Economics

Le boom Trump?

Dec 7, 2016 Kenneth Rogoff

CAMBRIDGE – Après des années d'hibernation, l'économie américaine se réveillera-t-elle pour signer son grand retour au cours des deux prochaines années? Avec une administration républicaine qui veut à tout prix relancer une économie déjà près du plein emploi, des promesses de restrictions commerciales qui font augmenter le prix des produits de substitution aux importations, et l'indépendance de la banque centrale qui sera probablement attaquée, il est quasiment certain que l'inflation augmentera – dépassant probablement 3 % à certains moments. Et la croissance de la production pourrait surprendre elle aussi, pouvant atteindre 4%, au moins temporairement.

Impossible dites-vous? Pas du tout.

L'économie semble déjà croître à un rythme annuel de 3%. Et même les plus fermes opposants aux politiques économiques du président élu Trump seraient forcés d’admettre qu'elles sont résolument pro-business (à l'exception notable du commerce).

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Kenneth Rogoff

Writing for PS since 2002
238 Commentaries

Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003. He is co-author of This Time is Different: Eight Centuries of Financial Folly (Princeton University Press, 2011) and author of The Curse of Cash (Princeton University Press, 2016).

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0 Comments on this paragraph, 58 Comments on this article

Peter Ellis Jul 23, 2017

No mention of the impact on the environment of burning coal. This is depressingly standard neo-liberal economics-speak - no thought about externalities.
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Mauricio Duran-Loriga Dec 29, 2016

"Germany was as successful as America at using stimulus to lift the economy out of the Great Depression". That is a big one to swallow. Beware half-truths.

1. Germany
Before Hitler's fiscal plan 1933-1935, the country defaulted on its debts (war reparations), and the value of the currency was downed to zero. Darth Vader Schacht was inexplicably cleared in Nuremberg.

2.United States
To finance the New Deal, FDR had to devalue the dollar in gold terms (from 20 to 35 an ounce). A 75% devaluation of the currency and of the debt.

It's only by defaulting big on their debts AND by crushing their own currencies that Germany and the US were able to launch temporarily efficient fiscal stimulus.

As a side note, QE is palliative care patchwork administered by illusionists to bowled over lambs.
If there is going to be a historic boom under President Trump, one way or another, but inevitably, debt certificate bearers will be first served with the shock they deserve for the 35 year old mother of all bubbles.
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John Katz Dec 13, 2016

This time is different?
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peter fairley Dec 13, 2016

Sen Mitch McConnell,& Paul Ryan want deficit neutral tax cuts only and less debt not more. Also say it is too costly to repeal Obamacare but fending off Obamacare ballooning costs is a big challenge. Optimism on Trump stimulus and inflation are way overdone. You can read this in Dec 13 Bloomberg article
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yuval Brandstetter Dec 12, 2016

The myth of low unemployment in the US keeps being iterated. Its a lie. US participation in the workforce, 63 percent of able-bodied adults is the lowerst ever. Under obama it has been made easier than ever to collect various benefits, such as worker comp. and one hundred weeks of unemploymnet, and Obama-phone (free communications) and food stamps and rent assistance and medicaid etc.. than ever before. No wonder the rolls of work-seekers have shrunk: It makes no sense to work at low end jobs if benefits exceed the value of work. Its an accounting trick, not reality.
- Jose araujo Dec 13, 2016
  
  It’s not a lie, it's a sign of progress. We have ended slavery for some centuries now, but it seems that someone forgot to tell the confederates..
  
  Yes, workers should refuse low paying jobs. I’m a worker and I contribute so that other workers don’t have to be exploited to put bread on the tables of their families…
  
  Let’s see how the ones who think they are being lied are going to react once all benefits are expunged and the low paying jobs not only return to the US but become the norm..
  
