mr. Trump, now, can represent the right person, the right human to put in motion a different kind of a redundant 'collaborationship' between different countriesm ethinicities, and tradition, under a common think: wanting to produce serving need of our people, as want to serve the need of people of other's countries.

Avoiding war situation and war table, switching with common table and common job, while working on few concern in the world, considering deep truth and necessity, Middle East, Africa, China and missing (?) lands, Usa and the missed word with Mexico. Iran and the closed doors on the planet and the whole on what concern right of expression among male, female, differents. We could make a huge deal, if could talk as humans on the verge of same goal, be conscious toward a form of collective superconsciusness.
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Quenby Wilcox Jan 25, 2017

As always Dr. Stiglitz is very insightful. However, he is wrong that no one can predict what Trump will do as President. I know EXACTLY what he will do, and that is what scares me so much. Trump's threat to sue his victims is VERY, VERY REAL! If Trump's administration is not stopped the USA will descend into a Civil War, and much, much blood will be shed.
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ian greenwood Jan 16, 2017

@richard re Trumpian SEE FOOTNOTE BELOW
looks like an error here : "Is it too much to consider that foreign trade favors the exporting country, certainly, more than the consumer?" Yes on terms of Jobs but not in terms of False value on your GDP.. which is where the economics is wrong..
Clearly the Wests resale of goods 10 times price paid in "poor" countries is contra to Footnote comment by Richard S Stone (see X Below) US/UK/EU exported the jobs and FOUND the resale profits and bank money stoking their "economies" & GDP. It could not continue - WHAT COULD tRUMP DO?. It is now a clear 10 years since Stern Review's Economics of Climate Change put my stuff on about Transition (will try to paste link and later the charts here..)

http://webarchive.nationalarchives.gov.uk/20081013130719/http://www.hm-treasury.gov.uk/d/IAN_1.p

please email back for charts etc what Lord Giddens said was Interesting Bank of England Said was Creative:

Ian.greenwood@phonecoop.coop

(charts etc, bank adjustment maybe of interest to the FED)
Otherwise with ice sheets drifting away from Antarctica. what is going to charge the thick ice for summer meltwater on mountains when all this ice is gone unless Trumpian policies change their tune?? I fear for your reservoirs and hydroelectric power as well as the longevity of your gas. a lot of climate change is irreversible

"Meanwhile, would it be so bad to put some restraints [better would surely be better directed austerity and ET tax for investments with DIRECTED AND DISCOUNTED-INTEREST bank MONEY for ECO-FIT]

on outsourcing and foreign trade?" [Using the Market properly directed would need about a quarter of the current academia and staff?]
"The general economic idea in favor of foreign trade seems to be that some "invisible hand" is going to improve the lot of American workers if we ship "work" to China (and some other places) and buy both goods and services from foreign workers. Denying this invisible hand approach brings cries of "Mercantilism" from many. A thoughtful reading Adam Smith would lead to the contrary" conclusion.

The problem with the invisible hand approach is that it may work well enough, but the effects are reflective of fairly well thought out policies. This present situation, meaning here and now, we can see that the current foreign trade policies appear to benefit certain elements of the country more than others, and certainly the rich more than the poor, and one side slightly more than the other.

X X Is it too much to consider that foreign trade favors the exporting country, certainly, more than the consumer? XX see note above contra to this - it is currently FALSE VALUE without some CONSTRUCTIVE INTERVENTION
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Janos Nagy Jan 16, 2017

Absence of stronger fiscal stimulus?
How 10 trillions deficit spending in 8 years for fiscal stimulus sounds.
How much more stimulus should have been enough to have a faster recovery?
By the way the usa economic supports about 40 million jobs in China.
The Chinese economic support only 1 million jobs in the usa
- Janos Nagy Jan 21, 2017
  
  To Jose araujo
  Actually any spending over the amount what the government collected by taxation is deficit spending.
  Deficit spending is eqval to stimulus spending.
  Just because it was not spent on roads or others but public service mostly welfare with a job (bublic service job) or just welfare staying home it is a stimulus money.
  One trillion a year deficit spending is giving 20 million people 50 thousand dollars a year income.
  But of course when you have a job deficit of 40 millions with other countries the deficit spending of a trillion is not going to fill the hole.
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- Jose araujo Jan 20, 2017
  
  Contrary to public belief, there wasn't a strong increase on public spending, nothing simmilar to a fiscal stimulus was done under Obama's administration.
  
