The CBO on Trade Policy Uncertainty

The CBO’s Budget and Economic Outlook is a must read. In addition to the widening budget deficit (no supply side miracle here), and the downward revision in projected 2018 growth, there is this commentary in the section blandly titled “Some Uncertainties in the Economic Outlook” (page 14 onward):

A sizable uncertainty in the U.S. trade and inflation forecast stems from recent changes to U.S. import tariffs and the retaliation of the country’s key trading partners.

The renegotiation of the North American Free Trade Agreement (NAFTA) similarly presents the risk that trade and inflation may differ from CBO’s projections. When CBO completed its current economic forecast, the agency estimated that the macroeconomic consequences of the U.S. tariffs and foreign retaliatory tariffs that had been implemented at that time would be small. The prices of washing machines, solar panels, steel, and aluminum increased in the first half of 2018, but those products account for only a small share of consumer and business purchases. Higher tariffs on more imported products, however, could add to inflationary pressure, which in turn would not only reduce the purchasing power of domestic income but also increase the costs of domestic production, making the prices of U.S. exports less competitive in international markets. In addition, retaliatory tariffs on U.S. exports are likely to reduce the profitability of U.S. businesses whose products are targeted by those tariffs.

Furthermore, heightened uncertainty about trade policy could discourage businesses from making capital investments that they might otherwise have made, because changes to trade policy affect price competitiveness in foreign markets as well as the costs associated with global supply chains. Recent volatility in equity markets might indicate that such uncertainty is already taking a toll on the value of U.S. businesses.

Stephen J. Davis presented a prospective look at this issue in his post the other day. Here is some additional information, regarding reported industrial equipment investment, and trade policy uncertainty.

Figure 1: Gross industrial equipment investment, in bn.Ch.2012$ SAAR (blue, left log scale), and US Trade Policy Uncertainty (red), normalized to geometric mean 1985-2010=100. 2018Q3 observation is for July. Source:, categorical index page, accessed 8/14/2018.

As noted before, industrial equipment investment, likely closely associated with export activity, is down. It might be a coincidence that trade policy uncertainty is as high as it’s been since negotiation of Nafta. Then again, it might be a harbinger of things to come.

77 thoughts on “The CBO on Trade Policy Uncertainty

  1. Moses Herzog

    CBO link is great.

    Was watching the Wisconsin Gov vote tonight, ‘cuz the proximity to our gentlemanly and jovial blog host and just as a “proxy” for the nation as a whole. Noticed the total Dem votes were 527k and the total Republican votes were 445k. That’s an 82k difference in favor of Dems. I’m wondering if Wisconsin Dems can “take heart in that” or if since Walker was the presumed victor, that the Republican primaries turnout was low, and when the final matchup happens a higher Republican vote turnout will “make up for” the 82k difference?? I know of at least one cerebral Asian man who will be tempted to do a jig (with his faculty offices door closed) if Evers can wing it.

  2. pgl

    This CBO report is a brutal reminder that the supply-side junk science in support of that tax cut for the rich was just that – junk science. Expect the usual nonsensical “rebuttals” from our Usual Suspects!

    1. Moses Herzog

      I think Friedman made some great contributions (including during war time he hasn’t gotten as much ballyhoo as he should have, which I find ironic). An exceedingly sharp man with a gargantuan ego to match (and or surpass). His interview with Phil Donahue (on Youtube) was TV magic. But how he ever bought into the supply side gunk remains an eternal mystery to me.

      Friedman has to rank as one of the quintessential examples (at least in America), of a guy who could make great contributions to a war time effort, without having to gran a rifle and put on hiking boots (if I can use some outdated phrasing).

      Imagine there was a time you could watch deep conversations, on “daytime TV” and it was all provided FREE through an antenna. But, now we have “progress” right?? That means you pay for commercials provided through a cable or satellite. —-if you’re an idiot. PAYING to watch commercials. If I ever understand that please come to my place of residence with a shotgun and shoot me.

