Why I think the UK is in a world of hurt, regardless of where Brexit goes. It’s just a matter of how bad…
Figure 1: UK Gross Fixed Capital Formation, in billions of 2000 pounds, seasonally adjusted (blue, log scale). Post-Brexit referendum period shaded orange. Source: OECD Main Economic Indicators via FRED.
So while UK GDP keeps on rising, forward looking components like fixed investment — susceptible to expectations and uncertainty — have already turned down.
Kudlow and Moore need to take a flight to London right away so they can tell the UK government to push for a tax cut for rich people. After all – that is their solution for all problems! Now the BoE might want to react by raising interest rates which would then to hurt investment even more. No worries – Moore will write an oped for The Guardian telling the Prime Minister to fire the members of the BoE and put him in charge!
Falling capital formation with an historically low UK unemployment rate. And then thousands of high paying jobs moving across the Channel. Not gonna be pretty.
https://ec.europa.eu/eurostat/web/lfs/visualisations#Ecotrends
That is a neat link. It shows that UK employment in 2017 was doing quite well. But yea – weakening investment demand could change that rather quickly.
2slugbaits and I have already had a relatively mild “going at it” over this—which I am certain is in the “to be continued” part of our friendly (I like to think it is friendly at this point) sparring. Let me restate for the record, that I do think Britain will be be hurt by Brexit on a short-term time horizon. My separation from 2slugbaits and the experts on this, is the severity of economic hurt that will take the form of. I have no doubts 2slugs will “take me to task” if I end up being wrong on it, as Menzie also has the right to do, if the spirit so moves him.
Moses Herzog Yes, it’s friendly. The reason I’m so downbeat on Brexit has to do with Britain’s already horrible productivity numbers. It doesn’t matter how you look at it; GDP per labor hour, multifactor productivity, unit labor costs…whatever, and what you see is a Britain near the bottom of the EU in just about every category.
https://data.oecd.org/lprdty/gdp-per-hour-worked.htm#indicator-chart
https://data.oecd.org/lprdty/multifactor-productivity.htm#indicator-chart
https://data.oecd.org/lprdty/unit-labour-costs.htm#indicator-chart
https://data.oecd.org/lprdty/labour-productivity-forecast.htm#indicator-chart
And all of those numbers are with Britain still inside the EU. Brexit will only make Britain’s productivity problem worse. The Brexiteers are living under this illusion that they’ll be able to shift towards more trade with the US. That’s highly unlikely, but even if they do they should be careful what they wish for. The US would be a far more dominant trade partner than the rest of the EU. So if the nostalgic Tories are dreaming of those long lost days of Empire and Greater Britain after Brexit….well, they’re just kidding themselves. Moving towards autarky is not a good way to improve productivity.
Not sure what the point of the above graph is. Here is a similar chart for the EU:
https://www.ceicdata.com/en/indicator/european-union/gross-fixed-capital-formation
I’m not sure what the point your graph is supposed to making. #1 the EU is not the same thing as the UK. #2 – the numbers in your link are in nominal terms whereas inflation adjusted (real) investment is the right metric. But #3 – click on the 1-year graph and you will note a recent decline.
Who cares whether EU nominal investment today is much higher today than it was a generation ago? Inflation adjusted – hello? Relative to income – hello?
UK not all of Europe – HELLO?!
Not sure what point is being made by the above graph. Here is a similar one for the EU as a whole:
https://www.ceicdata.com/en/indicator/european-union/gross-fixed-capital-formation
I see what your version did. It picked 2015 as its starting point which was sort of the bottom. Even in nominal terms current EU nominal investment was far below where it was in 2008.
Nice job of cherry picking there. As if we are too STOOPID to check what you are spinning here. Sorry to bust your bubble as it is clear to me at least you were being a tad deceptive. But nice try!
I should have said click on the ten year or “max” buttons to get the longer time series. My point was that according to the fixed investment metric, the UK doesn’t seem to be suffering any more as a result of the Brexit vote than the rest of the EU. In fact, I was a bit surprised by this, as the general view seems to be that the UK became “uninvestable” owing to Brexit uncertainties, leading to the large drop in the B. pound.
I doubt that adjusting for inflation would alter the picture materially.
OK. But a lot of the EU nations are not doing that well. So if the UK matches their dismal record – they are doomed!