  Public spending is destined to increase, since the demand for public goods (education, health and security) increases with social development.
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- Mike Holly Jan 16, 2017
  
  But average job pays $60,000 in USA compared to only $5000 on China. Using trade barriers to take some low-technology manufacturing (e.g., I-phones) back from developing countries (e.g. China) would offer mostly low-paying tedious jobs (at about $12,000 per year) and higher prices for consumers (at about $2000 per Iphone).
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Bruno Valat Jan 16, 2017

Remember : Hillary won ; Remember : Hillary won.... Always remember : Hillary WON ! Change the way use you to elect your president, now !
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dante crisante Jan 16, 2017

And so it begins the era of economic by 140 character!!

As the World grows in complexities, the most powerful nation in the Universe has decided to wind back the clock and facile solutions becomes the order of the day. Let's build a huge wall to keep Mexican out, let's give more money to the wealthiest so that they can employ more illegal migrants to cook and clean the pool for them, and let's promise angry white men that a person who has elevated to an art form avoiding taxes and looking supreme that he will do everything he can to make them happy again.

Is a greater fool the one that promises knowing he won't keep his promises or the idiots that believe the promises?

We live in interesting time, and Trump hopes that he can muddle through for the first 2 years by which time he wouldn't care less if those angry men are satisfied or not since he knows they have a very short attention span, just like him, i.e. acting like 3 year olds that stamp their feet when it doesn't go their way, but once they get the toy wouldn't know what to do with it.

I'm sorry, I didn't mean to denigrate 3 years olds by comparing them to the President elect Trump.
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Bernard Chalecki Jan 16, 2017

We have done an excellent job of industrializing China. If hostilities develop, they will encompass more than economics. It is almost certain that Taiwan will fall, along with a general re-alignment of loyalties and business partners. China is a long distance from us. Australia is under no illusions.
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Ted Carmichael Jan 16, 2017

In last year's "forecast", Stiglitz said, "Optimists say 2016 will be better than 2015. That may turn out to be true, but only imperceptibly so." That was his forecast. Wow! And he begins by congratulating himself for such "correct" and "clear" foresight. This year he provides this advice: "the waters will almost certainly be choppy". Again, Wow! And these forecasts were provided for free. I don't know where else one could gain such valuable guidance about the future!
- Lester Soss Jan 20, 2017
  
  An analogy might help Mr. Carmichael better understand the point that Professor Stiglitz was making. You have a choice between two Uber drivers who will take you the 60 miles on the coastal highway from Monterrey to San Simeon . This is a particularly treacherous and dangerous highway of hairpin turns, narrow lanes, and yawning cliffs immediately bordering the road. A slight error in driving results in a catastrophe. One driver guarantees that he will do the trip in 45 minutes. The second tells you he will do it in 2 hours. Which would you choose?
  
  A former friend (he voted for Trump) told me that in terms of investing, that it didn't matter what Trump and the congressional representatives from Koch Industries and Exon Mobile did in congress. "Just pick a good company", he said. I responded by saying that was equivalent to trying to decide whether to invest in Messerschmitt or I.G.Farben in Germany in 1938.
  
  In other words, politics matter even if you are only concerned with your own investments. If you think this administration and congress are going to do such a bang up job, invest accordingly. Two caveats: 1987, and 2008.
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Richard S. Stone Jan 16, 2017

I am not a Trump supporter, but I think that the Obama administration was too reactive rather than aggressive. Part of that was inevitable, because the Republicans (voters and office holders) were incensed that a Black Man was President. For most of them the only thing worse than a Black male President would be a woman president. HRC was not only flawed, she was impossible. And the HRC failure to address the Rust Belt States directly was a huge failure, one she could have addressed and resolved without much cost.

