Stop the Uncertainty!

The economic policy uncertainty, that is (With apologies to Susan Powter). Regardless of where you are on the econo-political spectrum, you should want economic policy uncertainty to be reduced. Remember all those conservative voices in the post-Global Financial Crisis saying policy uncertainty was slowing the economic recovery? Well, today is an opportunity to return considered, coherent, economic policymaking and trade negotiations.

First, here’re two indices of policy uncertainty — US news based and the US trade component, both from Baker, Bloom and Davis.

Figure 1: US Economic Policy Uncertainty index – news based (blue, left scale), and US Trade Policy Uncertainty categorical component index (tan, right scale). NBER recession dates denoted by light gray shading; most recent recession assumed to end April 2020. Orange denotes Trump administration; orange dashed line indicates election. Source. Policyuncertainty.com, accessed 11/3/2020.

Over the Trump administration, excluding the Covid-19 pandemic period, Economic Policy Uncertainty (EPU) was 31% higher (log terms) than it was during the period 2006 onward. US Trade Policy Uncertainty was 210% higher.

One effect of a reduced level of policy uncertainty would be a weaker dollar (given the dollar’s safe haven status); see this post for a statistically based explanation.

Figure 2: US Economic Policy Uncertainty index – news based (blue, left scale), and real value of US dollar against broad basket of currencies  (red, right log scale). NBER recession dates denoted by light gray shading; most recent recession assumed to end April 2020. Orange denotes Trump administration; orange dashed line indicates election. Source. Policyuncertainty.com, Federal Reserve Board vis FRED, accessed 11/3/2020.

Obviously, not all policy uncertainty would disappear with a Trump eviction, especially if the Congress remains divided with the Senate in Republican hands. However, it is hard for me to see how policy uncertainty could be further elevated — or even remain at similar levels — relative to what we’ve seen over the past four years.

Also… stop the policy insanity!

41 thoughts on “Stop the Uncertainty!

  1. ltr

    https://twitter.com/paulkrugman/status/1323622727467573248

    Paul Krugman @paulkrugman

    22 years since I wrote this and worried that Japan could be a harbinger of the future 1/

    https://www.brookings.edu/bpea-articles/its-baaack-japans-slump-and-the-return-of-the-liquidity-trap/

    It’s Baaack: Japan’s Slump and the Return of the Liquidity Trap

    THE LIQUIDITY TRAP-that awkward condition in which monetary policy loses its grip because the nominal interest rate is essentially zero, in which the quantity of money becomes irrelevant because money and bonds are essentially perfect substitutes-played a central role in the early years of macroeconomics as a discipline.

    8:47 AM · Nov 3, 2020

    Now the chief economist of the IMF says the whole world is there 2/

    https://www.ft.com/content/2e1c0555-d65b-48d1-9af3-825d187eec58

    Global liquidity trap requires a big fiscal response
    Central banks have taken unprecedented steps, but now demand needs a lift

    1. pgl

      9 states still not declared. Biden has a very narrow lead in Wisconsin so maybe we should stop counting the vote there. Isn’t that what Trump said earlier this morning?

      1. Barkley Rosser

        I went to bed last night after Trump spoke with WI, MA, and PA all showing Trump in the lead. So based on the Econospeak post I made several months ago about “He who takes Prairie du Chien (WI) takes the White House,” I went and checked on the outcome in that small city where the Wisconsin River empties into the Mississippi (and whose name is pronounced “sheen”). While the county it is in, Crawford, went for Trump by about 4500 to 3600, the city of Prairie du Chien went for Biden by 1303 to 1223. I went to bed a bit more relaxed, and now WI has been called for Biden and MI has also by several networks, so looks like my prophecy correct.

  2. Moses Herzog

    How do these numbers strike people???

    238+
    10 (WI)+
    16 (MI)+
    20 (PA)+
    6 (NV)

    =290 Can someone tell me what’s wrong with my math on those numbers???

    BTW, are Republicans now saying U.S. military members’ (soldiers’ ) votes shouldn’t be counted in the absentee vote?? Is that where Republicans like Mitch McConnell are going with this now??~~~in addition to donald trump calling war time soldiers who died for our country “suckers” and “losers”??

