Diverting Recovery Funds from Puerto Rico to Finance “the Wall”

In the likely event that Mexico does not provide the funds to build “a beautiful big wall” on our southern border, will Mr. Trump declare a national emergency and redirect funds? Mr. Trump has mentioned diverting monies from Puerto Rico recovery.

Numbers, from CNN:


There is more than $13 billion not yet physically spent on the infrastructure repair projects, but that have been promised to these communities.
For instance, more than $2 billion planned for projects in Puerto Rico has not yet been spent. More than $4.5 billion for projects in Texas, including those related to 2017’s Hurricane Harvey, has also not been spent.

Note that estimates for the total cost of building the wall range from $12-$40 billion. Hence, it is unlikely that redirecting these funds would be sufficient to complete the wall.

This then seems an opportune time to re-examine how well Puerto Rico has done in the wake of Trump’s “10 out of 10” self-assigned grade for hurricane disaster recovery, and hence able to do without recovery funds. This article provides some information.

Additional food aid for the island’s poor will soon be exhausted without supplemental funds opposed by the White House. At the same time, billions in community development appropriations have yet to leave Washington — a year after being approved by Congress to assist in the recovery from Hurricanes Maria and Irma.

Below I display two relevant series: overall establishment employment and construction employment.

Figure 1: Puerto Rico nonfarm payroll employment (blue), and construction employment (dark red), in logs both normalized to 2017M09=0. Source: BLS and author’s calculations.

Nonfarm payroll employment is 3% below August 2017 levels (in log terms) suggesting the recovery is incomplete. Construction employment is 6% lower than when Hurricane Maria struck.

What about overall economic activity? The November level was 1.5% below August 2017 levels.

Figure 2: Economic activity index (EAI), January 2000=100 (dark blue, left log scale), and cement production, 000’s 94 lb. bags (dark red, right log scale). Source: Economic Development Bank of Puerto Rico.

The slow comeback in the Economic Activity Index is remarkable given the burst of cement production, which is one component of the economic activity index. This means employment and gasoline sales and electricity generation recovered even less.

Studies of the impact of Hurricane Maria on Puerto Rico can be found here.

As an aside, taking monies from suffering (American) minorities to keep out (however ineffectually) other minorities (including those who have a legal right under international law to seek asylum) would no doubt give Mr. Trump infinite satisfaction.

52 thoughts on “Diverting Recovery Funds from Puerto Rico to Finance “the Wall”

  1. 2slugbaits

    In this context “spent” means that a contract has not yet been awarded. In Pentagonspeak the term would be “obligated”. Military Construction & Housing authorizations have a five year life, meaning that the monies appropriated by Congress must be “obligated” (i.e., put on contract) within the fiscal year of authorization plus four years. So an FY2019 authorization would have to be “obligated” by 30 Sep 2023. The project must be completed within five fiscal years after contract award because Treasury disbursements cannot exceed five years after obligation. The term “spent” does not mean cash going out the Treasury door; it simply means put on a contract.

    Trump has less than two years remaining, so it’s not very likely that he’ll be able to spend much if any of those dollars towards his big, beautiful wall. It will be tied up in the courts, he’ll have to negotiate land purchases, file environmental impact statements, and all that long before the first contract solicitation hits the streets. Then it will have to go through all of the usual administrative lead time legal hoops that go with every contract award. There’s a good reason why MC&H monies have a five year obligation life!!! That’s just how long it takes to move out on those kinds of projects. That’s why MC&H dollars from hurricanes Maria and Harvey are still unobligated. Trump has no clue how the G8 operates.

    Reply
      1. CoREv

        2slugs provides an important and key description of how liberal/Dem policies and regulations slow and negatively impact development and growth: ” It will be tied up in the courts, he’ll have to negotiate land purchases, file environmental impact statements,(which are also likely to be fought in court), and all that long before the first contract solicitation hits the streets.”

        There are so many more negatively impactful PROCESSES implemented to slow progress and implemented by “progressives” for the betterment of ???? to the detriment of those already devastated by events.

        Betcha liberals can not list any, but ask a conservative for a list. A perfect DoD example of these impacts is the years taken to develop and build the B47 versus the weeks taken to develop and build the P51.