Having unexpectedly won the election Trump now has the problem of being a nominal Republican with a true Republican Congress, an only slightly better situation than Obama had. Not only that, he is facing an anti-deficit Congress, with primitive ideas about growth.

Meanwhile, would it be so bad to put some restraints on outsourcing and foreign trade? The general economic idea in favor of foreign trade seems to be that some "invisible hand" is going to improve the lot of American workers if we ship "work" to China (and some other places) and buy both goods and services from foreign workers. Denying this invisible hand approach brings cries of "Mercantilism" from many. A thoughtful reading Adam Smith would lead to the contrary conclusion.

The problem with the invisible hand approach is that it may work well enough, but the effects are reflective of fairly well thought out policies. This present situation, meaning here and now, we can see that the current foreign trade policies appear to benefit certain elements of the country more than others, and certainly the rich more than the poor, and one side slightly more than the other.

Is it too much to consider that foreign trade favors the exporting country, certainly, more than the consumer? Would it be so bad if, when foreign trade agreements are being considered, that some discussion has to focus on exactly how the American worker and consumer are going to benefit? It simply does not do much good to say prices will be lower if the ability to by the goods is also greatly reduced. Why should we (or really either side of any foreign trade agreement) depend on an invisible hand? Hoping for a benefit is not much better that dreaming, and no substitute for planning.

I do not see it as reactionary or mean-spirited to ask precisely how each and any foreign trade agreement helps America and the American workers. Talk about it, think about it, and deal with the projected outcome, instead of counting on unseen (“invisible??”) forces to help out. Counting on such unseen forces smacks of religion and on a primitive sort of Darwinism, one that has nothing to do with science. Equating such foreign trade with national growth seems simple enough, but is it really the cause of such growth?

The problem I have with this is that I wonder if Trump understands much of this, or if he truly cares, and if he is capable of actually making these issues part of the real discussion. I tend not to believe that the current unemployment rate is 4.8% precisely because at 5% there should be serious wage inflation, and there is not. We will know that we are truly at 5% when wage inflation is a problem. And foreign trade agreements that ship work and services do not help those unemployed workers.
- Curtis Carpenter Jan 20, 2017
  
  If the American people wanted a more aggressive president, they would not have saddled Obama with a Republican controlled congress in 2010.
  
  Too many Americans seem to misunderstand the separation of powers. Perhaps they will learn as Mr. Trump demonstrates, with the collusion of his party's control of congress and (soon) the supreme court, what happens in the absence of that separation.
  
  But then. of course, it will be too late.
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brian corbett Jan 15, 2017

As the author points out trickle down economics has not worked, add globalization to the failed side of the ledger, which is why Trump is getting his chance. At the same time, lowering corporate taxes and starting a trade war is just adding more failure. The holders of riches are sitting on the biggest cash pile in history. Isn't there another way to redistribute the wealth?
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William Cash Jan 15, 2017

The biggest danger of Trump is that he will be carrying out Putin's orders and from an alliance with Putin which would be the most dangerous alliance since the 30s with Germany, Italy and Japan.
It would unite the 2 most powerful countries in the world and they could intimidate everyone. Both have talked about undermining NATO. Putin played a long shot and it came in.
If Trump isn't compromised, the burden is on him to release his tax returns. Until he does that, he is guilty
- Curtis Carpenter Jan 20, 2017
  
  No, the biggest danger of Trump is that he is clueless about how the Great Powers game is played, while he forces the United States into that game with seasoned masters of it like Putin and Xi.
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- Mike Holly Jan 15, 2017
  
  Even if the Russians don't have anything on Trump, fascists like to work together.
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Bob Aceti Jan 15, 2017

In a post-truth world facts seem to matter less when P.T. Barnum is barking that a sucker is born every day. Death is a solution. It removes losers from the economic playing while the slow rising tide lifts boats with strong water-sealed hulls. That is the perspective of the Trump regime. As long as he goes unchallenged by the Fourth Estate that has withdrawn into an echo-chamber with liberal acolytes that haven't yet realized they were check-mated by the Constitutional electoral college supposed 'check and balance'. Eventually, if the economy performs well, Trump will take full credit; and if the economy doesn't perform well, Trump will blame Obama and Clinton supporters. That is the bankable 2017 forecast that yo can bet on. In the meantime, the GOP will hold their collective noses and go with the flow as long as their President throws them a few bones and peanuts while they stage-craft new fiscal policies: those based on 'deals' cut between Trump and global authoritarians and 'show-me-the-money' billionaires.
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Patrick Newman Jan 15, 2017