    1. pgl

      At 2AM Trump wanted the vote counting in Wisconsin to stop. Now that it is clear he lost – he is demanding a revote. Funny how that works.

      1. Moses Herzog

        My personal favorite (besides the orange abomination not wanting votes counted in a race he has already lost) is when the orange abomination has Rudolph Giuliani running around asking for a “recount” when the original counting of votes hasn’t been finished. Does donald trump have Rosser’s Morphed Variation Dementia?? U.S. Military men’s absentee and mail-in votes apparently are no longer valid because Republicans view them as “losers” and “suckers”.

    2. pgl

      You might enjoy this from CNN:

      Bob Bauer, a senior adviser to the Biden campaign, said the call for a recount in Wisconsin by the Trump campaign is an attempt to “claw back” a defeat and called the Trump campaign’s messaging “a bit scrambled.”

      Bauer went on to declare that Biden “has won Wisconsin,” and he believes the Democratic nominee is at 270 electoral votes. CNN is yet to call the race in Wisconsin.

      “I have to note at the outset – after having declared a victory in Wisconsin last night, the President is now asking for the recount, so their messaging is a bit scrambled,” Bauer said in an interview with the Washington Post’s Bob Costa.
      “He lost in Wisconsin, he lost in Michigan, he lost in Pennsylvania, he lost in Arizona I could mention a couple other places, like the congressional district in Nebraska, which he also lost to Joe Biden, having won previously, and now all of a sudden we’re talking recount,” Bauer said.

      Again, CNN has not yet called the race in Wisconsin, nor the races in Michigan, Pennsylvania, or Arizona.

      Bauer went on to slam President Trump, saying, “I think it’s pretty clear that from last night and today that the President understands he’s in a different position, which is he’s trying to claw back this defeat and trying to turn it into legal action, into a victory.”

      He said that he is optimistic about Biden’s chances in Wisconsin, going on to say, “he has won Wisconsin.”

      “I’m highly optimistic. I think Biden is going to win Wisconsin, I think he has won Wisconsin, I think we’re at 270 electoral votes and above, and he’ll be the president-elect,” Bauer said.

    3. pgl

      Let’s say Biden wins all of these, which he is likely to do. Let’s say North Carolina goes Trump.

      They are saying Georgia is a toss up with its 16 EC votes. So with Georgia, Biden gets to 306. Without Georgia, we get that 290.

      Either way – expect a lot of angry Tweets from the White House for the rest of the month.

    4. pgl

      Did his parents drop young Eric Trump on his head when he was a baby? Check this rant out:

      https://www.youtube.com/watch?v=SfGVaMYzn1s&fbclid=IwAR3-3Ee6TM0mhW6AbP0ErLp3BKJoe93HEnY8Fa6Isazq54gkdh0wDZIOxvw

      Eric Trump spoke first, calling the counting of mail-in ballots “rampant corruption.” “It can’t happen,” the president’s son said. “It simply can’t happen. It’s not fair. This isn’t democracy.”

      Counting the votes isn’t democracy? What an utter moron.

  3. macroduck

    The consensus view is that Biden, if elected, will focus on domestic issues and will have a hard time giving much ground on China tariffs for political reasons. That seems right to me, but there is plenty of room for modest improvement in trade policy while waiting for Biden to turn his attention more fully to international issues.

    It may be that Biden’s long experience in foreign policy will lead him to deal with trade policy earlier than another president would under similar circumstances.

    If Trump wins? Sheesh! What is there to say?

    1. pgl

      I have heard with a Republican majority in the Senate, President Biden will not have a lot of pull on foreign policy issues. Of course that makes no sense as a lot of Republican Senators have similar foreign policy views as Biden. It just got muffled while Putin’s puppet occupied the White House.

      Biden can choose both a strong foreign policy team and have a focus on urgent domestic issues as long as he does not spend all day watching cable news and doing the Twitter.

  4. Dr. Dysmalist

    Doesn’t policy certainty presuppose policy sanity? There’s only one chance of us getting that from this election, and it doesn’t include any role for Mango Mussolini. If he’s still in the picture, we’re screwed.