  Maybe they will fill better once they are replaced by American robots, build and operated by white collar workers… the elites they despise…
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Maurice Simpson Dec 12, 2016

Don't follow your logic at all. Currently we have an inflation rate near 2% and an economy growing at a less than 2%/annum over the last 12 months. A classic Stagnant economy. If ( and it is a big IF) growth outpaces inflation by a mere 1%, why the effusive contentment ?
Btw, aren't you the author who was obsessed with debt levels stuck at perilous heights just 5 years ago ?? I have some bad news for you: aggregate debt levels ( public & private, but excluding financials) are worse than they were in 2008 at >300%. What are you proposing that we celebrate exactly ??
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Lorne Brown Dec 12, 2016

It seems like a break with reality to state that the economy is "near full employment" when 60 million workers are not considered unemployed because they gave up looking for a job. This goes over without a thought in a classroom of snowflakes but Trump lives in the real world. The forgotten deplorables still have a vote, as they proved in the Election. I would like to hear Mr. Rogoff's thoughts on corruption and the economy, like a Mexican billionaire providing Obamaphones to the forgotten but not deplorable.
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Harlan Green Dec 11, 2016

what??? "But if one believes, as I do, that the slow growth of the last eight years was mainly due to the overhang of debt and fear from the 2008 crisis, then it is not so hard to believe that normalization could be much closer than we realize." This from the chief debt-scold who cherry-picked data to justify European austerity policies? Come on, Dr. Rogoff, Repubs will only normalize asset bubbles with their tax cuts and privatization of public assets.
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Emilio Zuniga Dec 11, 2016

At 4.6% unemployment are US close to full employment? Can we acelerare grow by 50% without inflationary pressure and higher interest rate? With tax cut for Corporations and the high income strata debt will accelerate but fiscal revenues will eventually be enough to take IT down? There are two issues with likely Trump economic policies. One is its stability and granted that grow will acelerate, it looks more of the same bias where the low income and middle class don't get much.
- J.B. Borne Dec 11, 2016
  
  Where is all the talk now of income inequality? That was a liberal and media pet topic for years. Until very recently, 60% of jobs created since 2009 have been low-wage positions. Even for the mid-middle class, the American dream is not envisioning your children as waiters, hotel clerks and administrative assistants. These are the kinds of jobs that have been created under Obama's watch - not that he would know.
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Barry Rosenfeld Dec 11, 2016

Specify one "high return project." If the government can find any, why can't your great entrepreneurs and senior corporate managers? Rogoff, have you been a "closet Keynesian" who now is emerging?
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David Neunuebel Dec 11, 2016

"New York Times columnist Paul Krugman unequivocally insisted that a Trump victory would lead to a stock-market collapse, with no recovery in sight. Investors who relied on his insights lost a lot of money.". They probably did NOT lose a lot but they probably also did not make a lot.
- William Cash Jul 23, 2017
  
  Give it time. I expected a bump because of all the promises Trump made. Removing regulations always leads down the same path but it takes time.
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rc whalen Dec 11, 2016

It is interesting that the emotional state of the US economy is certainly more positive, almost as though Anthony Hopkins installed a new narrative in everyone (a la Westworld). Meanwhile, banking lending is falling and HY credit spreads are widening, suggesting that the forward prospects are not so rosy. Is the Trump wave really the party before the bust? Deregulation and fiscal action are certainly positives, but I wonder if the Yellen-FOMC asset bubble is not the real reason for the Trump rally -- belatedly. Do we have a slowdown ahead?
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William Cash Dec 11, 2016

It is tradition for democrat to hand over an economy that is strong and getting stronger. The republicans coming in are always greeted with enthusiasm by the business community and everything is rosy for a few years. But then the consumers can't continue this surge because the republicans always undermine them. Evnetually, with less regulation and policies that favor the rich, everything starts to collapse. Then the democrats are voted in to pull us back from the abyss that republican policies drive us to. About the time everything is starting to pick up, the republicans are put back in so they can demolish the economy again.
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Jeremiah Hartnett Dec 11, 2016

The President Elect is taking a higher risk/higher return approach but at least it gives us a fighting chance to bust out of our over-indebted malaise. I also believe Mr. Trump will attack bloated government and the savings that could accrue. Higher productivity from the bureaucracy would be a real boon in itself. Do not under estimate his talent and determination.
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J.B. Borne Dec 11, 2016

