Trump does magic. Maybe it will be black magic sometime, but he's an amazing phenomenon.
I think we do need to try to not just rely on the central bank to, in its wisdom, adjust interest rates, but allow for people to avoid being exposed to inflation risk.
Fear causes individuals to restrain their spending and firms to withhold investments; as a result, the economy weakens, confirming their fear and leading them to restrain spending further. The downturn deepens, and a vicious circle of despair takes hold.
Trump's victory clearly appears to stem from a sense of economic powerlessness, or a fear of losing power, among his supporters. To them, his simple slogan, 'Make America great again,' sounds like 'Make You great again': economic power will be given to the multitudes without taking anything away from the already successful.
The desperately poor may accept handouts, because they feel they have to. For those who consider themselves at least middle class, however, anything that smacks of a handout is not desired. Instead, they want their economic power back.
In my first few years of elementary school at the Edison School in Detroit, I did poorly. I remember worrying that I might fail the second grade and be held back.
As far as I can find, almost no one in the profession - not even luminaries like John Maynard Keynes, Friedrich Hayek, or Irving Fisher - made public statements anticipating the Great Depression.
Those on the downside of rising economic inequality generally do not want government policies that look like handouts. They typically do not want the government to make the tax system more progressive, to impose punishing taxes on the rich, in order to give the money to them. Redistribution feels demeaning. It feels like being labeled a failure.
We don't know the probabilities of future events. Still, you have to take action, and so you do it on gut feeling. That's the world we live in.
All taxes, except a 'lump-sum tax,' introduce distortions in the economy. But no government can impose a lump-sum tax - the same amount for everyone regardless of their income or expenditures - because it would fall heaviest on those with less income, and it would grind the poor, who might be unable to pay it at all.
Since the global financial crisis and recession of 2007-2009, criticism of the economics profession has intensified. The failure of all but a few professional economists to forecast the episode - the aftereffects of which still linger - has led many to question whether the economics profession contributes anything significant to society.
Hesitation is often like procrastination. One may have vague doubts and feel a need to mull things over; meanwhile, other issues intrude on thought, and no decision is taken. Ask people why they procrastinate, and you probably won't get a crisp answer.
I think that a lot of people in all walks of life have the impression, of course, that, 'I specialize in something. I can't - I don't have the time to read other things. I'll just go to pure entertainment when I'm relaxing, and then I'll come back to my pure specialty.' That produces - that attitude produces idiot savants, unfortunately.
Speculative markets have always been vulnerable to illusion. But seeing the folly in markets provides no clear advantage in forecasting outcomes, because changes in the force of the illusion are difficult to predict.
Finance is not merely about making money. It's about achieving our deep goals and protecting the fruits of our labor. It's about stewardship and, therefore, about achieving the good society.
Critics of 'economic sciences' sometimes refer to the development of a 'pseudoscience' of economics, arguing that it uses the trappings of science, like dense mathematics, but only for show.
As a child, I was fascinated by any branch of physical or biological science. Even today, I find great excitement in discovering the complexity and variability of the world we live in, getting a glimpse into the deeper reality that we mostly ignore in our everyday human activities.
One should have a wide variety of assets in one's portfolio. And oil, by the way, is a particularly important asset to have in one's portfolio because we need it, and the economy thrives on it.
