The new old hacks..

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Larry Kudlow and Stephen Moore, Trump's economic advisers remain deeply funny. In summary, they argue:

• Wages are stagnating because companies don't invest
  
• Companies don't invest because taxes (and regulation) are too high, that reduces the quality and quantity of the capital stock and hence productivity and wages.
  

Very simple evidence shows this is complete nonsense:

• Profits are at record high, as are corporate cash hoards. Interest rates are at century lows. Companies do not lack funds for investment.
  
• Instead, companies pay almost all profits to shareholders in the form of buybacks and dividends, the pay-out ratio is over 90%.
  
• US corporate tax income has been falling and isn't high internationally.
  
• Most important, the reason wages have stagnated is that the link between wages and productivity has been severed since the 1970s.
  
• Given these simple facts, an alternative explanation makes much more sense. Investment is low because there is insufficient demand as wages have been stagnating because most of the economic gains go to the top, where people save much more.
  
• So Kudlow and Moore have it backwards. Their policies would reinforce the loop where most of the gains concentrate at the top and demand leaks out of the system (in higher savings and tax haven accounts). 
  

Here is Kudlow, striking again:

But the fact remains that Hillary Clinton’s proposals to raise taxes on so-called rich people, rich corporations, Wall Street, investors (capital gains, dividends, and financial transactions), and estates will greatly harm middle-income wage earners who have essentially not had a pay raise since the year 2000

So taxing the rich will... hurt the middle class. How does that work? He has some "academic" sources (which are from the American Enterprise Institute, one of these right wing 'think tanks' that start their research with the conclusions:

Let me begin with AEI economists Aparna Mathur and Kevin Hassett. They have written extensively on the adverse effects of high corporate taxes on worker wages. They argue that high taxes drive capital out of the high-tax country, like the U.S., which leads to lower domestic investment. That in turn reduces the productivity of the worker, who will lack the latest advances in technology and machinery. And since there is a tight link between worker productivity and pay, lower wages result.

This is simply funny. Does anybody see high corporate taxes here:

U.S. corporate income taxes have declined sharply as a percentage of GDP since 1945. [2]  Part of the reason corporations are paying less in taxes today than they did 70 years ago is due to copious changes in the tax code. Yet there is a growing and vocal movement among well-financed lobbying groups to push federal lawmakers to lower the corporate tax rate. These business-backed groups claim that the U.S. corporate tax rate is too high, citing the 35 percent federal statutory tax rate. But that narrow argument ignores critical facts such as the many large tax breaks, loopholes and other corporate tax exceptions that big businesses have successfully lobbied to embed in the tax code. A 2014 study by Citizens for Tax Justice examined five years of data and found that Fortune 500 companies paid an average federal effective corporate income tax rate of only 19.4 percent, which is just over half of the nominal U.S. statutory rate of 35 percent. That same study found that many profitable, large U.S. corporations such as Boeing, General Electric and Verizon paid no federal corporate income taxes at all.

U.S. Corporate Taxes Are Below Developed Country Average | CTJReports

Even funnier is the supposed reason that wages have not risen. 'High' taxes deter investments, which deteriorates the capital stock (both qualitatively and quantitatively), and that supposedly depresses wages. If that's true, then how do these clowns explain this:



Despite record high corporate profits and cash hoards, and record low interest rates, companies do indeed invest insufficiently in new production capacity. Instead, they distribute almost all profits to shareholders, in the form of dividends and buybacks. 

This redistributes income to the top, where it is saved much more (or stashed in anonymous accounts in tax havens), so part of it isn't recycled, which one explanation for the lack of business investment in new capacity.

Undoing this redistribution to the top could actually revive investment and the economy, Kudlow and Moore have it exactly backwards.

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Here is a closer look at Larry Kudlow's funny history, from an older (2015) New York Magazine article:

Bush Tax Cuts Worked Brilliantly, Argues Republican Economist Lawrence Kudlow

By Jonathan Chait Follow @jonathanchait

Lawrence Kudlow, the CNBC pundit and Republican adviser, has co-founded the “Committee to Unleash American Prosperity” to lobby for supply-side economic policy. CUAP recently hosted Scott Walker, who appears highly congenial to the committee’s agenda. The interesting thing about Kudlow’s continuing influence over conservative thought is that he has elevated flamboyant wrongness to a kind of performance art. He has argued continuously, since Bill Clinton raised taxes on the rich in 1993, that higher taxes on the rich must necessarily destroy economic growth, and that lower taxes on the rich must necessarily bring prosperity. As (perhaps owing largely to unfortunate coincidence) the exact opposite has happened instead, he has resorted to a series of frantic post-hoc revisions.