  5. Moses Herzog

    Baby trump needs to get William Barr to bring him an imaginary number for Michigan and Wisconsin before people think donald is a weak pathetic loser P*ssy.
    https://www.youtube.com/watch?v=a9jWco4xw-U

    This is “ridiculous”. And “you know” it’s “ridiculous” “and everyone knows” it’s “ridiculous”. It’s all so “ridiculous” donald trump can get 3rd graders like CoRev, Bruce Hall, Ed Hanson, and sammy to agree with the orange toddler. sammy??? sammy?? Anyone know where sammy went?? Is sammy hiding in a closet somewhere together with “Princeton”Kopits trying to protect large corporate employers and meatpacking plants who hire illegal immigrants from legal punishment??? is sammy in the Shenandoah Mountains somewhere drawing a picture of what a skewed distribution looks like before Barkley Junior’s Razadyne wears off?? Remember employers who hire illegal immigrants are more American than Abe Lincoln, but the immigrants themselves are “rapists” and “murderers”. At least until “Princeton”Kopits needs a nanny he needn’t pay FICA taxes on or pay minimum wage to. Then the Mexican nanny is a nice house fixture.

  6. ltr

    November 3, 2020

    Coronavirus

    US

    Cases   ( 9,692,528)
    Deaths   ( 238,641)

    India

    Cases   ( 8,312,947)
    Deaths   ( 123,650)

    France

    Cases   ( 1,502,763)
    Deaths   ( 38,289)

    UK

    Cases   ( 1,073,882)
    Deaths   ( 47,250)

    Mexico

    Cases   ( 933,155)
    Deaths   ( 92,100)

    Germany

    Cases   ( 577,131)
    Deaths   ( 10,883)

    Canada

    Cases   ( 242,368)
    Deaths   ( 10,261)

    China

    Cases   ( 86,070)
    Deaths   ( 4,634)

  7. ltr

    November 3, 2020

    Coronavirus   (Deaths per million)

    US   ( 720)
    Mexico   ( 712)
    UK   ( 695)
    France   ( 586)

    Canada   ( 271)
    Germany   ( 130)
    India   ( 89)
    China   ( 3)

    Notice the ratios of deaths to coronavirus cases are 9.9%, 4.4% and 2.5% for Mexico, the United Kingdom and France respectively. These ratios are high, but have been significantly higher, while falling recently as new cases are being rapidly recorded.

  8. ltr

    November 3, 2020

    Coronavirus   (Deaths per million)

    Belgium   ( 1,022)
    Spain   ( 780)
    US   ( 720)
    Mexico   ( 712)

    UK   ( 695)
    Italy   ( 652)
    Sweden   ( 587)
    France   ( 586)

    Netherlands   ( 442)
    Ireland   ( 388)
    Switzerland   ( 285)
    Canada   ( 271)

    Luxembourg   ( 265)
    Portugal   ( 259)
    Austria   ( 132)
    Germany   ( 130)

    Denmark   ( 126)
    India   ( 89)
    Finland   ( 65)
    Greece   ( 63)

    Norway   ( 52)
    Australia   ( 35)
    Japan   ( 14)
    Korea   ( 9)

    China   ( 3)

  9. ltr

    https://news.cgtn.com/news/2020-11-04/Chinese-mainland-reports-17-new-COVID-19-cases-15-from-abroad-V8vuggLIfC/index.html

    November 4, 2020

    Chinese mainland reports 17 new COVID-19 cases

    The Chinese mainland registered 17 new confirmed COVID-19 cases on Tuesday,  2 of local transmission in northwest China’s Xinjiang Uygur Autonomous Region and 15 from overseas, the National Health Commission announced on Wednesday.

    A total of 128 new asymptomatic COVID-19 cases were also recorded on the Chinese mainland while 828 asymptomatic patients remain under medical observation. No COVID-19-related deaths were reported on Tuesday, the commission said, while 16 patients were discharged from hospitals after recovering.

    As of Tuesday, the total number of confirmed COVID-19 cases on the Chinese mainland had reached 86,087 with 4,634 fatalities.

