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Trump’s working class sellout, tactical nuclear weapons, government shutdown, tax reform and immigration

Trump’s working class sellout, tactical nuclear weapons, government shutdown, tax reform and immigration

Since Donald Trump became president, his core economic agenda has been sidetracked repeatedly by so-called cultural issues. However, now the administration is stepping up its tax reform effort. Even so, other issues threaten to derail this agenda item too. Moreover, it’s not even clear we’re talking about tax reform here. Thoughts below

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Quick thoughts on the failure of Fed-engineered unemployment

I am a sceptic of thinking about low unemployment as a bad thing – which is what people who think about policy in terms of the Phillips curve do. Now a study by the Philly Fed is saying that the Phillips Curve is a poor forecasting tool. Will this have any meaningful impact on policy? Some thoughts below

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Republican presidential candidate Donald Trump speaks to supporters as he takes the stage for a campaign event in Dallas, Monday, Sept. 14, 2015. (AP Photo/LM Otero)

On the coming failure of Trump’s tax plan

Recently I wrote that Donald Trump has failed to deliver any signs that tangible economic benefits are coming down the pike for his working class and blue collar base of support. It seems Trump has ‘sold out’ and is turning to corporate tax cuts at the expense of middle class tax relief. Some comments below

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The failure of the Trump presidency

We are only seven months into Donald Trump’s presidency. And I think we can call it a failure. I’ll have a lot more to say on that momentarily. But I want to flag this as not being a dealbreaker for the US or global economy because people put too much emphasis on the political economy in Washington. But Donald Trump is failing.

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The limits of monetary policy in today’s fiat currency world

The limits of monetary policy in today’s fiat currency world

As the Federal Reserve meets at Jackson Hole this week, I thought now would be a good time to talk about the limits of monetary policy – and why monetary policy alone cannot restore robust growth. And as I write this I want to make clear the goal of policy and the assumptions I am making.

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Understanding what a neutral macro-economic policy looks like

This is going to be a quick follow-on to the last post on monetary policy as the only game in town. I feel like the obvious question that post doesn’t answer is this one: what other policy tools we should use? And I want to tee up that question with this post.

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Some thoughts on full employment and this asset-based economic recovery

Some thoughts on full employment and this asset-based economic recovery

I see that Dartmouth economics professor Danny Blanchflower is talking about slack in the US labour market because he believes the Fed is premature in assessing its full employment mandate as fulfilled. I have a few thoughts on this issue I want to flesh out below and the crux of my narrative revolves around the over-dependence on monetary policy as a policy lever.

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An anecdote on the German housing bubble

An anecdote on the German housing bubble

I don’t know if there is a German housing bubble or even whether there will be one. I do know that we hear a lot about it in the press – the result of zero, even negative, interest rates. So let me give you a little anecdote from my trip to Germany last week.

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How the Fed handles financial stability is key to avoiding a crisis

How the Fed handles financial stability is key to avoiding a crisis

I’ve got two objectives here. One is to talk about the Fed and the other is to discuss the evolution of the US economy. Most of what I want to say is upbeat, both on the Fed and the economy. And I’ll lead with that. I do have some doubts about the long-term though – and I want to give […]

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US economic growth still in the 2ish% channel

US economic growth still in the 2ish% channel

In the aftermath of the shale oil bust that sent the US economy to stall speed in 2015, growth has rebounded, but only to a sort of 2%ish level. Continued low inflation insures further low nominal GDP growth aka secular stagnation. But so far, this stagnation has not made the economy more susceptible to recession. Some brief thoughts below Here’s […]

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Baumol’s cost disease, aging societies and inflation expectations

Quick hit here. I have been banging on about lowflation, repeatedly suggesting it is here to stay. The Fed, on the other hand begs to differ and is pre-emptively normalizing rates, as a result. No matter how you look at this, there’s a rub though: We all consume different products, so we each experience a different individual inflation rate. Even […]

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The wisdom of crowds and government bond markets

The wisdom of crowds and government bond markets

When you look at how markets are positioned, it’s clear that a lot of people see continued low growth for years to come – a veritable Japanification of the US economy. I hope this is one of those times that markets are wrong. But I am not willing to bet on the hope, just the opposite.

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