Paul Krugman: Living in the Trump Zone

"Don’t pretend that this is normal":
Living in the Trump Zone, by Paul Krugman, NY Times: Fans of old TV series may remember a classic “Twilight Zone” episode titled “It’s a Good Life.” It featured a small town terrorized by a 6-year-old who for some reason had monstrous superpowers, coupled with complete emotional immaturity. Everyone lived in constant fear, made worse by the need to pretend that everything was fine. After all, any hint of discontent could bring terrible retribution.
And now you know what it must be like working in the Trump administration. ...
What set me off on this chain of association? The answer may surprise you; it was the tax “plan” the administration released on Wednesday..., the single-page document ... bore no resemblance to what people normally mean when they talk about a tax plan. ...
So why would the White House release such an embarrassing document?
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Economists React to First Quarter GDP Report: ‘Stronger Than It Appears’

The U.S. economy grew at the slowest pace in three years during the first quarter, rising at a 0.7% rate, down from the prior quarter’s 2.1% rate. Here are early reactions from economists and analysts: “Perhaps most encouraging, business investment in equipment, which had languished for two years, posted a 9.1% annualized advance (I had looked for a 6% rise). If the government can pull off corporate tax reform, I look for a torrent of investment projects to be unleashed. Until then, gains will be limited.” —Stephen Stanley, Amherst Pierpont Securities [wsj-responsive-sandbox id = "0" ] “Economy stronger than it appears in [first-quarter] report, already showing signs of accelerating again. Tailwind for wages encouraging.” —Diane Swonk, DS Economics “While consumers may have stood still in the first quarter, sluggishness in consumer spending did not translate to the housing market…Housing is Continue reading "Economists React to First Quarter GDP Report: ‘Stronger Than It Appears’"

First-Quarter U.S. Growth – At A Glance

Matt Rourke/Associated Press
Winter of Discontent First-quarter GDP growth frequently looks soft, a possible by-product of measurement issues. The Bureau of Economic Analysis has tried to correct the problem with seasonal adjustments but some economists believe it remains, understating growth in the first quarter and overstating it later in the year. The underlying trend, though, has been undisturbed through the latest expansion: annual growth around 2%. Compared to the same period one year earlier, GDP advanced 1.9%. Consumer Caution Consumer confidence soared following Donald Trump’s election, but spending hasn’t matched sentiment. Personal consumption expenditures advanced a measly 0.3% in the first quarter, the slowest pace since the end of 2009. Consumers contributed 0.23 percentage point to the headline GDP number. The pullback may be temporary as warm weather damped demand for home heating–service spending advanced at the slowest pace in four years. Much of the weakness, however, Continue reading "First-Quarter U.S. Growth – At A Glance"

Is There a Case to be Made for Political Antitrust?

Asher Schechter at ProMarket:
Is There a Case to be Made for Political Antitrust?: After decades of approaching antitrust through purely economic analyses, are economists once again willing to take into account political considerations as well?Should political considerations play a role in antitrust? In the last four decades, the predominant approach was that antitrust enforcement should only be guided by economic considerations such as efficiency and consumer welfare. Now, if a panel at the recent Stigler Center conference on concentration in America is any indication, it seems that some economists are once again willing to take into account the political dimensions of antitrust.
 In 1979, former FTC chairman Robert Pitofsky published a seminal paper on what he termed the “political content” of antitrust. Contrary to the view that antitrust should be concerned exclusively with economic questions, Pitofsky argued that “political values” should be incorporated into the enforcement of
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Links for 04-28-17

Why the GDP Report Could Make U.S. Growth Look Rosier Than It Is

On Friday the government will release data that’s widely expected to show slow growth in U.S. output in the first quarter. Now—even before its release—there’s evidence output growth was even slower than this estimate will convey. The Commerce Department’s Bureau of Economic Analysis won’t incorporate into its growth estimates recently revised U.S. retail sales data that were made public Wednesday. Instead, these revisions will be incorporated next month, when the BEA updates its first-quarter estimates of gross domestic product, the government’s broadest measure of the economy’s output. The downward revisions to the retail-sales data suggest consumer spending was weaker in the first quarter than previously estimated. But the revisions didn’t come through soon enough to incorporate into the upcoming report. Using the new figures could subtract two-tenths of a percentage point from the “headline” figure in Friday’s GDP report, said Ben Herzon, economist with the private forecasting Continue reading "Why the GDP Report Could Make U.S. Growth Look Rosier Than It Is"

Trade, Jobs, and Inequality (Video)

Participants: Paul Krugman, Nobel Prize-winning economist, New York Times columnist, and distinguished professor at the Graduate Center. David Autor, leading labor economist; professor at MIT, where he directs the School Effectiveness and Inequality Initiative; and editor in chief of the Journal of Economic Perspectives. Brad DeLong, economics professor at U.C. Berkeley; weblogger for the Washington Center for Equitable Growth; and former U.S. deputy assistant secretary of the treasury, in the Clinton administration. Anne Harrison, professor at the Wharton School, University of Pennsylvania; former director of development policy at the World Bank; and author of Globalization and Poverty.