  3. Not Trampis

    Downunder we would expect to see revenue, spending and then the deficit in actual numbers and as a % of GDP.

    Don’t you yanks do this or did I miss it?

    1. Moses Herzog

      @ Not Trampis
      Can you tell us how Aussies put on their underwear and shoes?? Please save the Chinese precious time “stealing” this valuable Australian IP.

      CBO have it for revenues going back many years at this link:

      Can’t find it for expenditures at CBO, probably there, but I don’t know the location.

      Of course you could always show us your outstanding Aussie math skills and put the denominator under the numerator and just “wow” us all.

      1. Moses Herzog

        @ pgl
        Good spot. I suppose “Not Trampis” could argue it’s not broken down by individual revenues or individual spending numbers, but the light brown bar graph is basically what he’s asking for.

  4. PeakTrader

    The liberal/socialists on this blog seem intent on supporting communist and socialist regimes, along with destroying the greatest economy the world has ever seen.

    Foreign firms operating in China had great uncertainty before Trump imposed tariffs on steel and aluminum, including regarding exchanging IP for potentially extremely valuable market access.

    Socialists don’t care about property rights and will take them away, one way or another. There’s uncertainty that China will take away the big risks and hard work of foreign firms, I.e. in creating their most valuable asset – IP – and receive too little in exchange, while China uses foreign IP to compete with them globally at lower costs. Therefore, capturing high paying jobs from other countries and slowing the creation of new products and better jobs on a global scale.

    The liberal/socialists are either naive or ignorant, which is why they have a long history of failure. And, don’t know why they support Communist China so much, except maybe, because they hate America or capitalism.

    1. baffling

      peaktrader, the 80’s called and they want their reagan commies back. quit living in the past!

    2. pgl

      Your rants are getting more incoherent by the day. Hey Peaky – you need to stop drinking before lunch time.

          1. noneconomist

            Never too late to unleash Chaing Kai-shek to battle the Red menace.
            . Of course, we wouldn’t have had the Red China problem if we had allowed MacArthur to drop those 10-20 tactical A-bombs and invade with Chaing and a few thousand Marines. That’s a mission Col. Peak Trader would have volunteered for instantly.

  5. joseph

    From Trump’s press secretary yesterday:

    “This President since he took office, in the year and a half that he’s been here, has created 700,000 new jobs for African-Americans,” Sanders said Tuesday.
    She continued: “That’s 700,000 African-Americans that are working now that weren’t working when this President took place. When President Obama left, after eight years in office, he had only created 195,000 jobs for African-Americans.”

    For once, the Press was skeptical and checked the facts from the Bureau of Labor Statistics. In fact, Sanders had understated Obama’s record by a factor of 15, African Americans had gained almost 3 million jobs during Obama’s tenure.

    She was forced to issue a correction and later this came out:

    Apologies for @WhiteHouseCEA’s earlier miscommunication to @PressSec.

    Yep, that’s Larry Kudlow in action again. No excuse. The White House knew he was a lying hack when they hired him.

    1. pgl

      Huckabee’s job is to lie 24/7 so maybe the CEA thought their job was to feed lying large woman that pack of lies.

      I watched her appearance and she acted as if all that brown skinned people should bow down to their plantation owner (Trump) for having a job. This cow is even more racist than her boss.

      1. Moses Herzog

        Don’t victimize women with “slow metabolism and big bones” ok?? It’s better to encourage all American children to grow up fat disgusting wobbling pigs so they “can feel loved”. Get with the program. Women hate themselves when other women buy women’s magazines with beautiful women on them. It’s “unfair” and hurtful.

    2. Barkley Rosser

      Not Kudlow, Joseph. Try Kevin Hassett, he of the Dow 36,000 back in 1999. Kudlow runs the NEC not the CEA. I aleays thought it was a completely wasteful move by Bill Clinton to create the NEC. usually run by pop-schlop dumb bells who are supposed to be good at talking to the media and Congress rather than the actual professional economists who usually run the CEA, but have been largely relegated to minor putting together propaganda for the WH.