        That’s what a declaration of NATIONAL EMERGENCY can mean. All of this furor over something few admit is not needed.

        Reply
        1. 2slugbaits

          CoRev It sounds like you’re defining “progress” as letting a windbag like Trump just have his way. Did it ever occur to you that Trump is an idiot and maybe a little adult supervision would be helpful? Stopping to think things through before engaging mouth (or hitting the Twitter send button) might be a useful habit for Trump to learn. Those regulations that you see as impediments to Dear Leader Trump’s vanity projects just might actually serve a useful purpose. Ever hear of “measure twice, cut once”??? We don’t need Trump’s bull-in-a-china shop approach to governing.

          And I can name plenty of DoD projects that were rushed through without following correct procedures and regulations. Schedule driven projects don’t have a good track record. You sound like every project manager I’ve dealt with…deploy it ASAP and we’ll fix it later. And since when are conservatives so opposed to court actions? My conservative friends and family members are all fixated on the importance of stacking the court system with conservative judges and justices. And since when are conservatives such big fans of eminent domain?

          The only national emergency is our having a toddler in the White House.

          Reply
          1. ilsm

            2Slugs,

            “letting a windbag like Trump just have his way…….”

            That is Tea Party speak from 8 years ago!.

          2. Moses Herzog

            My personal favorite of the Tea Party slogans was “Don’t let big government lay a finger on my Medicare!!!”. Which magical Norse god did they think was sending them the checks??
            https://www.youtube.com/watch?v=pJp-roulVsA

            Well, you know, the teabaggers had some interesting folks:

            http://1.bp.blogspot.com/-mmkAbxLUDSI/Ti-C9WqfxaI/AAAAAAAAAZ8/NSJ8nIixEoo/s1600/Govt+out+of+my+medicare.jpg

            http://3.bp.blogspot.com/-y4ye8Zk3C2A/Ti-Dbk0EjFI/AAAAAAAAAaE/vTWmlymrgUE/s1600/tea+party+idiot.jpg

            But remember folks, there’s no need to read anything. Don’t use your major respected newspapers or your local public library. Just watch FOX “news”, listen to your Baptist ministers and “do it for jesus”. Please just “Do it in the name of Jesus”.

          3. 2slugbaits

            Moses Herzog My favorite Tea Party moment was when they held a big rally on the Capitol lawn and one of the wise Tea Party Congress critters announced that he was going to read the US Constitution for the benefit of President Obama. And then proceeded to begin reading the Declaration of Independence. Even worse, no one in the audience seemed to notice!
            You can’t make this stuff up.

        2. Barkley Rosser

          Wrong, CoRev. A majority of the population opposes building the wall. They do not think it is needed. Sorry, but that is a lot more than “a few.” Yet again, you are in a fantasyland, maybe the same one Newt Gingrich says that Anne Coulter is in.

          Reply
          1. pgl

            It is true that a majority of Americans get the simple realization – a wall does not accomplish anything. Now why no one in the White House understands this simple reality is the only remaining question.

          2. ilsm

            Barkley,

            As if the US has an informed and thinking population. No better than the demos lead around by the like of Pericles.

            A lot of things are “sold”……. or “dissed” using polls.

            The only poll that matters is the one sending Trump back to 1600 Penn………….

            Who asks the question is important.

            pgl,

            In US government spending “works” is the least of the considerations.

          3. 2slugbaits

            ilsm The Athenians only started losing after Pericles died. The Periclean strategy was “rope-a-dope” behind a wall. And for the most part it worked. Pericles was long dead by the time of the Syracuse expedition. The Spartan success depended upon help from the Great King in Persia…sort of like Trump’s electoral success depending upon the great Czar wannabee in Russia.

        3. Abe

          CoRev – Not sure what you are talking about exactly. You do realize that you are comparing the development of a Single-seat, single engine fighter (the P-51) based on designs current at it’s time in use to the design of a jet powered swept wing bomber (the B-47) which was radical at the time of development with six engines, weighed 10 times as much, was built to carry nuclear arms, etc.

          Also please correct me if I am wrong but both planes were developed and introduced by congresses which were controlled by Democrats with a Democratic President.