    Chinese mainland new locally transmitted cases

    Chinese mainland new imported cases

    https://news.cgtn.com/news/2020-11-04/Chinese-mainland-reports-17-new-COVID-19-cases-15-from-abroad-V8vuggLIfC/img/5a19019fe9d949fc9dc12916423c1d2b/5a19019fe9d949fc9dc12916423c1d2b.jpeg

    Chinese mainland new asymptomatic cases

    https://news.cgtn.com/news/2020-11-04/Chinese-mainland-reports-17-new-COVID-19-cases-15-from-abroad-V8vuggLIfC/img/ac70a3b59a544bb09330229cca8ebd12/ac70a3b59a544bb09330229cca8ebd12.jpeg

    [ There has been no coronavirus death on the Chinese mainland since May 17.  Since June began there have been 3 limited community clusters of infections, in Beijing, Dalian and Urumqi, each of which was contained with mass testing, contact tracing and quarantine, with each outbreak ending in a few weeks.

    Currently there are 2 apparently limited community clusters in Qingdao and Kashgar, with mass testing, contact tracing and quarantine again being used to identify the origins of as well as to contain and end the outbreaks.

    Imported coronavirus cases are caught at entry points with required testing and immediate quarantine.  Asymptomatic cases are all quarantined.  The flow of imported cases to China is low, but has been persistent.

    There are now 392 active coronavirus cases in all on the Chinese mainland, 9 of which cases are classed as serious or critical. ]

  10. pgl

    https://talkingpointsmemo.com/news/trump-foot-soldiers-get-marching-orders-counting-ballots-is-now-stealing-the-election

    “The President hardly needed to tell his foot soldiers in conservative media and on the right what the plan was: He’s been saying it for months. But, for good measure, he kept shouting it from the rooftops early Wednesday morning as soon as it was clear that Joe Biden still had a decent shot at winning the presidency: Counting all the ballots , he intoned in several different ways, is actually election theft!”

    Right now in Detroit a group of Trump thugs are trying to intimidate the people counting the votes in Michigan. The good news is the Detroit police have restarted to restore order so the vote counting continues.

    Michigan mobs trying to deny the right of Detroit citizens from voting? Just wait – Bruce Hall will come to these defense of these Trumpian terrorists. MAGA!

    1. Barkley Rosser

      Now now now, pgl. This mob was merely trying to prevent the counting of votes already cast, not trying to deny the eight of citizens from voting. Please, this is a very important distinction!!!

        1. pgl

          Sammy – were you observing? Maskless I assume and coughing all over the workers. Brooks Brother riot. Look it from 2000. It is being repeated today.

          Yea Sammy – you must stop the vote in Detroit, Atlanta, and Philly. But not out West. The only way Trump wins is to massively cheat. So get back to work and go beat him some Democrats!

          1. pgl

            Someone on MSNBC was wondering why Rudy Giuliani was leading Trump’s post election legal strategy. Line of the day was the answer:

            Trump does not have a James Baker to rely on so I guess Rudy is all he has.

          2. Moses Herzog

            @ pgl
            James Baker was/is no saint. Are we to believe that James Baker had no idea William Casey was intentionally delaying the release of American hostages in Iran in order to influence an election?? (that’s 80% a rhetorical question, feel free to answer it if the spirit moves you) You can say/claim James Baker was/is more intelligent than Giuliani. You cannot say he is any different morally.
            https://fas.org/irp/congress/1992_cr/h920205-october-clips.htm

            Theodore B. Olson is the appropriate analogy. You probably already know, the British have a saying for this mistake donald trump is making with Giuliani~~”horses for courses”~~although the line the person on MSNBC gave is much more funny, because no one knows who the hell Theodore B Olson is. Since Olson robbed the American taxpayer of $562,111 it’s probably good they don’t remember the bastard’s name.
            https://www.washingtonpost.com/archive/politics/1996/09/04/reagan-to-receive-562111-for-iran-contra-legal-costs/0c7c90ff-4afd-4b52-8a90-352cffc86244/

        2. pgl

          Sammy’s kind of people:

          https://www.cnn.com/2020/11/05/politics/eric-rudy-pa-presser-fact-check/index.html

