Who’s Getting the Rents?

The import quota rents that is. From Brian Riley/NTUF:

In addition to tariffs, some officials in the Trump administration have embraced the use of quotas to restrict imports. As opposed to taxing imports with tariffs, quotas limit the quantity of goods that Americans can import.

Quotas are worse than tariffs

As bad as tariffs are, at least they generate revenue for the federal government, as President Trump has repeatedly pointed out. In contrast, quotas drive up prices by restricting imports, but the federal government doesn’t collect a dime.

Quotas are also more restrictive than tariffs.

In competitive conditions, any quota can be converted to a tariff and vice versa (when there is no uncertainty). However, if domestic incumbent firms have market power, then quotas are much worse than tariffs. Consider the case of a domestic monopolist, shown in Figure 1 below:

Figure 1: Tariff and quota for small a country, with a home country monopolist. Source: Feenstra & Taylor modified by Chinn.

If a tariff t is imposed when there is a home country monopolist, the allowance for imports erodes the monopolist’s market power. Prices rise from Pw to Pw+t. Then consumer surplus is the blue trapezoid plus the green triangle.

If a quota (which under competitive conditions would equal the amount of imports coming in under the tariff) were imposed, then market power would be preserved, and the firm sets MC equal to MR for demand minus the quota. Prices rise to P3 > Pw+t. The consumer surplus is now reduced to only the green triangle.

The block defined by (P3Pw)x(D3S3) is quota rents…. who does this go to?

Typically, the rents go to whoever has the licenses to import. But the situation today is even worse than that — the foreign exporters are allocated the quotas, so they get the rents. In other words, we ensure that foreigners get the surplus that consumers lose…

Maybe there is some logic to this approach which makes sense for the country. However, I doubt there is. Rather:

According to Christine McDaniel of the Mercatus Center, “So far, the steel quotas have not been administered in a transparent way, which has made it even harder for U.S. manufacturers to access the steel they need for their everyday production processes.”

This means in principle the administration, or officials within the administration, could extract special deals or benefits away of the scrutiny of the public.

In other words, this policy framework is the absolute worst of the worst…

PS: In principle, if the US is a large country, it can affect the terms of trade, so that the net effect is a gain in surplus. With monopoly power, the calculus tilts toward a loss. In addition, empirical estimates indicate that consumers are shouldering the burden (see Amiti et al. (2019)).

PPS: For the 1982-84 voluntary export restraints on Japanese auto imports — my first research assistant job at Brookings, working for Robert Crandall, the estimate came out to $1000 extra dollars per Japanese car. Feenstra (1988) obtained estimates of $1000/car, taking into account quality changes.

118 thoughts on “Who’s Getting the Rents?

  1. Moses Herzog

    For about 5 seconds before doing a Google search I thought you might mean Robert Crandall of American Airlines fame. I was about to say “Crandall….. Navarro….. wow Menzie, you have worked together with some major A-holes” Thank goodness I’m a man who restrains himself from using vulgarity or that could have been an embarrassing moment. (you are buying that last part, aren’t you Menzie??)

    Robert W Crandall, God bless you Sir, and never leave out the W or I will have to send the union boys after you.

  2. Moses Herzog

    Wanna know why some blacks don’t wanna stand during the national anthem?? Here is the MILD version of the sh*t they put up with ALL THE TIME. It looks like how many?? 10 cops??—with nothing else to do in the day but bother tax paying blacks because some white trash Steve Bannon type or white trash Stephen Miller type 5 doors down is upset someone recently moved in. This is the MILD sh*t. Now ask yourself—how YOU gonna feel when you’re going about your day, and sh*t like this gets pulled??

    The average white housewife gets treated like this after picking up Timmy from soccer practice, what’s gonna happen?? She’s gonna ask for a badge number and all holy hell is gonna break lose at the next town hall or town council meeting—if she doesn’t already know someone in the city hierarchy. That sh*it gets OLD, and it sure as hell is old in the year 2019.

  3. Moses Herzog

    My comp is acting quirky tonight, so I’ve given up on my long blathering about what I read in the Mueller Report today (and I’m sure to forget half of it by tomorrow). But as I do my usual night owl wanderings online, i’m sure to find more than one item of interest. I’m dedicating this visual graphic, which, no, I did not myself create, to one of the great blog commenters of the modern era, and the man who “wishes they could all be California girls”—-PeakTrader:

  4. pgl

    “The block defined by (P3–Pw)x(D3–S3) is quota rents…. who does this go to? Typically, the rents go to whoever has the licenses to import. But the situation today is even worse than that — the foreign exporters are allocated the quotas, so they get the rents. In other words, we ensure that foreigners get the surplus that consumers lose…”

    That was the situation with Reagan’s “voluntary export restrictions” on Japanese cars, which USED to be the dumbest thing ever. Trump trumps Reagan’s stupidity!

    “This means in principle the administration, or officials within the administration, could extract special deals or benefits away of the scrutiny of the public.”

    What I have been saying for a while. Check the stock trades of Wilbur Ross, Jared, and Ivanka!

  5. pgl

    ‘PPS: For the 1982-84 voluntary export restraints on Japanese auto imports — my first research assistant job at Brookings, working for Robert Crandall, the estimate came out to $1000 extra dollars per Japanese car. Feenstra (1988) obtained estimates of $1000/car, taking into account quality changes.’

    Some excellent research on VER!

  6. pgl

    Finally got around to reading his entire discussion which is excellent. I’ll feature two key passages:

    “The Trump administration has imposed tariffs on $274.9 billion of imports, with a total cost to businesses and taxpayers of $37.9 billion per year. These tariffs are a hidden tax that makes the United States weaker by undermining economic growth and inviting foreign retaliation against U.S. exporters. Some White House officials now want the government to go a step further and cap imports of goods ranging from steel to aluminum to cars. It’s an odd strategy coming from an administration that has successfully cut regulations and taxes in other areas.”

    I recently hammered Kevin Hassett for overstating the benefits of USMCA. Yes there are minor benefits in the long-run but I wonder why Hassett never talks about the economic costs of Trump’s trade protectionist policies.

    “Quotas and central planning: Import quotas are a common feature of centrally planned economies like Venezuela, which imposed import quotas under socialist leaders Hugo Chavez and Nicolas Maduro. In 2001, the Chavez regime implemented import quotas in a misguided effort to boost domestic producers. Venezuela also imposed quotas on automobile imports in 2008 to promote domestic automobile manufacturing. The results of such policies were predictable. According to one report: “The human suffering is hitting [Venezuelan] society at every level—hyperinflation, violent crime, widespread deprivation, deepening poverty, and stifling import quotas that exacerbate the scarcity of critical goods.”

    Trump would like it if we became Venezuela as his 2020 campaign would benefit from things like crime and deprivation. Which of course the liar in chief would blame on Democrats and the Mueller report!

    1. Willie

      When George W. set about invading Iraq, I figured he was either an unwitting Iranian agent or a really well concealed Iranian mole. History shows that the Iraq invasion enhanced Iranian power in a way that nothing much else could have. Iran isn’t much friendlier, and what with Trump’s behavior, has no reason to.

      So, what’s this got to do with tariffs and quotas? Trump is an unwitting Russian agent or a not all that well concealed lap-dog for Vladimir Putin’s ambitions. The things he does that weaken the United States industrial and economic strength, the things he does that destabilize our alliances, the things he does that diminish American standing, stability, and reliability on both the domestic and international stages, all play into Putin’s hands. Instituting tariffs under the guise of some kind of industrial policy, and then slipping in quotas that can be used to help cronies and donors all work to destabilize and diminish the United States in the long run.

      It’s a free country. We collectively voted that guy into power. We will have to collectively clean up the mess he has a minimum of two more years to make.

  7. ilsm

    It’s Wednesday, that orange haired camel is wandering the spaces in my head shouting “Happy Trump Day”!!

    1. Moses Herzog

      This is really weird because I seem to remember something about this in relation to Russian propaganda. I’ll be damned if I can remember where I read it though. (That’s not a joke for anyone wondering)

    1. Menzie Chinn Post author

      Steven Kopits: Except widgets don’t get tortured in their home country of export, widgets don’t have children who can be relegated to gastarbeiter status, etc.

      1. ilsm

        @Menzie Chinn,

        The tortured migrants alluded to are leaving places sustained by the Monroe Doctrine (on the southern border) or in the past 26 years (Latin America, EU/East Europe) places tortured by the US “sanctions”, meddling and regime change……

        1. pgl

          The only more disgusting that WTF Princeton Stevie’s agenda is your stupid and pathetic agenda.

      2. Steven Kopits

        This is rather poor and incomplete analysis, Menzie.