          Now if you want to talk about money well spent please look no further than the Iraq/Afghanistan misadventures costing Trillions and more to come because the Republican President at the time and Republicans couldn’t spend the time nor money on doing any type of thoughtful planning.

          Reply
        4. baffling

          apparently corev has never been involved in the design and construction of a large project. there is a reason why it takes quite a bit of time. for one, it keeps a president, who has gone bankrupt numerous times, from embarking on a boondoggle of project. for another, only so many activities can be done in parallel. many of them have a serial path forward. and they must be done correctly. in the past, when trump screwed up his simply forced his investors to pick up the tab. now you want to give him carte blanche permission to spend and build with no oversight, and letting taxpayers bail him out? not the conservative view i have come to understand.

          Reply
    1. Bruce Hall

      2slug

      The FY allocations and expenditures report – https://www.fema.gov/media-library-data/1539209875417-a4b69649b46045013de05466f8b19815/October2018DisasterReliefFundReport.pdf – lays out nicely all of the current and past disasters that FEMA is addressing. Relief for Hurricane Maria destruction is about 1/2 of the total and will continue to be part of the future budgets.

      Given that PR wants another $70 billion and that far exceeds FEMA’s total budget, from where should the funding be taken? Let’s say that Trump’s $5.7 billion request (demand?) be given to FEMA. That leaves another $64 billion to meet the wants of PR. Should that come out of California wildfire relief? How about Medicare or Medicaid (the GAO estimates that $70 billion in improper payments occur in Medicare and Medicaid is rife with fraud)?

      Rather than taking shots at Trump, I’d really like to understand how you would fund the needs and wants of all of the disaster victims.

      Reply
        1. Bruce Hall

          Menzie, I guess that could cover up to half of what PR wants. But why don’t we just take the waste from Medicare and Medicaid and use that? Right, government doesn’t work like that.

          Reply
  2. Moses Herzog

    What people should know about this is Puerto Rican bonds at one time paid at least an 8% rate (actually higher but I don’t know where to access that data, and the bank prospectuses make the fine print small and intentionally complicated based on certain time marks where the rates shift and change). One part of the documents I read says that they end up paying back over half of the value of the entire loan in interest payments (less than half is the actual principal payback). That money comes (or came) out of Puerto Rican tax revenues. And if they don’t pay it then large banks either take a big chunk of collateral, or the U.S. federal government comes in and saves the fat cat banks (because they’re not and will never come in to save regular citizens, as we saw with the USA mortgage cram-downs that Republicans refused to pass around 2009). But Republicans didn’t do that in order to stuff TBTF bankers pockets by illegally confiscating working class people’s houses and personal assets, they did it because “they want to ‘respect’ contract law”. And President Obama couldn’t canvass America and stump for mortgage cram-downs either because whenever he talked to Jamie Dimon on the phone or at a party it made Obama feel like his schlong was much bigger. So you now, Obama had to have his priorities ranked properly.

    Now wouldn’t it be cool to invest in something with an 8%+ rate you know the USA government is going to come in and pull your ass out of the frying pan when you know damned well the creditors are never going to pay it all back. This is a form of TBTF bank welfare, government welfare handed to large banks panhandling to Republican officials. But we don’t call it welfare when billions are given to large banks, because, well, then it would look like bastards like Warren Buffett and Jamie Dimon are eating at the U.S. government pig trough, and we only like it when we can paint poor blacks out like that, not Jamie Dimon and good ol’ Uncle Warren Buffett. Uncle Warren just drinks Cokes and eats DQ sundaes, he wouldn’t suck the blood out of low-income people and then put his hand out to the government because he gave money to creditors he knew damned well would never pay back. Uncle Warren just makes cute 1940s jokes, sips cherry cokes, and grants interviews to Bloomberg and CNBC bimbos that lob softballs high in the air so Gramps Buffett can hit them out, while wearing his Omaha Saint baseball jersey.

    https://www.thenation.com/article/bankers-behind-puerto-ricos-debt-crisis/

    http://hedgeclippers.org/hedgepaper-no-61-the-golden-revolving-door/

    http://www.cadtm.org/Who-Owns-Puerto-Rico-s-Debt-Exactly-We-ve-Tracked-Down-10-of-the-Biggest