Thank you, Mr. Rogoff. It is refreshing and enlightening to read about opportunities and possibilities in a new administration. Many of us are weary of the "awfulizing" and "what offing" by media and pundits. It serves no purpose. Top corporate leaders and thinkers are extolling the benefits of the post-election Trump Bump. I'm with them and their optimism.
- J.B. Borne Dec 11, 2016
  
  Correction: "what iffing"
  Media have too much time and space to fill and must rely on manufactured material to collect their paychecks. They have been stung and humiliated by failing to predict the Trump victory. Now they're just babbling.
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Ga Steli Dec 10, 2016

I'd like to apologize to Mr. Rogoff for my post of DEC 7, 2016. I disputed the notion that the economy was already "growing at a 3% annual clip." I retorted by quoting some quarterly statistics on productivity. Obviously I had conflated the two variables. Pretty stupid, but I had just been reading upon productivity in a Robert J. Gordon article, about secular stagnation, and must have been primed for "productivity". Also their just released quarterlies were about the same, 2.8 & 3.1. But their stabilities are not the same. In fact the last four quarterly values are: 2.81%, 2.51, 2.80, 3.00. The last two years have had 2.4% growth, so growth has grown by 0.6pts. And so Mr. Rogoff is correct, generally, in asserting that current growth is currently around 3 %.
But I also misread the article in general, as being a prediction of what the author believes will happen, instead of an highly optimistic scenario of what might happen, namely growth above 4%. But It's not second nature to me that a 500 billion dollar stimulus might not achieve 4% growth, as the author is seems to believe.
But this brings up the larger, and more real, issue. Namely how important is higher growth to those who have, for so many years, failed to be effected by US economic growth. If there is anything I think, that lefties & righties can agree on, it is that the recent election reflected a populace concerned about the distribution of income, both by class and geography. In other words one big take-away from the Trump election it seems to me is that:
"Growth just ain't what it used to be.
You gotta think about distribution too. “
Mr. Rogoff scoffs, perhaps, at the notion of secular stagnation. But ought the different theories, by Piketty and Robert J. Gordon, be seen as so implausible, that they can safely ignored in our predictions and planning?
Increasing debt at this time risks finding ourselves in similar straits somewhere down the road, except with even less resources, and even less of an appetite for even more debt. How will that go down with those who voted for Mr. Trump, mostly out of hope for economic change, who may need the help of another stimulus to get out of another recession?
But even more important, ignoring the possibility of Secular Stagnation, leads us away from planning for it, by focusing attention upon projects that may have only short term effects, when we should be
restructuring the fiscal machinery in order to improve the general aspects of the welfare, health and education, of the populace as we move forward in what are clearly difficult and uncertain times.
This article is otherwise, actually, quite well written; in the way the author equivocates, and puts things. But the personal attack is irrelevant, as they always are. And some of his points I disagree with. But more important, the author seems to want to bait liberals by an equivocal portrayal of Trump-ian economic success. But he does this by conspicuously ignoring the likely fate of those whom the policies are said-to-be designed to help.
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Sama Sama Dec 9, 2016

"Many left-wing economics commentators, having insisted for eight years under Obama that there is never any risk to US borrowing, now warn that greater borrowing by the Trump administration will pave the road to financial Armageddon. Their hypocrisy is breathtaking, even if they are now closer to being right."

Not so fast professor!
That debt was accumualted to counter the most serious challenge to the economy of the United States (brough to us by Trump's friends and ideological backers). Your very much criticized and questionable empirical finding about the debt burden threshold was a misguided attempt to raise alarm about that. This debt will be accumulated by giving a massive tax cut to the rich (like Reagan's) and will surely make the distribution of income worse as a bonus!
Reagan came in with DEBT/GDP of around 33% and left with it being over 55%. Let's hope that this is the worst that could happen to us under Trump.
- Jose araujo Dec 13, 2016
  
  Most of the debt hawks (Rogoff included) are conservatives that are now lauding the benefits of infrastructure spending and trade tariffs… The ones that were praising China and now are blaming the outsourcing of jobs… The advocates of off shoring and opponents of globalization….
  
