Wait, economist errors help the rich? Shocking.

Jared Bernstein notices that a few economic beliefs are wrong:

The natural rate of unemployment that AOC questioned is one such idea (more on that below). There are three others worth singling out:

  • that globalization is a win-win proposition for all, an idea that has deservedly taken a battering in recent years;
  • that federal budget deficits “crowd out” private investments; and
  • that the minimum wage will only have negative effects on jobs and workers.

Economists and policymakers have gotten these ideas wrong for decades, at great cost to the public. Especially hard hit have been the most economically vulnerable, and these mistakes can certainly be blamed for the rise of inequality. It’s time we moved on from them.

He also notes the obvious:

Pegging the “natural rate” too high, ignoring the harm from exposure to international competition, austere budget policy, low and stagnant minimum wages — all of these misunderstood economic relationships have one thing in common.

In every case, the costs fall on the vulnerable: people who depend on full employment to get ahead; blue-collar production workers and communities built around factories; families who suffer from austerity-induced weak recoveries and under-funded safety nets, and who depend on a living wage to make ends meet. These groups are the casualties of faulty economics.

In contrast, the benefits in every case accrue to the wealthy: highly educated workers largely insulated from slack labor markets, executives of outsourcing corporations, the beneficiaries of revenue-losing tax cuts that allegedly require austere budgets, and employers of low-wage workers.

This is old-fashioned Political Correctness: economists, politicians, and many others say they believe certain things not because they’re true but because saying it is beneficial to them.

Typical Trump Political Correctness

Here’s the latest political correctness advanced by the Trump administration:

Officials from the White House’s Office of Legislative Affairs, Office of Management and Budget, and National Security Council all raised objections to parts of the testimony that Rod Schoonover, who works in the office of the Geographer and Global Affairs, prepared to present on the bureau’s behalf for a hearing Wednesday.

The document lays out in stark detail the implications of what the administration faces in light of rising carbon emissions that the world has failed to curb.

‘‘Absent extensive mitigating factors or events, we see few plausible future scenarios where significant — possibly catastrophic — harm does not arise from the compounded effects of climate change,’’ the document said.

White House officials took aim at the document’s scientific citations, which refer to work conducted by federal agencies including NASA and the National Oceanic and Atmospheric Administration.

According to several senior administration officials, all of whom spoke on the condition of anonymity to talk about internal deliberations, Trump officials sought to cut several pages of the document on the grounds that its description of climate science did not mesh with the administration’s official stance. Critics of the testimony included William Happer, a National Security Council senior director who has touted the benefits of carbon dioxide and sought to establish a federal task force to challenge the scientific consensus that human activity is driving the planet’s rising temperatures.

The administration wants to ignore science that doesn’t mesh with their beliefs. This is almost the definition of political correctness. It would be almost funny if the future of the planet didn’t depend on it.

The president is going to say it anyway, so we need to help him.

This is quintessential Donald Trump (via here):

In the days ahead of German Chancellor Angela Merkel’s first visit to the White House during the Trump presidency, in March 2017, NSC career staffers were told the president wanted to tell Merkel that other NATO countries owed the U.S. money. Could they prepare a report on the topic? Career NSC staffers got to work and returned with the basics: that NATO countries don’t owe the United States money because that’s not how the military alliance works; that every NATO country is supposed to spend at least 2 percent of its GDP on defense, and that while many had fallen short of that commitment, others met it or were on track to do so. In short, no one “owed” the United States anything.

NSC career staffers presented this information to a senior administration official in the West Wing. According to one of them, the official replied: “The president is going to say it anyway, so we need to help him. I mean, it’s not a legal document.”

The career staffers were flummoxed.

“It was the weird disregard for facts that made it offensive,” one of the then-staffers said. “They said, ‘Never mind all that, he’s going to do it anyway so give us stuff that helps the case.’ It was frightening, in a way.” The then-staffer said he refused to contribute further: “I didn’t want to lie.”

It’s also quintessential political correctness, you don’t say what’s true you say what the boss wants to hear. That’s what’s so bad about this, the only thing that matters to Trump is whether he likes it.