        When markets are constrained, either by price or volume restraints, black markets will tend to arise as the market tries to return to equilibrium. We would therefore expect smuggling and other similar distortions under either quotas or tariffs. Take soybeans, for example. This, from Bloomberg, last November.

        Argentina has become the epicenter of soybean trading dynamics — at least for now.

        The South American nation has risen to become the top buyer of U.S. beans in the last three months as China looks elsewhere in an escalating trade war with the Trump administration. Almost 1.3 million metric tons of U.S. oilseed have been inspected for export to Argentina from Sept. 1 through Nov. 22, according to the U.S. Department of Agriculture. That compares with none in the same year-ago period, USDA data show.

        Thus, a net exporter of soybeans has become the US’s number customer of soybeans. What could it mean?

        With quotas, particularly with prohibitions, where the quota = zero, every aspect of the business is illegal, including production, manufacturing, processing, storage, transport, distribution, sale, purchase, consumption and possession. Under such a regime, the participants in the business are operating with a loss of two crucial property rights. The first, of course, is with respect to the government itself. Therefore, if a migrant woman is raped coming across the desert, she is in no position to complain to the police, and indeed, in Mexico, the police are some of the key predators in the chain. The second loss of property rights is with respect to others in the business, including competitors and other actors. Therefore, if one drug cartel kills the drug sellers of another cartel, the latter is in no position to seek redress from the criminal or civil justice system. Therefore, both these issues create a wider climate of lawlessness which results in 1) the exploitation of the weak players in the system, and 2) the impulse to organize security based upon economies of scale, which implies geographic dominance, ie, turf.

        The exploitation of the weak involve all aspects of confiscation of value, including theft, fraud, robbery (but not assault), kidnapping, extortion (including cartel passage fees), rape or coerced sex, indentured servitude (impressment into a gang), assumption of risk (smuggling for the cartels), forced labor, forced prostitution (related to paying smuggling fees), and false imprisonment (police) related to extortion. Failure to comply with cartel requirements — most notably by failing to pay the cartel crossing fee at the border — will lead to rape, assault, mutilation and death. These are all predictable outcomes of a black market business model under a prohibition.

        In the domestic market, a lack of property rights leads to wage theft, workplace exploitation, and sexual harassment. All these are also the predictable outcome (to the coefficients) of a quota based system, and all of them disappear in a tariff-based (legalize and tax) system.

        Similarly, prohibitions lead to violence and corruption by the businesses themselves. The violence is principally directed at competitors. Thus, if we look at inner cities, the majority of gun deaths are between individuals who will all have extensive criminal records and involvement in the drug trade. This is similarly true in, say, Northern Mexico, with the government exacerbating the problem by taking down the drug kingpins, thereby creating management and market voids in the wake, which will be contested by force of arms.

        With respect to protecting property rights from the government, the preferred tool is corruption, specifically bribery. Barring that, intimidation or explicit violence is the alternative: Plata or plomo, as Pablo Escobar liked to say. Here is wikipedia’s list of 186 politicians murdered in Mexico’s war on drugs.
        https://en.wikipedia.org/wiki/List_of_politicians_killed_in_the_Mexican_Drug_War These tactics apply to the media and community groups as well.

        Thus, black markets bring a stunning level of pathology.

        You have three policy options:

        1. Allow unlimited entry to migrants. That is not going to happen. You can vote out every Republican in government, and it still wouldn’t happen. There is a lot of romanticism about policy, both left and right. The right fantasy is that somehow migrants will magically disappear. On the left, it’s that the border will magically disappear. Neither is going to happen.

        2. Suppress supply. This works, and you can show why on a simply supply-demand graph, but it leads to sub-optimal economic outcomes. If you are a true conservative, this is your chosen strategy. I do not believe I have met a true conservative yet by these standards.

        3. Continue with the present system. Here’s the Menzie counter to go with that, from May 14 last year. Just under one million events.

        Death 2,465
        Rape / Coerced Sex 81,523
        Kidnapping and extortion 32,230
        Human trafficking 19,907
        Assault / Robbery 100,482
        Drug Smuggling 37,918
        Extended Incarceration 77,732
        Total 352,256
        Arrested in US or Mexico 441,742
        Abandoned Trip 138,400
        Total including Arrest and Turn Around 932,399

        4. Legalize and Tax. Here’s what the Menzie counter looks like in a market-based system which you so decry.

        Death 95
        Rape / Coerced Sex 853
        Kidnapping and extortion 4,835
        Human trafficking 3,033
        Assault / Robbery 5,024
        Drug Smuggling 379
        Arrested in US or Mexico 10,807
        Extended Incarceration 4,645
        Total (excl. Abandoned Trip) 29,671
        Abandoned Trip 1,422
        Total (incl. Abandoned Trip) 31,093

        That’s a reduction in pathology of 97%.

        So, you may prefer the status quo and reject the price mechanism as on organizing principle in society. It leaves me dumbfounded to see you endorse such cruelty. Not my policy preference.

        1. pgl

          Poor analysis? The topic at hand was trading in goods – not migration of people. But leave it to you not to know the difference.

          1. Steven Kopits

            Menzie wrote: “Except widgets don’t get tortured in their home country of export, widgets don’t have children who can be relegated to gastarbeiter status, etc.”

            He was referring to migrant policy, not trade in his comment. I responded to that.

            I’d add that those children right now have no status at all. Here’s a new report from MPI. We have 100,000 undocumented children graduating from US high schools. What do you want to do with them, if they have no status?

            I would add that I have not written anything about the management of dependents for undocumented residents of the US.

          2. pgl

            “Menzie wrote: “Except widgets don’t get tortured in their home country of export, widgets don’t have children who can be relegated to gastarbeiter status, etc.”

            He was referring to migrant policy, not trade in his comment. I responded to that.”

            Princeton Stevie Boy has no clue that Menzie was mocking Stevie Boy!!!

            Look dork – this is a thread about trade in goods and not some excuse for your self promotion BS.

        2. 2slugbaits

          Steven Kopits Correct me if I’m wrong, but your pay-to-play visa plan still includes immigration quotas by way of capping the number of visas issued by the State Department.

          1. Steven Kopits

            It is a price-based, not volume-based, system. That’s the point.

            There are always an infinite number of visas on sale at any given time. That’s the central means of closing the border: the migrants’ knowledge that they can enter the US at will and stay indefinitely.

            The price of the visa is set by
            1. The lowest number which closes the border to illegal immigration, and
            2. Ends the domestic black market in migrant labor.

            The test for item 1. is Border Patrol apprehensions, which we are looking to reduce from around 3,000 /day in March to a target of 150 / day when the plan if fully implemented.

            The number of visas for undocumented residents is
            1. The number of undocumented Hispanics in the workforce from the MCA countries
            2. Their undocumented dependents
            3. Less: those above with violent criminal histories
            4. Less other sub-groups deemed ineligible by Congress (eg, those in the country less than two years), but not more than 5% of the total population (else the black market won’t go away)
            5. Plus about 350,000 extra visas to cover demand expansion due to legalization

            There is potentially another cohort, those in the US on tourist visas doing short term work (mostly 14-60 days in country). These can be included or not. It’s a lot of visas — 5 million or more — but not a lot of work days in total.

          2. Steven Kopits

            Visas are not ‘issued’ as such in this system, and State may well not be the issuer.

            The proximate issuer would be something like the Visa Oversight Management Committee (VOMC). The VOMC is charged with setting the price of the visa. The volume is determined passively by the migrants when they buy them. Once a migrant is background-checked in this system, they can draw a visa at will for any duration up to the maximum (less than a year, initially).

            If it were my choice, the VOMC would be an agency (a very small group) operating under the auspices of the Treasury. It’s primarily a price-setting and revenue maximization body. I

          3. Steven Kopits

            To follow this thought just a bit further.

            The visa is this case is just an activation code. You would buy it, as I conceive it, on a participating reseller’s website, for example, Southwest or Spirit Airlines, right along side your air ticket. The key to this whole system is splitting the background check and the visa into two separate documents. Today, it’s really packaged together. So if you submit paperwork for a visa, you’ll pass your background check and receive the visa at the same time. In a market-based system, you pass the background check first. That’s the US government’s opportunity to reject you. If you pass that, you can buy a visa anytime. Again, this is central to creating an on-demand system which allows the closure of the southwest border.

          4. 2slugbaits

            Steven Kopits There are always an infinite number of visas on sale at any given time.

            I don’t think that’s what you were saying earlier. How is an infinite number of visas different from an open border?

          5. Steven Kopits

            Slugs –

            It’s a price-limited system. Like Disney World.
            Here’s the ticket site at Disney World. https://disneyworld.disney.go.com/admission/tickets/theme-parks/

            See, you can buy a ticket for any day you want! In principle, there are an unlimited — perhaps I mis-spoke to say ‘infinite’ — number of tickets on sale. So why isn’t Disney overrun if there are unlimited tickets for sale? Because demand is mediated by the price!