Today, in an interview with Jim Tankersley, Kudlow provides the updated version of his theory. Kudlow’s biggest problem is that the United States recently had a president who closely followed his economic prescriptions, and the result was a mediocre recovery with stagnant wages culminating in a worldwide economic meltdown. Does this in any way cut against Kudlow’s belief in the stimulative power of marginal tax cuts? No, no, Kudlow explains. According to Tankersley, “Kudlow blames President Obama and his GOP predecessor, George W. Bush, for expanding safety net programs and discouraging work.” Also, Kudlow “says Bush’s temporary and targeted 2001 and 2008 tax cuts failed, but that his big rate cuts in 2003 spurred a five-year ‘boom.’” So, to sum up, Bush’s supply-side tax cuts worked. But he also passed non-supply-side tax cuts (in 2001) that failed, and he spent too much.

Let us consider these arguments individually.

1. Did Bush’s 2001 tax cut fail to include supply-side incentives? No. It cut the top tax rate to 35 percent. At the time of their passage, Kudlow celebrated the 2001 Bush tax cuts as an important success:

The Bush plan is a crucial first step toward returning to the principle of supply-side tax policy that focuses on marginal tax-rate relief. As the incentive effects gradually kick in over the years ahead, economic growth will increase and inflation will decline. The dollar exchange rate will appreciate. Stock markets will recover.

2. Did Bush’s spending undermine the recovery? Funny, at the time, Kudlow was insisting the economy was undergoing a “Bush boom” that was massively underappreciated by everybody except himself and a handful of far-sighted supply-siders. As as disaster loomed, Kudlow insisted that the notion that the Bush boom might go into recession was a liberal hallucination.

3. Did Bush’s 2008 tax cuts create a “five-year boom”? Aside from the fact that the Bush recovery was one of the weakest of the postwar period, not a "boom," there is the "five-year" problem. Why would the 2003 tax cuts get credit for everything that happened before 2008, but not after, since they continued through 2012?

Indeed, Kudlow continued to credit those tax cuts intermittently for whatever good economic news followed over the next four years. At the end of 2010, President Obama signed a two-year extension of the Bush tax cuts. A few months later, Kudlow was explaining that the Bush tax cuts had created more wonderful economic growth:

“So, did the big March jobs report put President Obama back on the road to reelection? Well, if so, guess who he has to thank — the GOP, whose tax cuts saved him from himself,” Kudlow said. “At this rate, nearly 2 million jobs are going to be created in 2011. So, the White House has got to be very happy. But here’s the sublime irony: The wake-up in job creation is a function of Republican policy. After all, for two years the Obama Democrats spent themselves into oblivion. Over trillion dollars of so-called big-government stimulus – it didn’t work. It was replaced, however by Republican tax cuts that the president signed only after a shellacking at the polls.”

Of course, the portion of those tax cuts benefiting only the richest 1 percent of taxpayers ended at the beginning of 2013. Since then, job growth has accelerated:

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Stephen Moore is at it again:

Who else is there? Yet, amazingly, a caucus of lifelong Republican politicos in Washington are announcing to the world with defiance and self-righteousness that they will vote for Hillary Clinton. They are mostly former Mitt Romney and George W. Bush operatives. They lost, and now they want people to believe that their anti-Trumpism is a principled act of heroism. They ingratiate themselves to The New York Times, Washington Post and team Clinton -- the sworn enemies of free markets and conservative values. Somehow this doesn't offend their moral compass.

What Republican Turncoats Forget | RealClearPolitics

Sworn enemies of free markets??

No, Mr. Moore. Your might not realize, but in certain cases markets can fail. They fail in healthcare through adverse selection (only the highest risks want insurance but insurance are only interested in the lowest risk), where they produce externalities like pollution (the social cost of production exceeds the private ones and the cost of production are shifted on society at large).

But we don't clamor for the nationalization of all means, and we leave markets alone where they work well and don't produce adverse effects on society. Markets very efficient, but not always faultless or suited to resolve all problems. They are a means, not an end in themselves. But your ideological world view simply doesn't seem to be able to take those nuances aboard. 

One might also read our manifesto

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Here is former Reagan functionary, and one who was intimately involved with the tax cuts under Reagan, about the proposed tax cuts from Trump (Kudlow and Moore):

But the Reagan tax cut played only a secondary role in the 1980s boom, which wasn’t really much of a boom. Real G.D.P. grew 37.9 percent in the 1970s, compared with 36.1 percent in the 1980s. The economy felt better because inflation came down extraordinarily quickly, far more quickly than economists in 1980 thought was possible. But this was primarily a result of the Federal Reserve’s tight money policy, not taxes. The tax cut deserves credit for softening the blow from the reduction in inflation, which brought on a sharp recession in 1981-82. But what we think of as the Reagan boom was the typical rebound from a sharp recession, just as we had seen after all previous postwar recessions. Much credit for growth in the Reagan years must go to the sharp increase in government purchases for his defense buildup.

What many Republicans also forget is that Reagan cared about deficits and supported 11 different tax increases from 1982 to 1988 that collectively took back half of the 1981 tax cut. Although many conservative economists predicted doom from the 1982 tax increase, which equaled 1 percent of G.D.P., the beginning of the boom coincided with its enactment.

