When everything is dangerous and stupid nothing is dangerous and stupid

My goodness Donald Trump sunk to new levels of ignorance today when he off-handedly suggested completely blowing up the US and world economy.  That is not hyperbole.  Josh Marshall explains:

On CNBC this morning Trump suggested that one strategy he’ll use for reducing the national debt is having bond holders accept “haircuts”. To be clear what that means, he’ll try to get people who own US Treasury bonds and are owned X to accept X/2, or some reduced amount of what they are owed.

That’s called defaulting on a debt obligation.

In other words, he wants to put the US through something like bankruptcy. Now, to be clear, in the world of business this is not at all uncommon. In a bankruptcy proceeding almost everyone takes a haircut. Many lose everything. You were owed $7 million and you have to accept $2 million. It often happens in simple business negotiations too. Things aren’t going great. Debt has to be restructured to help the company survive. A creditor thinks they might lose everything so they’ll accept 50 cents on the dollar.

So all good, except the United States is not a struggling casino. It’s a sovereign nation with sovereign debt.

It is not too much to say that centuries of American prosperity have been undergirded by the “full faith and credit of the United States.” In other words, the US always pays its debts in full and on time. Indeed, it’s black letter text in the US constitution that the country’s debt can never even be questioned. Defaulting on the national debt would clearly be unconstitutional.

That’s the constitution part, which is a weighty matter. But the entire architecture of the global economy and the United States place in it rests on the certainty and basic risklessness of US government debt obligations. It’s as simple as that. (This has actually allowed the US to in effect have people pay the Treasury to hold on to their money since 2008.) Introducing the idea that the US might pay back only a portion of the returns on Treasury bonds would basically disrupt the entire global economy, have massive and traumatic knock-on effects on the US economy and its ability to service its own debt. It would be catastrophic, an entirely self-inflicted wound.

To be clear, this will never happen. But the fact that Trump is proposing it shows that when it comes to macro-economics and global economics Trump is a huge ignoramus who shouldn’t be allowed anywhere near the Treasury. It’s amazing suggestion. Not just stupid but someone who simply knows nothing about how the economy works.

Yep.  Anybody who has had a single course in Political Economy or macroeconomics should get this.  It truly is astounding for a major presidential candidate to say something so epically dumb and irresponsible.  But for Trump, it is just a matter of degree compared to his near-daily spew of phenomenally ignorant things.  The problem is, what do you do when you are the media confronted with this?  The NYT has a fairly sober piece full of phrases like, “Such remarks by a major presidential candidate have no modern precedent” and “Experts also described Mr. Trump’s vaguely sketched proposal as fanciful,” and “But Mr. Trump’s statement might show the limits of translating his business acumen into the world of government finance,” but that’s about all you can do.  A reporter cannot write a phrase that more accurately describes this such as “mind-blowingly stupid.”

Alas, Trump has already set the bar for stupid and dangerous so low, that this will probably barely even make any waves.  I don’t care what people think about Hillary Clinton, anybody who has the slightest clue how the global economy works is a fool and beyond hopelessly blinded by partisanship if they think it a remotely reasonable idea to vote for Trump.

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Photo of the day

From a recent Telegraph photo of the day gallery:

A Pakistani owner waits for customers for a horse ride to earn his living at Clifton beach in Karachi, Pakistan.

Trump and conservatism

Good post from the Atlantic’s Russell Berman:

Paul Ryan and Mitch McConnell didn’t have a whole lot to say on Wednesday, a day after Donald Trump became the presumptive standard-bearer of their party.

You’ll have to forgive them if they needed some time to cope; their dream of enacting the conservative agenda that has been a bedrock of Republican policy for a generation might well die with Trump’s nomination…

Consider the apostasies of the Republican nominee-in-waiting:

Ryan has made his career out of proposing dramatic reforms to Medicare and Medicaid, arguing that they must either be partially privatized or block-granted to the states to save them for future generations. Trump has shot down these ideasin language that could be taken straight from the lips of Nancy Pelosi…

Trump’s opposition to pretty much every trade accord of the last 25 years is now a centerpiece of his economic platform…

Ryan has been a leader in the camp of congressional Republicans that has pushed for comprehensive immigration reform, including a path to legal status—if not citizenship—for undocumented immigrants. McConnell is more hawkish on immigration, but like Ryan he is adamantly opposed to Trump’s call to deport millions of people or ban Muslims from entering the United States.