          After announcing the Trump campaign’s plan to pursue a series of lawsuits at an event billed as a press conference in Philadelphia, the President’s son, Eric Trump, and his personal lawyer, Rudy Giuliani, didn’t take questions from the media. Instead, they spent time lambasting election officials who they said blocked access to ballot-counting locations for partisan Trump campaign poll watchers and casting doubt on mail-in ballots.
          Their attempts to discredit voting by mail are the latest in a sea of misinformation on the topic propagated by the Trump campaign. Giuliani attempted to pin delays in vote counts and other issues on mail-in ballots, implying fraud.
          “This whole new thing that never happened before in our country, these mail-in ballots, which has been a cause of real concern for everyone, because they can easily be fraudulent,” Giuliani said.
          Facts First: Mail-in ballots are not new nor do they “easily” result in fraud, despite the insistence of the President and his allies. In both 2016 and 2018, approximately 25% of US voters cast ballots by mail, which includes the handful of states that conduct elections entirely by mail and traditional absentee ballots. Richard Hasen, a professor of law and political science at the University of California, Irvine, told CNN that while “absentee ballot fraud happens at relatively higher rates than other kinds of election fraud,” that overall rate is still “quite low.”
          Echoing complaints from campaign representatives, Giuliani insisted observers in Philadelphia were not granted the access they legally deserved to see the opening and sorting of ballots. As a result, Giuliani argued the whole count was “illegitimate.”
          Facts First: This is false. A Philadelphia Election Day judge decided that the city’s board of elections complied with the law in how it allowed observers access to the canvassing process.
          The law allows the observers to be present, the judge wrote, but they do not have the right to inspect or look over the shoulders of the workers counting the ballots.
          Furthermore, local, state and federal officials have not reported any major incidents that could call into question the legitimacy of the count or how poll watchers were treated.
          Eric Trump claimed that in Pennsylvania, “They’re not letting our poll watchers watch the polls. They’re not letting them inside.”
          Facts First: This is misleading. There have been some instances where poll workers did not understand the rules and those were handled by the district attorney but for the most part, registered poll watchers have been allowed at polling places.
          The Pennsylvania Secretary of State’s office has said it was aware of just one incident, cited by a lawyer for the Trump campaign, in which a watcher who was registered for a different zone and different ward was not allowed into a polling location, despite rules allowing access to any city location.
          Eric Trump suggested the Trump campaign was being cheated out of a win in the state of Pennsylvania overall.
          “We are going to win Pennsylvania, but they are trying to cheat us out of it,” Trump said.
          Facts First: Though it’s unclear who exactly Eric Trump was referring to, the ongoing counting of votes in Pennsylvania is not cheating. Ballots are always counted after Election Day.
          In Pennsylvania, absentee ballots cannot be processed until the morning of November 3 and ballots received up until November 6 can be still be counted as long as they’re postmarked on or before November 3. As a result, it’s unsurprising that counting is continuing past Election Day in Pennsylvania. After the state decided last fall to allow “no excuse” absentee ballots for this election, Pennsylvania Republicans attempted to change the state’s law so that processing could begin earlier and the number of days after the election that counties could receive ballots would be limited. However, they were unsuccessful, and the status quo remained.
          This was not the first time the Trump campaign falsely claimed Pennsylvania’s policy for mail-in ballots amounts to cheating. President Donald Trump implied as much on Tuesday, in response to a US Supreme Court decision to uphold a Pennsylvania state Supreme Court ruling which allowed ballots received up to three days after the election to count, even if there is no legible postmark.
          Addressing the Trump campaign’s plans to file a lawsuit in Pennsylvania, Eric Trump made it sound like the situation in Pennsylvania was so dire it had driven them to sue.
          “We are going to file suit in Pennsylvania. It’s a shame that we have to do that. It’s the last thing we wanted to do, it’s the last thing my father wanted to do,” he said.
          Facts First: While we can’t fact check the President’s intentions, his campaign has been filing lawsuits in the lead up to the election against mail-in voting and new policies enacted by states to address the impact of the coronavirus pandemic on the election. And even outside of the context of this election, Trump is known for being fairly litigious. So it’s misleading at best for his son to claim this is the last thing he wanted to do.

