He does a pretty good job of gaming out what the aftermath of 2016 might look like:
"Harding, You said:
“The GOP is the party of obstruction; it will refuse any minimum wage increase until a Republican is in office as President.”
"You have no imagination. They will be a chastened party in 2017, totally humiliated, and they’ll go along with Hillary. She’ll throw a bone like corporate tax reform (which she supports anyway.) Romney has already caved on the minimum wage; trust me the GOP will cave in 2017. The political mood of the country will be TOTALLY different from today, that’s always what happens after a blowout. In 1981, frightened Democratic Congressmen often voted for Reagan’s spending cuts."
"The interesting question will be whether the Fed keeps targeting inflation at 2%, as the minimum wage rises to $12."
http://www.themoneyillusion.com/?p=31624
Sounds plausible to me. Sumner isn't happy about it like I am, of course. It will be interesting to see the effects of the higher MW that is clearly on its way.
Here, though, Sumner is just wrong. He claims that incomes aren't stagnating.
"The Financial Times has a diagram showing that less than 50% of Americans are now viewed as “middle income”. Elsewhere I’ve pointed out that almost 90% of Americans self-identify as middle class, so these stories are highly misleading. "
http://www.themoneyillusion.com/?p=31611
That's more about American's aspirations than reality. Sumner usually says there's no such thing as public opinion on economics. But he trusts that? Because 90 percent believe they are middle class doesn't mean they are.
"The main reason that the middle income group has shrunk is that more and more Americans have incomes above the (arbitrary) cut-off point, and fewer and fewer are either “middle income” or poor."
"The middle class is shrinking because we are becoming better off."
http://www.themoneyillusion.com/?p=31611
This kind of makes the point of those who are saying we have a problem with economic polarization-fewer middle class, more rich and more poor.
"Let me head off some comments by acknowledging that there are certain areas that are worse off than in 1971, such as Detroit. But overall, the country is more prosperous than ever. (Also note that these are inflation-adjusted incomes.)"
The country could be more prosperous and also less equal in terms of allocation.
"Then why is Trump doing so well? For the same reason the Polish version of Trump did well in the recent election, despite per capita incomes in Poland doubling since 2004. What is that reason? I have no idea, but it obviously wasn’t stagnant incomes in Poland, or in Massachusetts for that matter (where Trump got 49%.)"
Per capita income-ie, average income-doesn't tell us anything about allocation and whether the middle class is hollowing out.
Here is Dan W in the comments section engaging in wishful thinking:
"The Martin Wolf article has one excellent paragraph criticizing Trump followed by many paragraphs of stupid, self-indulgent, idiotic political analysis. He hates the Republican Party and the current alignment of Trump as a Republican allows him to spew his vitriol about his political enemy. OK, but does Wolf recognize that 60% or more of Republicans DO NOT LIKE TRUMP!!! So in fact many Republican voters are showing that they are NOT fooled by Trump. But Wolf is blind to this for all he sees is an opportunity to blame the GOP."
http://www.themoneyillusion.com/?p=31611#comments
Well Trump is getting more votes by far than any other candidate. The 60 percent may not be voting for Trump but they failed to agree on a common non Trump candidate.
As usual, the GOP is too divided to do anything anymore, even stop Trump.
"The Liberal pundits who are so quick to blame Republicans and Conservatism for Trump are strangely silent about the vote in the Democratic primaries, where a Socialist has been winning some states with 70% of the vote. Does that not speak volumes about failure and dissatisfaction in the Democratic Party? This ought to be a huge story and an embarrassment to the Democrats. But it is not because (a) many of them agree with the Socialist and (b) criticizing their own team does not serve the agenda of crushing their political enemy – which is the only goal that matters to those who see political means and ends as everything."
How can the Dems be embarrassed over Bernie losing the Dem nomination while Trump is winning the GOP nomination?
As long as the GOP is around, it will be tough for the Dems to be too embarrassed.
One more great line from Sumner on the GOP Circa 2017:
"Harding, Is the model Germany after WWI, or after WWII? I say 2009 was Germany after WWI, and 2017 will be like Germany after WWII. Total capitulation."
http://www.themoneyillusion.com/?p=31624
"Harding, You said:
“The GOP is the party of obstruction; it will refuse any minimum wage increase until a Republican is in office as President.”