      Hassett has largely been under the radar and ignored, although praised by many when he was appointed. But he has recently been surfacing with stuff that does not make him look good, including half-baked arguments for the Trump tariffs. In this latest matter of Af-Am jobs, he provided a further distorted talking point that Sanders used as part of her “correction,” which was distorted. Hassett calculated numbers from election days for looking at the beginning periods of the Obama and Trump presidencies, giving Obama the terrible last quarter of the Bush presidency and Trump the reasonably decent last quarter of Obama’s presidency. Hasset is certainly a better economist than Kudlow, but with this stuff he is right down there in lie lie land.

    3. joseph

      Thanks for the correction, Barkley. I mixed my initialisms. Although, to be fair, there’s an awful lot of right-wing economic hacks in the administration to keep track of — Kudlow, Hassett, Mulvaney, Mnuchin. But you know the bench on public villains is getting pretty thin when they have to resort to Mulvaney doubling up at the OMB and the CFPB.

  6. 2slugbaits

    A sizable uncertainty in the U.S. trade and inflation forecast stems from recent changes to U.S. import tariffs and the retaliation of the country’s key trading partners.

    I want to wish the Fed the best of luck in sorting out the price effects from Trump’s trade war. In a perfect world the tariffs would be a one-off thing (i.e., a level shift) and not really an acceleration the inflation rate. But we don’t live in a perfect world. The trade war will increase the price of imports, but it should also reduce the price of domestically produced exports (e.g., soybeans and Menzie’s pork chops). But the trade war also means we’ll lose the efficiency benefits of trade, so productivity will suffer and that’s a recipe for 1970s stagflation.

    A little (but only a little) off topic, I don’t think the Turkish lira crisis is getting enough attention in the US media. When I watch European news (e.g., Deutsche Welle and BBC) the lira crisis is front and center. A lot of the European banks are heavily exposed. The global markets have been taking a beating for over a week now, but it doesn’t seem to be getting much attention in this country. Turkey’s economy has been a basket case for quite awhile and Erdogan is the Minnie Me version of Trump, so the lira crisis was bound to happen sooner or later; but Trump’s recent actions against Turkey have precipitated the crisis. There are plenty of reasons for the US to oppose Erdogan, but Trump’s excuse (shielding a likely guilty American evangelical pastor) has to be the worst casus belli. Setting aside the strategic risks of pushing Erdogan into the arms of Putin and Xi, the risks to the international banking sector ought to be alarming folks. Amber lights should be blinking. Instead we get Omarosa.

    1. Moses Herzog

      Came this close to buying pork chops at the store the other day. A relatively big package for $5.75. Would easily serve three with a side of vegetables. But alas, Menzie never gave us his pork chops recipe/ way to cook. When is this Menzie guy going to branch out to some good recipes and cooking directions on here??

  7. Not Trampis

    Sorry to interrupt Peak trader accusing Trump of being a commie but has anyone answers to my questions

    1. PeakTrader

      Not Trampis, I guess, “downunder” means upside down.

      You should invite 2slugbaits, Pgl, and baffling – they’ll fit right in 🙂

      The Three Amigos or Curley, Larry, and Moe.

          1. pgl

            Look above and you might see that I did answer his question. Oh wait – you never learned to read. Never mind.

  8. Moses Herzog

    I’m asking an open question here people:

    We see Alex Jones being blocked/suspended on tons of social media (a man by the way, I am no fan of). The worse crime Jones has committed?? Being a crappy husband?? Spreading rumors and “lies” like fringe media in America has done for decades?? YES, in my subjective opinion, the answer to those two questions is YES. What other “crimes” has Jones committed?? Feel free to inform me (no sarcasm there, I earnestly want to know).