    Many Puerto Ricans may wonder at this point, what they should do?? Here’s some sage advice from Bobby Knight related to sexual assault that also applies for the citizens of Puerto Rico. WARNING: This could “trigger” some “SJW” people, and people with a deep inner need to be “righteously offended” and then get tingles thinking to themselves how saintly they are. If you are the type person that watches the Oprah Winfrey Network regularly or needs a special designated section of your college campus to sit in order that you don’t hyperventilate or have “an event”, THEN DO NOT CLICK ON THIS.
    https://twitter.com/kanew/status/726444248900345856?lang=en

    Reply
  3. Moses Herzog

    The one good thing about Orange Excrement is he never acts like a hypocrite, or treats people who work for him over many years just like they’re trash.
    I hope all the hispanic Republicans rush out to vote for him in 2020, ‘cuz it’s not like he treats latinos like toilet paper or anything.
    https://www.washingtonpost.com/politics/donald-trumps-demand-for-a-border-wall-shut-down-the-government-at-the-same-time-his-company-was-firing-undocumented-workers/2019/01/26/8cf75d66-20c5-11e9-8e21-59a09ff1e2a1_story.html

    Reply
  4. pgl

    Rational policy would spend more on Puerto Rico not less. But there may be another regime. Regime change in Venezuela. How does that build Trump’s racist wall? Some protester actually said that if Trump intervenes in their civil dispute overthrowing the existing government, Venezuelans will not only build that wall but paint it too. Talk about selling out fellow Hispanics!

    Reply
  5. Bruce Hall

    Last year Puerto Rico asked for $139 billion in hurricane recovery aid. Puerto Rico’s annual budget is $9 billion. https://www.npr.org/2018/08/09/637230089/puerto-rico-estimates-it-will-cost-139-billion-to-fully-recover-from-hurricane-m

    • says it only really needs $70 billion because the other half is available in funds already allocated
    • wants $33 billion to repair or replace houses damaged or destroyed. That works out to over $206,000 per home which probably far exceeds the value of those houses before the storm
    • wants $30 billion for a new water system and another $26 billion for the electric grid
    • while we’re at it, throw in another $15 billion for schools
    “and the list goes on.”

    $139 billion: that works out to over $42,000 for every man, woman, and child living on that island.. Much more if you subtract those people and businesses who have already handled their problems independently. https://www.telegram.com/entertainmentlife/20181230/after-battering-by-hurricane-maria-puerto-ricos-recovery-nearly-complete

    I guess that sounds reasonable until the next major hurricane.

    Reply
      1. pgl

        I see that Bruce Hall has never grasped the concept of a Fiscal Union. I bet Florida asked for more aid after their latest hurricane that is in their annual state budget. Of course the white people in Florida deserve our help even if Bruce and his ilk would deny it to brown Puerto Ricans.

        Reply
        1. Bruce Hall

          pgl, I’m surprised you comment on an economics blogs since everything is about race and not much on economics. Interesting that Florida only has “white people”. Oh, wait, it has a higher proportion of blacks and hispanics than the U.S. in total. Oh, well. Facts be damned.

          BTW not all PRs are “brown”. In fact, according to the U.S. Census Bureau, about 69% of Puerto Ricans are classified as “white”. https://www.census.gov/quickfacts/fact/table/pr/PST045217. That’s a higher percentage of “whites” than the Detroit area. Why not just send money to Detroit based on “racial qualifications”?

          Reply
          1. pgl

            Huh – I guess it was the other Bruce Hall who cited FAIR as his authority on immigration matters. Until you acknowledge the fact that you cite unreliable rightwing loony tunes, you have ZERO credibility here.

            Also – you dodge the issue of FISCAL UNIONS entirely. Then again – something tells me you have no clue what I mean by this term.

          2. Bruce Hall

            pgl, you have a unique ability to take an argument with which you disagree in one particular instance and make it the basis for objecting to facts in other instances. In other words, you disagree with FAIR’s analysis, so because I cited that in one instance, you reject any other sources I cite regarding any other issues.

