Grasping Reality on TypePad, by Brad DeLong

(3) Trump overpromises:

• Look at his Atlantic City prestige properties...
  • The Trump Taj Mahal is closing October 10...
  • The Trump Plaza closed two years ago...
• Overpromises, collects his money up front, disappoints, and moves on...

(4) Trump doesn't have a policy-planning organization any more:

• What is the state Trump's policy planning and analysis staff in Alexandria?
• There isn't one.
• Trump policy grunt staff in Alexandria is no more (Erick Ericsson: http://theresurgent.com/one-of-trumps-major-initiatives-to-appeal-to-conservatives-just-collapsed/).
  • Trump and Lewandowski promised Rick Dearborn (Jeff Sessions former chief-of-staff) and John Mashburn (Thom Tillis's former chief-of-staff). They hired people
  • Manafort came in, and Trump and Manafort then told them--after three months of "the checks are on the way"--that they were volunteers.
  • They quit.
  • Stephen Miller, Dan Kowalski. Walid Phares--all that are left doing any grunt-work, as opposed to phrase-spinning...

(5) Is Hillary overpromising?

• Since the mid-1980s when Charlie Schultze read people the riot act, Democratic candidates have underpromised...
• Look at all the forecasts Obama's people have made since he took office
  • Never predicted unemployment would get this low: 4.9%
  • Never predicted job growth would be this high: payroll jobs +14.9M in this recovery, +11.3M since start of term
• Obama ranks 4 out of 12 post-WWII presidents in job creation during his term:
  • Johnson
  • Clinton
  • Reagan
  • Obama
  • Truman
  • Carter
  • Kennedy
  • Nixon
  • Ford
  • Bush I
  • Eisenhower
  • Bush II

(6) Three different views of Donald Trump:

• People who have let Trump manage think he's a lousy manager
• People who have let Trump control think he takes everything that isn't nailed down--on the "you messed up: you trusted me!" theory...
• People who have used Trump as a pitchman--they are happy:
  • Not despite, but because he overpromises
  • And overpromises in a way that convinces enough people...

(7) How well does Trump do his job, really?

• Suppose he had just taken his inheritance and put it in the markets as a passive investor
• He would be three times as rich as he claims he is...
• And I haven't found anybody in New York real estate who thinks Trump is as rich as he claims he is:
  • In one respect it looks a little like Bernie Madoff
  • If he were making the results he was claiming...
    • A lot of people should have run into his operations
    • They haven't...

(8) Trump's big Idea: tax cuts for the rich:

• For 35 years the claim has been that our rich are overtaxed
• And if only taxes on the rich would go down
  • We would boost entrepreneurship and enterprise
  • We would unleash massive extra economic growth
• No sign of it so far:
  • Tax cuts for the rich make for a richer rich
  • No sign of them boosting anybody else

(9) One thing in government policy looks like it is boosting entrepreneurship:

• RomneyCare!
  • Set up by Romney in Massachusetts in mid-2000s
  • Afterwards people could start a small business and still buy not-incredibly-unaffordable health insurance
  • It is working as hoped...
• ObamaCare does the same thing nationwide…
• Preliminary signs that it is working in the rest of the country as well...

(10) Could we get 4%/Year Growth?

• Yes, but only with greatly increased immigration.
• We need 2%/year growth in workers to get 4% growth over the next five years--and people growing up only gets us 1%/year these days.
  • Beyond 5 years we can boost growth by starting massive investment now...
  • Throwing 11 million people out of the country would push growth over the next four years down from the 2.5%/year we are currently expecting to 1%/year...

(11) Should we scare people by threatening to default on our debt?

• Donald Trump says we should
  • Then we could buy our debt back cheaply.
• The problem is that our national debt is not a cost but a profit center.
• The rich of the world buy our bonds because they trust the U.S. Treasury to keep their money safe.
• Do the accounting properly and that is worth $600 billion/year to us.
• The profits from being in the safe assets business over the next generation vastly exceed what we could get by scaring people.
• Worries about the debt are not worries about what the debt is now, but about what the debt will be in 40 years.
• Over the next generation Trump's debt plan would be a huge mistake
  • But he doesn't have the policy planning staff in Alexandria any more to tell him so
  • And even if they did, would they?
  • Surrounded by yes-men.