  Also that most left wing economists were against many of Obama’s policies, because most of them were inspired and implemented by supply sidders and conservative economists, that now criticize the policies they advised to the Obama administration (El Erian….)
  
  In a word, sycophants, they will say anything to remain close to power.
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Marc Freed Dec 9, 2016

So the Trump Administration could be as successful as Nazi Germany? That's comforting.
Both business and public investment can promote growth if they invest in productive enterprises and long-lived infrastructure that lowers costs for all users. Using government to bring back American manufacturing jobs from the 20th century does not meet those criteria. Despoiling an already fragile environment for short-term profits simply shifts environmental costs forward much like debt-fueled consumption. Of course he and his administration do have an opportunity to get it right - ever new administration does - but I won't hold my breath hoping for wise governance for a guy who apparently does not even use a computer.
- William Cash Dec 11, 2016
  
  J. B. Borne, I don't think you understood the comment. Reread it.
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- J.B. Borne Dec 11, 2016
  
  Anyone comparing any country or economy to those of Nazi Germany should have face-on conversations with relatives of concentration camp survivors. Talk about hate speech! This is a demonstration of it.
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Paul Daley Dec 9, 2016

Is anybody ready to make book on the direction of the US and world economies over the two years? Is anybody ready to subsidize banking systems that are making book on the direction of the US and world economies? It's something to think about because it is something we'll all be doing as the ECB continues with QE and central banks struggle to establish adequate capital/asset ratios. At a time when the world needs to close the gap between asset prices and underlying income flows, we'll be dealing with continuing subsidies for asset prices and income flows boosted by unsustainable government debt. Does anybody really believe this is going to turn out well?
- Norm Winn Dec 11, 2016
  
  Absolutely NOT. But it may well be the road we're traveling. I have no idea what the markets may do in the coming months, but I'm pretty confident we're going to witness increasing political, economic and social disconnects, and tensions are only going to worsen.
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Ariel Tejera Dec 8, 2016

It is actually curious ... an economic boom caused by increasing global uncertainty ... only with Trump. Now we are the world of Trump.

Even more curious since the vulnerabilities of the US are the same (if not worse) than in previous years - with the *very notable* exception of oil dependence.
- Ariel Tejera Dec 8, 2016
  
  Correction: *oil independence*
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Neil Gundel Dec 8, 2016

The "breathtaking hypocrisy" of "left-wing commentators" who have pooh-poohed the risks of deficit spending to finance infrastructure is mostly a figment of Dr. Rogoff's imagination.
Borrowing to pay for infrastructure is STILL widely supported - even now as fire-sale interest rates are starting to disappear.
It's the borrowing to pay for huge tax cuts for the wealthiest families in the U.S. that continues to look foolish, which not only add to the debt for no good reason, they do so inefficiently, and by raising long-term rates, they cut into the value proposition of infrastructure investment.
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F. Gregory Wulczyn Dec 8, 2016

Interesting point of view. Especially his prediction that Summers is wrong about secular stagnation. We'll see. "Confidence" seems to be doing a lot of work here, without any empirical justification. Is it so clear regulatory uncertainty in the insurance and health care markets will trigger a boom? That companies looking at what is going on with Carrier and Boeing will feel their animal spirits rising? Certainly no sign in similar right-wing populist turn of events in Great Britain or Italy. Maybe Krugman will have to retire the "confidence fairy" and replace it with the "confidence fool".
Others have commented on his dishonesty dealing with Krugman. The same is true with the strawman: "Many left-wing economics commentators, having insisted for eight years under Obama that there is never any risk to US borrowing, now warn that greater borrowing by the Trump administration will pave the road to financial Armageddon. Their hypocrisy is breathtaking, even if they are now closer to being right."
"Left-wing" economists I read are not abandoning Keynes re beneficial effects of stimulus, any stimulus, what they are saying is that medium to long term the exacerbation of crony capitalism will reduce economic performance.
- Mauricio Duran-Loriga Dec 8, 2016
  
