Author Archives: AdolfoLipinski

Peter Navarro: Genius or Idiot? Or Neither?

Mother Jones

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Tyler Cowen says that UCI professor Peter Navarro is “one of the most versatile and productive American economists of the last few decades.” Matt Yglesias says Navarro is an idiot. Who’s right?

I think there’s a category error here. Back in September, Navarro co-authored a paper about Donald Trump’s trade policy. Roughly speaking, Navarro relied on the following accounting identity:

GDP = Consumption + Investment + Government Spending + Trade Balance

So if our trade balance goes up from -$500 billion to $0, Navarro said, GDP will go up $500 billion and the government will collect a lot of extra taxes. Hooray! But as Yglesias points out, this is comic-book-level nonsense.1 Let me offer an analogy:

Corporate profits = Revenue + Investment Income – Labor Costs – Other Costs

So if I cut labor costs in half, corporate profits will go up. Right? I think you can see that this is unlikely. If you fired half your workers, you probably could no longer produce anything and your company would go bust. If you cut everyone’s wages in half, you’d suffer a steady exodus of your best people and probably end up far less profitable. If you replaced half your workers with machines, profits might indeed go up, but not by the amount of payroll you save. You’d have to account for the capital cost of the machines—which would probably reduce investment income—and the cost of maintenance—which would increase other costs. Bottom line: depending on how you do this, lots of different things could happen.

In the case of GDP, it’s true that everything in the formula has to add up, since this formula defines what GDP is. But if the trade balance goes up, there are several obvious possibilities. Consumption might go down. Investment might go down. Government spending might go down. In fact, once all the dust has settled, overall GDP might ultimately go down, stay the same, or go up. The real answer is that you’d need to model out an actual plan and figure out where it reaches equilibrium. Navarro knows this perfectly well.

So what is Navarro? Brilliant economist or idiot? Neither one. He’s someone who used to be a versatile and productive economist and is now a China-obsessed fanatic2 willing to say anything for the chance of a job in the Trump administration. He hasn’t lost 50 IQ points, he’s merely become so fixated on the dangers of Chinese trade that he no longer cares about economics. He cares only about saying things that might build support for his preferred policies, regardless of whether they’re true.

In other words, he’s now just another dime-a-dozen political hack. Trump will keep him around as long as his PhD is useful and then toss him aside.

1No offense meant to comic books.

2Three of his five most recent books are: The Coming China Wars, Death by China: Confronting the Dragon, and Crouching Tiger: What China’s Militarism Means for the World.

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Peter Navarro: Genius or Idiot? Or Neither?

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Wall Street Billionaires To Advise Trump On Populist Economics

Mother Jones

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Excellent. Donald Trump has introduced his blue-chip economic advisory team:

The list includes strikingly few academic policy experts, usually the bread-and-butter of campaign policy teams. Instead, the advisory team of 13 men — and no women — consists largely of personal friends or longtime business associates of Trump. The median net worth of Trump’s official economic advisers appears to be at least several hundred million dollars.

That wealthy group includes Harold Hamm, a self-made oil billionaire…. Dan DiMicco, a former chief executive of steelmaker Nucor…. Steven Mnuchin…. chief executive of the hedge fund Dune Capital Management…. Steve Roth…. Vornado Realty Trust; hedge fund billionaire John Paulson…. The only academic economist on the team — the only one who has a doctorate in economics — is Peter Navarro of the University of California at Irvine, who focuses on trade with China.

….Trump’s outsider crew at times conflicts with his message of economic populism….His team is filled with hedge fund managers, bankers and real estate speculators.

A whole bunch of Wall Street billionaires plus Stephen Moore, an annual contender for stupidest man in the world. This fits Trump perfectly, especially since he’s not going to listen to any of them anyway. Why should he, after all? He knows more about how the economy works than any of them, believe me.

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Wall Street Billionaires To Advise Trump On Populist Economics

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All Trump-ed out, Chris Christie goes home to block funding for lead-poisoned families

All Trump-ed out, Chris Christie goes home to block funding for lead-poisoned families

By on 7 Mar 2016commentsShare

Chris Christie’s bad month keeps getting worse: he dropped out of the presidential race after an abysmal finish in New Hampshire, he endorsed Donald Trump to the Republican establishment’s revulsion, and six of his home-state newspapers called on him to resign. You’d think that, at this point, the New Jersey governor’s parade of missteps would be over.

But lo and behold, Christie can’t help himself. This week, he’s back home, spending his time blocking Democratic legislators’ efforts to clean up high levels of lead in New Jersey cities.

On Monday, New Jersey’s legislature reviewed two bills meant to alleviate lead poisoning, which affects children’s development, by funneling $10 million into the state’s Lead Hazard Control Assistance Fund, which would provide financial aid to homeowners who wanted to safely remove lead paint and earmark money to relocate families whose children have high lead levels. The fund has spent $16.5 million since its creation in 2004, based off a  50-cent-per-gallon fee on paint sales. The newly proposed bill would obtain funding through this fee.

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Christie has opposed efforts to earmark funding in the state’s budget in the past, vetoing another version of the same bill in January. It was the third year in a row that the bill has failed to make it through. The last time Christie vetoed it, Director of the New Jersey Sierra Club Jeff Tittel said the move was akin to “stealing money that would keep lead out of our homes and protect our children from lead poisoning.”

“First of all this has been an over-dramatized issue,” Christie told reporters last Thursday, according to NJ Spotlight. His reasoning: “You cannot fund everything. So make some choices and I will certainly be willing to consider that along with everything else that comes about.”

Christie’s argument is that New Jersey has seen success with reducing lead poisoning, with the number of children with unsafe levels of lead dropping by 70 percent from 1997 to 2013. He also argues that the state funds existing lead programs — after Superstorm Sandy, New Jersey earmarked $7 million a year for lead abatement, and receives $5 million in federal funding to fix damaged properties yearly. But the bill’s advocates say that more funding is needed. Due to the Centers for Disease Control stricter limit on what level of lead in children’s blood is considered “safe,” the number of children in New Jersey considered to have an unsafe level of lead in their blood jumped from 800 children in 2012 to more than 5,000 in 2013.

Lead poisoning has been a national topic the past few months, after Flint’s 100,000 residents found a high concentration of lead in their water supply. Most lead poisoning comes from contaminated water sources, soil in places where cars relied on lead-based gasoline, and, more rarely, from consuming or inhaling lead-based paint particles. Flint isn’t the only place with a lead problem, either. Across the country, nine counties report that 10 percent or more of their population tested positive for lead poisoning, according to 2014 CDC data. Research by public health advocacy groups show that 11 New Jersey cities and two counties have higher lead levels than those in Flint, Michigan.

Though he’s now stumping for Trump, Christie may have more something in common with another one of his one-time presidential opponents. At the most recent Republican debate last week, Florida Senator Marco Rubio said that Flint’s water crisis a tragedy, yet still defended Michigan Governor Rick Snyder. “The politicizing of it, I think, is unfair, because I don’t think someone woke up one morning and said “let’s figure out how to poison the water system to hurt someone, but accountability is important,” Rubio said.

Snyder agrees:

But it shouldn’t come as a surprise that Christie is following in-step with other Republican politicians — after all, it’s clear that at this point, he’ll follow anyone into hell.

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All Trump-ed out, Chris Christie goes home to block funding for lead-poisoned families

Posted in alo, Anchor, FF, G & F, GE, LAI, ONA, Radius, solar, solar power, Uncategorized | Tagged , , , , , , , , | Comments Off on All Trump-ed out, Chris Christie goes home to block funding for lead-poisoned families