BTW Krugman’s take on Brexit was not so bad in terms of business cycles but a definite cost in terms of long-term living standards. We will see.
Martin is crying Wolf: https://www.ft.com/content/473bd2ae-4ee5-11e9-b401-8d9ef1626294?segmentId=62dcad5f-4bd9-3cc2-a1e0-b169738e74ee
I’m excessively lazy in some aspects (most actually), and I don’t start digging deeper into the weeds until I think something actually has a decent chance of occurring. We’re getting pretty close on Brexit. Some thoughts I have— or thoughts I have stolen or “borrowed” from others I think are pretty solid thoughts.
1) If Brexit happens, who can match monetary policy much closer to their own individual problems (matching monetary policy to fiscal budgets, rates, and inflation)?? Britain or the EU?? (I feel the question is largely rhetorical with an obvious answer, but logical disagreement is welcome)
2) The EU cannot bully Britain like they bullied Greece (have they figured that out yet?? And when the EU finally do realize that, will they realize it would have been better for the EU had they just even been a little less rigid??)
3) Britain may suffer, but they will suffer much less than Greece. A blatantly obvious observation, still worth noting or “speaking out loud”.
4) By keeping its sovereignty, Brits have much more power to eliminate leaders who represent them poorly and make decisions against their own interests. How much power do EU citizens have when the EU council craps on them?? i.e there is a ballot box connection between those being represented by leaders and how those leaders acquire their political positions.
5. Has Britain taken steps to have a functional customs union and border infrastructure when the Brexit takes hold?? If they do this (or better yet have already done it) during this “stall period” for a softer landing, they will help nullify the biggest risk (a bigger risk than labor productivity) of a “Crash Brexit”.
6. How much can we trust Bank Of England’s estimates on the economic losses of Brexit—when the financial sector of London is apt to be one of the biggest losers in Brexit, and by making more nightmarish scenarios on Brexit, the London bankers stand a better chance of turning public opinion against Brexit??
7. With the dropping of the value of the pound, how much is Britain’s manufacturing sector apt to GROW post-Brexit?? A very fair question that very few economists are discussing at the moment. And as EU countries’ manufacturing sectors die off in the next 8–10 years do you think they would trade shoes with Britain, in say, 2030, for a strong manufacturing sector?? Or you think countries such as Greece will still be happy selling tourism trinkets to Germans, Americans, and well-off Chinese??
All of these things are worth pondering, along with how well Mario Draghi’s successor is at fighting disinflation at the ZLB. HYPOTHETICAL Imagine you can have one of two jobs offered you tomorrow that you will be stuck with (along with the complaints and public pressure that goes with the job). An either/or offer for one of two jobs. You can be the head of the Bank of England–or the head of the ECB with your eyes facing Brexit’s effect on the EU, trade slowdown, world economic slowdown, investment slowdown, the ZLB—-and every country in the EU wanting/needing a different level of monetary/inflation policy.
Careful how you pick which of those two jobs you want. Could be the difference between short-term pain and your entire life becoming a living hell that you have to explain to every citizen of Europe you ever meet on the street or at the grocery store for the rest of your life.
Moses Herzog: But UK had the best of both worlds pre-Brexit: Common market with EU, but because out of the eurozone, had their own monetary policy.
I think you can trust the Treasury Department’s and Bank of England’s estimates to bracket reasonable (i.e., mainstream) views.
In the first statement, if you’re saying never joining the EU would have been better than joining and then “Brexit-ing”—I will agree with that.
In your 2nd statement, could a person say the BoE estimates were “reasonable”?? Yes. You can say reasonable. “Unbiased”??—you can’t use that word. And you didn’t use that word, I’m just making the point. The worst case BoE estimate scenario is over 10% GDP loss. Unless that is on the assumption that the EU has a serious economic downturn at the same time, then 10% is a bullcr*p number. If “BoE” take it out to 2030 they even throw out an 18% number on output loss. Seriously??
Menzie, do you remember Federal Reserve leaders’ and staffs’ reaction to Raghuram Rajan at Jackson Hole in 2005?? I wager you do remember, and that you might even have been there. Now in that case, Rajan was the “doom and gloom” guy instead of the BoE, so the analogy may not be quite apt. But you get my basic gist. You’ll excuse me if I don’t take every word from Central bankers as “from the mouth of God”.
