Daily Adams

Economics

Trumpnomics Robs Poor, Middle Class

Leaving aside for a moment the undeniable legal, political, and economic hurdles to unilaterally imposing a 45 percent tariff on all Chinese imports, as well as the utter gibberish at the end of Collins’ response about inflation and the federal budget (seriously, I have no idea), let’s take the plan at face value. According to Team Trump, their import tax would (i) force American consumers to pay 10 to 15 percent more for food, clothing, shoes, electronics, and other basic necessities; and (ii) thereby assist American manufacturing companies and their workers.

Put another way, Team Trump has now freely admitted they want to indirectly subsidize U.S. manufacturers via higher prices that American families and businesses would be forced to pay for these domestic producers’ goods.

Via Endorser Agrees: Trump Policies Will Benefit Rich at Expense of Poor and Middle Class @ Cato Institute.

Incredible

We are concerned to see the Sanders campaign citing extreme claims by Gerald Friedman about the effect of Senator Sanders’s economic plan—claims that cannot be supported by the economic evidence. Friedman asserts that your plan will have huge beneficial impacts on growth rates, income and employment that exceed even the most grandiose predictions by Republicans about the impact of their tax cut proposals.

As much as we wish it were so, no credible economic research supports economic impacts of these magnitudes. Making such promises runs against our party’s best traditions of evidence-based policy making and undermines our reputation as the party of responsible arithmetic. These claims undermine the credibility of the progressive economic agenda and make it that much more difficult to challenge the unrealistic claims made by Republican candidates.

Via Former Dem CEAs Write Open Letter to Sanders @ Marginal REVOLUTION.

Really Old School 

Being “pro business” doesn’t necessarily mean “pro free markets.” Reality TV star and wannabe Republican presidential nominee, Donald Trump reminds us of this.Writing for The Stream, Acton’s Director of Research, Samuel Gregg, argues that not only does Trump seem to be a mercantilist, but, if implemented, this medieval economic system would weaken the United States.

Via Is Donald Trump a mercantilist? @ Acton PowerBlog.

Dems Smear Capitalism

Bernie Sanders makes no attempt to differentiate between crony capitalism and decent hardworking businessmen. Hillary Clinton actually does this for a minute in her response to Sanders, but then goes on to regurgitate the current absurd, but fashionable, anti-inequality view that is being pushed on the masses.

Via Sanders, Clinton Clash on Capitalism at Democratic Debate Last Night @ Economic Policy Journal.

The Truth About Keynesian Demand-Side Theory

Let’s turn to the basics. In the Keynesian view of the world, government deficits are expansionary. They lead to greater overall spending in the economy. Balanced budgets and government surpluses are contractionary. They are “austerity” policies. Deficit spending, of course, can be produced by an increase in government spending or by a reduction in taxes.

So there you have it …. Ooops. Did you say tax cuts are expansionary? Yes. Tax cuts. The Keynesian model is a demand side model. A tax cut puts more money in the hands of people, and when they spend it, aggregate demand increases. There are no direst supply side effects in the model. Tax cuts don’t get people to work more or save more or invest more. But they do get people to spend more.

Via Keynesianism Vs. Paul Krugman And Why We Aren’t Growing Faster @ Forbes.

The Limits of China Under Communism

There is no historical example of a closed imperial economy facing large capital-driven, open states and sustainably competing over a long term. That is not to say that China isn’t an economic powerhouse and a remarkable site of energy and potential. It is certainly both. But we also know Chinese debt — as secret as the state likes to keep it — is enormous, and that its financial system is like any other bubble. It is predicated on inflated earnings reports and expectations. The great “Beijing Consensus,” China’s absolute commitment to showing 8% growth every year, is unsustainable, at least through legitimate means. And without it, China is beginning to look like an enormous totalitarian ponzi scheme — a phenomenon common enough in world history, but extremely dangerous be near in the long run.

Via China: The new Spanish Empire?