            We’re using exactly the same system for work visas, with the difference that we have a somewhat different definition of ‘full’ than Disney does.

            This is straight from the first chapter of any intro econ textbook — that price mediates supply and demand. I’m struggling to see why you are unable to understand the concept.

        3. PeakTrader

          Steven Kopits, making up numbers doesn’t support your case.

          When you legalize something, you get more of it, including crime, drugs, immigration, etc..

          The additional tax revenue will be tiny compared to the additional social costs.

          That’s why there are laws, to prevent and deter.

          1. Steven Kopits

            “…making up numbers…”

            To the best of my ability, I try never to ‘make up’ numbers. All the assumptions I make are based on available, typically public, sources, and all the associated spreadsheets are publicly available.

            However, there is substantial uncertainty about some numbers. Take for example, the rate of rape / coerced sex of migrant women. If you read the press, the percent comes out in the 30-80% range. However, if you talk to field researchers, they say this applies principally to those who find their way to shelters, and came across without paying a coyote or the cartel fees. Indeed, the percents there are thought to be north of 80%. However, there is an open question regarding those women who paid the fee. The field researchers I talked to said that they believe these women, as a general rule, were not molested.

            And yet, I can read quotes in the papers of coyotes telling women to take birth control before starting out on the journey. And another account where the mother is too slow and the coyote offers to wait for them if he can have sex with the daughter. So there’s plenty of trickery, too. And it is readily apparent that sexual favors will tend to find their way into the crossing fee as a kind of payment in kind. Many of these migrant women are crushingly poor, and I have to imagine this kind of offset can be negotiated. And it is further clear that these women will never, ever tell their families, particularly if it had some element of a transaction, ie, was in some form ‘voluntary’. This makes it potentially no less traumatic (perhaps even worse), but virtually impossible to assess by survey.

            So what’s the right coefficient? In European migrant surveys, it’s 50%. I use 60%, because that’s the most common number in the press in the border zone. But am I using the wrong sample? It’s very hard to say.

            The point, however, is not whether the correct number is 10,000 or 100,000. The point is that policy should never, never, put people in harm’s way like this.

            As for any number I have put down, I am happy to walk you through the logic.

          2. Steven Kopits

            “When you legalize something, you get more of it, including crime, drugs, immigration, etc.”

            The crime factor related to the black market typically falls by 95%. The gangster era in Chicago did not end because Capone was convicted, but because Prohibition was repealed.

            I can walk you through any of the numbers posted above. Take deaths. Mexico is on pace for 50,000 murders this year. Prior to the war on drugs, it was maybe 12,000. So that’s a big number, and likely some share is of migrants, for example, those kidnapped for ransom or who fall afoul of the cartels for failing to pay the fee. The body count I put up is those found by Border Patrol, by ranchers, by local police, in morgues, adjusted for bodies not found, and bodies on the Mexican side of the border, plus those migrants who may have died in Mexico in transit to the border zone. It’s not hard to get to 3,000, and we’re using 2500. Of course, this changes with caravans and asylum, etc.

            In a market-based system, there is no point in trying to get across the border illegally. So the migrant looks up a job at home, calculates the potential wage v flight and visa costs, and hop a plane from Guatemala City to their destination, say, Pittsburgh. The migrant is never in the border zone and never traverses Mexico at all. Therefore, there is no associated risk of death. This applies one-for-one with rape and coerced sex. We don’t solve the problem with better enforcement, we terminate the entire business model of sneaking over the border. The migrant, critically, has property rights all the way through. At no point are they in a lawless zone. That’s how we achieve the reductions in pathology.

          3. Steven Kopits

            “When you legalize something, you get more of it”

            Let me quote myself:

            Because the US has lifted at least three prohibitions historically, the increase in demand can be estimated by reference to experience, in this case, with alcohol and marijuana. US per capita alcohol consumption, for example, declined by 9% from 1915, five years before Prohibition, to 1929, three years before Repeal. Marijuana legalization is associated with an increase of consumption in the range of 5-15%. In Colorado, adult marijuana use increased by 12.5% from 2014, the year after legalization, to 2017. These two precedents suggest legalization would increase demand by 10-15%.

            Pew Research’s latest population estimates for 2016 imply approximately 5.4 million undocumented Hispanics in the workforce. Assuming legalization increases demand by the historically observed 10-15%, the migrant worker population could grow 0.5-0.8 million persons over the two years following the implementation of a market-based program.

            However, both alcohol and marijuana were legalized with a fixed tax approach. In our proposed MBV system, prices would be actively managed to reduce the incoming headcount and meet conservative goals.

            In a fixed fee system with a $3.50 / hour visa cost, demand would increase from 5.4 million to 6.2 million workers. With a price-managed system, the value of the visa is allowed to edge up modestly and additional visas are issued with the intent to prevent the re-emergence of a black market in labor. Assuming an unlimited supply of Central American labor at $6.50 / hour, the Hispanic migrant workforce would increase from 5.4 million to 5.75 million and the price of the visa would increase by about $0.30 / hour (+8%). Therefore, in a price-managed system – and assuming our supply and demand curves are approximately valid – the number of visas would increase by 350,000 ceteris paribus. Even with these additions, the Hispanic migrant workforce would only return to the levels of 2011 and remain 500,000 below its 2007 peak.


          4. Steven Kopits

            “That’s why there are laws, to prevent and deter.”

            First, I am not proposing a lawless system. Far from it. Enforcement under an MBV system is in some ways far more aggressive than the system today.

            Second, laws do not deter anything. Ever driven in a 55 mph zone? Was anybody driving 55 mph? The enforcement of laws deters things, but it is virtually impossible to achieve compliance with laws that are widely flouted. Again, I refer you to a 55 mph zone.

            Third, prohibitions are the single biggest generators of crime out there. The extraordinary predation of migrants, the violence in our inner cities, the unchecked criminality in northern Mexico: all principally the result of prohibitions.

          5. PeakTrader

            Steven Kopits, you’re still making up numbers.

            Many crime rates fell during Prohibition. Also, alcohol consumption fell substantially.

            Getting rid of the 55 MPH speed limit will cause faster driving.

            Marijuana was never legal before, like alcohol.

            And, black markets are typically illegal.

            Why have laws by making illegal behavior legal?

          6. Steven Kopits

            US homicide rates rose about 50% during Prohibition and declined after Repeal. US alcohol consumption initially fell steeply after Prohibition, but the market quickly adjusted, and by 1923, per capita alcohol consumption was higher than it had been in 1918 (Prohibition coming in 1920) and stayed above this level through the 1920s. Even if a take a more charitable starting point, say 1915, alcohol consumption during Prohibition after the initial slump was never more than 15% lower.

            Thus, Prohibitions do work, partially. They cut consumption by 10-15%, consistent with marijuana consumption growth in Colorado since recreational legalization there in 2013. A lot of bad things happen for a 15% reduction in consumption, that’s for sure. Are 38,000 deaths in Mexico just this year worth a 15% reduction in hard drug use in the US? Not at all clear to me.

          7. Willie

            That is not strictly true. When Prohibition ended, the social and legal costs associated with trying to suppress alcohol disappeared. Alcohol was, and still is, taxed. Crime associated with bootlegging pretty much went away. Only a mindless bot can’t figure that out.

    2. pgl

      Do you feel to make stupid comments like this every time you brush your teeth? Trade in goods – not migration of people. Or do you not know the difference?

      1. Steven Kopits

        So, the Chileans used visa waivers, meaning they passed background checks. These were not illegal immigrants or any sort. They were tourists. I believe 19 million tourist visas are issued annually to Mexicans alone. So there is plenty of opportunity to come steal stuff from Americans on tourist visas, which would be essentially untouched by an MBV program.

        The advantage of the MBV program is that it would be biometrics based. The Chileans used fake passports and other documents. Can’t do that with a biometric system. Similarly, with an iPhone based system, the preps would be identifiable by biometrics by a cop with nothing more than an iPhone. Now, Chile would not be a first round participant in an MBV program. But Mexico would.

        An MBV system as construed can be used directly by Mexican police. It’s just an iPhone app, linked to the cloud and from there to both Mexican and US authorities. So if a Honduran jumps the border into Mexico and is caught there, he would be immediately fried with US Customs and Border Patrol, even if he never attempted to enter the US.

        So we’re talking a much, much more robust system than that currently in place. Having said that, some visa holders will be criminals. But at least they would be documented. Today we have seven million undocumented Hispanics in the country.

  8. pgl

    Two more choice quotes:
    ‘The Trump administration has imposed tariffs on $274.9 billion of imports, with a total cost to businesses and taxpayers of $37.9 billion per year.’