Moses Herzog: Take a look at the estimates summarized in this paper:
https://journals.sagepub.com/doi/pdf/10.1177/002795011623600101
Two studies are academic: LSE/CEP and NIESR. Then there’s OECD. You can judge BoE against those (as well as HM Treasury’s 2018 study).
https://www.parliament.uk/documents/commons-committees/Exiting-the-European-Union/17-19/Cross-Whitehall-briefing/EU-Exit-Analysis-Cross-Whitehall-Briefing.pdf
Thanks Menzie, I will read those. In fact I will try to read them tonight.
Moses Herzog It seems like you’re mixing EU and EZ. Those are different things. The EZ is about a single monetary system. The EU is about a single customs union and single market for labor, goods and services. Britain was right to stay out of the EZ, but Britain is wrong about wanting to leave the EU. As to Britain being bullied by the EU, how do you think the Brits will feel when the EU dictates terms and Britain has no voice, as will be the case with May’s so called deal? I believe the phrase “Remain” economists use is “pay but no say.” And if the British think the EU is a bully, then just wait until Britain finds itself relying upon the US as its principal trading partner. If Brexit goes through, then I don’t expect some sudden collapse of the British economy. Britain won’t be plunged into recession. But Britain will suffer a prolonged decline in productivity relative to the rest of Western Europe. After a generation or so the Brits will be one of the poorer countries in Europe.
I don’t know if you saw that map of how Britain voted for Brexit by constituency, but I thought it was revealing. Every constituency in Scotland, Northern Ireland and London voted to remain. Every one without exception. And ever constituency in England (outside of London) as well as Wales voted for Brexit. The dynamic sectors of the British economy voted to stay in the EU. The geographic areas with dying sectors voted to leave the EU. Brexit was a hunkering down reflex of people who feel alienated and forgotten by younger, richer and more urbane parts of Britain. The Brexit voter in Manchester resembles the Trump voter in the rust belt. You can understand their frustration and sense of alienation, but in their anger they’ve only made their situation worse.
BTW, it will be interesting to see how long Scotland stays in the UK if Brexit comes to pass. Scotland wisely voted to stay in the UK a few years ago, but Brexit makes the argument to stay in the UK a lot harder to defend.
@ 2slugbaits
I’m not mixing up the EZ and the EU, and I think I’ve made that clear—more than once, to the point I’m gonna get angry if you go back to that one again. Your other thoughts are quite welcome and I am not completely immalleable on this. I feel strongly (at this point in time) that the effects of Brexit on Britain are not going to be as deep as many forecast. And I respect you as one of the better commenters here, so I’m happy to have your swordsmith hammer sharpen the duller parts of my sword, but please don’t say that again.
If I thought they were the same Why the F— would I be bringing up the differences between the BoE and ECB monetary policies?? Menzie seems to be able to “get” that I understand that, and I wish you would follow suit in that department. Just think how often I disagree with Menzie on Economic issues—how often???—you can bet if I didn’t feel pretty strongly about it, I wouldn’t be taking a road Menzie is not walking on.
2 Slugs,
A small correction on your statement regarding the voting outcomes in UK on Brexit. You are right that all districts in Scotland voted remain as did all around London. Nearly all of England outside of extended metro London voted leave, although there were a handful of districts scattered about that voted remain. However, you are wrong about Wales and Northern Ireland. Wales did overall vote for leave but by nearly the same pretty close percentage as UK overall, with some parts voting remain, and with no areas of Wales being very strongly either way. In Northern Ireland the overall vote was for remain, although not by as much as in Scotland or London, but there was a very sharp split between different areas. The more Catholic areas came on strongly for remain while hardline Protestant areas came on strongly for leave, as strongly as the hardline parts of more rural England.
Indeed, after May foolishly had an election after the vote and the Tories lost their majority, she had to sign up with the hardline Northern Irish DUP that is super pro-Brexit, with their position complicating her negotiating ability with the EU. Their position is a warning sign of how one of the worst possible outcomes of Brexit may well be the reappearance of a hard border between the two parts of Ireland and the reappearace of open hostilities within Northern Ireland itself where to this day there remain high walls between neighborhoods in Belfast. Indeed, figuring out what to o about Ireland has been all along the hardest issue to resolve in the negotiations with the EU, with the DUP perfectly fine with reimposing that border between the two in order to guarantee that Ulster remains in the UK.
