Tag: Donald Trump

Essay 88: Podcast-Alert: Cars, Steel & National Security

Listen to The Sound of Economics

Guntram Wolff is joined by Alan Beattie, the author of the FT’s new Trade Secrets newsletter, and by André Sapir, Bruegel’s very own trade expert to discuss President Trump’s tariffs and whether or not they’re working.

Bruegel has launched an updated series of the Sound of Economics, hosted by Bruegel’s Director Guntram Wolff, Deputy Director Maria Demertzis and former Economist journalist Nicholas Barrett. Subscribe on iTunes, Spotify or Google Podcasts.

Previous Episodes

How to Make the European Green Deal Work

The European Green Deal will be a defining feature of Ursula Von der Leyen’s incoming Commission. But will carbon border taxes and single carbon prices be enough to make Europe climate-neutral by 2050? This week, Nicholas Barrett and Guntram Wolff discuss Bruegel’s new paper “How to make the European Green Deal Work” [Archived PDF] with Grégory Claeys and Simone Tagliapietra. Listen here.

How Not to Spend It

Digital banking has made our lives easier, but why are people use mobile banking more likely to be overdrawn? This week Maria Demertzis and Nicholas Barrett are joined by Annamaria Lusardi, Denit Trust Endowed Chair of Economics and Accountancy from George Washington University School of Business to discuss financial literacy. Listen here.

Essay 84: World Watching: U.S.-China Tariffs

(from the PIIE Insider)

News and Analysis from the Peterson Institute for International Economics
November 13, 2019

They Saved the Worst for Last: Why Trump’s Impending December Tariffs on China Should Be Rolled Back

The terms and deadlines of President Donald Trump’s trade war with China are hard to follow, but one thing is clear: American consumers and businesses should welcome a rollback of impending final rounds of China tariffs as part of a possible “phase 1” deal to be announced later in November, say Mary E. Lovely and Yang Liang. Washington has acted against China to punish it for preventing US access to the Chinese market and for violating US intellectual property rights.  Beijing is reportedly demanding that impending December tariffs be dropped before they sign any deal. Trump says he hasn’t decided how many tariffs might be lifted.

Key Takeaways

Read the full story at PIIE [archived PDF].

Essay 45: Then and Now Thinking: Facile Comparisons Lead to “Concept-Fraud”

The economist Arthur Laffer recently received an award from President Trump. Laffer wants to deceptively “cartoonize” reality by arguing that as taxes “go to 100%” (i.e., confiscation), output will go to zero and conversely as taxes “go to zero” output will go to “infinity.”

This is an example of playing with “bad infinities.”

This Laffer argument has been naively compared to David Hume’s economics:

“Back in the eighteenth century, the wise Scot David Hume anticipated David Hume in these 1756 words of sooth:

“‘Exorbitant taxes, like extreme necessity, destroy industry by producing despair; and even before they reach this pitch, they raise raise the wages of the laborer and manufacturer, and heighten the price of all commodities. An attentive disinterested legislature will observe the point where the emolument ceases and the prejudice begins.’”

(David Hume, Writings on Economics, ed. Eugene Rotwein, Edinburgh, Thomas Nelson and Sons, 1955, page 87)

(quoted in Greed is Not Enough: Reaganomics, Robert Lekachman, Pantheon Books, 1982, page 49)

Reaganomics and Laffer-nomics have nothing to do with David Hume and facile “then-and-now” comparisons, all of which are false since the “anarcho-capitalism” of Reagan/Thatcher views has noting to do with Hume. 

Thatcher said: “properly speaking, there is no such thing as society. There are only individuals.”

But Hume believes the exact opposite as a socially conscious brand of conservative:

“Hume cherished the structures that sustain our social life. He was in this respect deeply conservative, in the good sense of the conservationist of the shapes and forms which these institutions have taken.

“And of course he was deeply mistrustful of any scatterbrained project of doing better, by promoting anarchism or society without government or law, or dismantling the institutions of contract or private property. 

“He would have had absolutely no patience whatsoever with the contemporary takeover of social ideals by monetary and market values.

“When free-marketeers say that there is no such thing as society, they are denying the very arches needed to sustain contracts, law, government, and markets in the first place, and then knavery loses its stigma, and we may well expect the worst, as their practice becomes ‘answerable’  to their ‘speculation.’”

(quoted in How to Read Hume, Simon Blackburn, Granta, 2008, page 70)

Deceivers make duplicitous linkages between hallowed names and ideas of the past and the dangerously “tricky” present.

Thus, Hume-to-Laffer linkages and trajectories makes no sense whatsoever. This is an example of “then-and-now thinking” used for “concept-fraud.”

Essay 34: Arguments Without End: Are They Good or Bad?