  Left-wing economists are the truly barbarous relic, fed on a diet made exclusively of red stars soup. Aren't there boatloads packed with cronies in China, Cuba, Venezuela, ...?
  What's the tab of crony capitalism (corruption) ?
  What's the tab of the welfare state, including unfunded liabilities?
  Decades ago the multiplier effect was positive. Nowadays it is absurdly negative. Societies have not become dumber at producing goods and services. Politicians have decreed a gargantuan set of obligations that are crowding out all current savings + future wealth, and that is exactly what is killing economic performance worldwide.
  If the media thinks the mismatch between subprime mortgages in 2008 and its correspondent collateral caused the greatest financial crisis ever...well that was a drop in the bucket compared to the mismatch directly attributable to the welfare state.
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Steve Hurst Dec 8, 2016

Arh I understand. Trump is Sonic the Hedgehog and we can expect spin and err... hedging. Thank you. There again he could end up a cartoon in a cartoon graveyard
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Big Earl Magillicuddy Dec 8, 2016

So, the predicates to this theory are pretty standard from the Reinhard/Rogoff worldview, once which has, needless to say, been rather soundly debunked on more than one occasion using what the academic community calls "actual data". [https://en.wikipedia.org/wiki/Growth_in_a_Time_of_Debt#Methodological_flaws}

But nonetheless, Mr Rogoff should be applauded for sticking to his guns despite all evidence to the contrary. It takes either tremendous ego, a complete lack of introspection, or both. Kudos, sir. "Growth in a Time of Debt" becomes "Boom in the Time of Ineptitude". I look forward to Mr. Rogoff's mea-culpa article if/when this prediction is found to be made of the same combustible material.

(Also, you'd think we'd have less "seems" and more "should" in an article from such a storied academic. Is "maybe sorta" really the most you can muster? I guess this theory didn't pass some presumed 90% threshold?)
- Jose araujo Dec 13, 2016
  
  We unfortunately are all aware of the R&R data mining (calling it research is rather insulting to research), with the latest being the India debacle following Rogoffs "conclusions". We could add the infamous Alesina on the basket along with many other inflationistas, gold buggers, debt hawks, etc.
  
  Rogoff and Carmen are the perfect example of sycophants, which unfortunately is and was very common in academia; they have a completely unrealistic take on reality which they refuse to change because not only I t would render all their work useless but would mean defending views that are not shared with the establishment.
  
  Shame to see how defenders of free trade, free markets are now propagandists of olygarcharchic, corporate statistm models.
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- Karl Barber Dec 9, 2016
  
  Obviously, you have poor understanding and little knowledge of Reinhart/Rogoff research. You are also seriously confused about the excel error.
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Lester Soss Dec 7, 2016

I have always looked to Dr. Rogoff for insightful comments and analysis of the economy. I even bought his book in hardcover. However, this time, in his attack on Paul Krugman, he seems to have veered into a "settling scores" arena. Krugman did write of an economic debacle on election night, but was quick to not only qualify his statements, but also to apologize for them. Rogoff writes that if you listened to him, you would have lost a lot of money. But that really isn't quite true. I sold a boatload of bank stock on election day. It was a mistake. However, I didn't lose anything. I just failed to make even more money then I had already made. I wanted to stop "riding the tiger". But Krugman's consistently correct macro-analysis over the last 8 years( along with Delong and Wren-Lewis) is why I have that money to begin with. Had I listened to Rogoff, I would not have had it.

One last point, it is not hard to conceive of how this reckless politician could catapult the world into economic chaos. As a matter of fact, the night he won, that is exactly what the market believed he would do (the DJ futures were off 800). It was only after he gave a normal acceptance speech that the markets calmed down. Nothing really has changed on the dangers of a Trump risk. Just let Flynn advise him to fire on a Chinese warship in the China sea, and you will see what will happen to the market.