These economists also predicted catastrophe from the 1993 tax increase enacted under President Bill Clinton and from the expiration of many of President George W. Bush’s tax cuts in 2013. But in each case financial markets and the economy grew sharply afterward.

By contrast, the economy tanked during the Bush years despite numerous large tax cuts. The final proof that tax cuts are not the be-all and end-all of growth policy is the Tax Reform Act of 1986, which dropped the top income-tax rate to 28 percent. Conservative doctrine predicted an economic boom, but I don’t remember one, nor can I find one in the data.

Trump’s Misguided Embrace of Tax Cuts - The New York Times

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Pretty comprehensive, this and it gets better towards the end.. From Media Matters:

What Media Need To Know About Trump Economic Policy Advisers Steve Moore And Larry Kudlow
Research ››› May 12, 2016 11:45 AM EDT ››› CRAIG HARRINGTON & ALEX MORASH

Politico reported that Donald Trump is tapping conservative economic pundits Stephen Moore and Larry Kudlow to assist in remaking the presumptive Republican nominee’s tax plan, which has been lambasted as a budget-busting giveaway to high-income earners and corporations. Media should be aware that both Moore and Kudlow have long histories of playing fast and loose with the facts while making outlandish and incorrect claims about the economy.
Trump Tapped Two Discredited Economists To Rebuild His Disastrous Tax Plan
Politico: Trump Picks Conservative Media Darlings Steve Moore And Larry Kudlow To Re-Write His Tax Reform Plan. Politico reported that Donald Trump has tapped conservative economic pundits Steve Moore and Larry Kudlow to revise Trump’s tax plan, which, in its current form, would expand the deficit by $10 trillion over the next decade and has come “under criticism from both the right and left for vastly expanding the deficit.” From the May 11 edition of Politico:

Trump’s initial proposal, rolled out with fanfare at Trump Tower in Manhattan last September, has been in the spotlight since he became the presumptive Republican nominee last week and promptly declared that it was only a starting point for any negotiations with congressional Democrats, should he become president.
But it turns out Trump’s team is open to revamping it far sooner than that; the campaign last month contacted at least two prominent conservative economists — Larry Kudlow, the CNBC television host, and Stephen Moore of the Heritage Foundation and a longtime Wall Street Journal writer — to spearhead an effort to update the package.
[...]
Trump’s initial plan has come under criticism from both the right and left for vastly expanding the deficit, with the nonpartisan Tax Foundation estimating it would add $10 trillion to the federal deficit in the next decade. Democratic frontrunner Hillary Clinton has moved quickly to tattoo the plan’s steep price tag onto Trump, with her team holding a call on Monday calling it a reckless expansion of debt. [Politico, 5/11/16]

National Review Furious Over Kudlow And Moore’s Flip-Flop On Trump. National Review’s Jonah Goldberg berated both right-wing economic figureheads on March 9 for endorsing Trump, despite the presumptive Republican nominee’s lack of apparent conservative policy bona fides. Goldberg pointed out that both Kudlow and Moore had attacked Trump’s policy proposals as recently as last August, but “as Trump rose in the polls, Kudlow and Moore joined the ranks of Trump's biggest boosters”:

Consider Larry Kudlow and Stephen Moore. In August, the two legendarily libertarian-minded economists attacked Trump, focusing on what they called Trump's "Fortress America platform." His trade policies threaten the global economic order, they warned. "We can't help wondering whether the recent panic in world financial markets is in part a result of the Trump assault on free trade," they mused. As for Trump's immigration policies, they could "hardly be further from the Reagan vision of America as a 'shining city on a hill.'"
Months later, as Trump rose in the polls, Kudlow and Moore joined the ranks of Trump's biggest boosters -- and not because Trump changed his views. On the contrary, Kudlow has moved markedly in Trump's direction. He now argues that the borders must be sealed and all visas canceled. He also thinks we have to crack down on China. [Media Matters, 3/10/16]

Politico: The Entire Field Of GOP Candidates Was “Wooing … Washington Wonk” Moore. Moore, an economic contributor at the conservative advocacy group FreedomWorks and Fox News contributor, is a well known figure in right-wing economic policy circles, with previous stints at the Club for Growth, The Wall Street Journal, and the Heritage Foundation. He was highly sought among potential Republican presidential candidates in the lead up to the 2016 presidential primary season. According to a lengthy March 12, 2015, profile in Politico Magazine, Moore was banking on landing “a paid 2016 campaign job” that could be a “topper” to his Washington career:

For Moore, a paid 2016 campaign job could be the topper to a Washington career that’s placed him at the center of the conservative cause but never within a candidate’s inner circle. Such a job would mean he’d have to take a leave of absence as chief economist at the Heritage Foundation, cancel his Fox News contract and stop the lucrative paid speaking trips that bring him to luxury locales from South Florida to Curaçao. But he thinks it might be worth it.
[...]
Moore made his initial moves to link up with 2016 candidates in early 2014 when he informed The Wall Street Journal that he planned to advise the budding Republican presidential field. To avoid the potential conflict of interest, Moore surrendered his press pass and returned to the Heritage Foundation, where he could work on conservative policy papers and build out campaign contacts. [Politico Magazine, 3/12/15]