    Tariff rates near 15% are a big deal. A very bad big deal.

    ‘As one candy manufacturer pointed out, “If we could just buy sugar at the price the rest of the world pays for sugar, we could move the 250 jobs we have in Mexico to Ohio.”’

    Now what to tell the children? Trump is driving up the price of their candy?! And it now is Mexican produced candy – not candy made in America.

    Actually this last quote goes to the fact that sugar is an intermediate good much like steel and aluminum. And as we drive up the price of intermediate goods ala Trump’s insanity, we encourage multinationals to shift American jobs to overseas affiliates. Of course Trump does not understand business in the real world. All he gets is how to rip off the construction sector.

  9. Mike Smitka

    In the case of the auto industry the Japanese players – certainly Toyota, quite possibly not the government negotiators – knew very well how profitable the VER would be, and worked to keep the dispute alive and moving towards establishing a quota. Prior to the VER competition among the major exporters – Nissan (as Datsun), Honda and Toyota but also many smaller players – meant exports to the US weren’t particularly profitable. There’s a good book in Japanese, done by a team of newspaper reporters, and I’ve also talked to individuals with first-hand knowledge. As far as I know that story never made it into English. Oh, and in the Japanese press, after the VER, Toyota started to be jokingly referred to as “Toyota Bank.” Since it was at the time a modest-sized company, $1,000 per vehicle had a huge impact on their profitability. It helped that Toyota was likely the low-cost producer due to their focus on factory management.

    1. Menzie Chinn Post author

      Mike Smitka: Good point. That’s why the Japanese companies weren’t so averse to continuation of auto VERs at the time. They knew who was truly getting the shaft was American consumers who were subsidizing Japanese corporations.

      1. Moses Herzog

        I’d like to say (as your average goofball white American male) that the Japanese have proven themselves time and time and time again to be smarter, quicker to adapt, better long term visionaries, having more genuine concern over product quality, etc….etc…. than American automakers in about every facet of the automobile industry, at least since 1980, and arguably even before that. Of course W Edwards Deming played no “small part” in that—but at least the Japanese were intelligent enough to listen to the man, whereas American carmakers only had utter disdain for Deming’s ideas and applications—-which in part gave life to the Japanese auto industry and the Japanese economy. Yes, the Japanese can credit themselves for the vast majority of this, but W. Edwards Deming gave them a strong assist pass on getting the ball into the basket, and doing a dunk slam in the face of the old white guys in the “Big Three” American boardrooms.

        My Dad was born in the late 1920’s and the last car he owned was a Toyota. Had my Dad lived longer, he made it clear in his octogenarian years, the next brand of car he would have bought was a Kia (Korean I believe). My Dad was sharp, and though traditional in many aspects, always looking to the future—most guys my father’s age and generation were still emptily fantasizing about crappily made gas guzzlers that were manufactured during their glory years. My father was not going to buy an overpriced metallic sack of SHIT because it had “made in America” stamped somewhere on it. Nor should ANY American.

  10. pgl

    Who is Bryan Riley?


    “Bryan’s background includes years of research on the impact trade has on people in the United States. He has led grassroots campaigns in support of initiatives like the North American Free Trade Agreement (NAFTA) and in opposition to special-interest efforts to get the government to pick winners and losers in the U.S. economy….Bryan Riley grew up in Manhattan, Kansas. He holds a bachelor’s degree in economics from Kansas State University and a master’s degree in economics from the University of Southern California. Bryan first came to Washington, DC as an NTU intern during the Reagan administration, and he continues to champion President Reagan’s pro-trade vision for America.”

    A master’s in economics from USC strikes me as at least as prestigious as a master’s degree from George Mason. Riley worked for Reagan who was certainly better on these issues than Trump. We are not talking about some leftwing socialist but we are talking about someone who takes good policy seriously. Which of course is the antithesis for the servants of the corrupt Donald J. Trump!

  11. Moses Herzog

    One thing I thought was interesting, and it reminded me of Kelly Anne Conway’s husband who has been very openly against donald trump. Jared’s brother Joshua Kushner has been openly against trump and made it very clear to everyone he didn’t vote for donald trump and wouldn’t vote for him. That’s been written in many places but most notably in the Vicky Ward book “Kushner, Inc.”

    Maybe sometimes the Apple does far fall from the tree?? Instead of whining about his felony criminal father getting a light sentence in prison for serious crimes that hurt many people, Joshua appears to be trying to make the world around him a better place. Considering his genes and family background, I would say UNLIKE Jared, Joshua can hold his head high.

    1. pgl

      Jared has a brother? I presume Joshua got all the brains and was the good son. Jared has to be an embarrassment to his own parents.

      1. Moses Herzog

        I doubt that is how the Kushner parents see it—his father was an immoral bastard the same as donald trump—I think that is why the attraction between the two families. But yours would be the correct view in my opinion. But you also see that a lot in families, the favored child can do no wrong, and they also tend to hold the family line better than the ill-favored child. I was trying to think of some other celebrity examples here. You can probably think of more than I can. In China you tend to see college age girls are much more impressive than their male counterparts because they favor the boys more and baby them. The girls have to “face the music” of life more and therefor tend to be more independent and better able to handle stormy seas. The difference is rather striking if you’re over there for an extended time. I think it’s both a holdover from the agrarian days and the fact at least until very recently they often illegally aborted female children the preference was so strong. Some women had multiple abortions because they keep going at it until a boy pops out. I had a college colleague I was talking to in the late office hours over there from Wuhan province and she went into tears talking about her Mom and all her health problems from abortions. As unspoken a topic as it is over there you will see it kind of bubble up out of the cauldron here and there.

        I mean it is related in the sense that is why some siblings (again getting back to jared and Joshua here) can end up so strikingly different—because they are treated strikingly different. You know, it’s not just the old Tommy Smothers joke—there’s real life truth in it.

  12. pgl

    Two pieces of related data. FRED shows that tariff revenues have almost doubled over the past two years:


    Then again going from $37 billion per year to $72 billion is not exactly going to offset the massive tax give away to the rich per that STUPID December 2017 income tax deform.

    The CBO 30 years ago estimated how much the government could raise by licensing out quota rights:


    ‘CBO’s analysis shows that a maximum of about $2.6 billion in auction fees could be raised in 1990 if existing import quotas, including voluntary export restraints, were auctioned. Assuming that expiring import quotas are extended, a total of $21.7 billion could be collected over the five-year period ending in 1994. Unlike the CBO baseline, these economic estimates assume the renewal of expiring laws and policies. If current import quota agreements were allowed to expire, estimated auction fees would fall to $0.4 billion by 1992.’

    Of course this was the existing regime of quotas so maybe we need a new CBO analysis.

  13. pgl

    Sometimes it is tough being the accountant for a crook!


    “Trump attorneys warn accounting firm not to hand over financial records

    The president’s attorneys urged Mazars USA to not comply with an imminent Democratic subpoena.”

    Naturally Mazars told Congress they could not turn over these records unless a subpoena was issued. A subpoena has been issued and if the accounting firm does not turn over the record – this could be the death of this accounting firm.

    Trump’s attorneys should know better but of course everyone works for King Donald I!

    1. Moses Herzog

      That’s a great link you put up. They should be able to get those tax records, if they can’t I think SDNY is going to get many of these records. Here is a broader view of the problems donald trump is creating for himself. And at this stage of the game, donald trump can no longer (if very naive parties ever believed he could) claim “legal ignorance” or “ignorance of the law”—- THIS IS INTIMIDATIONS, THREATS, AND REVENGE ON WITNESSES AND THOSE PROSECUTING HIS CRIMES, CLEAR AND SIMPLE and the longer Nancy Pelosi plays doddering decrepit geriatric—the more dangerous this gets by the day.

      1. ilsm

        @Moses Herzog,

        George S Patton famously criticized the poverty of a defensive strategy. Offense the best defense.

        Yeah, Trump is a crook, that is no indictment in US politics since at least 1993.

        An impeachment would be “divisive” in Pelosi’s view. Imagine watching a deep dive into “predicates” on C-SPAN.

        Can you support the position that throwing the election to Clinton is a valid reason to be Nixon?

        Imagine a qualified cross exam of witnesses on C-SPAN! Outcomes not filtered by NYTimes and such.

        Pelosi is looking above the hype.