Regarding the economic outcome, I tend to agree with you, 2 Slugs, although in the short run a sharp decline of the pound might soften the blow, as happened immediately after the vote, whch the UK economy did better for awhile than many forecast.
To Moses, you claim you know that the UK is not in the Eurozone, but your first three points above only make sense if the UK was under the ECB and did not have the monetary policy independence that it indeed has.
Barkley
Thanks for the correction on the vote counts. I didn’t see the district-by-district vote counts, only the colored maps of the districts, so some of the smaller ones might have been obscured. As to the short-run, Simon Wren-Lewis argues that the slight economic uptick immediately after Brexit was likely due in part to people temporarily increasing consumption out of wealth.
Mose,
That you feel “pretty strongly” (in bold letters) is a sign that maybe you should rely more on your reason and intellect than your gut. You have in a number of recent posts been sort of degenerating into ranting nonsense as you do sometimes.
Really, you are often informed and intelligent. Please let that side of you get back in charge again..
@ Barkley Junior
If you were 1/1000th as smart as you imagine yourself, or even just of average intelligence, like you might have been before senility set in, you’d ask yourself if when Germany and France originally started forming a trade union, if they had the same currency. Do you think that implies anything to other situations??
After you got the answer to that last suggested question—Ask a specialist if he has a way to stagger the effects of dementia. He’ll know why you’re asking.
Mose,
Are you aware that your question about France and Germany is completely incoherent. You wrote, “if when Germany and France originally started forming a trade union, if they had the same currency.” Period. That is what? Then you added “Do you think that implies anything to other situations?” Since the first part said nothing, the second part is very unvclear.
I shall also note that it is somewhat ambiguous exactly which time period you are referring to. Of course currency union came after they formed a customs union, which in turn came after they formed a free trade zone. When you use the term “trade union” which of those do you mean, or are you referring to a “labor union.” That is what the term “trade union” means, as apparently you do not know.
And, it is even murkier as the original inspiration for the European Coal and Steel Community, which was the predecessor of the EEC, which was the free trade zone, while the EC was the customs union, was the period of German rule over France during WW II when there was free trade in the coal and iron and steel sectors, although I suspect this is not what you were referring to, and to which polite people these days say as little about as possible. But then, I suspect you really do not know any of this history or details worth a bean.
2 Slugs,
A small correction on your statement regarding the voting outcomes in UK on Brexit. You are right that all districts in Scotland voted remain as did all around London. Nearly all of England outside of extended metro London voted leave, although there were a handful of districts scattered about that voted remain. However, you are wrong about Wales and Northern Ireland. Wales did overall vote for leave but by nearly the same pretty close percentage as UK overall, with some parts voting remain, and with no areas of Wales being very strongly either way. In Northern Ireland the overall vote was for remain, although not by as much as in Scotland or London, but there was a very sharp split between different areas. The more Catholic areas came on strongly for remain while hardline Protestant areas came on strongly for leave, as strongly as the hardline parts of more rural England.
Indeed, after May foolishly had an election after the vote and the Tories lost their majority, she had to sign up with the hardline Northern Irish DUP that is super pro-Brexit, with their position complicating her negotiating ability with the EU. Their position is a warning sign of how one of the worst possible outcomes of Brexit may well be the reappearance of a hard border between the two parts of Ireland and the reappearace of open hostilities within Northern Ireland itself where to this day there remain high walls between neighborhoods in Belfast. Indeed, figuring out what to o about Ireland has been all along the hardest issue to resolve in the negotiations with the EU, with the DUP perfectly fine with reimposing that border between the two in order to guarantee that Ulster remains in the UK.
Regarding the economic outcome, I tend to agree with you, 2 Slugs, although in the short run a sharp decline of the pound might soften the blow, as happened immediately after the vote, whch the UK economy did better for awhile than many forecast.
To Moses, you claim you know that the UK is not in the Eurozone, but your first three points above only make sense if the UK was under the ECB and did not have the monetary policy independence that it indeed has.
Barkley Junior, you’re a senile ass, so you know, just try not to fall on the way to the nursing home cafeteria, PLEASE.
Let me clue you in Junior, when your area of specialty is SUPPOSED to be math and stats, and you misquote academic papers and still don’t know the difference between uniformly distributed data and a skewed distribution —you really need to STFU. I don’t even wanna know what your Dean thinks reading your comments.
Mose,
If I am as senile as Nancy Pelosi is, I’ll take it. Again, she is the smartest person in the Congress.
