European Media In Disbelief About Trump's Rise

This article provides a sample of the media coverage in Europe about Trump's success in the GOP primaries.  Much of it is satirical and critical, but Trump is viewed more favorably in the Czech and Russian media which argue that he reflects popular discontent with the US political system.  Trump is also viewed favorably by right wing populist parties which have also taken strong positions against immigration and multiculturalism.

While the media coverage of Trump in Europe has been extensive and very popular it fails to recognize a critical distinction between the rise of right wing populist parties in Europe and Trump's success in the US.  Trump has not spawned a new populist party like those in Europe which failed to find a home in any of the major political parties.  Trump threatens to take over one of America's two major political parties.  His position on immigration, race, and other conservative issues only differs from those of his two major contenders in style, not in substance.  Trump has been winning GOP primaries by convincing the GOP electorate that he will be more vigorous in supporting their goals than the other candidates.  His language is crude, and less subtle, than that of the other candidates and that has been one of the keys to his success.  He speaks like one of them.  The real issue in the GOP primary campaign is that Trump has capitalized on positions that the Republican Party has nurtured in it's base.  He has successfully taken them to an extreme.  The Southern Strategy has come home to roost in the Republican Party.  He is not trusted by GOP establishment because he may not be the kind of puppet to which the Party elite has become comfortable.  It prefers candidates who talk the right wing conservative game in the election cycle but which will focus on the economic policies of the elite after they are elected.  The Republican Party has lost control of its identity with the rise of Donald Trump.  They are totally confused about how to proceed if Trump is nominated and if he would manage to become President. 

US Politics In The Age Of Trivia

Ted Cruz and Marco Rubio ganged up on Donald Trump in last night's GOP "debate" which turned into a bar room brawl.  The media responded to the debate by describing the magnitude of the blows that each candidate inflicted on the other candidate.  Marco Rubio was declared the winner of the brawl and he was praised for finally showing why he would make a good president.  He landed the most solid blows to The Donald, who was stunned by the ferocity of the attacks, and was backed into a corner from which he failed to escape.

In case anyone wondered how any of these candidates would run the economy, which is less interesting to watch than a bar room brawl, this article provides a simple analysis of their economic plans.  It shows that each of the candidates has a serious problem in handling addition and subtraction.  Each of them rewards the electorate by cutting taxes substantially.  They also reward their followers by making a promise that is dear to many of them.  They propose to amend the Constitution so that the federal government cannot run a budget deficit.  That creates a real problem for which they will need to invent a new system of mathematics.  The tax cuts that they promise to their base that hates to pay taxes, create a huge hole in the federal budget.  They will have to cut federal spending by a similar amount in order to conform to the balanced budget amendment to the Constitution that they propose.  Furthermore, in order to demonstrate their commitment to strengthening the US military which has been weakened by a Democratic President, who is not really a US citizen, they will substantially increase the military budget.  They are silent about the government programs that they must cut in order to pay for their tax cuts and the increase in military spending.  Their only salvation is that their electoral base is more interested in the manliness that they put on display in their debates than it is about silly details in the federal budgets that they proposed.  The media also seem to share their interests.  They are better at judging the manliness of the candidates than they are at dealing with boring budget proposals.  After all, they have to attract large audiences to their columns and TV news reports.  That is how they are judged.

Saudi And Russia Make The Case For Efficient Markets

Saudi and Russian oil producers agreed to freeze oil production at current levels.  That decision will make things difficult for high cost producers who wanted a cut in oil production to avoid a further decline in the price of oil.  A Saudi official told an audience of energy producers in Houston that they should respect the market forces that are underway.  The market will determine which producers will survive.  The high cost producers of shale oil and Canadian tar sand oil will need to cut costs to compete with low cost Saudi and Russian producers.  If they are unable to become more efficient they market will force them out of business just as it is supposed to do.  Prices will continue to fall in response to an imbalance between supply and demand drive them out of business.

That was a tough message coming from a Saudi official who led the oil cartel which has carefully managed oil production to manage the price of oil for many years.  It wants to drive the high cost producers out of business so that the cartel can get back in the business of managing the price of oil. Many of the high cost producers have been borrowing heavily in order to survive the drop in prices.  Much of their debt has become junk debt with yields as high as 20%.  The banks that hold this debt are in as much trouble as the producers.

The Saudi minister must still be chuckling after delivering his message about efficient markets to an audience that firmly believes in the market system that is killing them.