The Dutch historian Pieter Geyl (died in 1966) coined the phrase “argument without end” to get at the constant reappearance of old arguments or viewpoints. One gets the impression that arguments are either persistent or perhaps permanent. One simplistic example could be argument about socialism: Sweden is “good,” but Venezuela (or Cuba) is bad. This book takes the view that “arguments without end” are not the end of knowledge but rather a potential beginning: it could be that some issues cannot be captured by one school of thought: the awarding of the 1974 Nobel Prize to both Hayek (“the right”) and Myrdal (“the left”) is an example of this need for hybridity. Both Hayek and Myrdal are each seeing something valid and it’s a “fool’s errand” to decide who is “eternally” correct.

Let’s apply this thinking to a deep “argument without end” within and about history.

Michel Foucault (died in 1984) following Nietzsche, argues that history seems “linear” but is more random and non-linear than the “linear” historians see or admit.

There’s an aphorism in Nietzsche, (from his The Dawn) which Foucault uses…history is made by the “iron-hand of necessity shaking the dice-box of chance.”

In other words the world we know, traveling somehow from the assassination of Kennedy (November 2, 1963) to the impeachment hearings of Trump in October 2019, must be thought of as a kind of “random walk” behind which are trends, cycles, so that one gets a fusion of structure and surprise. If you emphasize surprise you’re closer to Foucault than to those narrative historians who think they can show you the exact threads which connect “then and now.”

Here’s an example of such a historian, the celebrated G.R. Elton of England, whose classic The Tudor Revolution in Government is a masterpiece of orthodox analysis. The book centers on the administrative revolution in the 1530s in England which implied, says Elton, “As regards political and social structure, the sixteenth century produced something quite new in England—the self-contained sovereign state in which no power on earth could challenge the supremacy of statute made by the crown in parliament.”

“In this revolution, in this making of a new kind of state productive of a new kind of society, administrative reforms played their part. It is against this background of controlled upheaval that they must be seen and understood.”

(Elton, The Tudor Revolution in Government, Cambridge University press, 1966, page 426/427)

Orthodox historians see history as a “nail-down-able” system of storylines and the controlled upheavals have a direction (teleology) which allows you to use—in this case the 1530s in England—as a beginning, an origin, a “datum line,” and once you have this clear starting point you can follow the story to now and include comparative developments in France or Germany or China.

The orthodox “explain strategy” starts with an origin, a “starting gate” like a horse-race.

The Foucault–Nietzsche view is that these starting points are not entirely useless but in the end don’t help you because history is in the end governed by “the dice-box of chance” even if it is held by “the iron-hand of necessity.” History is more “upheaval” than “control” more surprise than structure. “Determinism” such as perhaps based by pinning down a starting point from which one can “build out,” is a wish-dream since history is nonlinear and nondeterministic. Even Elton’s phrase “controlled upheaval” is full of questions and problems.

Modern “complexity theory” in mathematics tries to get at these differences analytically. A “meta-intelligent” student would go from this historians’ “argument without end” to the analysis of complexity in math as a way of rounding out the exploration.

An “argument without end” can thus be useful if the student does not insist on some final “apodictic” or certain-forever answer.

Essay 26: Extracting Educational “Signals” from the “Noise” Around You

A student should train him or herself to extract “signals from noise” in the world all around oneself.

For example:

You see the British movie Carrington with Emma Thompson concerning the British painter Dora Carrington. In her “circle,” which overlaps the Bloomsbury Group of such luminaries as Keynes and Bertrand Russell, there’s a scholarly member called Gerald Brenan, who became a world-famous analyst of the Spanish Civil War (1936-1939):

“Edward FitzGerald ‘Gerald’ Brenan, CBE, MC was a British writer and Hispanist who spent much of his life in Spain. Brenan is best known for The Spanish Labyrinth, a historical work on the background to the Spanish Civil War, and for South from Granada: Seven Years in an Andalusian Village.”

His basic information is:

Born: April 7, 1894, Sliema, Malta
Died: January 19, 1987, Alhaurín el Grande, Spain
Spouse: Gamel Woolsey (m. 1931–1968)
Movies: South from Granada

Think of Brenan’s book title, The Spanish Labyrinth. Ask yourself if the concept of a national labyrinth is not exceedingly eye-opening. Would it not be very educational to study the features and characteristics of the American, Chinese, or Russian “labyrinths?” Would not any country’s political economy overlaid with its labyrinthian realities be very instructive?

Think of the Trump labyrinth in October 2019, all the players, deceptions, overlapping functions, pressures. paymasters both hidden and overt and obviously it’s all a kind of “deception machine” which is its own labyrinth. Thus, without even having read the Gerald Brenan masterpiece on Spain, the very name of the book is eye-opening and informative in a “meta-intelligent” way (i.e., it tweaks your sense of overview right away).