        3. pgl

          Sammy sees no problem with this behavior by Trump’s terrorist mobs:

          https://talkingpointsmemo.com/live-blog/trump-camp-keeps-desperately-launching-court-fights-as-path-to-victory-shrinks?entry=1342848

          Amid pro-Trump protests at the Clark County Elections Department in Nevada, county registrar Joe Gloria told reporters that “my wife and my mother are very concerned for me.”
          “I am concerned for the safety of my staff,” he said. “We’re putting measures into place to make sure we have the security that’s necessary.”
          However, Gloria said he and his staff are undeterred from carrying out their duty.
          “We’re going to be okay. We’re going to continue to count,” he said. “We will not allow anyone to stop us from doing what our duty is when counting ballots.”

        4. Barkley Rosser

          sammy,

          Funny you should bring this up. I have read an account from Michigan of a place where counting going on. There were two GOP observers who were breaking rules and clearly engaging in voter intimidation. For starters they were both violating in place rules to maintain social distancing and wear masks, which neither was doing. The more obnoxious of the two was a woman who insisted she needed to hover maskless over poll workers so she could hear everything they said. She focused on non-white voters as well as those who had lost or not sent in an absentee ballot, who were not allowed to vote without a call being made to the county clerk to verify they had not submitted an absentee ballot. This particular observer would hover over these voters, including hovering over the desk where they called the county clerk. She also indulged in staring down various voters in a hostile and intimidating way, again, mostly non-white ones. The poll workers kept asking her to obey the rules, which she very arrogantly refused to do, insulting them. Eventually they called the sheriff, and she left, although her partner remained.

          This is your “observing,” and often it is very intimidating. There have been much worse cases in other places. Many of these Trump supporters showing up to “observe” are simply deranged and behave in inappropriate and illegal ways.

  11. ltr

    Latin American countries have recorded 4 of the 10 and 6 of the 16 highest number of coronavirus cases among all countries.  Brazil, Argentina, Colombia, Mexico, Peru and Chile.  Mexico has the fourth highest number of cases among Latin American countries and the the tenth highest number of cases among all countries.

    November 3, 2020

    Coronavirus   (Deaths per million)

    US   ( 720) *

    Brazil   ( 753)
    Argentina   ( 707)
    Colombia   ( 624)
    Mexico   ( 712)

    Peru   ( 1,045)
    Chile   ( 747)
    Ecuador   ( 716)
    Bolivia   ( 745)

    * Descending number of cases

  12. pgl

    https://www.worldometers.info/coronavirus/country/us/

    So the 7-day daily average of COVID-19 in the US is now 852. So all the lying from Bruce Hall and the rest of you pathetic Trump minions is now exposed for the intellectual garbage.

    Of course this reality cannot change the vote yesterday. But then that vote when properly counted will clearly show Biden is the next President.

    But yea the Traitor in Chief will do anything to challenge this reality. And of course our Usual Suspects will twist like pretzels to support this garbage too. But dudes – wear masks when you prostitute yourself even more.

  13. pgl

    7-day average daily death count in the US is now up to 894:

    https://www.worldometers.info/coronavirus/country/us/

    Thanks God Biden and Harris talked about how to finally get this virus out of control. In my view – Trump needs to resign today so they can start work on this right away from the White House. And of course none of the Usual Suspects better spin their use intellectual garbage here as we have all grown kind sick of their lies.

  14. sammy

    pgl,

    Trump should skip “recount” and go straight to “audit.” That way we can determine whether voter fraud is a factor.

  15. sammy

    pgl,

    The main issue is with the mail in ballots. Which is good because there is a physical ballot to examine. The name should be checked against the in person vote, the death rolls, the signature should match, as should the date be proper as well as the address. You sort the ballots as clearly valid, questionable, and clearly fraudulent, and go from there.

    Any problems with that?

  16. pgl

    Biden leads in Georgia. His lead in Arizona is holding up. His lead in Nevada is growing. Biden is taking a big lead in Pennsylvania. It is time for Donald and Melanie to start packing and move back to Florida (we certainly do not want him in New York).

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