How long does China need the USA market - five years, ten years? With a 1.4bn population China is a 'world' in itself and SE Asia is a growing market. China's leaders are keen to develop the domestic high spending consumer economy. Will a Chinese corporation eventually take Apple over?
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Kuldip Singh Jan 15, 2017

The main reason Trump triumphed is, as Van Jones stated - because of a white lash.
Trump may be a disrupter for the economy. Whether this leads to more jobs or higher GDP remains to be seen.
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Mike Holly Jan 15, 2017

Clearly, Trump is following the script laid out by Adolph Hitler and other fascists. They support “state monopoly capitalism” led by a strong leader directing privatization, monopolization, subsidization and control of large private companies led by favored businessmen that are obedient to the leader's directives for investment, production and allocation of resources. Fascism has also relied on deficit (infrastructure) spending, high employment but low wages, trade barriers, nationalization of industries and unions, militarization and conquest. Using trade barriers to take some low-technology manufacturing back from developing countries will offer mostly low-paying tedious jobs. and higher prices for consumers, as will restricting immigration.
- Mike Holly Jan 20, 2017
  
  In my opinion, corporatism is the first stage of fascism. Today’s corporatist system, first established under George W Bush, has involved a merger between business and state interest groups to establish economic policy. Trump will take the nation to full blown fascism which is led by a strong leader.
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- Jose araujo Jan 20, 2017
  
  It's called Corporative Statism or State Corporativism. Plutocracy has allways been the end game for most conservatives.
  
  And many still think they voted against the elites....
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Robert O'Regan Jan 15, 2017

Stiglitz et al, are predictably confused by a multi-armed economic approach; they are checking the implications of each arm
and, if I may, the train has left them in the station. Wait for the next learned articles on "The Evil of the Multi-armed Economist"
and the raft of self-awards, like the Nobel, etc prizes.
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Per Kurowski Jan 15, 2017

Are we talking about Trumpian Uncertainty or Trumpian Risks? There is a lot of confusion out there.

Bank regulators developed their risk weighted capital requirements based on the ex ante perceived risks, which wer already cleared for by bankers, and so these risks are excessively considered. Any risk even if perfectly perceived causes the wrong actions if excessively considered.

Bank capital should be there to cover for uncertainties… like the possibility of a Trump, or the possibility that bank regulators themselves, have no idea about what they’re doing.
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Ted Peters Jan 15, 2017

I am shocked to find myself agreeing with the good doctor Stiglitz, but on the issue of a trade war I am also very anxious about Trump's rhetoric on this issue. Rather that block importation, we need to boost our own competitive capacity by lowering corporate taxes and rolling back burdensome regulations. The alternative is to increase the economic gap between our coastal eiltes and our heartand middle class.
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James Ross Jan 14, 2017

Trump won not on his merits but on the overwhelming negative ratings of his opponent. Anyone could have beaten HC.
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Enrique Woll Battistini Jan 13, 2017

Trump believes in Trump; but does Trump understand Trump?
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ian Inkster Jan 12, 2017

Ian Inkster
ps may I with apologies alter a key passage that reads as nonsense, in my previous comment - therein I wrote that 'the reform has NOT occurred in a regime of right-wing aggressive isolationism' when of course the opposite was meant: the reform has indeed occurred in precisely that regime!
Ian Inkster
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ian Inkster Jan 12, 2017