"You have no imagination. They will be a chastened party in 2017, totally humiliated, and they’ll go along with Hillary. She’ll throw a bone like corporate tax reform (which she supports anyway.) Romney has already caved on the minimum wage; trust me the GOP will cave in 2017. The political mood of the country will be TOTALLY different from today, that’s always what happens after a blowout. In 1981, frightened Democratic Congressmen often voted for Reagan’s spending cuts."
"The interesting question will be whether the Fed keeps targeting inflation at 2%, as the minimum wage rises to $12."
http://www.themoneyillusion.com/?p=31624
Sounds plausible to me. Sumner isn't happy about it like I am, of course. It will be interesting to see the effects of the higher MW that is clearly on its way.
Here, though, Sumner is just wrong. He claims that incomes aren't stagnating.
"The Financial Times has a diagram showing that less than 50% of Americans are now viewed as “middle income”. Elsewhere I’ve pointed out that almost 90% of Americans self-identify as middle class, so these stories are highly misleading. "
http://www.themoneyillusion.com/?p=31611
That's more about American's aspirations than reality. Sumner usually says there's no such thing as public opinion on economics. But he trusts that? Because 90 percent believe they are middle class doesn't mean they are.
"The main reason that the middle income group has shrunk is that more and more Americans have incomes above the (arbitrary) cut-off point, and fewer and fewer are either “middle income” or poor."
"The middle class is shrinking because we are becoming better off."
http://www.themoneyillusion.com/?p=31611
This kind of makes the point of those who are saying we have a problem with economic polarization-fewer middle class, more rich and more poor.
"Let me head off some comments by acknowledging that there are certain areas that are worse off than in 1971, such as Detroit. But overall, the country is more prosperous than ever. (Also note that these are inflation-adjusted incomes.)"
The country could be more prosperous and also less equal in terms of allocation.
"Then why is Trump doing so well? For the same reason the Polish version of Trump did well in the recent election, despite per capita incomes in Poland doubling since 2004. What is that reason? I have no idea, but it obviously wasn’t stagnant incomes in Poland, or in Massachusetts for that matter (where Trump got 49%.)"
Per capita income-ie, average income-doesn't tell us anything about allocation and whether the middle class is hollowing out.
Here is Dan W in the comments section engaging in wishful thinking:
"The Martin Wolf article has one excellent paragraph criticizing Trump followed by many paragraphs of stupid, self-indulgent, idiotic political analysis. He hates the Republican Party and the current alignment of Trump as a Republican allows him to spew his vitriol about his political enemy. OK, but does Wolf recognize that 60% or more of Republicans DO NOT LIKE TRUMP!!! So in fact many Republican voters are showing that they are NOT fooled by Trump. But Wolf is blind to this for all he sees is an opportunity to blame the GOP."
http://www.themoneyillusion.com/?p=31611#comments
Well Trump is getting more votes by far than any other candidate. The 60 percent may not be voting for Trump but they failed to agree on a common non Trump candidate.
As usual, the GOP is too divided to do anything anymore, even stop Trump.
"The Liberal pundits who are so quick to blame Republicans and Conservatism for Trump are strangely silent about the vote in the Democratic primaries, where a Socialist has been winning some states with 70% of the vote. Does that not speak volumes about failure and dissatisfaction in the Democratic Party? This ought to be a huge story and an embarrassment to the Democrats. But it is not because (a) many of them agree with the Socialist and (b) criticizing their own team does not serve the agenda of crushing their political enemy – which is the only goal that matters to those who see political means and ends as everything."
How can the Dems be embarrassed over Bernie losing the Dem nomination while Trump is winning the GOP nomination?
As long as the GOP is around, it will be tough for the Dems to be too embarrassed.
One more great line from Sumner on the GOP Circa 2017:
"Harding, Is the model Germany after WWI, or after WWII? I say 2009 was Germany after WWI, and 2017 will be like Germany after WWII. Total capitulation."
http://www.themoneyillusion.com/?p=31624
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