David R. Henderson  

Economists Against Trump

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370 economists have signed a statement opposing Donald Trump for president. It's quite good with one exception that I'll get to. If I had known that this would come along, I would have (a) tried to be one of the signers and (b) signed an earlier statement against Hillary Clinton's policies. My hesitation at doing the latter was that I worried that it would be interpreted as a statement in favor of Trump. But by signing the anti-Trump statement, I would have covered that problem. One of the signers of both the anti-Trump and anti-Clinton statements--he might well be the only one--is my friend Mario Rizzo of New York University. I wish I had had his foresight.

First, let me point out my one problem with the anti-Trump statement: it's not that it's false--it's probably true--but that it's a strange item to lead with. Here is the first bullet point in the anti-Trump statement:

He degrades trust in vital public institutions that collect and disseminate information about the economy, such as the Bureau of Labor Statistics, by spreading disinformation about the integrity of their work.

Really, guys and gals? That's your first major argument against him? Do you realize how nerdy and self-interested this makes you sound? He doesn't trust the government to collect data and not distort it. As I said, I think the charge against him is reasonably justified, but surely that shouldn't be the lead charge.

The rest, as I said above, is quite good. If I were to summarize it, my summary would be almost as long as the statement because each bullet point is important, accurate, and terse. The statement takes on many of the myths about the decline in manufacturing, the effects of NAFTA, and whether one can reduce the federal budget deficit without "an increase in tax revenue and/or a reduction in spending on Social Security, Medicare, Medicaid, or Defense." [Spoiler: one can't.]

But here's my problem: Where the hell were you guys and gals when Bernie Sanders and Donald Trump were mouthing a lot of the same nonsense during the primaries? I know that you can easily answer, with some credibility, that you were doing your own thing, sticking to your knitting, and that the current presidential election is an action-motivating event. If so, then I beseech you to keep it up. Whoever gets elected--and I still think it will be Hillary Clinton--show some integrity by, when she or Trump spouts some of this nonsense, going public with nice, hard-hitting critiques.

My criticism, by the way, does not extent to co-blogger Scott Sumner, who has signed this letter. He has been outspoken on these issues for some time and has been doing a lot of the heavy lifting that a few hundred of these other people should start doing.

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COMMENTS (12 to date)
Andrew_FL writes:
whether one can reduce the federal budget deficit without "an increase in tax revenue and/or a reduction in spending on Social Security, Medicare, Medicaid, or Defense." [Spoiler: one can't.]

As phrased this statement is not literally true.

Fair enough that serious plan for significantly reducing the deficit long term requires reforms Trump has never even contemplated-and probably never would-but I hope the letter is more specific than your sentence.

David R. Henderson writes:

You’re right. Their wording was a little better than mine. It was that a “credible solution” requires this, and I think that’s true.

Andrew_FL writes:

I agree! Sorry for being pedantic.

David R. Henderson writes:

No problem. Many people accuse me of being pedantic, and occasionally (not usually :-)) it’s justified.
I appreciate your comments.

john hare writes:

I would quibble a bit on the phrasing. Instead of an "increase in tax revenue", it was, an "increase in federal revenue" I would be more inclined to agree. There would seem to be a number of things that could be done to raise federal revenue that aren't necessarily taxes.

Any of a dozen things that could be done to grow the economy could increase the revenue without raising taxes. A few white elephants could be sold and fees could be charged for some services that are nominally free or under priced at the moment.

David R. Henderson writes:

@john hare,
You’re right. I do think, though, that even if you did all those things but didn’t cut SS, Medicare, Medicaid, or Defense substantially, you would still end up needing to increase tax revenue. That is, unless the feds defaulted on the debt.

Ben writes:

"Do you realize how nerdy and self-interested this makes you sound?"

Being self-interested and nerdy is practically part of the economists' job description.

I also object to their first point about degrading trust in "vital public institutions" such as BLS, but for a somewhat different reason. They show learned statism. These people, it seems, can't imagine ways that data could be gathered by private parties. They like receiving goodies (data) that government appears to provide for free to them.

Macroeconomics seems to be an outgrowth of the state, since the definition of an "economy" relies upon border-lines drawn by states. That whole profession may feel threatened by a thoroughgoing move to diminish state interventions.

Rick Bohan writes:

"These people, it seems, can't imagine ways that data could be gathered by private parties."

Oh, but we can. We can also imagine the many ways that private parties might decide it's in their economic interests to fudge the data. You know...like Moody's and Standard and Poor's does.

@Rick Bohan
I propose that every agent or organization, whether government or private, has interests (reference: public-choice economics). We humans should not expect to escape interactions with self-interested others. But I (or you, or any other agent) can hope that those from whom I accept information are in some relationship with me — a relationship such that if I act upon their information, and consequently lose, they lose something too: something at least as significant as a degree of reputation or of hope for future friendship or business. Such relationships are stronger, I claim, in private relations than in political "public" relations.

About Moody's and Standard and Poor's: If you refer to the inflated bond ratings which seem to have contributed to the 2008 crash, I, being out-of-the-closet biased against the state, found a way to blame those inflated bond ratings on the state. Here is my report which I hope has a measure of truth. Three or four "private" bond-rating agencies (including Moody's and Standard and Poor's) were indirectly certified by some federal government bunch. (For my purposes I don't need to distinguish between government bunches; they all deserve the same respect. But I acknowledge that other people have different and legitimate purposes. You might know the name of that government bunch.)

That bunch had a short list, including only those three or four "private" agencies, from which it would accept bond ratings. Given the size and power of this government-bunch player, no honest and private market in bond ratings was likely to grow. Each of those "private" bond-rating agencies had a stronger cooperative relationship with the government bunch which accepted their bond ratings than with the actually private investors whose assets were risked, if I got my story right.

Emil writes:

I echo Richard O. Hammer

I work (as a consultant) with both private and public clients. It is, from my experience, blatantly obvious that both are populated with people who act on incentives but the private sector, while far from perfect, tends to be more honest about this than the public sector, where there is often a pretense of being objective when it's, to an outsider, obvious that they are not. Thing is, it becomes much easier to parse and interpret information you receive when there is such honesty

Tim Escobedo writes:
Do you realize how nerdy and self-interested this makes you sound?

Wait. For real? Aren't these the defining characteristics of those leaning toward the classical liberal corner of the spectrum?

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