            There seems to be something rather dogmatic about that approach.

          3. pgl

            “pgl, you have a unique ability to take an argument with which you disagree in one particular instance and make it the basis for objecting to facts in other instances.”

            Bruce Hall went on and on and on defending the lies from FAIR even as he constantly moved the goal posts. And now he calls this “one particular instance”.

            Way to duck ANY responsibility for your own BS Bruce! As I said – you have ZERO credibility.

          4. Bruce Hall

            pgl, Bruce Hall went on and on and on defending the lies from FAIR even as he constantly moved the goal posts. And now he calls this “one particular instance”.. If providing alternative estimates (GAO) is “moving the goal posts”… guilty. The problem is that anything related to illegal immigration is based on estimates and even the government can’t do better than that without better data. You may recall the recent Yale study that estimated 22 million illegal aliens in the U.S. instead of the more commonly held estimate of 12 million. So, by necessity, any estimate of the economic costs associated with illegal aliens must be a fair wide range.

            Regardless, have you noticed that you haven’t really refuted anything? You simply make ad hominem remarks. Meanwhile, I provide sources which you are free to show why you disagree as opposed to you don’t like the way they make you feel. You claim expertise, but rarely display any.

            Waiting for some real responses. By “real” I mean supportable as opposed to “everyone who thinks differently than me is a racist.” https://www.lawliberty.org/2019/01/29/the-politics-of-language-and-expanding-accusations-of-racism/. (see, I’ve given you another opportunity to debate this thesis without resorting to name-calling)

      2. ilsm

        2slugs,

        Rebuilding in the face of a perils, which has been around thousands of years is insane.

        How long since you were trained in operational risk?

        Reply
      3. Bruce Hall

        2slug, how about a “weather” tax? There were hurricanes when you and I were young. There were hurricanes when our grandparents were young. That time, Puerto Rico was in the wrong place at the wrong time. But if you want to tax carbon, don’t forget to apply that tax to everything coming out of China… maybe even triple the tax for those items. Why? Because China will accelerate CO2 emissions from coal. http://www.mining.com/chinese-companies-build-700-coal-plants-outside-china/. That also means it will dump a lot of other pollution into the global atmosphere.

        As for higher temperatures causing more or more powerful hurricanes (and tornadoes), that’s still being debated. We know for certain that the number of hurricanes and tornadoes striking the U.S. has decreased of the last couple of decades… even with better detection of tornadoes and measuring of hurricane forces.

        But yes, a $30/ton (why stop there?) tax on “carbon” (meaning CO2 emissions) would definitely raise a lot of money for redistribution and cause a lot of economic pain for a lot of poorer Americans and hardly be noticed by wealthier Americans. Good regressive tax strategy.

        Reply
        1. 2slugbaits

          Bruce Hall Absolutely. We shouldn’t exclude CO2 emissions from China. That’s why it’s important to account for embodied CO2 emissions in final demand, as argued in this OECD paper that you can download:
          https://www.oecd-ilibrary.org/science-and-technology/estimating-co2-emissions-embodied-in-final-demand-and-trade-using-the-oecd-icio-2015_5jlrcm216xkl-en

          And the problem with a carbon tax is that it’s highly progressive and not regressive. Almost every carbon tax proposal out there redistributes income from the top down to the bottom. That’s why plutocrats hate it.

          As for higher temperatures causing more or more powerful hurricanes (and tornadoes), that’s still being debated.

          Only in VFW halls by geezers wearing MAGA hats guzzling cheap beer.

          Reply
          1. Bruce Hall

            2slug and pgl, the carbon tax as envisioned increases the cost of products purchased, so like a sales tax it is regressive, only the mechanism of where the tax is assessed is different. https://www.investopedia.com/ask/answers/042415/what-are-differences-between-regressive-proportional-and-progressive-taxes.asp

            I would have thought you would understand that the wealthy don’t have to or simply don’t spend as much of their income on consumables than the poor. However, I realize the counter-argument is “yes, but the government will collect the money from corporations and give it to the poor in the form of tax rebates”. That may be. Simply add another tax and another giant government bureaucracy and all is well with the world. After all, a guy earning $50K driving 20 miles to work emits far less carbon than a guy earning $200K driving 20 miles to work. Problem solved.