Trump Has Been Trying To Rebrand His Tax Plan On The Fly
NBC’s Chuck Todd: Trump Called For “Lowering Taxes On Everybody,” But Has Now Changed His Position. NBC's Chuck Todd noted that “During the primaries, Trump put out a plan lowering taxes on everybody, including the wealthy,” but now Trump “says he's open to raising taxes for the wealthiest Americans.” From the May 8 edition of NBC’s Meet the Press:

CHUCK TODD (HOST): This may well be this generation's defining moment in American politics, particularly for Republicans. The Republican Party splitting apart as it turns its back on its new presumptive nominee, Donald Trump. What we're witnessing is nothing short of what you might call tissue rejection. Conservatives who warned that Trump would ultimately prove he's not one of them are having their own I-told-you-so moment. During the primaries, Trump said he was opposed to raising the minimum wage; now he says he's open to raising it. During the primaries, Trump put out a plan lowering taxes on everybody, including the wealthy; now he says he's open to raising taxes for the wealthiest Americans. [NBC, Meet the Press, 5/8/16]

WSJ ’s Kimberley Strassel: Trump “Disavowed” His Tax Plan. Wall Street Journal columnist Kimberley Strassel noted that Trump had “disavowed” his tax plan and “said he wasn’t a big fan of it” during the May 8 edition of Fox News Sunday:

KIMBERLY STRASSEL: Look, when we talk about a non-perfect candidate, I keep hearing everyone talk about Trump's agenda. Paul Manafort was on saying his agenda and he articulated it so well. What part of that agenda are we talking about? When he put out his tax plan, or when he disavowed it this week and said he wasn't a big fan of his own tax plan? When he said we cannot raise the minimum wage, and then he turned around this week and said, “Well, yeah, we probably can do that after all”? [Fox Broadcasting, Fox News Sunday, 5/8/16]

Moore And Kudlow Play Fast And Loose With Economics
Larry Kudlow Lectured Single Parents About Poverty Even Though He Admits To Having "Virtually No Knowledge In This Field." Kudlow appeared on a panel at the Conservative Political Action Conference (CPAC) to discuss family issues on March 4 and noted that he has "virtually no knowledge in [the] field" of issues that affect low-income American families, yet he still used his CPAC platform to shame low-income Americans and lecture single parents. In his opening remarks, Kudlow argued that "welfare is not a substitute for marriage [or] child-rearing." Kudlow bragged that he is "ignorant" of many issues facing families, but feels that he can speak about them because "there's enough documentation for ignorant people" to talk effectively about the supposed cause-effect relationship between poverty and single parenting. [Media Matters, 3/4/16]

Kudlow Used His CNBC Platform To Attack Taxes, Regulations In “Anti-Business” Connecticut. On numerous occasions in 2016, Kudlow used his position at CNBC to lob political attacks at Democratic politicians in Connecticut, which he called an “anti-business state” because of supposedly onerous tax and regulatory policies. Kudlow’s attacks came amid speculation that he would run for the United States Senate against incumbent Sen. Richard Blumenthal. [Media Matters, 2/3/16; 2/9/16]

Kudlow Previously Endorsed The Trump Tax Plan He’s Now Re-Writing. In an interview with Breitbart News following the October 28 Republican presidential debate hosted by CNBC, Kudlow admitted that he did not “know all the details” about Trump’s tax plan, but he endorsed Trump’s “spot on” proposal to lower corporate tax rates to just 15 percent. The interview seemed to confirm Trump’s claim during the debate that Kudlow “loves my tax plan.” [Breitbart News, 10/28/15]

Jared Bernstein: Stephen Moore’s Support Of “Right-To-Work” Laws Is Based On “Fact-Free” Claims.Economist Jared Bernstein of the Center on Budget and Policy Priorities (CBPP) addressed Moore’s false claim that so-called “right-to-work” laws would offer extra protection to workers in Wisconsin in a March 2, 2015, op-ed in The Washington Post:

Workers in a bargaining unit in non-RTW states don’t even have to pay full union dues. If they object to, say, the union’s political activities, they can pay reduced dues that cover only the costs of negotiating and enforcing the contract. Since that’s most of what local unions do, by the way, such fees amount to 80 percent to 90 percent of full dues.
So when Steve Moore of the Heritage Foundation claims that workers in non-RTW states “can be compelled to join a union and pay dues at a union shop whether they wish to or not” or that they “can even be forced to pay union dues for partisan political activities with which they don’t agree,” he’s deep within a fact-free zone. [The Washington Post, PostEverything, 3/2/15]

