Famous US Economists are Looking like Hypocrites & Fools with their Attacks on Trump's Policies. NZ Labour is Secretly being Advised by them.

Nobel Laureate Joseph Stiglitz, who has visited NZ and has a close relative living here, and secretly advised our Labour Party during the Ardern era, wrote a best-selling book called, "Globalization and Its Discontents" in 2002. It argued that globalization had hurt many low income workers. Meanwhile, another famous American economist, Harvard Professor Danii Rodrik, wrote a follow-up book called "The Globalization Paradox" in 2011 arguing for a leaner global system "that puts national democracies front and center". It warned of "pushing economic globalization beyond the boundaries of institutions that regulate, stabilize, & legitimize markets. Hyper-globalization in trade & finance, intended to create seamlessly integrated world markets, has torn domestic societies apart". Both Stiglitz & Rodrik wrote their books before Trump became President. Globalization is defined as the free movement of goods, people, and capital across borders. Now Stiglitz & Rodrik, and an army of US academic economists at Ivy league universities, are launching nuclear attacks on the President's domestic & foreign policies which .. you guessed it .. put his own nation's democracy "front & center", and mark a retreat from globalization, which they had been supporting. Rodrik writes, "A crucial difference between the right & left is that the right thrives on deepening divisions in society - “us” versus “them” - while the left .. overcomes these cleavages through reforms that bridge them". All he reveals with that shallow line is that many of America's so-called top economists are blinded by partisanship.

This Blog is not defending Trump - its simply making an observation that US economics is in crisis. Many big names in the subject at Ivy league universities are looking like hypocritical, empty vassals. Starting after 2000, many built careers writing about flaws in free markets that undermined the benefits of globalization & began to attack 'neoliberalists'. They advocated more economic nationalism. Then when Trump was elected who put America first, they exploded in fury at him. Their argument is based on the idea that it is good to put America first and make it Great Again, but Trump is doing it the wrong way. However these economists have a problem - a majority of Americans voted for him. Stiglitz and others reacted by arguing Trump is a "populist" president, insulting his supporters as being too dumb to understand economics. What is the preferred policy of the likes of Stiglitz, Rodrik, Nobel laureate Paul Krugman & French economist Thomas Piketty? Higher taxes to fund greater welfare so the losers of globalization are compensated that way. It is this approach that has become the policy of NZ Labour, which has been heavily influenced by this group of "big names". Labour wants wealth & capital taxes slapped on Kiwis to fund higher welfare, whilst at the same time still promoting a free-trade agenda. Labour may yet win an election on it, since Stiglitz, Rodrik, Krugman & Piketty are smart. National's economics advisers are not in their league, being the likes of local yokel lawyers & accountants, owners of local real-estate firms & the PM's neighbors on Waiheke (lets not name names, but we could).

Would Elon Musk get a fail in Monetary Economics by Milton Friedman?

As much as I admire much of what Elon Musk stands for, amusingly he's now getting into economics in a big way. Seems its a hobby for him, when he's not launching rockets. Its related to his new role as boss of the Department of Government Efficiency (or "Doge"). On that note, with President Trump sitting next to him, he gives us a mini-lecture on monetary economics. It starts off, "Provided the economy grows faster than the money supply .. and the output of real useful goods and services exceeds the increase in the money supply .. then you have no inflation". Is this correct? Milton Friedman, the towering giant of monetary economics, was famous for his "monetarist rule" that the money supply should be increased at a constant rate each year, equal to the average long-run growth rate. Some folks explain it intuitively by appealing to the "Quantity Theory of Money", which says the money supply equals the Price Level multiplied by GDP (assuming the rate at which the money supply turns over each year, its "velocity", stays the same at 1). Consequently, when the money supply rises at the same rate as GDP, prices stay the same & there is no inflation. By stark contrast, the Musk rule for the money supply leads to deflation, or falling prices. Just saying.