  14. Moses Herzog

    Finished reading David Lynch’s “The Unified Field” tonight. More like “gliding” the book. The book is mostly pictures (suitable for me, eh??) and mostly you’re just gliding your eyes over the art, maybe trying to pic up oddball small fragments or particles that seem out of place or some small letter he’s put in the art. It’s really oddball stuff but you can pic out patterns in the work, the main one being he often tries to create a 2-dimensional or 3-dimensional quality to it, some of them you felt the false sensation you could put your hand on and it would be like on of those globes where you can actually feel the mountains or large land masses with your hands, but obviously since it’s a book it’s just a flat laminated sheet when you put your fingers on it. When I watch his works or look at his art, often I get the feeling of very very dark things (which I enjoy in some kind of jaded way) in his background, possible crimes or some kind of severe abuse he has observed somehow. He says that is from his time in Philadelphia, but I get the sense it’s more than that, and not just his time in Philadelphia—that maybe he saw some dark things in some rural areas out West. He often also likes to leave things vague or unanswered and supposedly let the viewer’s mind float wherever it will go. You can see that in his short series, I think it was called “Rabbit” which is an interesting one. Really makes me think of my childhood somehow watching that “Rabbit” series. Hearing the train off in the distance, etc. Well just some bloviating there.

    Didn’t have the mood for Mueller Report last night, think Lynch’s obsession with Cherry pies and coffee is gonna have me going out for Jelly donuts and a cheap coffee here.

  15. pgl

    Biden is in so how did the Racist in Chief respond?


    “”Welcome to the race Sleepy Joe,” Trump tweeted. “I only hope you have the intelligence, long in doubt, to wage a successful primary campaign. It will be nasty—you will be dealing with people who truly have some very sick & demented ideas. But if you make it, I will see you at the Starting Gate!”

    Sleepy? Well Biden did announce very early in the morning so maybe Trump was still asleep. But to question Biden’s intelligence when Trump hires the stupidest people on the planet as economic advisers on the planet?! Yea – Biden will have to deal with people with “very sick & demented ideas” during the General Election as these people are called Team Trump!

    1. sammy



      Trump actually went easy on Biden with this nickname. Could have been a lot worse!

      1. pgl

        I read Trump’s tweet which was beneath childish and incredibly stupid. But then that is your style Sammy!

          1. pgl

            Ah yes – Trumpsters have sexual aggression on the brain. Hey Sammy – be careful, some of your favorite websites are laced with viruses!

          2. sammy


            Every time a person sees the Biden boob logo, they will be reminded of his wandering hands. This is not good. It’s a visual gaffe. Good luck with the whole Biden thing!

  16. JBH

    Barkley Rosser: You are clearly a Trump hater. You are also a practitioner of the ad hominem. That is, you engage in illogic. You attack Trump mercilessly. You also ad hominem attack me with sundry questions about my background, what knowledge I have of econometrics, if I’m degreed, where I went to school, ad nauseum. So after patiently putting up with you, I have a question. And it is a serious one. How did your mind get so twisted that the totality of dross you see in president Trump occludes most if not all the gold that he possesses? The gold including but not limited to intentions, policies, and inherent talents whereby amongst much else including becoming a billionaire he helped change the skyscape of New York City so that millions of passers-by have looked up and gotten pleasure out of his architecture, not to mention his rebuilding the Rockefeller Center skating rink which the NYC government failed at, a rink which gives millions of others much pleasure indeed. Even more telling, half the nation’s voters with eyes wide open on balance saw more gold than dross or they never would have voted for him. People are not stupid. But through your commenting pattern it is revealed that 100% of the time you go out of your way to trash Trump. This reveals maximal lopsidedness. This lopsidedness is what permits the usage of twisted. So how is it, then, that your mind got so twisted that you are unable to see the good in a man and see only what you deem as bad?

    1. pgl

      So much rubbish – so little time especially this BS:

      “The gold including but not limited to intentions, policies, and inherent talents whereby amongst much else including becoming a billionaire he helped change the skyscape of New York City so that millions of passers-by have looked up and gotten pleasure out of his architecture, not to mention his rebuilding the Rockefeller Center skating rink which the NYC government failed at, a rink which gives millions of others much pleasure indeed.”

      Trust me as a resident of New York City – this is perhaps the most insulting thing ever said about my city. We New Yorkers know better and most of us have more disdain for the EgoManiac in Chief than Barkley has ever expressed. Could you take your Trumpian idol worship somewhere else?

    2. pgl

      JBH brings up what skating rinks in NYC (a topic JBH knows nothing about):


      “Donald Trump has a long history of stretching tax and financial rules to his greatest advantage. It started about three decades ago, when he offered to fix the city’s Wollman Ice Rink in Central Park. The city had been unable to cut through the political maneuvering and repair the rink, which sat broken for six years. Trump stepped in and offered to help, and in 1986 the city reluctantly agreed to let him do it.”

      #1 – this is Central Park not the Rockefeller Center. But let’s continue:

      “Trump completed the repairs on time and under budget. A spokesman for the Trump Organization said that the operation pays millions in rent to the city while investing millions in capital improvements. “I think he was entrepreneurial, and took somewhat of a risk,” said Adrian Benepe, who worked as a press secretary for the New York City Parks Department when Wollman Rink repairs were underway. “But it certainly wasn’t philanthropy. He was well compensated for his work,” added Benepe, who called it a myth that Trump repaired the ice rink as a gift to the city. Trump fixed the rink at the city’s expense. He made no profit, and asked contractors who worked on Wollman Rink with him to do it for no profit as well. In exchange, he promised them the project would pay for itself in publicity. “He did the right thing, he did a wonderful thing,” said Art Nusbaum, who was president of HRH Construction, the firm Trump hired to work on the rink. “But he chose to pollute it, with his ego getting in the way of everything,” added Nusbaum.”

      But wait – there is more!

      “One of Trump’s companies and another firm continue to operate the rink. The city takes a percentage of the money made, but Trump and the other operator get to keep more than two-thirds of the take. An audit of Wollman Rink Operations (WRO in the document below) completed July 5, 2007 by New York City Comptroller William C. Thompson, Jr. found some accounting irregularities at the rink. One report found Wollman had underreported its revenue by $106,608. That means the city lost its share of that revenue.”

      But JBH does not admit to all of this mess. But how could he since he actually thinks Rockfeller Center and Central Park at the same place! What an idiot!

    3. Barkley Rosser


      This is hilarious. I do not in general ask people where they went to school or whatever, preferring to judge people on the quality of their arguments, your generally being very poor. I asked you because at one point you proclaimed that you had “graduate study in math and econometrics.” Have you forgotten making that declaration? When I have asked you about it, usually after you say something clearly stupid or ignorant, I have always put that in quites, because it was you who claimed it, but then you have since refused to follow up and say where or much else, aside from this silly bit about “universities” around the “top 40” in economics. I think the real bottom line is that wherever it was, you pretty clearly flunked out. No wonder you do not want to let us know.

      As for New York, well, pgl lives there, but hetore down Bonwit Teller and destroyed the fine art work on its front to build his tower. He did nothing for Rockeffeller Center skating rink, but he did give some money for the rink in Central Park, although he has wildly exaggerated what he did there. It is likely he is not a billionaire and may never have been one. He is the most evil and immoral person to occupy the White House ever, almoat at 10,000 lies and counting, so bad he makes even Aaron Burr (a mere VP) look almost good. His followers are so stupid he could shoot somebody dead on 5th Ave. and they would still follow him; he has bragged of this. Burr killing Hamilton in a duel? Nothing.

      As for people being stupid, a lot of them and many are also ignorant. But do keep in mind, three million more voted for his opponent than did for him. The smarter ones outnumber the dumber ones.

      Oh, and why do you keep talking about “gold”? Are you another gold bug like Cain and Moore, hoping for a Fed appointment fro Trump if you kiss his behind hard enough?

        1. pgl

          You had a question? Pardon me as I was laughing too hard at your utter stupidity about what goes in my city to notice your stupid and pointless question!

        2. pgl

          Elided? Do you even know what this means? Here was your “serious” question:

          “How did your mind get so twisted that the totality of dross you see in president Trump occludes most if not all the gold that he possesses?”

          Barkley is right – you are obsessed with gold. Your serious question is really dumb. Occludes? Do you have a clue what this word means.

          JBH – your entire comment was word salad gibberish. The only thing worse is your incredible ignorance of even the most basic things about Manhattan.

        3. Barkley Rosser


          Your question about why my mind is “twisted”? Sorry, but people who admire Trump are the ones with twisted minds.

          So, again, you were the one who bragged about doing “graduate study in math and econometrics.” So, where was that and did you actually flunk out?

      1. pgl

        I do live here and I know Rockefeller Center is a good half mile south of the southern end of Central Park. If JBH ever decides to visit my center, I hope he brings a tour guide. Otherwise this troll might get lost, end up in Spanish Harlem late at night. That might be a very dangerous thing for some fool wearing a MAGA hat.