By the way, on a happier note, wasn't that a great chess tournament?
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Jan Vlcek Dec 7, 2016

More jobs? Sure, highly-skilled. Problem? Cannot fill them all now. Add a million more, then what?
OK, maybe low-skilled then. Sure, they may get filled, by those who've been fired from other low-skilled ones. But so what? Won't make much impact on the economy.
See the problem? No matter what Trump does, he cannot create jobs in the middle, i.e. manufacturing jobs requiring skills that can be learned, jobs that form the next rung on the ladder upwards.
By the way, for Rogoff to have his vision come true, even for a short while, every element in his essay must come true. Want to assess the likelihood of that?
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Mauricio Duran-Loriga Dec 7, 2016

Hibernation? What hibernation?
Corporate profits are 50% above its historic median.
Valuations are at the 99% historic percentile ever.
In 1933, FDR received a country in economic ruin.
By his first executive order that implied a gold revaluation (dollar devaluation) he got inflation running at 30% in less than 3 months.
FED raising rates, China eager to devalue, Europe surrounded by political uncertainty, all signal a rising dollar. No boom with a rising dollar.
Just to cover for the fiscal gap caused by unfunded liabilities (entitlements) the US GDP should grow an extra 3% a year.
Productivity will by no means deliver but a fraction of this in the best case.
So then, what is the size of the additional gargantuan malinvestment (tax cuts, QE Infinity, trade barriers, etc) needed to foster such objectives? Not even doubling US debt will make it in one Presidential term.
In that case the dollar will plunge, causing a currency domino elsewhere, a huge global shake-up, and possibly a crack-up boom .
We have to face the unsustainable welfare state H-bomb.
It's unavoidable.
The establishment bet heavily on Clinton, but got Trump.
Be very wary of an adversarial FED.
Impossible you say? Not at all.
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Karl Barber Dec 7, 2016

Well put, Mr. Rogoff. The article on the benefits for the U.S. is in line with comments by Daniel Gros devoted to positive effects for the euroarea. The two should be read together. Now we need a third balanced opinion on the effects for emerging markets and developing economies.
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M M Dec 7, 2016

The commentators herein have really torn this article into pieces! Well, today Trump was voted by the Times Magasine as the "Best Person of 2016" (no wonder with all the publicity (mostly adverse) that he got in the last 12 months. The majority of the economists and some laureates, are like "The Blind...Leading the Blinds"....
- M M Dec 8, 2016
  
  Steve, trust me, I was not defending nor condoning the decision of the eTimes, it seems it is just the signs of the times we live in, being utter madness..
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- Steve Hurst Dec 8, 2016
  
  @M M
  
  I hate to disillusion you M M but notables like Stalin and Hitler have also been Times Man of the Year, it means nothing
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Paul Daley Dec 7, 2016

Nothing about Fed policy? Does it accommodate Trump fiscal policy or not? Rogoff seems to assume (probably correctly) that the Fed is committed to a slow normalization of interest rates that would give a Trump boom room to run, as debt piles up. Congressional interference with bank regulation might also boost debt and business investment. But, if a debt overhang was the problem, how is more debt the solution? Yes, all crises eventually end. But how well or how badly they end makes an enormous difference.
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dan baur Dec 7, 2016

Trump has a track record of on time and on budget on complex projects. I'm surprised there was even a contest between him and the Crooked one. Goes to show you that the IYI (Intellectual Yet Idiot) class (Krugman, Stglitz, Shiller, etc.) has way too much influence.
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dan baur Dec 7, 2016

The problem is that GDP goes down if Trump is successful in reining in spending.

What is good for GDP growth is bad for the country and the world - i.e. a very destructive war like WW2.