NY mag: Moore “Can’t Find A Single True Fact” Supporting The Campaign Against Obamacare. New York magazine columnist Jonathan Chait offered a detailed response to several demonstrably false claims made by Moore in a Washington Times op-ed, stating that Moore “can’t find a single true fact to support his case” against the Affordable Care Act (ACA). Moore based his allegation that the ACA “isn’t affordable” on several claims, and  Chait chided the argument as “so incoherent that it is hard to follow” before concluding that “not a single substantive claim in [Moore’s] column appears to be true.” [New York, 2/18/15]

Moore Claimed For Years That Obamacare Would Hurt Full-Time Jobs Without Any Proof. Throughout 2013, Moore repeatedly claimed that Obamacare was driving millions of workers into part-time jobs at the expense of full-time employment. After professional economists debunked his unsubstantiated claim, Moore simply adopted a new claim that a major spike in part-time work loomed in the future. More than one year later, the impact of Obamacare on part-time employment was, at best, “fairly small,” according to FiveThirtyEight chief economics writer Ben Casselman.

[Media Matters, 10/23/13; FiveThirtyEight, 1/13/15]

Paul Krugman: Moore’s “Incompetence Is Actually Desirable” In Conservative Circles. Nobel Prize-winning economist Paul Krugman briefly investigated the “mystery” of Moore’s successful career in economic policy in a February 18, 2015, blog post for The New York Times. Krugman concluded that Moore is not held accountable for consistently making bad predictions and misstating basic facts about the economy because “incompetence is actually desirable” in his field:

But here’s the mystery: evidently Moore has had a successful career. Why?
Think about Heritage: It’s immensely wealthy, and could surely afford to hire a technically competent right-wing hack. The Wall Street Journal, similarly, could have attracted someone much less likely to trip over his own intellectual shoelaces. Again, the problem isn’t even that Moore got the macroeconomics of recent years all wrong, although he did; it’s the inability to write without making embarrassing mistakes.
So why is he there (and he’s not alone — there are some other incompetent hacks at Heritage)?
I suspect that the incompetence is actually desirable at some level — a smart hack might turn honest, or something, But it’s remarkable. [The New York Times, 2/18/15]

Moore Falsely Claimed That Higher Minimum Wages Would Kill Jobs. Moore has claimed on many occasions that increasing federal, state, or local minimum wages would have an adverse effect on the labor market -- hurting teenage and entry-level employment, reducing overall hiring, closing businesses, and driving further workplace automation. None of these claims has proven true, and Moore was caught off guard when confronted with his faulty predictions on the February 19, 2014, edition of CNN Newsroom: [Media Matters, 2/15/13, 7/24/13, 8/29/13, 9/1/13, 2/19/14]

Moore Used Bogus Cost Calculation To Stoke Fear Of Unaccompanied Minors. Moore cited his own calculations in estimating that the cost of temporarily educating unaccompanied immigrant children in public schools would be “about a billion dollars a year,” on the August 7, 2014, edition of Fox News’ Your World. Moore’s estimate was roughly 65 percent higher than it should have been, according to research from Moore’s own Heritage Foundation. [Media Matters, 8/7/14]

Moore Was Caught Distorting Job Creation Figures In Push For Tax Cuts. Moore published a misleading op-ed in The Kansas City Star on July 7, 2014, attacking liberal economists for “cherry-picking” data to support their policy preferences while citing job creation data from a handful of states to bolster his claim that tax cuts boost economic activity. According to a correction published by the paper on July 25, Moore “used outdated and inaccurate job growth information at a key point in his article” and “damaged his credibility on the jobs issue” by cherry-picking data to support his own policy preferences. [Media Matters, 7/25/14]

Moore Inexplicably Called Expanding Paid Sick Leave “Very Dangerous For Cities.” Moore responded to a proposal by New York Mayor Bill de Blasio that would extend paid sick leave protection to employees at many small businesses, claiming on the January 17, 2014, edition of Fox News’ Your World that the proposal was “very dangerous for cities” and would turn urban centers into Detroit-like “wastelands.” [Media Matters, 1/17/14]

Moore Called The IRS “A Welfare Program” For Paying Out Tax Refunds. Moore said the U.S. should “scrap the IRS,” on the November 11, 2013, edition of Fox News' America’s Newsroom, calling the agency “a dispenser of cash” and “a welfare program.” Moore’s welfare claim was based on that fact that millions of Americans get money from the IRS each year in the form of income tax refunds. [Media Matters, 11/11/13]

Moore Claimed That Fracking Is To The Economy Like “A Cure For Cancer” Would Be To Health Care.Moore said hydraulic fracturing or “fracking” is “like the equivalent in health care of a cure for cancer,” on the October 3, 2013, edition of Fox News’ Happening Now. Ironically, fracking has been linked to numerous negative health effects including cancer in addition to environmental dangers. [Media Matters, 10/3/13; Natural Resources Defense Council, 1/27/16]