And there’s more, of course.  And, of course, there’s areas of agreement, but I think this is the crux:

Beyond all of this, conservatives must face an even scarier possible conclusion about Trump’s success. What if the conservative platform that congressional leaders like Ryan and McConnell have long advocated was never all that popular with rank-and-file Republicans? Conservative lawmakers in Congress have assumed that however much Democrats demonize Republicans for trying to slash spending and entitlement programs, cut taxes, and pursue free-trade policies, at least that agenda unified and excited the conservative base. Trump’s nomination, however, seems to blow up that claim. [emphasis mine]

And, there’s plenty of polling evidence to, in fact, support this conclusion.  Republican elites could convince themselves their policies where popular because they managed to conflate them with white ethnocentrism (i.e., none of this stuff for those other people).  Once you pull out the white ethnocentrism on its own, as Trump clearly has, there’s just not the support for Medicare cuts, trade deals, immigration reform, etc., that Ryan et al., would prefer.

Trump and the demographics of the general election

Jamelle Bouie makes the case (and one I am very much in agreement with), that America’s pattern of demographics and voting in recent general elections makes a November win very unlikely for Trump:

Unlike Republicans, Democrats plan to hit Trump with a fusillade of attacks from all directions. And they plan to exploit weaknesses that Republicans didn’t touch until it was too late to stop Trump. They’ll hit Trump for his open and vicious misogyny; they’ll publicize his history of racism and discrimination; they’ll attack him where he’s strong with stories of ordinary people he’sscammed and defrauded; they’ll emphasize the fact that he doesn’t know anything about the world or governing…

Which brings us back to our question. If Trump is a viable general election candidate—if he has a shot at the White House—how does he do it? How does he improve on Mitt Romney?

Let’s look at the popular vote. Trump needs to win about 3 million morevotes [than Romney] to turn the tide. He needs to do that in an environment where the incumbent president is popular, the economy is growing, and most people are satisfied with their direction in life. By itself, that’s difficult… [emphases mine]

Eighty-seven percent of all Latino voters have a negative view of Trump, according to a new Latino Decisions national survey. In Florida, it’s 84 percent. In other Latino heavy swing states like Colorado and Nevada, it’s 91 percent and 87 percent, respectively. If Trump loses 87 percent of Latino voters nationwide (and nothing else changes from 2012), the Democrats add North Carolina to their 2012 haul as well as 8 million more popular votes.

OK, well, what about black Americans? There aren’t any detailed polls of blacks vis-à-vis Trump, but most nationalsurveys show disapproval in the 80 to 90 percent range. If black turnout stays at its present trajectory, Trump will need to crack 15 percent with blacks to peel critical swing states from Democrats. (A Trump who could accomplish that is also a Trump who is clearly winning.) No Republican has secured more than 15 percent of the black vote in 60 years.

Trump is deeply unpopular with women, too. Seventy percent hold a negative view, according to a recent Gallup survey. If Trump loses 70 percent of women, then he’s lost, period.

What about white voters? The white share of the electorate has shrunk 2 points to 69 percent, while the Hispanic, black, and Asian shares have grown. In fact, of the 10.7 million increase in eligible voters, the large majority comes from nonwhite groups. If nothing else about the 2012 results change, the Democratic candidate will win with more votes across the board. Given that fact, as Greg Sargent details for theWashington Post, Trump would have to outperform Romney by substantial margins among whites to win Rust Belt states like Michigan, Wisconsin, Ohio, and Pennsylvania

Donald Trump begins the general election with a huge deficit in head-to-head polls, deep unpopularity, and major demographic headwinds. Unless he wins unprecedented shares of black and Latino voters, or, barring any improvement with nonwhite voters, unless he wins unprecedented shares of white voters, he loses. And he has to do this while running as the most unpopular nominee in 30 years of polling. He has to do it while running against a Democratic Party operating at full strength, with popular surrogates (including a former president) crisscrossing the country against his campaign. He has to do it with a divided Republican Party. He has to do it while somehow tempering his deep-seated misogyny and racism. All this, again, in agrowing economy with a well-liked president—solid conditions for a Democratic candidate.

Ummmm, yep.  Now, that’s no guarantee Trump will lose.  The economy could stop growing and Hillary could be indicted or there could be some other exogenous shock to the system.  But barring that, it truly is hard to see Trump’s path to victory.

Alas, that won’t stop many pundits from proclaiming one for him by overly focusing on campaign effects.  For example, in the Post Philip Wallach writes that, among other things, “Trump is much better at dictating the terms of engagement.”  He may be.  But I think the state of the economy and candidate favorable/unfavorable ratings are far more predictive.  Yes, Trump can win.  But if he does, it’s not because he’s some Jedi Master campaigner, but because the fundamentals of the campaign– which now heavily favor Clinton– change in an unexpected way to favor Trump.

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