Trump’s gamble on the economy might make sense

first_imgHe’s allowing the government to run large budget deficits — some of the largest ever outside wartime or recession — in the hopes that this will somehow put growth on a higher trajectory.Irresponsible as that might sound, it actually makes some sense.In the long run, economic growth is a function of two variables: population and productivity.For decades, America had plenty of both. Birth rates were ample, and any additional labor could be attracted from elsewhere.From 1947 to 2007, workers’ output per hour grew at an average annual rate of 2.3 percent.So for the most part, American presidents could focus on improving rather than reviving growth.But since the last recession, the picture has changed. In advanced economies, central banks have the tools they need to fight it.Slow productivity growth, by contrast, has become a real concern, especially as countries seek the resources to take care of aging populations and still invest in their futures.Republicans and Democrats may disagree on the best way to create deficits, whether it be tax cuts and military spending or investments in infrastructure and education. But the balance of risks leans toward trying this experiment.Be it the Trump administration or the next, someone was eventually going to take the gamble.Conor Sen is a Bloomberg View columnist. He is a portfolio manager for New River Investments in Atlanta and has been a contributor to the Atlantic and Business Insider.More from The Daily Gazette:EDITORIAL: Find a way to get family members into nursing homesEDITORIAL: Urgent: Today is the last day to complete the censusEDITORIAL: Thruway tax unfair to working motoristsEDITORIAL: Beware of voter intimidationFoss: Should main downtown branch of the Schenectady County Public Library reopen? Categories: Editorial, OpinionPresident Donald Trump is conducting a risky experiment on the U.S. economy. So the whole game becomes a big bet that deficits — created by the government’s tax cuts and spending plans — will boost productivity growth. Treasury Secretary Steven Mnuchin suggested as much last week when he said that the Trump administration’s policies could lead to wage growth without inflation, and that people shouldn’t worry about the forthcoming deficits.Ironically enough, this policy was espoused by the Bernie Sanders campaign (as my colleague Noah Smith has noted).The idea is that by running the economy hot and making labor more expensive, the government can induce businesses to do more investment than they would in a normal economy.Ever since the financial crisis, a weak economy has discouraged businesses from investing, leading to weaker productivity growth — so why not try the opposite? It’s a theory that hasn’t been tested in recent decades, but an intriguing one.What are the potential risks and rewards? Sticking with the status quo promises more of the same underperformance — annual real GDP growth of about 2 percent. The deficit experiment has two possible outcomes.In the best case, the U.S. gets some form of productivity miracle. In the other, rising inflation forces the Fed to raise interest rates to cool off the economy, triggering a recession.Most policymakers, economists, and investors aren’t worried about a period of inflation like what the world experienced in the 1970s. Labor-force growth is slowing as baby boomers retire. For a variety of reasons, some understood and some not, productivity has decelerated as well.The Obama administration largely accepted the new reality: In a 2016 report, it projected inflation-adjusted gross-domestic-product growth of just 2.2 percent for the next decade, and offered fairly traditional ideas such as immigration reform, more cross-border trade, infrastructure spending and education investments.Trump has taken a very different approach, aiming for annual growth of 3 percent over the next decade.This certainly won’t come from population, particularly given his administration’s attitude toward immigration.That leaves productivity, which some of his policies don’t do much to encourage, either.Tariffs on imports such as steel and aluminum will serve largely to make output more expensive.Tax cuts might prompt companies to make more productivity-enhancing investments, but the effect will likely be modest given uncertainty about how long the cuts will remain in place.last_img read more