Moore Supported Spending Cuts That Inhibited Economic Growth. Moore complained that the data in the Bureau of Labor Statistics’ (BLS) job report for September 2013 fell short of some expectations. When asked on the October 22, 2013, edition of Fox News’ Happening Now if he thought the across-the-board spending cuts known as sequestration were to blame, he claimed that “the sequester has been very good for the economy.” In an August 11, 2013, Wall Street Journal op-ed, Moore had claimed that the cuts were a “success” and free of “negative consequences.” In reality, the budget cuts had significant negative impacts on the economy. The Congressional Budget Office estimated that repealing the cuts would have stimulated economic growth by $113 billion and created up to 900,000 new jobs in just one year. [Media Matters, 10/22/13; 8/12/13]

Moore Promoted Right-Wing Myth That Congress Is “Exempt” From Obamacare. Moore reiterated a prominent right-wing myth that Congress had exempted its members and staffers from Obamacare on the August 12, 2013, edition of Fox News’ America’s Newsroom. [Media Matters, 8/12/13]

Kudlow’s Climate Denial At CNBC Was Bad For Business. Media Matters conducted a study of CNBC’s coverage of climate change in 2013, finding that several CNBC figures, including Kudlow, deny the science of man made climate change. Despite Kudlow’s repeated denial of climate science on the airwaves of the nation’s leading business network, many business experts invited to discuss climate change accepted the science and argued that climate change was hurting the economy, and would continue to do so without a concerted response. On one occasion, Byron Wien, vice chairman of Blackstone Advisory Partners, told CNBC that climate change was hurting crop yields, thereby raising the cost of food for millions of consumers. [Media Matters, 6/18/13]

Moore Dismissed Critical Lack Of Infrastructure Funding In United States. Moore ignored Republican obstruction of proposals to invest in America’s crumbling infrastructure on the June 21, 2013, edition of Fox News’ America’s Newsroom, dismissing “this idea that there’s not enough money for infrastructure” in the United States. In fact, there was a significant drop in infrastructure spending as a percentage of gross domestic product after Republicans gained a majority in the House of Representatives in 2011. [Media Matters, 6/21/13]

Kudlow Distorted Health Insurance Mandate To Claim Violators Would “Face A $25,000 Fine Or Imprisonment.” Kudlow distorted a provision in the health care reform bill proposed by Sen. Max Baucus (D-MT), which later became the Affordable Care Act, on the September 30, 2009, edition of CNBC’s The Kudlow Report to claim that "if an individual opts out of this insurance plan ... apparently they face a $25,000 fine, or imprisonment, or both." In fact, the bill would levy an $1,900 "excise tax" on those who don't purchase health insurance; those who refuse to pay the tax could face a fine or prison sentence, as The Wall Street Journaleditorial Kudlow cited clearly stated. [Media Matters, 9/30/09]

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A little reality check on this article by one of the economic advisers of Trump, Stephen Moore. Our comments are in comments balloons

Our 1 Percent Economy

By Stephen Moore
Sunday, 04 Sep 2016 11:56 AM

Have you noticed that Hillary Clinton wants to talk about the economy about as much as she wants to talk about Monica Lewinsky or Benghazi? Here's why: The economy is lousy. Feeble.

But not that lousy:
- No recession since the financial crisis, the third longest expansions since WOII
- 14M+ private sector jobs created
- The longest streak of initial unemployment claims under 300,000 since the 1970s
- The recovery compared and discussed here

Barack Obama's own numbers prove it. We got revised GDP numbers from the Commerce Department and the economy is actually getting worse. The rate of economic growth was slightly less than 1 percent for the first six months of 2016. No wonder almost half of Americans think we are still in a recession. They are personally in recession.

Is this really the best that the mighty American engine of economic growth can do? The Wall Street Journal recently reported this is the most tepid recovery from a recession since the 1940s. That was with 2 percent growth. Now we are peddling faster for slower speeds.

The business sector of the economy has sunk into what Larry Kudlow of CNBC calls a "soft recession." Profits are shrinking (down 2.4 percent last quarter), so how long can the stock market rise?

- Profits have fallen basically as a result of the oil crash
- Profits and stock prices are still basically at record highs, so are corporate cash balances

The consumer is keeping the economy out of negative territory, but that's only because we are spending more than we are earning. The federal government thinks it can borrow and borrow forever, but how long can families do that before they go bust? About as long as the housing bubble could inflate without bursting.

This is some recovery. Under Ronald Reagan we had growth rates quarterly of 4, 5 and even 6 percent. Economists in the '80s worried about overheating. Too much growth. Now growth is nowhere to be seen — except for those at the very top of the income ladder.

- The top of the income ladder has been taking most of the growth exactly since those Reagan years, and the likes of Moore want to give them even more tax cuts
- The economy, whilst not overheating, is closing in on full employment and full capacity as the potential growth rate is considerably lower due to slower growth in the labor force and labor productivity
- Reagan's economy wasn't really doing better in terms of growth compared to Carter

The Democrats who keep saying how well the economy is doing seem to be living in an alternate universe. And that's probably because so many of the left-wing pundits and economists live and work in Washington, D.C., which really is doing just fine. D.C. is booming thanks to the tribute taxpayers from real America send each month to the capital. Three of the five wealthiest counties are around D.C. That tells you everything about who is getting rich off liberal government expansion policies.