    4. 2slugbaits

      JBH what knowledge I have of econometrics,

      I think it’s a fair question given some of your homegrown “econometric” stuff that you’ve described. I strongly suspect that your econometrics is vintage late 60s or early 70s, as evidenced by your obsession with R-square values. Talk about old school. You don’t even seem to understand the difference between a structural equation and a reduced form equation.

      helped change the skyscape of New York City so that millions of passers-by have looked up and gotten pleasure out of his architecture,

      Trump’s tastes are trashy, garish and philistine. His Trump Tower is an eyesore that should be torn down. The only thing trashier was his failed Taj Mahal….what a dump!

      half the nation’s voters with eyes wide open on balance saw more gold than dross or they never would have voted for him.

      Slightly less than half. And half of the electorate has an IQ less than 100. Coincidence?

      including becoming a billionaire

      You and PeakTrader are the only two folks here who still believe Trump is a billionaire. News flash. He’s not. Even Forbes now admits that they were deceived by Trump’s exaggerated claims of wealth. If he was so rich, then why did he need the income from a television show for so many years? We saw some of his 2005 tax returns. Those returns make it quite clear that he’s not a billionaire.

      Trump is profoundly immoral in his personal life. He’s an inveterate liar. He lies to the press. He lies to voters. He lies to his fellow GOP supporters in Congress. He lies to his wives. He lies to his mistresses. He lied to the draft board. He lied about his academic credentials. He lied about the medications he’s on. He lied about Obama’s birth certificate. He lied about millions of illegal votes for Hillary. He lied about the Central Park Five. He even lied about where is father was born. He stiffed 40,000 contractors in New Jersey. He defrauded thousands of people who signed up for Trump University. He’s assaulted multiple women, including having raped his first wife who only recanted the story after he paid her off with a big check and nondisclosure agreement. He had drug issues in the 80s. He’s a physical coward who equated the risk of going to Vietnam with his risk of catching STDs. He’s been found guilty of various infractions and crimes at least a half dozen times. He thinks Roy Cohen is a model lawyer. He’s a racist and has been convicted court of being a racist. He has no attention span. And he’s dumb as a fencepost.

      And if his personal immorality wasn’t bad enough, his lack of policy expertise is nothing short of shocking. His tax bill was a budget busting disaster. His immigration policy has made a bad but manageable situation much worse and unmanageable. His NK policy has been a bust. His Iran policy is uninformed and could lead to yet another Gulf War. He has made the situations in Yemen, Libya and Syria (which were already bad when he came to office) much worse than they were when Obama left office. Russia sees him as weak. His tariffs are an economic loser…and no, trade wars are not easy to win. And he still can’t believe his friend Vladimir Putin interfered in the election. In fact, it’s so bad that his own chief-of-staff had to tell DHS not to mention the Russians and 2020 because Donald would blow up.

      Trump deserves a little bit of credit for a few things…this despite himself. I give him some credit for the prison reform bill. I give him some credit for the bump stock ban. And his new NAFTA 1.01 treaty is marginally better than NAFTA 1.00, although most of the good stuff in NAFTA 1.01 was negotiated and agreed upon long before Trump took office.

      1. pgl

        Hey – ask JBH how to get to Rockefeller Center. Or maybe not as he will send you to Harlem Hill!

      2. Barkley Rosser

        Well put, 2Slugsbait. You hit a lot of the high points, a lot more than I did. About the only disagreement I might have is that Trump may not have made things worse in Syria, although basically all he did was follow through on the policy Obama had already put in place. Otherwise, I completely agree.

        Oh, another especially egregious matter is the support he and Kushner give to “Bone Saw” MBS in Saudi, with that pretty clearly involving serious money flowing from MBS to the Trump gang.

  17. pgl

    Stuart Varney of Faux Business interviews Princeton Steve’s perfect girl – Lara Trump!


    In the midst of railing against a migrant caravan headed to the U.S.-Mexico border, Trump campaign adviser Lara Trump threw in her two cents on Chancellor Angela Merkel’s 2015 decision to admit refugees into the country during a Thursday interview with Fox Business host Stuart Varney. Trump said that Merkel’s decision “was the downfall of Germany,” in response to Varney saying that the migrant caravan clip reminded him of “a march across Europe by a million people who wanted to get into Western Europe” and how Merkel “let them in.” ‘It was one of the worst things that ever happened to Germany,” Trump said. “This President knows that, he’s trying to prevent that from happening here, but Congress has got to get their act together and do the right thing for the American people.”

    1. ilsm


      Lara Trump could have thrown in that Merkel’s migrants ruining Germany were largely from Obama/Clinton’s regime change fiascoes in Libya and Syria………..

    1. Barkley Rosser

      Heck, Mose, I do not have a chance. After all, I am as senile as Nancy Pelosi as you have wisely pointed out.

  18. sammy

    JBH might have been wrong about the location of the skating rink, but he is right about Trump fixing it. This is significant because it marks Trump’s entrance into politics. I lived in Manhattan at the time and the Wollman Rink in Central Park was a 6-7 year rehab mudhole at the hands of the City. He took the project over at his own expense and finished it in like 90 days and became a hero.

    A friend of mine overheard a conversation between Trump and an NYC official. They were watching all the people skating on the rink and Trump remarked that it was a beautiful evening and it would be wonderful to watch the skating at night. The official said that we don’t have the funds to keep it open that late. Trump said to keep it open and send me the bill.

    Another story: Trump Limo got a flat, a Samaritan stopped and helped him fix it. Trump offered him money and he declined. Trump pressed further (he doesn’t like to be thwarted : )). Finally the guy said OK my wife’s birthday is coming up, send her some flowers. He said Ok, give me your address, and on her birthday a giant bouquet was sent to her and in the middle of the bouquet was the deed to their house.

    The first story was first hand, and the second was second hand, so I can’t testify to their authenticity. But did you know that……. Trump donates his entire presidential salary to charity? Did Obama, Clinton do that? Even Carter? You guys have him all wrong, to your detriment.

    1. sammy

      Does Biden donate his entire salary? Does Warren? Did Hillary? Does Bernie? Who amongst the Dem many millionaire presidential candidates does?

      1. pgl

        Trump is lining his pockets in other ways big time. What part of the word corruption do you know understand?

      2. 2slugbaits

        sammy Who knows whether or not Trump actually donates his entire salary? He won’t show us his tax returns, so why should we believe him? Especially since lies about everything. And if Trump was really all that concerned about ways to help out, why doesn’t he reimburse the government for the cost of his weekly golf trips to Mara Largo?

        As to the good Samaritan story, why would any husband want Donald “Sexual Predator” Trump to send his wife flowers??? I mean, just think about that.

    2. Barkley Rosser

      Oh sammy, what a sucker you are. That Good Samaritan story is a notorious fake. Check it out. No one has ever stepped forward to say they were that person. Back in 1997 when the story was going around (with several different states for where it supposedly happened), a Trump publicist actually denied it.

      I shall leave it to pgl to talk about the Central Park case. The real picture of Trump’s general record of charitable giving is his Foundation, to which he contributed nearly zero and which had to close due to legal problems and scandals. Largely he used it to pay for things for him, rather than him using it to provide charity.

      So, sure, he is donating he $400,000 annual salary to charity. Will give him that, and no Dem did. But then, even though he is not a billionnaire and probably never has been, he is much wealthier than any of them and always has been, having inherited far more than any of them has ever been worth, with several of them, including Blill Clinton, Joe Biden, and Barack Obama, basically having been born fairly poor, even if they have now managed to become millionnaires.

      1. PeakTrader

        Barkley, are you talking about The Central Park Skating Rink and Trump:

        “Having fallen into utter disrepair during the New York City fiscal crisis, unable to make ice, the city’s Parks Department embarked on a total refurbishment of the facility in 1980, estimating it would take two years to complete. After six years and having flushed $13 million down the drain, the city announced they would have to start all over again and it would take another two years to complete. Wollman Rink had quite visibly failed. The Wollman Rink fiasco amplified the public perception of the general incompetence of government and their inability to complete even the simplest projects.

        Enter the Donald. In late May of 1986, the 39-year-old Trump made an offer to Mayor Ed Koch. Trump would step in and take over the construction and operation of the project for no profit and have it up and running in time for the holiday season. Koch tried mightily and quite sneakily tried to reject Trump’s offer. A very public Trump-Koch feud ensued; Donald ultimately prevailed taking on the responsibility to finish the rink in less than six months for no more than $3 million. The city politicos could only hope that when Donald failed it would divert attention from their own incompetence.

        Instead of failing, Trump finished the job in just four months at a final cost 25% below the budget. It wasn’t rocket science according to Trump. It was common sense and “management.”

        City officials stopped attending press conference because it was actually becoming an embarrassment. The rink which had been a perpetual money loser started making money immediately, which Trump donated to charity.”

        1. PeakTrader

          If Trump was President in 2009, job growth would’ve been much stronger and the output gap would’ve closed quickly.

