Gongol.com Archives: November 2016

November 30, 2016

Don't count on 4% economic growth

The incoming Trump Administration is exercising the same kind of belief in economic magic that too long possessed the Obama Administration. The Obama Administration long bet on 4% GDP growth as a way to fix the Federal budget. It was absurd of them to bet on that assumption; it wasn't going to happen, and any projections based on such a fanciful figure were bound to be wrong. Now, the presumptive Trump Administration Treasury Secretary is making the exact same fantastical promises. This is sheer madness. Utter and complete madness. Would we all like to see sustained 4% real GDP growth? Absolutely -- it would permit the economy to double in size every two decades or so. That would be (literally) awesome. But it isn't going to happen. The United States last had sustained 4% growth rates in the 1960s. Rates were in the low 3% range through the 1970s, 80s, and 90s. And since then, they've been in the 2% range. Anyone promising 4% annual GDP growth is a huckster, a fraud, and a snake-oil salesman -- unless they can explain precisely what mechanisms they intend to put in place that will cause the economy to suddenly adopt a growth rate twice as fast as anything we've seen since before the Nixon era. Perhaps worst of all is that these people are promising to make the growth rate escalate in part by shutting down trade and getting the government more heavily involved in picking winners and losers. Make no mistake about it: If the only reason a manufacturer like Carrier chooses to build products in the United States is because they're getting sweetheart deals in the form of tax breaks and state-funded incentives, then the economy should be expected to grow at a slower rate than it presently does -- not faster. (And, by the way, if economic barriers are put up that implicitly punish Mexico, then expect the pressure on the border to get worse, not better.) The only way to sustainably raise economic growth rates (without some dramatic event like a war) is to improve the output of the workforce, which is entirely based upon the number of workers and the productivity we get from each one. The number of workers has been shrinking (in relative terms) since the turn of the century, so anyone who pretends to have an answer about economic growth that doesn't center on dramatically raising productivity is a person who is lying to you or is too stupid to be entrusted with any meaningful power. And that's awful, because a lot of people have gotten their hopes up...really, really high.

Anderson Cooper has a good question

The CNN anchor wants to know why the President-elect is watching CNN instead of reading briefing materials? People are starting to get careless with phrases like "post-literacy" (which is being used by some to describe Trump) -- and that's reckless. There is no such thing as "post-literacy". There is literacy...and there is illiteracy. If someone is not literate, that makes them illiterate. Don't muck up the language with a new phrase just because it seems catchy. And note, too, that there are several forms of literacy -- all of which it is wise for any functional adult to possess, but most especially a President of the United States. These include, but are not limited to: literacy in its most common sense; numeracy; technological literacy; economic literacy; and scientific literacy. An adult failing to possess (or at least attempting to acquire) functional literacy in all of those areas should be allowed nowhere near the levers of power if the voters have their own best interests in mind.

The First Amendment comes first for a reason

Always: Our true allegiance and loyalty should be pledged to the Constitution above all.

Some recommended introductory reading in economics

A few books for the beginner

A woman who abandons a two-year-old child isn't a "mom"

Nor is she a "mother". At best, she is a womb-landlord.