- What expansion policies? Public expenditure as a percentage of GDP hasn't increased under Obama, neither has public sector employment
- The only expansion policy has been the ACA, which has managed to insure 20M people, end discrimination on the basis of pre-existing conditions, enable people to work less hours, change jobs or start companies without fear of losing coverage, dent medical debt, which is the single biggest reason for personal bankruptcy

Clinton says that what the economy really needs now is a tax increase. That's crazy talk. A new study by the National Center for Policy Analysis says that Clinton's economic plan will eventually shave 1 percent off GDP. That would technically sink the economy down to zero growth.

- You can't have it both ways, complaining that the top gets all the benefits and then complaining when Clinton wants to give them a tax raise
- You might wanna check the effects of Trump's tax plans

Oh, and speaking of government borrowing, there was more "wonderful" news this past week. The deficit is now climbing again to an estimated $600 billion this year. The red ink is headed back to $1 trillion on current course. 

- Under Obama, the deficit has been reduced from 10% of GDP (as a result of the financial crisis) to less than 3%, one of the best public finance achievements in the post-war history.
- Republican's are generally much more irresponsible with public finances, providing huge tax cuts for the rich which never really result in higher economic growth and increased tax revenues, leaving huge deficits as a result.

Some states are facing a 20 percent or more rise in Obamacare premiums this year.

- Yes, in some states these premiums rise 20%+, but in general, premium rises have been pretty contained since Obamacare was introduced
- And what about what is happening to employer provided health-care, which about 18x more people receive. You never hear these people complain about the 63% rise in deductibles, for instance..

Clinton and Obama point to the low unemployment rate. We are creating jobs, but they are burger flipper and "Would you like fries with that order?" jobs. The good jobs are disappearing. The Financial Times reports that more than 1 million manufacturing jobs have been lost since 2007.

- These disappearing manufacturing jobs are the result of the financial crisis and automation
- There is no evidence that the quality of new jobs has been worse in this recovery

So much for morning in America.

What is needed to turn the ship of state? Tax cuts. Deregulation. American energy production. The repealing of Obamacare. Trump should talk about little else if he wants to win. Clinton seems clueless about where jobs come from. This is the woman who once said that businesses don't create jobs.

- The US has tried tax cuts and deregulation, that's when things started to go wrong

Could it get worse? Here's how economist David Tuerck described Clinton's jobs plan in his NCPA study: "What we have here is a plan to destroy hundreds of thousands of private sector jobs just to pad government payrolls while, in the process, doing almost nothing to improve tax fairness."

- There has been virtually no increase in public sector employment under Obama, unlike any other recovery (including that of Reagan). Obama has ended some of the Bush tax cuts for the rich and introduced a few new ones. Democrats are addressing tax fairness. Republicans want to abolish the estate tax which is exclusively falling on the rich, and reduce other taxes mostly for the very top, they have no right arguing about tax fairness.

Obama and now Clinton keep promising more growth and more fairness. So far, they have produced neither. As The Wall Street Journal recently put it, Clinton's agenda theme should be called "Hope and No Change." 

- The Wall Street Journal is where Moore and Kudlow write. The opinion pages have a history of predicting mayhem under democrats, increasing inflation, rising interest rates, their predictive value is laughable.
 - So is that of Kudlow and Moore 

Voters need to decide if they think four more years of this will lead to any different result.

Read more: Stephen Moore:
Important: Can you afford to Retire?

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Here is Krugman about a letter of economists for Trump. The usual suspects (Kudlow and Moore, and others). Krugman hits exactly on what is informing us in this website, beliefs that trump facts. 

The Curious Confidence of Charlatans and Cranks



Brad DeLong tells us about a letter being circulated by economists for Trump — although, as he notes, they don’t dare say that, and describe themselves only as critics of Clinton. Several things are notable about the letter, including the absence of many usually reliable Republican hired guns economists. But they do have a Nobelist, Eugene Fama, at the top. And the substance of the letter — government bad! taxes and regulation bad! free markets rool like Reagan! — is pretty standard.

What’s curious is why, exactly, anyone should believe this story. In recent memory, GW Bush failed to deliver the promised Bush boom and eventually presided over disaster; the Obama economy has not been all one might have hoped, but as many have noted, the job growth of the past three years and the income growth that has finally emerged would have been hailed as triumphs if Mitt Romney were president. Taking the longer view, Clinton > Reagan and Obama > Bush, by almost any measure. Why doesn’t this reality seem to register?