          Trump is very successful. He’s a billionaire, raised a great family, won a Presidential election with no experience, etc..

          You’re not alone, even the McCain, Bush, and Romney types hate him. Not everyone wants to depend on destructive (and now self-destructive thanks to Trump) political clowns.

          1. PeakTrader

            Barkley says: “Bill Clinton, Joe Biden, and Barack Obama, basically having been born fairly poor, even if they have now managed to become millionaires.”

            They didn’t make money in the tough private sector.

            Trump was with Marla Maples one day and saw a bum on the street.

            Trump said: “That bum is worth more than me.”

            Marla said: “How can that be. He’s a bum.”

            Trump said: “That bum is worth zero. I’’m worth negative $2 billion.”

            Business owners are often rich one year and broke the next.

            Many politicians don’t understand that. They get steady incomes.

          2. Barkley Rosser


            No, job growth would not have been better in 2009 if Trump were there. It might have been catastrophically worse.

            In 1930 as the Great Depression began, Congress passed the Smoot-Hawley tariff, to “save American jobs.” Our major trading partners (UK, France, Germany, Canada) fully retaliated resulting in a massive collapse of world trade, which, while not the leading cause of the much deeper plunge into the worst of the Great Depression, without doubt seriously aggravated it.

            We were very lucky in 2009 that we did not have an incompetent drooling idiot nationalist protectionist like Trump sitting in the White House imitating 1930. It would have been far worse. As it is, all observers see Trump’s idiot trade war slowing global economic growth, although at the current time fortunately the world economy has been growing sufficiently that this drag has not tanked growth, with our trading partners holding back somewhat from full retaliation helping.

            Really, PT, you are seriously out to lunch.

          3. PeakTrader

            Barkley, we already have evidence Trump’s economic policies created an additional 1 million or more jobs than otherwise (i.e. than continuing Obama’s failed policies).

            If Trump was President in 2009, the trade disputes would’ve been settled long ago and the economy would be even stronger.

            Of course, leftists would’ve undermined Trump even then, indirectly supporting our economic adversaries.

            You’ve been out to lunch for years. Time to get back into the real world.

          4. Barkley Rosser

            Sorry, PT, but claiming a trade war in the midst of the worst economic decline since the Great Depression would have been easily solved without an awful outcome is about as rank a fantasy as I can imagine. We are in a period of sustained growth, and although Trump declared that “winning” trade wars is “easy” and this would be all over soon, it is not. It would have been far worse in 2009 than now.

            About the only possible thing that Trump might have done in 2009 that Obama did not is that maybe he could have gotten GOP in Congress to run a bigger deficit fiscal stimulus than they were willing to accept from Obama. But given that it would probably have been more about tax cuts than spending increases, it probably would not have made all that much difference.

            As for “Trump successful,” well, there were studies done back when he was running showing that he would have been a lot wealthier than he was then reported to be if he had simply put his inherited wealth in a bank. Instead he squandered it on a lot of bad investments, going bankrupt six times so that the only people who would fund him were Russian oligarchs, which appears to be why he is fighting so hard to keep anybody from looking at his tax returns or his finances more broadly, in sharp contrast to all previous presidents. What a joke.

            As for being a good family man, well, he has clearly been the worst husband ever of any president, although like Hillaryin their second debate, I shall grant that he appears to have been a reasonably good father.

        2. pgl

          I posted earlier the real story. Your cherry picked account is incredibly incomplete. Trump raised the price of skating and lined his pockets for a lot money of the loot than the original deal was supposed to give him. In other words your account is another BIG FAT LIE!

          Hey Peaky – way to make a fool out of yourself again!

        3. noneconomist

          Trump is so popular in Manhattan? That must be why he got 11% of the vote there in 2016. An obvious “Thanks for the swell job on the skating rink and all that neat gold.”

    3. pgl

      “JBH might have been wrong about the location of the skating rink, but he is right about Trump fixing it. ”

      And then Trump jacked up the price of skating and continued to rip off the city. Oh wait – you did not read the link of the true story it seems. Too busy thinking about boobs. Typical Trump troll.

    4. JBH


      I did error in mixing up the iconic rinks in NYC. A thing hardly important to the larger story. We all make mistakes from time to time. Grace is how we overlook them in others. But look at how pgl takes this trivial bit in his teeth and hee-haws comment after comment about it. I never respond to pgl. It ought to be obvious why. Empty is the very definition of the content of 9/10ths of his posts. Yet he attacks me. He attacks everyone! As a rule, fear-based people usually attack those they fear.

      As for 2 slugs, that mouth-flapper says in no uncertain terms that Trump is not a billionaire. Forbes says $3.1 billon. Who are you going to believe, slugless or your own two eyes? Someone who with a boxcar of paper bags and a tanker truck full of water couldn’t forecast himself out of a wet paper bag if his life depended on it. In over a decade, I don’t recall him making a single clearly-stated time-dated forecast on this site.

      Then Rosser. A name-dropper par excellence. Yet unwilling to answer the simple question I pose to him, after prying, prying, prying into my past academic credentials. Which I long ago rose on from. Became a member of the BLUE CHIP panel of forecasters. Dropped off after Bob Eggert – who talked monthly with every forecaster in the country, so you can imagine how much I learned through our scores of conversations – sold the BLUE CHIP business to Capital Publications. I have a track record, to my knowledge unparalleled, of correctly calling ahead of time each and every business cycle peak and trough since the trough of 1982, without a single false signal over all that time. The recent 64% probability of recession did not spike high enough to where that call would get made. Merely a warning. Menzie recently asked where these probabilities came from. I answered him in considerable detail. It’s all in the records.

      Then Mr. Scatology himself weighs in with a cackle. Catfight!!! Catfight!!! Another to whom I never respond. Also for obvious reasons. What earthly good would it do to lay down in the filth of the hog-trough with a sow? An unfunny one to boot.

      Fortunately Baffled has trucked off somewhere. And noneconomist is still trying to count as high as the number of sealed indictments that will soon be opened.

      These are the core of the pussy-hat brigade. Arrogant tearer-downer acolytes of president you didn’t build that. About to get the shock of their life when a real builder and real patriot unveils the mountain of legal work that has gone on quietly behind the scenes this past two years in the United States Department of Justice. Now ridded of the Obama vermin. Now that his tensile correct policies on all fronts have inspired private sector businesses to grow the economy this term to date – to the benefit of all Americans I might add – by an astonishing percentage point over that of his predecessor. Setting the necessary economic base for what is to come. Now that the Mueller report, which is not at all quite what it appears to be (few know this), is finally out. Now finally Trump is ready to get down to the real business.

      1. Barkley Rosser

        Oh wow, not only do we have JBH still not coming forth on where he flunked out of grad school (and anybody inquiring of this matter he bragged about is “prying, prying, prying”) now he is telling us an unverifiable story about being some super wonderful forecaster who was never wrong for “BLUE CHIP.” Really? Look, JBH, given the rather large number of simply false or unverified statements you have made about many things, these more recent claims simply lace any credibility. Just pathetic.

        BTW, when you start talking about people being “vermin,” well, I shall simply note that this is language used by an unpleasant major national leader from 8 decades ago or so who used this language about a group he then proceeded to commit genocide against to the tune of millions of people. This is the company you wish to keep? No wonder you do not want people prying into which grad school you flunked out of.

        1. noneconomist

          Add “vermin” to his filthy immigrants lowering the gene pool and the rousting out of bed of those “traitors” in the middle of night and get a pretty good idea of JBJ’s preferences in leadership style and tastes in reading.
          Add to that perhaps communist intrigue wherein a communist sets fire to the Capitol, making it necessary for the President to declare a national emergency while arresting all 231 communists in the House and 47 in the Senate. (Their names will be prominent among the 305, 005 communists rousted out of bed, etc).
          Yes, we get it. The masses possess a very inadequate knowledge of history. Count on those patriots like JBH–he’s never wrong, no matter the subject–to set them straight.

      2. Menzie Chinn Post author

        JBH: I am trying to get at whether you approve or dis-approve of the pussy-hat brigade. Is it wrong to decry molestation and abuse? Is it wrong to complain of misogynistic statements? I get the impression you think that being mysoginistic/sexist and supportive of sexual abusers should rejoice in doing. If this assessment is correct, then you sir are a sorry excuse for a person.

        1. Moses Herzog

          When a person frequents or hosts a blog, you know that certain “cutting remarks” will be made. Some dead on target, and some pretty far out in left field. Of course I am more blunt sitting behind a keyboard than I often am (generally) in everyday real life. If most people are honest, they will admit to the same. That is part (though shouldn’t be the main) attraction of reading and visiting blogs. We can let off steam, and even some commenters proposing racist immigration policies, one can argue that posting racist encouragement and support is better than waving a baseball bat or using a car as a murder weapon in Charlottesville. It is a way for sharp people to share ideas and both well-balanced and misguided people to let off steam—which is healthy. Letting off steam and anger is healthy when not doing serious damage to others.