I think it is quite right to focus in on protectionism and possible trade war at this moment. Joseph Stiglitz is on the ball. It’s important because -
1. i’ts one of the marginally more consistent aspects of Trumpian rhetoric;
2. it belongs equally to politics and economic, it is indeed a focus for the Trumpian political economy, in so far such a weird creature exists;
3. i’ts being mounted in a phase of continued global recession with the likely winners and speedier growers lying outside of the Atlantic economy;
4.. i'ts being mounted in a phase of continued global recession with the likely winners and speedier growers lying outside of the Atlantic economy;
5. finally, and perhaps strangely, in a certain more coherent context it could have made some historical sense.
As I and others have argued for some few years now, the ability of the US to take in such a huge variety and mass value of imports from so many developing systems, has been problematic from its very start - say from around the Nixon Shock of 1971. This secular ability to import at great cost was of course offset from the US poitical economy point of view by certain advantages - importing from small systems created alliances in the Cold War world, whilst adding key raw material to the US technological system; it provided cheap consumer goods to US consumers helping to keep down wages and inflation more generally; it prompted movements of US investment to trading partners; it prompted investments in high-tech exports to set against the import bills.
Whatever the balance of effects for the US, this secular large-scale importation at high trade debit was one major component of the technology transfers and development effects that promoted fast growth in the Asian NICs and China, and to an extent throughout the global system, part of the failure of the USSR around 1989, and possibly a requisite of present development in such systems as India.

Some form of protectionism or trade regime modification was probably in the offing anyway, especially with the continuation of recession in the older economies. The complete and unforeseen disaster has been that the reform has not occurred in a regime of right-wing aggressive isolationism and modified neo-liberalism, rather than as part of a more truly liberal reform package of welfare expenditure, military drawback, and attempts at regional and city regeneration.
Secondly, it has been mounted as a direct attack on China, which is by no means a clever way of doing global politics. Just when the Chinese economy is settling into a stable character of more moderate growth, progressive structural change and industrial devolution (movement of growth away from the southern seaboard areas towards the centre will aid the environment of the cities, scooping up cheaper labour and raw materials on the way in exchange for the costs of new infrastructure), so too Trumpian philosophy decides to use trade restriction as a crude tool of geopolitical suasion! This coincides with a period when China might have expected to be both seeking more areas of potential soft power through commercial alliances and liberalism as well as more liberal political projects in the inner hinterlands, possibly led by the huge funds locked up in the coffers of local governments and their banks.

So, Trump is a complete disaster in global terms and for reasons that are not presently at the centre of the media furore surrounding him! It really is a bit depressing. True liberals who might have had some case in addressing trade matters are now scared right off by a fear of being thought allied to other elements of the Trumpian world – walls against Mexico, an insular anti-immigration and incipient racism, utter chauvinism, the strangest relations with Russia’s Putin (that is, Russia’s Trump), all elements which even singly could not have been imagined even this time last year. It bodes badly for any thought that new coalitions of interest might act as bulwarks against the onward movements of Trumpism.
Ian Inkster, SOAS, London January 2017.
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Wayne Davidson Jan 10, 2017

Sir, the very laws of economics you adhere to and that were exploited by profligate Governments and Corporations have led us to this very point in history,
to quote from your article;
"striking data showing that average life expectancy in the US was on the decline."
"with the incomes of the bottom 90% having stagnated for close to a third of a century"
These two points alone are an axiom that demands we "repeal" the ordinary laws of economics.
The 2008 Great Recession and its predictability was beyond the preview of economists and by default the US and European governments because economics has never had observable or predictable outcomes.
Economists and governments response to the GFC was to apply stimulus packages based on Keynesian economic theory, QE and zero interest rates in an attempt to increase employment and GDP.
This economic theory was so successful, Global inequality now equates to 50% of the worlds wealth now in residing in 1% of the population.
Sir, Donald J Trump is the outlier not in the sense that most pundits pontificate about, but an outlier with the potential to change the political and economic history of the planet. As President of the United States he has the potential to bring down the Ponzi scheme that is the world economy.