As for me misquoting about uniformly versus skewed distributions, how many times does it need to be pointed out to you that a distribution over a genome is not the same thing as a distribution over a population, and they are not necessarily identical. When are you going to get this through your head? You have made a complete fool of yourself here with your wanking on about this. Nobody has come to your defense, while several others have supported me on this point. Got it?
Barkley Rosser: Agree; I wish I was as sharp as Speaker Pelosi.
Sorry about the repeated post, folks. I made one error. The Northern Irish DUP holds a completely contradictory position: they do not want a new hard border (my error), but they also want the UK with Northern Ireland to totally leave the EU customs union. Needless to say, these two positions are impossible to reconcile, and this has made May’s negotiating and political position basically impossible.
My ancestors are from Northern Ireland and Scotland. I would love it if both exited the pompous United Kingdom and joined the Republic of Ireland. Then again I had the pleasure of living in Dublin back in the 1990’s.
This way the Welsh and English can leave the EU customs union while the Celtics can stay in it.
pgl,
The Welsh are also Celts, although, along with the Bretons in France and the Cornish in England, a different branch than the Gaels of Ireland, Scotland, and the Isle of Man. The Gaels are sometimes called “q-Celts” while the Brythonic Welsh-Breton-Mannish called “p-Celts” because of certain spellings in their eespective languages.
Endlish is a largely a Germanic language, based on the Anglo-Saxon Old English, (related to Frisian), albeit with a lot of Latin influences introduced by the Normans after 1066.
BTW, pgl, both the q-Celt Mannish and the p-Celt Cornish are now dead languages.
Ooops, pgl. It is not “Mannish,” but “Manx,” like those cats with no tails that also come from the Isle of Man. My bad.
I watch this guy semi-regular, and why you might wanna watch him is for the political side of it, NOT the economic side. But I do think he does a decent job of breaking down the politics on any particular day, and you don’t have to site through commercials. He usually uploads something in the very wee hours of the morning, like 4am in the morning. So If you’ve got insomnia around 4am check out the Youtube and watch him live, or just watch the uploaded video because they leave the taped video up to watch anytime—this link I’m giving just watch the first 17 minutes —then after that it gets into momentum trading garbage. https://www.youtube.com/watch?v=peedSMpaGys
I notice that the chart is of gross capital formation.
I suspect that the UK data is like the US data on capital formation
that has become somewhat misleading.
In the US, the old rule of thump was that depreciation offset about
one-third of gross capital formation. But because modern IT capital
equipment has a much shorter lifespan than traditional equipment,
depreciation now absorbs about two-thirds of capital spending —
that is just a WAG estimate. ( WAG is a technical engineering
term that stands for Wild Ass Guess) Consequently, net capital
formation and the growth in the capital stock is much smaller
than the gross data implies. It is even smaller on a per employee basis.
This is clearly a major factor in much weaker productivity growth in the US.
I have not looked at the UK data, but I suspect that they have the same
problem –maybe just to a lesser degree.
I have no stake in the following event, but thought there was a chance one of Menzie’s or James’ regular readers might take an interest. I would say at least two of the guests are solid people, and maybe all of them are great for all the hell I know, but I know at least two of them are very worth listening to. If I am not mistaken the event will take place in Washington DC on April 11th. Hope the event is worthy of note to any of the blog regulars.
https://twitter.com/bhgreeley/status/1111677251442094088?
Always keep safety in the back of your mind in your travels, Uncle Moses says.
https://i.redd.it/2nv4aokv38p21.jpg
One of the commenters on this blog, who I have a high degree of respect for, recently discussed “Intellectual dishonesty” as relates to AOC and Bernie Sanders on their economics policy stances [In the MMT post I believe it was]. Although I strongly disagree with that, I’m willing to give that commenter that that is a valid opinion to hold, and a reasonable person can issue it with a logical argument.
That being said, I’m curious, where does that same commenter (who again, I respect as one of the better commenters on this blog) rank this in terms of “intellectual dishonesty”??
https://www.nytimes.com/2019/03/31/us/politics/joe-biden-flores.html
Now, I think we have to ask another question before we can answer the above question I pose to “said commenter”. The question is thus: “When we see how Joe Biden treated Anita Hill in public, on national TV, how might we guess Joe Biden treats women in private??”