Another example: you look at a syllabus for a history course on English history and notice a title: The Shaping of the Elizabethan Regime by Prof. Wallace T. MacCaffrey (1968/1971). The very title alerts you to the fact that the evening news right now is about “the shaping of the Trump regime.”

The word “regime” supplants the usual “the administration” and the power politics and musical chairs are constant. The Elizabethan regime had similar features on a smaller scale. The basic phenomena are comparable and apply to all regimes. Your sense of overview becomes stronger by ranging between then (Elizabethan times, Tudor England) and now (Trump regime juggling.)

Take an example from TV: PBS had a Nature program entitled The Queen of Trees which takes one single tree in Africa and shows you the complexity of the micro-ecosystem it lives by:

“Nature reveals the importance of an unlikely partnership between a regal tree and a tiny wasp in The Queen of Trees.

“It may be one of nature’s oddest couples: a tiny wasp that can barely be seen, and a giant fig tree, the sycamore, which shelters a remarkable menagerie of wildlife among its limbs. The wasp and the fig depend on each other for survival. Without the wasp, the tree could not pollinate its flowers and produce seeds. Without the fig, the wasp would have nowhere to lay its eggs.

“The Queen of Trees shows this delicate dance of survival in exquisite detail, including spectacular close-ups of the wasp’s remarkable life inside a ripening fig. To capture such incredible images, filmmakers Victoria Stone and Mark Deeble spent two years camped out near a giant sycamore fig in Kenya’s outback, documenting the tree’s pivotal role as a source of food and shelter for everything from gray hornbills, Africa’s largest bird, to swarms of invading insects searching for food. In a surprising turn, some insects come to the tree’s aid—sparking a battle.”

The intricacies of the tree give you a sense of the limits of knowledge: if we can hardly really understand the “life and times” of one tree in Africa, does the pretense of science that we will one day know everything about everything expressed in rigorous equations, no less (à la Stephen Hawking’s visions) seem suddenly very unlikely and quixotic? The tactics and alliances and “politics” of the tree are “infinitely” complicated by themselves and thus getting an overview of the multiverse seems supremely hubristic.

These three examples show you the process of extracting “signals” from the “university” all around you.

Essay 23: Movies as a Kind of University

A meta-intelligent attention to movies (as well as songs) can serve as a university or university supplement.  Let’s think of three early eighties movies together, as a cluster:

  1. Romancing the Stone (Michael Douglas)
  2. Salvador (James Woods, Oliver Stone movie)
  3. Under Fire (Nicaragua setting)

These movies taken together reveal changing relationship between the West and the developing world. (so-called less developed countries or Third World).

Why?

There’s a scene in Romancing the Stone where Danny DeVito’s character finds himself in Colombia and exclaims at one point, “Who will save me from this Third World toilet?” (i.e., Donald Trump’s view at present).

In Salvador, there’s a scene where James Woods’ character is told by a local woman, commenting on the turmoil of the moment (such as Archbishop Óscar Romero’s assassination): “This reminds me of the “Matanza” (“massacre”).

The 1932 Salvadoran peasant massacre (Matanza) occurred on January 22 of that year, in the western departments of El Salvador when a brief peasant-led rebellion was suppressed by the government, then led by Maximiliano Hernández Martínez. The Salvadoran army, being vastly superior in terms of weapons and soldiers, executed those who stood against it. The rebellion was a mixture of protest and insurrection which ended in ethnocide, claiming the lives of an estimated 10,000 and 40,000 peasants and other civilians, many of them indigenous people.

All of this Central American turmoil has deep roots in (Spanish) colonial land distribution as well as post-colonial “state-formation” after the Spanish empire was gone, where the political elite families took over the land with millions of landless and subsistence-farmers excluded from any prospect of betterment. (The Guatemalan massacres of indigenous Indians under Ríos Montt follow the same pattern with its deep roots in “state malformation.” Costa Rica was somewhat spared this turmoil via 1948 progressive revolution under Figueres).

Under Fire shows the Nicaragua revolutionary situation in 1979. The “periodistas” (journalists) represented by Gene Hackman and his friends are told by a revolutionary soldier woman, “The world is now about North-South, not East-West.”

“North-South” means West/Third World and their changing relationship as opposed to Washington-Moscow rivalries.

The current migration crisis on the U.S. border in 2020 has everything to do with this background history of “state malformation” in Central America and its collision with nativist/populist virulence in Trump’s America. (i.e., Trump/Miller/Bannon). These problems can only be addressed by “developmentalist” policies and understandings and not by “know-nothingism.”

Thus, these three movies, taken as an “accidental cluster” give us an unintended insight into the moving “tectonic plates” that give us current history.

Movies should be seen in this “meta-intelligent way” (i.e., informative in an overview sense).