            You really don’t think that the “carbon tax” will end up in the cost of goods purchased? And if you rebate the money to the “poor”, how have you changed their behavior? If you drive up the cost of electricity and food and clothing and travel and education and every other human activity, how have you saved the climate?

            It’s a progressive’s wet dream.

          2. 2slugbaits

            Bruce Hall if you rebate the money to the “poor”, how have you changed their behavior? If you drive up the cost of electricity and food and clothing and travel and education and every other human activity, how have you saved the climate?

            Fair question. And you’re not the first person to ask that question. Here’s a post that tries to explain how a carbon tax changes behavior via the substitution effect. It’s geared for people who aren’t economists:
            https://worthwhile.typepad.com/worthwhile_canadian_initi/2019/01/marginalists.html#more

          3. Bruce Hall

            2slug, I appreciate the link to the “lay-person” version of why a carbon tax is a good idea. There is just one caveat: it all depends on the notion that the cost of such a program and the market contortions that will result are actually worth doing in the first place. That is built on the idea that as CO2 increases, global temperatures will increase proportionally… and they do not. The sensitivity of climate to CO2 concentrations is relatively small and other factors can either increase or decrease global temperatures. Plus, we are asked to take it on faith that a warmer earth is a more dangerous earth, but the opposite may well be true… or there simply may be winners and losers which happens all of the time.

            Dr. Tim Ball wrote this about that: https://principia-scientific.org/junk-science-of-climate-sensitivity-and-co2-forcing/

            Now you may have more expertise in economics, but Dr. Ball has far more expertise in climate science. I’ll admit Dr. Ball is “controversial” in the eyes of some. So is Dr. Judith Curry who has come to the same conclusion: http://www.drroyspencer.com/2018/04/new-lewis-curry-study-concludes-climate-sensitivity-is-low/ as has Dr. Roy Spencer. Now, I would, at this point, expect some ad hominem attacks on those people by pgl, but qualified scientists, even if they don’t work for the government, can reach different conclusion and do all of the time. That’s the beauty of real science: it’s always open to questioning and debate and reevaluation. Or are we still stuck on Newtonian physics?

            But thanks for the link anyway.

        2. pgl

          A weather tax? WTF? Maria was not a person who could be taxed. Oh wait – there was more:

          “Puerto Rico was in the wrong place at the wrong time.”

          Blaming the victims. I guess on 9/11/2001 those people who went to work at the World Trade Center should have been blamed for their misfortune as well.

          Hey Bruce – with your attitude on these things, some advice. Do not ever come to my city. Having a lot of New Yorkers angry at you could get dangerous.

          Reply
        3. pgl

          “Good regressive tax strategy.”

          Bruce Hall has just won the award for dumbest troll ever. That carbon dividend endorsed by liberal and conservative economists have figured out how to make a carbon tax actually progressive.

          So we can add climate change policy to Fiscal Unions as two other economic concepts that are way over Bruce’s head!

          Reply
          1. Bruce Hall

            pgl, although I responded to you and 2slug in a previous comment, I’ll add this link just for you because…
            • you’ll have a hissy fit that it goes to a conservative organization that includes economist Donald J. Boudreaux as part of its staff
            • you’ll have to address the real world issues of another so-called progressive tax scheme

            https://www.aier.org/article/why-carbon-tax-wont-work-real-world

            I thought it timely because it was published within the last two weeks.

          2. 2slugbaits

            Bruce Hall The author is well outside conventional academic economics. He preaches the Gospel of St. Hayek, which has a peculiar appeal to a lot of lay folks who are interested in economics but don’t have the formal training to actually understand modern econ. You find a lot of “entrepreneurial economists” (Krugman’s term) who come from GMU and work at places like Heritage, Cato and AEI. Stephen Moore is another GMU guy. They tend to write a lot for readers that rely upon intuition but lack formal training. A good example is the way he misuses Coase’s theorem as a way to throw up some academic sounding mumbo-jumbo to give his article a whiff of intellectual respectability. Are you familiar with what Coase actually said? It isn’t really relevant here because the transaction costs of a carbon tax are negligible relative to the costs of carbon. In short, you were being played. It’s typical of stuff I see from a lot of plutocrat sponsored “think tanks” whose main purpose is to give stupid arguments a veneer of academic respectability.

