Friday, September 16, 2016

The Utter Bullshit of Trump's Economic Plan

I have to admit that I'm finding the presidential election extremely disheartening.  Trump is stupid, racist, xenophobic and utterly devoid of substance.  But as usual, the Republican political commentators are all pledging fealty.

      Let's look at one piece of Trump's economic plan as an example: he said he would get the economy growing at a 4% rate.  How?  He didn't say.  But rest assured it will involve some combination of tax cuts and deregulation.

     How feasible is this promise?  It's not.  Consider the following chart:

US real GDP grew at that pace during the 1980s and 1990s but isn't anymore.  Why?  because during the 1980s and 1990s the labor force participation rate was growing:

This occurred because women entered the labor force and the baby boomers moved through the system.  But now the boomers are retiring and women are leaving the labor force.  Put in broader terms, there are fundamental changes occurring in the U.S. that can't be altered through policy -- unless you want to increase immigration.  And we know how far that'll get in our new white power society. 

     In fact, this problem of slower growth is global -- it's occurring in Japan and the EU who are experiencing the exact same population dynamics.  For a really good discussion, read Larry Summers secular stagnation hypothesis or the latest speech from Fed President Lael Brainard.    

     This one piece of Trump's economic plan is bullshit and unattainable given his and Republicans hatred of non-whites.  But that no longer matters.  We are formally in a post-fact world where magical thinking reigns supreme.  And the bigger the lie, the better.