"Bubbles are a phenomenon generally tied to speculative investing. But in a larger sense our entire economy has assumed the characteristics of bubble or a Ponzi scheme. That is because it has come to depend upon staggering and continually expanding amounts of debt: government and private debt; debt in the trillions, and tens of trillions, and hundreds of trillions of dollars; debt that in the aggregate, has grown by 500 percent since 1980; debt that has grown faster than economic output ( measured in GDP ) in all but one of the past 50 years; debt that can never be repaid; debt that represents claims on quantiles of labor and resources that simply do not exist". (The End of Growth.
Richard Heinberg ).
- rob denehy Jan 11, 2017
  
  Very well put. That leaves uncertainty squared for investors. Just how much can the system change without collapse - and what does it collapse into?
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- yw yap Jan 11, 2017
  
  Factual (y)
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- M M Jan 10, 2017
  
  Wayne, I enjoyed very much reading your commentary. Well said. Thank you.
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G. A. Pakela Jan 9, 2017

Trump will likely use existing mechanism to discipline trade such as anti-dumping measures for Chinese steel exports, based on the fact that China subsidizes the continuing existence of their unprofitable overcapacity in steel. It also appears like there will be a tax on imported goods that will not technically be a tariff but more similar to the treatment of imports and exports in countries that rely on a VAT. Pure free-traders will tell you that it is a wonderful thing to give someone paper money in exchange for real goods. However, economics lacks the analytical capability to predict the impact of a dominant country like China that follows a mercantilist policy for decades on end. Small U.S. companies, U.S. steel producers and blue collar workers have paid the price for this imbalance. In the meantime, Chinese people cannot even breath the air because their leadership refuses to invest in U.S. sourced scrubbing and mercury-reducing technology. While there are no specific predictions in Dr. Stiglitz's post, I predict that economic growth will be higher than the past eight years. This will be due to investment-friendly tax cuts that will reduce the after-tax cost of capital will increase U.S. investment, job creation and growth over the next four years, and the infrastructure investments make up for the reduction in housing-related construction employment.
- Curtis Carpenter Jan 9, 2017
  
  If the growth rate accelerates, it will go hand in hand with a further ballooning of the national debt. We've seen the phenomenon before, when Ronald Reagan chased the fantasy of supply side, "trickle down" economics. Trump and his friends will benefit handsomely, and leave the rest of us to pick up the bill later.
  
  You might recognize the pattern with his ridiculous "wall" -- we'll all pay for it now, while he claims political rewards and offers us nothing but the promise that Mexico will pay for it "later." Or similarly, how he and his party will repeal the ACA now, and offer nothing but the promise that they will replace it "later." "Later" always seems to come right at the end of a Republican administration.
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thomas greaves Jan 9, 2017

Stiglitz speaks and it's always worth listening. However, it is difficult to discern quite what a reader of this piece is listening to, other than reasons for not knowing what the future holds. Economics is not a science, but a study of behavioural tendencies; and in the present climate of political chaos there is absolutely now way of predicting anything about how a population will act. Thus, any economist who pretends to know or predicts in this climate is a fool. I guess this shows that Stiglitz' final sentence is aptly stated.
- Alexandr Rubtsov Jan 11, 2017
  
  Экономика - наука. Но серьёзная наука в закрытом доступе, а в открытом "эксперты" типа Стиглица, Рубини и т.д.
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Ariel Tejera Jan 9, 2017

Trump may be in a complex trap. Increasing world uncertainty, as part of his overall strategy, will cause capital flows to migrate, paradoxically, to the U.S. This, along with the expected increase in Treasury inter-bank rates, will strengthen the dollar, and hence reduce the competitiveness of U.S. exports.
The immanent problem is the converse that Germany faces: to export more, you need buyers.
- Kerry Pechter Jan 11, 2017
  
  Please don't allude to a Trump "strategy." He has no strategy. He didn't even prepare an acceptance speech. This is an ad hoc, ad lib administration. His appointees and Republican legislators don't believe in the concept of "public policy." They don't want government to make policy at all. They just want to milk the government while telling the rest of us (the lie) that the government is "broke." And please, less handwringing about the debt. It was described as fatal and unsustainable 30 years ago, when it was much smaller. And here we are, with rich people richer than ever, the dollar strong and smartphones in every hand. The government is the cashier at the chips window of the global casino, and it never runs out of chips. Money is a societal convention, open to abuse and manipulation of course, but infinitely flexible. There's a lot of debt because all money is ultimately debt. There's more debt because the population of world doubled in the last 30 years. But it takes a smarter person than Trump (and than Bill Clinton, a much smarter man) not to screw all this up... it requires forbearance and sophistication. Which Trump doesn't have.
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- Ariel Tejera Jan 9, 2017
  