More of Trump’s Political Correctness

The intelligence community has again said that President Trump is wrong:

On Tuesday, top intelligence officials described a different Iran than the president has, one that is not currently trying to make a nuclear bomb and appears to be complying with a 2015 nuclear agreement, even after Trump promised last year to withdraw from it.

On Syria, intelligence officials said the Islamic State would go on “to stoke violence” with thousands of fighters there and in Iraq, and with 12 networks around the world. They also said North Korea was not likely to permanently shed its nuclear weapons — contradicting a prediction Trump has made based on what he has called the “best” relationship the two nations have ever had.

Trump being Trump, he knows that this can’t be true:

In a series of posts the day after senior U.S. intelligence officials briefed Congress and directly contradicted some of Trump’s rosier estimations, the president reasserted his own conclusions and trumpeted his accomplishments on critical national security matters. He said the Islamic State’s control in parts of Iraq and Syria “will soon be destroyed” and there was a “decent chance of Denuclearization” in North Korea.

It’s a good time to remind everyone that when Trump says ‘fake news’ he means that he doesn’t like it, when he says something is wrong it’s probably right, and when his lips are moving or he’s sending out a tweet he’s lying. It’s all about his political correctness–it’s only right if it agrees with him.

An unsurprising result

I think most of us expected this:

In spring 2017, not long after President Trump took office, bullying rates among Virginia middle school students were 18 percent higher in places where voters had chosen Trump over Hillary Clinton, a study says.

There were no meaningful differences in bullying and teasing rates between Democratic and Republican localities before the 2016 election. But a statewide sample of more than 155,000 seventh- and eighth-grade students across Virginia’s 132 school districts suggested a correlation between voter preference and the rise in bullying after Trump was inaugurated.

They found that a 10-percentage-point increase in voters supporting Trump was associated with a 5 percent jump in middle school teasing because of race or ethnicity and an 8 percent increase in middle school bullying.

The paper is here. It includes this in their explanation for why they did the study:

Although rates of bullying have decreased since 2005 (Musu-Gillette et al., 2017), numerous media reports have claimed that racially and sexually related incidents are on the rise as a result of the 2016 presidential campaign (Bazelon, 2016). There have been more than 50 news reports of school bullying since the election in which students made statements linked to the newly elected president (Samaha, Hayes, & Ansari, 2017). The assumption of these reports is that the election of Donald Trump stimulated an increase in bullying behavior. The National Education Association (Blad, 2016), news analysts (Page, 2017), as well as experts on bullying (Juvonen, 2017) have characterized President Trump as engaging in bullying with his harsh and demeaning statements.

It is obviously difficult to demonstrate a causal link between statements by a public figure and schoolyard bullying. Nevertheless, there are incidents in which youth made threats and jeering statements that closely matched language used by President Trump (Thomsen, 2017). Such incidents are suggestive of the social learning model of aggression and classic studies showing how easily children model the aggressive behavior of adults (Bandura, 1971). However, skeptics have understandably questioned the evidential value of anecdotal observations (Kamenetz, 2016).

The President is a classic bully so it’s not surprising that some students might emulate him.

NY Times: Donald Trump is rich because his father gave him lots of money

It’s politically incorrect to say this but Donald Trump is not a self-made billionaire. From the New York Times:

But The Times’s investigation, based on a vast trove of confidential tax returns and financial records, reveals that Mr. Trump received the equivalent today of at least $413 million from his father’s real estate empire, starting when he was a toddler and continuing to this day.

and he got much of this money the way the rich often get their money, he swindled it:

Much of this money came to Mr. Trump because he helped his parents dodge taxes. He and his siblings set up a sham corporation to disguise millions of dollars in gifts from their parents, records and interviews show. Records indicate that Mr. Trump helped his father take improper tax deductions worth millions more. He also helped formulate a strategy to undervalue his parents’ real estate holdings by hundreds of millions of dollars on tax returns, sharply reducing the tax bill when those properties were transferred to him and his siblings.

These maneuvers met with little resistance from the Internal Revenue Service, The Times found. The president’s parents, Fred and Mary Trump, transferred well over $1 billion in wealth to their children, which could have produced a tax bill of at least $550 million under the 55 percent tax rate then imposed on gifts and inheritances.