Chris Paul sets record as Clippers top T-Wolves

first_img“It’s huge, man. Magic is a mentor of mine, somebody I look up to,” Paul said. “His basketball production was unbelievable so be mentioned in anything with him is huge and an honor.”He scored 12 straight points for the Clippers in the final 3:41 to hold off another late charge from the Wolves and break out of a six-game slump in which he was hitting just 35 percent of his shots. “It’s just cool to see the ball go through the net,” Paul said. “I’ll take it whenever. Fourth quarter is winning time and we’re all competitive, but as the leader of the team, me and Blake, we know that’s when it’s time to win.”Kevin Martin had 28 points and 10 rebounds and Nikola Pekovic had 20 points and seven rebounds for the Timberwolves. But Love managed just 10 points on 2-for-14 shooting to go with 12 rebounds for the Wolves, who have lost two straight to start a tough stretch of five games in seven nights. “We were just tired, I think, and it’s not getting any easier heading forward,” said Love, whose Wolves host Brooklyn on Friday night before trips to Houston and Indiana. “Nights happen like that and you just try to fight through it. I was a little frustrated. I was getting slammed out there.”Jamal Crawford scored 16 points for the Clippers, who made 12 of 24 3-pointers and held the Wolves to 37.8 percent shooting. The Clippers led by 11 points with seven minutes to play in the game, a 12-3 surge by the Wolves cut the deficit to 84-82 with 4:34 to play. But Griffin hit a 21-foot jumper and Paul, who had just four points in the game’s first 43 minutes, converted a three-point play, hit a 3 from the wing and added a 15-foot jumper and a 19-footer to help the Clippers seal it. “That’s why he’s a superstar and one of the best point guards in this league,” Martin said. “He got hot at the end and he’s capable of doing that. We did everything we could do to try to force him to miss shots, and unfortunately for them he didn’t.”In a matchup of two of the best power forwards in the league, Griffin and Love spent the first half essentially playing each other to an underwhelming draw. They combined to shoot 4 for 17 before Griffin made his move in the third. He scored 14 points in the quarter, often going right at Love and scoring any way he wanted. Layups, jumpers, nifty spin moves in the post. It was all on display for a player who has put everything together in the past 10 days. Griffin came into the game averaging 25 points and 11.3 rebounds per game over his previous four, and he showed vastly improved defense on Wednesday night as well. He had two blocks and two steals, frustrating Love all the way. “I think for the first time, I don’t know if it was from being tired, shot wasn’t falling or they were getting away with a lot, my emotions got the best of me,” said Love, who was 0 for 4 in the second half and had eight assists. “But that happens to people every now and then. I just tried to get myself going in other ways.” Newsroom GuidelinesNews TipsContact UsReport an Errorcenter_img MINNEAPOLIS >> Blake Griffin and Kevin Love had been duking it out for 3 1/2 quarters, and Chris Paul was content to watch two of the best power forwards in the game pound away at each other. When the two big guys started to tire from the grueling duel, the little man took over and finished off the Minnesota Timberwolves. Griffin had 20 points and 10 rebounds to win his matchup with Love and Paul scored 16 points in the fourth quarter to lead the Clippers to a 102-98 victory over the Timberwolves on Wednesday night.Paul finished with 20 points and 11 assists for his 12th straight double-double to open the season, breaking Magic Johnson’s previous mark of 11 straight in 1990-91. last_img read more

Patriots owner Robert Kraft calls Donald Trump ‘divisive and horrible’ in leaked recording from 2017 meeting

first_imgPatriots owner Robert Kraft was never on the same page as President Donald Trump when it came to players protesting racial injustice at NFL games.In a leaked audio recording from a 2017 NFL meeting, Kraft can be heard criticizing Trump for being “divisive and horrible.” The meeting came one month after Trump ripped “son of a bitch” protestors for kneeling during the national anthem and disrespecting the American flag. MORE: Watch highlights from Colin Kaepernick’s workout”I must tell you, I think these dialogues are great,” Kraft said in a recording shared by TMZ. “But the elephant in the room now, in my opinion, is this kneeling, which every player has a right to do if they feel it’s right. The problem we have is, we have a president that will use that as fodder to do his mission that I don’t feel is in the best interest of the matter.”It’s divisive, and it’s horrible. And it’s actually the opposite of what you all are trying to do.”Kraft added that the NFL had “lost the message to America” because nearly half of the population would be on Trump’s side. “I just hope one of the things that can come out of here is that we find a way to be unified, and be able to carry through and follow through,” Kraft said. About 30 people attended the meeting, including owners, executives and players, according to The New York Times. Team owners were reportedly focused on finding a way to avoid Trump’s disapproval and warned players not to get drawn into a war of words with the president.Despite all of the controversy at the time, this disagreement doesn’t seem to have hurt Kraft’s longtime friendship with Trump.Kraft praised Trump during a February interview with Fox News, saying he’s “working very hard to serve the best interests of the country.” Kraft also sat at Trump’s table during an official state dinner in July, according to Business Insider.last_img read more