  Significant increase in public spending, and lower taxes, which have been announced, will counteract, pulling down the dollar. But their cost will quickly weight on the strategy as public debt interest soars.
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Jerry F. Hough Jan 9, 2017

For decades, the last two decades at Brookings, I was a specialist on the Soviet political and economic system and the last 15 years I have taught the US presidency at Duke. In 1993 Stiglitz became my hero in his battle with Summers over the latter's Hayekian policy in Russia, which Stiglitz called pure ideology. Correct. Then Summers continued his Hayekian policy in the Clinton deregulation and as Obama's czar.

Last year I supported Trump because of his left-wing populism and Clinton's Eisenhower-Goldwater policy. He is a toss of the dice, but I thought he basically agreed with Stiglitz on foreign economic policy. Now Stiglitz sounds like Summers and Krugman, although without the latter's hysteria. What is going on?

In fact, no one knows what Trump will do. So far as I can tell, his foreign economic policy is based on sophisticated changes in the corporate tax system to bring outsourcing under control and an attempt to correct the main infiinte supply of labor produced by it and our immigration policy. He obviously is not going to deport large numbers of people or limit himself to a wall I assume he will severely limit incoming immigration through needed, enforceable reforms and get his 60 Senators by combining it with amnesty.

Trump's economic policy seems sophisticated Keynesianism like Reagan's that increases the deficit. How in heavens name do you get a fiscal stimulus that both parties have opposed for 30 years? It must be through tax cuts.

But a tax cut is especially importrant now. The zero interest rate was explicitly trickle down--asset stimulus. Increase the market, increase the spending of the rich--the top 20% who own stocks--and they will increase the demand among the 80%. It failed. It distorted the economy and benefitted only the market. Interest rates need to be normalized, but Krugman is right that that may negatively affect growth. So you have to keep demand high on the fiscal side just to compensate and tax cuts are the only way to increase the deficit.

Trump speaks symbolically and he told the NYT editors that he negotiates by beginning with extreme positions and moves to a compromise. It is for Democratic economists like Stiglitz to come up with the alternatives that Democrats propose. We have to move towards a VAT and that is what "flat tax" means politically. The only good idea I have read comes from Ted Cruz--abolish the Social Security tax and replace it with a VAT. Ryan's replacement of things like food stamps with an increase in negative income taxes is supported by Reich. Their levels are too low but they can be forced up with the 60 vote requirement.

The abolition of Obamacare with a one-two year time postponement is brilliant. It forces both parties to come up with a good program or be destroyed in 2018. Mikulski, Harkins, and Schumer all said that Summers-Citibank-Obama made a terrible mistake in 2009 (with no health care until 2014, not in 2009-2010 when people were suffering and we needed demand) when the Democrats had the vote for a single payer sytem because they didn't want the stimulus-deficit.

The main reason to support Trump in 2016 was that his victory should open up the 2020 politics in a left-wing party that is with Eisenhower, if not Goldwater. But that means it must get over the crazy McCarthyism against the status quo Putin to shift the blame from its Goldwater activist nominee. Those like Stiglitz must start coming up with fresh tax ideas like Cruz and Ryan (both born in 1970, not the 1940s). Ryan, it should be remembered, voted for Bush's great prescription drug program although it expanded socialist Medicare unfunded.

My low-medium confidence feeling is that Trump is really serious about peeling off minorities who have been given only symbolic things by the Democrats--and doing it with economic policies.

My high confidence feeling is that for the first time since LBJ we have a President who really knows how to use power. The ethics vote in the House and the replacement of the Ohio Republican chairman are only a foretaste. Trump is perfectly capable of going into the Republican primaries in 2018 and campaigning against those who oppose him--and winning. He is going to transform the Republican Party, and the Democrats better adjust or their party is going to start losing its minority base as well as the whites and go the way of the Whigs.