The Trumps paid a total of $52.2 million, or about 5 percent, tax records show.

Fred Trump gave Donald money in multiple ways, all designed to minimize taxes,:

He made Donald not just his salaried employee but also his property manager, landlord, banker and consultant. He gave him loan after loan, many never repaid. He provided money for his car, money for his employees, money to buy stocks, money for his first Manhattan offices and money to renovate those offices. He gave him three trust funds. He gave him shares in multiple partnerships. He gave him $10,000 Christmas checks. He gave him laundry revenue from his buildings.

and if Fred Trump could get others to partially pay, all the better:

Each year Fred Trump spent millions of dollars maintaining and improving his properties. Some of the vendors who supplied his building superintendents and maintenance crews had been cashing Fred Trump’s checks for decades. Starting in August 1992, though, a different name began to appear on their checks — All County Building Supply & Maintenance.

Mr. Walter’s computer systems, meanwhile, churned out All County invoices that billed Fred Trump’s empire for those same services and supplies, with one difference: All County’s invoices were padded, marked up by 20 percent, or 50 percent, or even more, records show.

The Trump siblings split the markup, along with Mr. Walter.


The Trumps used the padded All County invoices to justify higher rent increases in Fred Trump’s rent-regulated buildings. Fred Trump, according to Mr. Walter, saw All County as a way to have his cake and eat it, too. If he used his “expert negotiating ability” to buy a $350 refrigerator for $200, he could raise the rent based only on that $200, not on the $350 sticker price “a normal person” would pay, Mr. Walter explained. All County was the way around this problem. “You have to understand the thinking that went behind this,” he said.

As Robert Trump acknowledged in his deposition, “The higher the markup would be, the higher the rent that might be charged.”

State records show that after All County’s creation, the Trumps got approval to raise rents on thousands of apartments by claiming more than $30 million in major capital improvements. Tenants repeatedly protested the increases, almost always to no avail, the records show.

Donald would have lost his money a couple times if this father hadn’t bailed him out, such as:

Donald Trump took on a mien of invincibility. The stock market crashed in 1987 and the economy cratered. But he doubled down thanks in part to Fred Trump’s banks, which eagerly extended credit to the young Trump princeling. He bought the Plaza Hotel in 1988 for $407.5 million. He bought the Eastern Airlines shuttle fleet in 1989 for $365 million and called it Trump Shuttle. His newest casino, the Trump Taj Mahal, would need at least $1 million a day just to cover its debt.

On Dec. 17, 1990, Fred Trump dispatched Howard Snyder, a trusted bookkeeper, to Atlantic City with a $3.35 million check. Mr. Snyder bought $3.35 million worth of casino chips and left without placing a bet. Apparently, even this infusion wasn’t sufficient, because that same day Fred Trump wrote a second check to Trump’s Castle, for $150,000, bank records show.

In December 1987, records show, Fred Trump bought a 7.5 percent stake in Trump Palace, a 55-story condominium building his son was erecting on the Upper East Side of Manhattan. Most, if not all, of his investment, which totaled $15.5 million, was made by exchanging his son’s unpaid debts for Trump Palace shares, records show.
Four years later, in December 1991, Fred Trump sold his entire stake in Trump Palace for just $10,000, his tax returns and financial statements reveal. Those documents do not identify who bought his stake. But other records indicate that he sold it back to his son.

And now he’s President of the United States. It makes me proud.

Trump doesn’t care about the law

I posted a week ago that ICE and CBP don’t care too much about following the law. Donald Trump shows where this attitude comes from in a series of tweets:

We cannot allow all of these people to invade our Country. When somebody comes in, we must immediately, with no Judges or Court Cases, bring them back from where they came. Our system is a mockery to good immigration policy and Law and Order. Most children come without parents..

So he’s saying the US should stop following the law to uphold Law and Order? Interesting. A later tweet:

Hiring manythousands of judges, and going through a long and complicated legal process, is not the way to go – will always be disfunctional. People must simply be stopped at the Border and told they cannot come into the U.S. illegally.

He again suggests the US should do something illegal and throws in a lie–if people come to the border to ask for asylum they’re not illegal. This is part of his political correctness, anything he does is fine while anything he doesn’t like is illegal.

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