These guys are all over the place—some of them even were caught “hiding out” or uuuuh “taking refuge” at the SPLC. My question to those commenters in here who talk like SJWs is—-Do you prefer guys like me, who state honestly how we feel so you can feel self-righteous and Godly as you call me a “sexist” or “misogynist” or do you prefer the weasels like Biden who tells you what you want to hear as you share drinks with him before he molests someone later that same night?? I think I already know the answer to this question, but just give me the pre-prepared stock response so I can have some laughs later.
Moses Herzog I’m assuming I am that much respected commenter. First, I don’t think Bernie Sanders and AOC are being deliberately or intentionally dishonest in using MMT as a cover for enacting GND policies. I don’t know AOC, but I do know Bernie and his wife. They have been dinner and spare bedroom guests. They are personally charming, and although I don’t agree with Sanders on a lot of economic issues, he’s one politician about whom I don’t feel I have to count the silverware after dinner. With Sanders, what you see is what you get. When I said that some supporters of the GND were being intellectually dishonest, I meant that they were both fooling themselves and their supporters into espousing a left-leaning version of voodoo economics. I think Sanders and AOC have been too willing to suspend critical judgment about MMT for the simple reason that it allows them to sidestep difficult and unpopular stances. In short, it’s wishful thinking. An intellectually honest approach would stop short of endorsing MMT simply because it gives you an answer you like. We see that in lots of discussions. For example, I don’t think CoRev is insincere in his silly beliefs about global warming; but he is guilty of unintentional intellectual dishonesty and dissembling when confronted with things he has said in the past. I don’t think Ronald Reagan was insincere in his belief in supply side economics, but he was guilty of allowing himself to be suckered by “policy entrepreneurs” who cynically used his naivete.
As to Joe Biden, he didn’t shower himself in glory during the Anita Hill and Clarence Thomas hearings. But then again, that was true of just about every politician. There was also no way to make things easier on Anita Hill except to advise here to not say anything at all. Biden had other witnesses that he could have brought in to support Hill’s testimony, but that risked putting even more women through the same hell as Anita Hill. If senators weren’t convinced by Hill’s testimony (and I was), then they weren’t going to be convinced if another dozen Anita Hills testified. Biden was put in an even more difficult position after Anita Hill failed a polygraph test. Of course, we’ll never know how Clarence Thomas would have fared with a polygraph test since he refused to take one. Bottom line is that I don’t think there was any winning solution for Biden or the Democrats. You take you losses and move on.
Biden’s problem isn’t that he “molests someone later that night” after drinks. That’s something reserved for presidents and Supreme Court justices. Biden’s problem is that he is old school and has an old school sense of paternalism about him. Back when he first came to the Senate he had the benefit of paternal support from one of the old lions of the US Senate and over the years he’s carried on with that avuncular and paternalistic attitude. He’s that way with men and not just women. He’s always been an up close, touchy-feely kind of politician. It’s who he is, just as his running off at the mouth is who he is. I think there’s a world of difference between a sexual predator and who someone whose nature makes him overly familiar with others relative to today’s standards of personal space. Even his accuser agrees that there was nothing even remotely sexual about the incident; only that she felt he violated her personal space and that made her feel uncomfortable. A far more serious issue with Biden is his college plagiarizing charge back in law school.
Appreciate the reply. You give people more benefit of the doubt than I do. I tend to be more cynical. Especially Reagan. No one is that dense, even post-Alzheiners, it’s hard for me to believe he didn’t have some idea the people he was effecting. Breaking the unions. Reagan belongs to the actors’ unions–then spends a lot of life energy breaking other labor unions. I respect your tolerance, but some things just don’t “come out” in the wash for me. And that’s something I can never forgive. My Dad lived those years, struggling. A man with a master’s degree in education working as a case manager in a federal prison to put food on the table. That is neither forgettable or forgivable in my book. Reagan ranks lower than Calvin Coolidge or Herbert Hoover in my book on those scores.
2 Slug,
Well, at least Bernie and AOc do not realize how the really big problem with MMT is that its advocates fail to realize that a normal distribution of budget deficits implies a normally distributed income distribution rather than the skewed distribution that they claim is out there and must be dealt with by higher taxes on higher income people. in this they should have paid close attention when Moses Herzog explained how an even distribution on genomes implies even distributions rather than skewed ones on populations. In any case, it is good to know that Bernie is what he looks like.