But those like Stiglitz are very lucky. Instead of a status quo President who will never admit a mistake, they have a President who just might transform a party like FDR did and an opposition party that certainly reverse the extreme move well to the right Nixon made by Carter and Bill Clinton. (Warren was and is a Nixon-like Republican. Both parties need a Stiglitz with new ideas, not one who moans about the 1980s and the populism that he (and I) predicted.
- Alexandr Rubtsov Jan 11, 2017
  
  Следующий виток глобализации подразумевает переход эмиссии мировой резервной валюты от США к наднациональному органу. И проигрыш Клинтон только ускорит этот процесс размежевания.
  Соответственно, задача Трампа противостоять этому, через укрепление доллара. После периода раздачи денег в долг наступает период возврата долга с процентами, что создаст дефицит долларов в мире и заставит должников слушаться Трампа. Потому Россия, которая не должна Америке, и не враг Трампу, а вот Китай, в который вложили огромные деньги теперь будет их возвращать. Или отдавать за бесценок инфраструктуру. И это вынудит китайские власти идти на жесткое противостояние Америке.
  Но, в любом случае, прогресс не остановить и Трампу не удастся сохранить лидерство США.
  И вопрос следующего столетия заключается в том, какую политику будет проводит уже мировой центробанк центробанков - МВФ, Если он продолжит порочную практику США и будет направлять деньги на поддержание среднего класса в странах золотого миллиарда, то нас ждёт ещё одно столетие несправедливости и войн. Если же эмиссия будет расходоваться на инвестиции по всему миру в глобальную инфраструктуру и помощь будут получать все страны, то мы получим возможность порвать порочный круг кризисов и выйти на "конец истории".
  Но Трамп обречен. Он ничего не сможет сделать. Он - спичка против лавины.
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- Curtis Carpenter Jan 9, 2017
  
  So much for the credibility of Jerry F. Hough and, to a lesser degree, Brookings and Duke.
  
  How do I avoid concluding that Hough's judgement and character aren't as flawed as Donald Trump's? Should I find some hope that he hasn't started "tweeting" to demonstrate that he "really knows how to use power?"
  
  "He is a toss of the dice?" "Trump speaks symbolically?" I'm afraid Mr. Hough, like Trump himself, expresses too well Hannah Arendt's "banality of evil."
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- stephan Edwards Jan 9, 2017
  
  A tax break for corporations, combined with a VAT on top of income tax for the peons Hmmmm. That should go over like a lead balloon.
  If you think the democrats and republicans of even the republicans and the republicans are going to compromise on health care you shpould pay more attention of that their is no chance. Not gonna happen. Repeal and delay is because even the repubs can't agree and the democrats won't urinate on the republicans if they where on fire. Any compromise by the democrats benefits the far right of the republicans not very likely.
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Jose araujo Jan 9, 2017

With so much of the US GDP tied with intelectual property rights and copyrights, it would be foolish to start a trade war with any country.
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Michael Public Jan 9, 2017

Due to the local business conditions being so challenging for American companies, it is possible to say there has always been an import duty by another name levied by China. For example, MacDonald's sold most of their local shares to a domestic company today - why would they do that unless they believed the long term prospects for them owning the business were poor.
- Michael Public Jan 9, 2017
  
  Spelling correction: It is McDonalds - not MacDonalds. Who would have thunk it!
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Michael Public Jan 9, 2017

He can't target China so easily. There are several other nations waiting in the wings who have similar ability to export cheaply to the US - they could even just assemble things while the heavy lifting is still done in China. He could slap a 45% import duty on all imports but that would mean a 45% retaliation by all other countries meaning a return to mercantilism. So it is fair to say, due to the economic realities of such action, there is no coming trade war with China. He will instead stick it to them on other fronts - Taiwain, South Sea, upgrading the military and so on.
- Alexandr Rubtsov Jan 11, 2017
  
  Тогда Китай не сможет вернуть вложенные в него инвестиции. Это спровоцирует мировой хаос на рынке кредитов, инвестиций. Кто вложит свои деньги в Тайвань если до этого обанкротились те, кто вложил в Китай?
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