            His main argument is that there is no guarantee that carbon tax revenues will be rebated. So what? Can he guarantee that the Trump tax cut will deliver the kind of economic growth promised by the AEI? The fact is that there are good political reasons for believing politicians will want to keep the promise to rebate tax revenues. It’s highly progressive and would be very difficult to take away, just as Social Security and Medicare and Obamacare are very difficult to take away once voters get them. So here he’s just bullshitting his way through and hoping nobody notices. It’s also a political science argument and not an economic argument. But even if the carbon tax revenues get diverted to fund green projects, why is that worse than dumping carbon into the atmosphere? Even a second best approach like diverting carbon tax revenues to green projects is still better than the worst case scenario of allowing unrestricted carbon. And his discussion of rent-seeking is about as dishonest as you can get. Rent-seeking is a problem, but Big Coal and Big Oil are almost the definition of rent-seeking industries. Again, he’s just using and abusing terms to impress interested amateurs who really don’t know better. It’s the same problem that Simon Wren-Lewis complains about when “macromedia” misrepresent ersatz economics as real economics. The general public just ends up being confused and assumes one view is just as valid as another.

            There’s reason why there’s a lopsided consensus among academics for something like a carbon tax with a progressive rebate. It’s supported by conservative and liberal economists. The only “economists” who don’t support it are the fake hired gun “entrepreneurial economists” at places like AEI and Heritage or the WSJ op-ed page.

          3. Bruce Hall

            2slug: so an credentialed economist who works outside of a university setting is not to be considered “legitimate”? I think you mean that an economist who considers the actual conditions under which systems operate is tainted by reality.

            Let’s apply that thinking to researchers who work in private industry. Since they are not employed by state or federal governments, their research is not to be trusted and the products of their research is not to be used. We should rely on in-bred the closed clique of academia for all truth and knowledge? That’s a bit of a stretch.

          4. Menzie Chinn Post author

            Bruce Hall: No, a credentialed economist who regularly mistates data and facts, who popularizes indices with no empirical content, and manages to get kicked off the editorial page of a newspaper for citing data three years out of date should not be given attention.

          5. Bruce Hall

            Menzie I seemed to have pushed a hot button for you with regard to Donald Boudreaux. I tried to find the particulars about him being kicked of the editorial page of a newspaper, but that didn’t seem to pop up on a search. Wiki had this: https://en.wikipedia.org/wiki/Donald_J._Boudreaux.

            I chuckled a bit at this bit given your comment about him:
            Boudreaux has publicly criticized Nobel Memorial Prize in Economic Sciences laureate Paul Krugman, stating that Krugman frequently “commits elementary errors” when discussing economics.

            I know that philosophically you two are miles apart, but you both seem to have fairly good standing in the economics sphere. Perhaps I’m wrong, but since economics is not what I’d call a “hard science” but closer to a mathematical art form, I’m guessing there are areas that can be looked at and different conclusions drawn. I’d attribute that to agenda bias.

          6. Menzie Chinn Post author

            Bruce Hall: My apologies. I was responding to what I thought was a comment on Stephen Moore. Boudreaux is *not* a congenital liar, and is perfectly fine as an Austrian.

          7. 2slugbaits

            Bruce Hall You shouldn’t trust someone whose paycheck depends upon producing answers that the boss wants to hear. You shouldn’t trust someone who claims to be an economist but then grossly misstates something like Coase’s theorem, all the while hoping that the inattentive or untrained reader doesn’t catch it. You shouldn’t automatically trust someone who subscribes to offbeat and unconventional economic views without asking yourself why those views are offbeat and unconventional. And you really should be skeptical when that person presents his views as mainstream when they are not. Would you blindly trust the efficacy of drugs tested by “scientists” at Big Pharma? Would you blindly trust the expert opinion of a car salesman? Would you trust health studies funded by the tobacco institute? Or the sugar industry? There are some corrupt academics and some corrupt government researchers, but it’s far less of a problem because their salaries are largely independent of whatever results they find or don’t find. One of the luxuries of academic tenure and career status in the government is that you can speak truth to power without fear of consequences. Listen to your old hero Ronald Reagan: Trust but verify.