          I felt I must be doing something right, when mentioned next to “baffled” and “noneconomist”—two of the softer spoken commenters here, who have made some very bright points. (I need to learn from them how to be less long-winded yet still substantive)

          But that was quite the rant. The only person I think JBH left out was the school janitor at La Follette School of Public Affairs. Can you tell JBH some peccadillo he has (other than he probably has a great work-ethic) so that that janitor does not feel left out??

          1. pgl

            I’m just trying to get this fool to get a proper map of Manhattan as well as reading up on the full details of how Trump ripped everyone off on that ice skating rink in Central Park, which JBH for some reason thinks is Rockefeller Center!

          2. Moses Herzog

            I think it quite ironic that the internet is blamed for so much of this. Maybe because I feel the internet has been a great gift to me in my life, so it’s hard for me to see its downsides. But from my view, AM (amplitude modulation) radio has done much more damage to this country than the internet possibly ever will and certainly ever has up to this point. In fact, I can make a strong argument AM radio has even done more damage than FOX news. Where did most of these FOX folks come from?? Many from radio. Glen Beck and Sean Hannity are two who immediately come to mind. Then you’ve got Rush Limbaugh, Mark Levin. Our favorite “economist” Kudlow had a weekend show for quite awhile after he got too ugly for CNBC. Bill Cunningham on the weekends (who also had a Maury Povich style illegitimate black babies schtick on TV for awhile). Then you have the sharper ones like Alex Jones and Joe Rogan who are trying to make the transition over to the internet, because they’re younger and know that’s where things are going.

            Writers and commentators as sharp as Camille Paglia and Andrew Sullivan have discussed the deep and broad impact of AM radio on this nation. What do rural farmers listen to while they work?? What do day laborers listen to while they work?? What do semi-truck drives and taxi drivers and Lyft drivers listen to while they work?? It has a HUGE impact when these people need something to take their mind off monotonous tasks and might listen as much to 6–8 hours a day. You can be a pretty well educated person and independent minded, and if you listen to the same dogma 6–8 hours a weekday or more—the chances of being swayed to that mindset are very high. Not to mention when you listen to the same voice as much as 4 hours a day, listeners start to get an emotional attachment to the host or a sense that they “know” them.

            The response to this argument is “Well you have NPR on the left”. NPR is almost always tied into or affiliated with a University of decent size. So in most states how many of those NPR stations will you have?? Maybe 4?? And they are FM stations. You’re very lucky if those stations can cover a 2 hour drive of distance or an entire metro area. How far do AM radio stations go?? Some of them in essence cover half the country and even stretch out into Canada. That has a MAJOR sociological and cultural impact that it seems many liberals and Democrats are still clueless clear into 2019 how much that impacts people’s thought processes.

            Now again some people will say “But people listen by mobile phone now—not an actual antenna radio”. I would debate that, among the older and rural crowd, people still like radios. But let’s just say for argument’s sake they all listen by mobile phone or tablet now. That habit of WHAT they listen to have already been formed over roughly 4 decades.

      3. pgl

        “I did error in mixing up the iconic rinks in NYC. A thing hardly important to the larger story.”

        Confusing Rockefeller Center with Central Park is not important? LOL! And you had the larger story all wrong. I posted a link to what actually happened and how Trump ripped every one off. Of course a dumbass like you would not bother reading the true story. Which is cool as neither did PeakStupidity nor CoRev!

        1. Moses Herzog

          This is similar to what I have said about your pal Barkley Junior. Never let facts get in the way of a fun argument. Barkley Junior provides a citation to a long article on Native American Ancestry in white Americans he hadn’t even read himself, to say the distribution was “skewed”. Barkley assumes no one will read it themselves, and therefor his false quotation of what it says will “win out”. The article never so much as once even uses the word “skewed”. It states very clearly and plainly it is uniformly distributed in the white population. Not only do I provide the link to Barkley Junior’s own citation (which now after a period of months he still never has), I lift and directly quote the portion which clearly states it is uniformly distributed. NEVER MIND…… The fact shows Barkley Junior to be wrong in his assertions. So he his no interest in that.

          You’re assuming facts win out over people’s personal egos. Even with University “professors”, that is not always the case.

          1. Barkley Rosser

            Oh gag, Moses, you really are desperate to somehow come out of your disgraceful carrying on with this matter.

            Sorry, you are lying. The article never said it was evenly distributed throughout the population. It said it was through the genome, as has been pointed out way too many times by now.

            You are right that it never says the distribution is skewed. It did not need to. That was obvious from the data that was presented so that only someone ignorant of population genetics and probability would not see it. This was evident in the cross-state distributions among “white” population. There is no way out of this for you, Moses, other than to either admit you are wrong or just stop dragging this matter up and making a fool of yourself.

            When we went through this before at ridiculous length tried many different ways to get you to see what is involved here. I shall make one more try, and, frankly, I do not remember if I made this argument before. But consider different sub-groups of the white population. There are WASPS whose ancestors have been in the US for a long time. There are Irish Catholics whose ancestors on average have been here a shorter time. There are Jews whose ancestors have been here an even shorter time. There are also other groups who have arrived at different times and had different histories of where they have lived. So, guess what? Groups that have been here longer and who also have been more likely to live in rural areas in the West are more likely to have Native American ancestry than those who have arrived more recently and have lived much more in eastern urban areas. A WASP born in Oklahoma (where there is a high Native population and there has been a lot of cross-racial intermarriage) is a lot more likely to have Native American ancestry than a Jew born in New York City whose parents immigrated from Russia, who is almost certainly going to have zero Native ancestry.

            The Native American ancestry is simply not at all evenly distributed across the US white population. This is and was a ridiculous and just plain stupid assertion by you. It is frankly even dumber than some of the silly stuff that Peak Trader keeps repeating and claims he has demonstrated despite having had it repeatedly shown that he is just plain wrong.

            Are you maybe finally getting it this time, Moses?

  19. pgl

    Now that CoRev and PeakLiar has helped JBH figure out that Rockefeller Center is not Central Park, all three are spewing the Trump lies about the ice skating rink as they ignore the full story. Let me make this easy for this incompetent and dishonest trio by putting forth the key link to the real story as well as a key paragraph:


    “One of Trump’s companies and another firm continue to operate the rink. The city takes a percentage of the money made, but Trump and the other operator get to keep more than two-thirds of the take. An audit of Wollman Rink Operations (WRO in the document below) completed July 5, 2007 by New York City Comptroller William C. Thompson, Jr. found some accounting irregularities at the rink. One report found Wollman had underreported its revenue by $106,608. That means the city lost its share of that revenue.”

  20. pgl

    The audit of Wollman Rink Operations


    This audit documents all sort of accounting irregularities where Trump’s people essentially ripped off the city. But also jump to page 13 where a section documents the non-completion of capital improvements as Lasker Rink. Then jump to Appendix C that shows the dangerous conditions at Lasker Rink. Anyone who thinks Trump did a marvelous job benefitting the city does not know how to read.

    1. PeakTrader

      Is that all they found?

      It seems, Wollman Rink is still operated by the Trump Organization.

      When the rink reopened in November 1987,[12][17] ticket prices were raised from $2.50 to $4.50, and attendance was up from 130,000 in 1980 to 250,000 in 1987. As part of its agreement with the city, the Trump Organization donated most of the profit to public works, including $50,000 for the rink’s electricity costs, and to charity, among them United Cerebral Palsy, Partnership for the Homeless, and Gay Men’s Health Crisis. [18] The Trump Organization continues to hold a contract to operate the rink through April 30, 2021.[19]


      1. PeakTrader

        Pgl says “Trump’s people essentially ripped off the city.”

        So, Trump’s “people” include independent vendor contractors, other contractors, transactions in 2004, etc..

        You believe Trump’s “people” were selling tickets at the gate, working at all the concession stands, overseeing every repair, renting out skates, etc.?

        Sure, government would’ve done a better job. The Trump Organization fulfilled its obligations. How were the audit disputes settled?

        1. noneconomist

          New York City voters love Trump so much he lost four of the five boroughs there in the 2016 election, including the 89-11 thrashing he received in his “hometown”, Manhattan. He did win Staten Island. They may be waiting for THEIR rink.

          1. PeakTrader

            Yes, it may have been Pgl’s Democrats “ripping-off” the city.

            Only 86% of Manhattan voted for crooked Hillary.

            Hillary did better in the Bronx.

          2. noneconomist

            Oh. Only 86-14. Much better. Must have been the skating vote that made it that much closer.

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