Republcan Senate Refuses To Consider Any Obama Nominee For "Supreme" Court

The president has a constitutional right to nominate a candidate for the open position due to the death of Scalia.  Ordinarily, the Senate would go through the process of evaluating the candidate.  The Republican Senate,  and the Republican House of Representatives no longer recognizes the legitimacy of the president that was elected in 2012.  The Senate refuses to even consider a candidate for the vacant position.  The Republican House will not even meet with White House officials to consider the budget submitted by the Obama Administration.  This is not the typical kind of competition between two political parties that is expected in a democracy.  It reflects a total breakdown of the system of checks and balances in our system of governance.  The Republican Party is broken.  It is a revolutionary party that refuses to cooperate with a political party that does not support its revolution.  It attempted to impeach President Clinton and it has obstructed the Obama Administration during his entire presidency.  The Supreme Court has become part of its revolution.  It was supposed to be an apolitical referee of our judicial system, and it was our most respected political institution for most of its history.  That is no longer true.  Popular support for the "Supreme" Court has declined dramatically.  It is approaching the abysmal decline in popular support for our obstructionist Congress.

Analysis Of GOP Candidate's Tax Proposals

The GOP candidates are in strong agreement about tax policy.  All of them have proposed plans which make the tax system less progressive.  That is accomplished by reducing taxes on investment income and other taxes that are paid primarily by wealthy families.  All of the plans dramatically reduce federal tax income.  Trump's plan would cut federal tax revenues by $12 trillion over ten years.  Three organizations analyzed the proposals and summarized the results in this article. 

Since the tax cuts will reduce federal tax income budget deficits will skyrocket under the GOP plans.  There are two ways in which the tax cuts can contain rising budget deficits:  The government can cut spending or the tax cuts will magically grow the economy.  The experts believe that some growth might be derived from tax cuts but not in the order of magnitude required by the tax cuts.  The only way to pay for the tax cuts that go primarily to the rich is to cut spending on popular social welfare programs.  All of the candidates have avoided any discussion of cuts to these programs during their campaigns.  The debates have focused on social and religious values along with the fears that many have about immigration and terrorism. 

Marco Rubio argues that he will be the new Ronald Reagan who bring the Republican Party into the 21st century.  It would be more precise to argue that he and the other candidates would continue the policies introduced by Reagan which produced huge budget deficits because the tax cuts failed to grow the economy as he proposed.  Populists in both parties are concerned about their economic futures.  The Republican Party has put their solution on offer.  Let them eat social values and use tax policies to funnel more wealth and income to the super rich.

The Republican Establishment Has Selected Marco Rubio For President

The GOP primary elections were very bad for the establishment's favorite going into the elections.  Jeb Bush finally decided to withdraw from the primary campaign.  The GOP establishment has no choice but to throw its support to the empty suit with a young and pretty face who may have the ability to attract Spanish speaking voters.  Donald Trump could still win the nomination but the GOP establishment has thrown all of its support in the direction of an empty suit who has done nothing during his brief political career to establish presidential credentials.  Jeb Bush, who helped him to rise through the political ranks in Florida, must be astonished that Rubio has inherited his position as the GOP establishment's new favorite.

 Paul Krugman has taken a look at Rubio's economic policies, which have the stamp of the Republican elite all over them,  and they are not surprising.  They are even worse than George Bush's policies.  Few of the Republican voters, who will determine the GOP candidate, are aware of Rubio's economic policies.  They have been rarely discussed during the GOP debates.  Moreover, it is hard to distinguish Rubio's policies from the other candidates who all favor cutting taxes for the rich and increasing federal budget deficits.  The resulting deficits provide the excuse for cutting federal spending on Social Security, Medicare and other social welfare programs.  Rubio and the other GOP candidates know little about these policies themselves.  They have all been developed by economists who work for think tanks funded by GOP billionaires.  Consequently, the contest is all about personalities and other extraneous factors.  Republicans will have to choose between an empty suit and an entertainer with an expensive hair cut.

The Melting Away Of Social Democracy In The North Atlantic Nations

Thomas Piketty wrote a book that sold 2.2 million copies in which he argued that the period following WW ll until around 1980 was an anomaly.  That was a period of rising income an wealth  equality and the establishment of a social democracy.  We have entered a new period in which income and wealth inequality are increasing rapidly and putting an end to the social democracy that was created during the anomaly.  Brad DeLong does a nice job of explaining Piketty's argument and some of the good and bad critiques of his book.  Piketty argued that steps could be taken to reverse the inequality trend that he described, but that it would take a major effort by governments to restore the period of social democracy that arose following the destruction of capital during the Great Depression and the second world war.  DeLong reached a pessimistic conclusion that is quoted below.  It would be hard for anyone observing the presidential primary campaigns to be positive about the ability of our political system to reverse the trends that are underway.  Unfortunately, very bad politicians get a lot of help from very bad economists who assist them in developing economic and social policies.

But right now money talks very loudly indeed. And I leave the Piketty debate more depressed about our ability to keep it from talking so loudly. What makes me more depressed? The Piketty debate itself does: The eagerness of so-many economists to aggressively make so many shoddy arguments that Piketty does not know what he is talking about--that makes me think that Piketty does indeed know what he is talking about.