One big answer, I think, lies in profound ignorance, in the insistence that history is what it was supposed to be, not what it was. Way back Mr. Fama was caught insisting that there was a great takeoff of global growth after 1980 due to financial deregulation. In fact, growth in advanced countries has been slower since 1980 than it was before, and it’s really, really hard to attribute Chinese growth under Deng Xiaoping to U.S. banking deregulation. But this is the right: legends that support the cause trump awkward facts.

And let’s be clear: this is a problem that won’t go away even if Trump goes down to defeat. People like Paul Ryan are barely more in touch with reality than @ilduce2016.

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Kudlow and Moore, Trump's economic advisers, here is Krugman:

I’ve been writing about Donald Trump’s claim that Mexico’s value-added tax is an unfair trade policy, which is just really bad economics. Here’s Joel Slemrod explaining that a VAT has the same effects as a sales tax. Now, nobody thinks that sales taxes are an unfair trade practice. New York has fairly high sales taxes; Delaware has no such tax. Does anyone think that this gives New York an unfair advantage in interstate competition?

But it turns out that Trump wasn’t saying ignorant things off the top of his head: he was saying ignorant things fed to him by his incompetent economic advisers. Here’s the campaign white paper on economics. The VAT discussion is on pages 12-13 — and it’s utterly uninformed.

And it’s not the worst thing: there’s lots of terrible stuff in the white paper, at every level. Should we be reassured that Trump wasn’t actually winging it here, just taking really bad advice? Not at all. This says that if he somehow becomes president, and decides to take the job seriously, it won’t help — because his judgment in advisers, his notion of who constitutes an expert, is as bad as his judgment on the fly.

Economics and Politics by Paul Krugman - The New York Times

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Here is Noah Smith on one of the new old hacks, Larry Kudlow, who might very well be the next chairman of the Council of Economic Advisors:
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But the worst perpetrators of this fallacy tend to be conservative econ/finance commentators. And of these, the worst I've seen is Larry Kudlow. Kudlow is being mooted for chairman of the Council of Economic Advisers -- basically, the president's chief economist. Here's an excerpt from a Kudlow post in December 2007 (!) denying that the economy was in danger: 

The recession debate is over. It’s not gonna happen. Time to move on. At a bare minimum, we are looking at Goldilocks 2.0. (And that’s a minimum). The Bush boom is alive and well. It’s finishing up its sixth splendid year with many more years to come.

Notice how this is actually wrong (there was a mild recession in 2001), but Kudlow explicitly associates economic good fortune with the President's term in office. Here's another, from around the same time:

The GOP...has a positive supply-side message of limited government, lower spending, and lower tax rates....I believe the economic pendulum will soon swing in favor of the GOP. There’s no recession coming. The pessimistas were wrong. It’s not going to happen. At a bare minimum, we are looking at Goldilocks 2.0. (And that’s a minimum)...The Bush boom is alive and well.

Or here's Kudlow on Obama:

You've had so much war on business in the last eight or 10 years…I think that has really damaged the economy and has held businesses back from investing and creating jobs. It will take a while to turn that ship around," Kudlow said of Obama's economic policies.

You see the same kind of President-based magical thinking here. In fact, go back and read Kudlow's commentary over the years, and his whole body of work is shot through with this simple thesis - Republican presidents are great for the economy, Democratic presidents are terrible, etc. Kudlow has ridden the Fundamental Fallacy about as far as it's possible to ride it. 

In a recent post, James Kwak declares that Kudlow is a victim of what he calls "economism" (and which I call "101ism"). He thinks Kudlow is wedded to a vision of an economy where free markets always work best. But I respectfully disagree with James. Kudlow doesn't seem to think about supply and demand, or deadweight loss, or any of that - nothing that would be taught in an econ class. 

Kudlow's thinking is more instinctive and tribal - it's "Republican President = good economy". It's the idea that if the man in charge comes from Our Team, things must go well, and if it's someone from the Other Team, things are bound to be a disaster. The Fundamental Fallacy doesn't come from Econ 101 - it's far more primal than that, an upwelling of our deepest pack instincts.

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Larry Kudlow basically is a joke.

Jonathan Chait catches Larry Kudlow praising the Orange One for choosing a cabinet of billionaires, because rich men are incorruptible — after all, they don’t need even more money. As Chait says, this is ludicrous on its face; consider, for example, Russia’s oligarchs.

What Chait doesn’t note is the special irony of seeing this argument from Kudlow, or indeed any right-wing advocate of supply-side economics.

Remember, their whole worldview is based around the claim that cutting taxes on rich people will work economic miracles, because of incentives: let a plutocrat keep more of an extra dollar in income, and he’ll innovate, create jobs, lead us to an earthly paradise in order to get that extra income.

To belabor what should be obvious: either the wealthy care about having more money or they don’t. If lower marginal tax rates are an incentive to produce more, the prospect of personal gain is an incentive to engage in corrupt practices. You can’t go all Ayn Rand/Gordon Gekko on the importance of greed as a motivator while claiming that wealth insulates a man from temptation.

Greed Springs Eternal - The New York Times