          8. Bruce Hall

            2slug, your statements of “blindly trusting” seemed to be a roundabout way of saying “you shouldn’t believe someone who disagrees with my bias”.

            I worked with economists at Ford who were not those “whose paycheck depends upon producing answers that the boss wants to hear.” Just because someone works at a university or for the government doesn’t mean they don’t let their particular weltanschauung encroach on how they interpret data or events. The same goes for those who work in the private sector. Economics relies on incomplete information or information that is a proxy for reality, so it is open to interpretation. I’m not knocking economists or economics; the world generally operates on incomplete information which is why it is so dynamic.

            You (and Menzie) may disagree with the likes of Don Boudreaux in terms of philosophy, but an economic proposition is only as good as the system in which it operates and I believe all systems are inherently faulty and prone to overreaction and inefficiencies regardless of whose economic bias is attempted to be implemented. As to “off-beat and unconventional”, again I see that as an agenda bias remark. All too often, the “off-beat and unconventional” becomes the mainstream and the norm… in medicine, physics, economics, an so on. Ad hominem attacks are the enemy of “better truth” (the “truth” being ever elusive).

            I’d love to listen to a debate between Menzie Chinn and Donald Boudreaux. I’d bet there were significant areas where “me too” would be the response.

    1. pgl

      More disinformation? Trump spewed a lot of lies about immigration over the weekend which seems to be sourced from your rants. Take a bow!

      Reply
    2. pgl

      “FLORIDO: Yeah, well, after a lot of public pressure, you may remember, the governor hired a team from the George Washington University to answer that question of how many people died as a result of the storm. And that report is due out at the end of this month. But in this report submitted to Congress today, the government says that what it does know is that in the four months after the storm, there were more than 1,400 additional deaths compared to the same time period in previous years. And it also acknowledged that many of those may be storm-related, though it still can’t say for sure. But it is the first time that it’s acknowledged that many of those probably were due to the storm.”

      I’m sure Princeton Steve will tell us that this is a severe overestimate per Princeton Steve’s “expert analysis”.

      Reply
  6. Alan Goldhammer

    President Trump will quickly run afoul of the Congressional appropriation process if he tries to go the emergency declaration process. There will be a legal suit(s) filed immediately after the declaration and we will need to follow the trail of judicial decisions up to the Supreme Court. Given the past case ruling on this way back when Truman tried to do something similar, President Trump should not hold out much hope of this working.

    Reply
    1. pgl

      Good legal analysis. But what is Trump’s real goal? A worthless wall or simply looking like the tough guy appeasing the Make America White Again crowd?

      OK the courts shoot his lame brain idea down and he rails against the courts. Now if we as voters are stupid enough to let him get away with this in Nov. 2020 – shame on us.

      Reply
  7. noneconomist

    Disaster preparedness update from northern California: For those worried about our inability to do sufficient forest” raking” here or otherwise face stoppage of federal funds if a natural disaster occurs, take heart.
    Good recent weather (temp was in the high 60’s yesterday) had many neighbors out with chain saws and other power equipment preparing their properties for the coming fire season. Just beginning my own debris piles (chain saw not yet in use) that normally have to be burned before May. (The nearby national forest has suspended prescribed burns because, well, those who would do the burning were, uh, not working for some reason. Thus, a month was missed that could have been put to good use).
    Weed/grass growth is just beginning and will reach a peak in April, necessitating a wait before setting the string trimmer and mower to good use.
    Was impressed yesterday while driving through a nearby heavily treed subdivision where much work has already been done–lots of rakes there–by homeowners.
    And just to remind those who have forgotten: in case of a natural disaster –like a wildfire– I would expect no less than the full help of the government, especially since Californians send well over $400 billion/yr. to Washington. Getting back at least a small portion of that money is the least that should be done. Especially since I’ll soon be ” raking” like crazy, much the same as I’ve been doing for the past 40 years.

    Reply

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