GDP is the wrong measure. Keynesianism is nonsense as is "aggregate demand" and "stimulus". Obama increased debt by 8 TRILLIONS and has absolutely nothing to show for it.
- Jeremiah Hartnett Dec 11, 2016
  
  not if the spending reduction is coordinated with productivity enhancing changes.
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dan baur Dec 7, 2016

"Germany was as successful as America at using stimulus to lift the economy out of the Great Depression" - really, there is no difference between the criminals of that era: Hitler, FDR, and Stalin. FDR's crimes are as repulsive as those of the others:
- never leaving power,
- extending the depression through failed policies,
- stoking the war and then sending millions to die and kill in the imperialistic war,
- sending people to concentration camps
- selling half of Europe in communist slavery,
- etc. etc.
- Jose araujo Dec 7, 2016
  
  No comment.
  
  dan Bour a life dedicated proving Einstein right
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dan baur Dec 7, 2016

What "badly needed infrastructure spending"?!?

Just give ONE example if you have any. ONE! And NO, patching local roads neglected by money-wasting local bureaucracies is not investment.

Hopefully, Trump wants to open up projects like pipelines to private investors, rather than push the government with its AWFUL track record into infrastructure "investing".
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Ga Steli Dec 7, 2016

"The economy already seems to be growing at a 3% annual clip." (Rogoff)

"Productivity increased in the third quarter at a 3.1 percent rate, the Labor Department reported Tuesday. That followed three quarterly declines and was the best showing since a 4.2 percent increase in the third quarter of 2014." (http://www.voanews.com/a/united-states-workers-productivity-jumps-third-quarter/3625414.html)

Rogoff doesn't seem to me to be making much of an attempt at objectivity here.
- Jose araujo Dec 7, 2016
  
  Imagine what we will be reading once Trump is in government...
  
  Rogoff is the perfect example of a sycophant..
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Thomas OConnell Dec 7, 2016

Seriously? "Germany was as successful as America at using stimulus to lift the economy..." So building the infrastructure for Blitzkrieg and concentration camps is equivalent to investing in public works (TVA, FHA, etc)? Considering the desperate struggle to perpetuate the myth of the a "bounded rational agent", I should not be surprised that you consider these socio-politcal constructs as equivalent. You are quite mistaken. The means do not justify the ends: equity and morality matter. Every person, everywhere deserves an equal opportunity to life, liberty and the pursuit of happiness.
- Jose araujo Dec 7, 2016
  
  Worst than that. Rogoff was an apostle of austerity and debt hawks, a supply sidder which hostile to any form of fiscal stimulus, but now reveals that it’s ok for fiscal spending, providing government favors his own colors…
  
  A combination of conglomerates and slave labor appears to be Rogoff’s ideal society.
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Marc Laventurier Dec 7, 2016

Ken very efficiently touches on key points and possibilities. What is notable to me is how reliant the situation Ken sketches is on shaping the psychology of markets, inducing animal spirits where they might not naturally evolve in a form to perpetuate and populate the status quo, all against the cosmic background of unpayable debt in every social dimension. Enter Trump in his gold lame cape pretending to similarly reupholster the national furniture, and with a few cartoonish BOOM!s and KAPOW!s, America's great again. All this reflects rather poorly on economics, capitalism and democracy.
- Jose araujo Dec 7, 2016
  
  The good thing is that they are starting to reveal their true colors, forgetting that popular vote can validate their social ideals, but will not change reality.
  
  Time for us to dust out the books of the forgotten ones. Rousseau, Voltaire, Lock, Hume, Locke, Kant, and yes Marx
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Jose araujo Dec 7, 2016

"In many ways, Germany was as successful as America at using stimulus to lift the economy out of the Great Depression."

In conclusion, Rogoff thinks that Fiscal stimulus and infrastructure spending is good if you are a dictator and bad if you live in a democracy?

At last Rogoff's true color’s emerge
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Jose araujo Dec 7, 2016

Stopped reading @ "economy already near full employment", is this now the official mantra for supply sidders?

Trickledown economics produce growth? Are R&R going to engineer a bugged excel to prove it?

Economy near full employment and people voted for trump because jobs were being outsourced to China, and they don't even grasp the paradox
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