    But allow me to be so bold to present an example, followed by my open question:

    Let’s say you had a hypothetical man. Let’s refer to him affectionately as “good ol’ ‘JB’ “. Now, “JB” is 81. “JB” has a doctoral degree and was educated in the Jesuit tradition. We can say that JB is “hyper-educated” without a smidgen of exaggeration. JB is sophisticated and a man who has seen and knows the world. JB belongs to a “club” shall we say (some might call it a “cult”, but let’s not be too harsh, eh??). This club reveres the Virgin Mary, to really, deity status. To the point they pray to her. Now, this club JB belongs to, has a significant percentage of its “middle management” members busted for pedo behavior. Most of them will have zero punishment, as it has gone past the “legal statute of limitations”. And this man, JB, after it has been shown multiple times in the past and another story had just yesterday broken in the “Pennsylvania area” shall we say, of hundreds/thousands of more pedo crimes committed by “middle management” HAS NOTHING TO SAY ABOUT THE TOPIC.

    Today, “good ol’ JB” STILL has a Twitter account. Which man is worse?? YOU be the judge.

    1. baffling

      alex jones was suspended from twitter (and others) for breaking rules defined to allow use on the platform, not simply because he is a scumbag human being. on the other hand, jb and/or others may have actually committed crimes, and should play out in a court system not online platform. not really disagreeing with you moses, but not sure if twitter can/should ban you for doing things off of the platform. that said, i would imagine some of the trump commentary probably breaks the rules of twitter, and would not mind a public suspension of his account.

  9. Moses Herzog

    Hey you guys, I have some good news!!!! You know I have had a problem making the OLS regressions work that Menzie has given us some examples of. I would try to input the n sample data into some free software and crunch the numbers but it never seemed to work. The reason is, my dad was short and I am tall, so it makes it impossible for me to “regress”. I say, my dad was short and I’m quite tall, so I can’t “regress”.

      1. CoRev

        Benlu, that’s a good question. Since they are meeting here in the US, my guess is the US invited China. Futures prices for July 2019 jumped over $.20 just on the meeting announcement.

        1. pgl

          More proof you can’t read. The 2nd bullet point of the article noted who did the inviting. And I thought PeakStupidity was reading impaired!

          1. CoRev

            Pgl, More proof you can’t read. I never cited Peak’s article, but was referring to another I read else where this AM, but thanks for confirming my guess was accurate. Speaking of accuracy how are you “fish in the barrel” doing in refuting my estimate or re-calculating whether US soybean farmers have yet lost money on the 2018/19 crop? Just to jog your memory ti was:
            “Have soybean farmer’s yet or will they even be hurt by the tariffs? Anyone up for a little arithmetic?
            Avg. actual price received by farmers for 2017/18 soybeans $9.47/Bu. (from 7/2018 WASDE Report)
            Price received for ~1/2 of the 2018/19 harvest $10.05+ (low estimate in the pre-tariff time frame) From WaPo article
            Typical profit/loss on ~1/2 2018/19 harvest +~$0.58/Bu!
            WASDE estimated price for remaining ~1/2 2018/19 harvest ~$9.35?Bu (from latest WASDE Report)
            Typical profit/loss on ~1/2 2018/19 harvest -~$0.12/Bu!

            I bet you “fish in the barrel” never noticed your discoveries of the break-even price actually lowered the value I used raising the profit on farmers who already hedged and lowering the loss amount for the remaining un-hedged 2018/19 crop.

            BTW, thanks for that effort confirming my findings. With your efforts and the current price as of 12:40:43 CT 16 Aug 2018 the July 2019 price is now up +25’0,and, that’s just on the POSSIBILITY of change in the tariff conditions. Do you even understand making it even more likely, using my calculations, farmers may not have yet lost money.

            Total profit/loss on ~1/2 2018/19 harvest +~$0.46/Bu* (*before any Fed subsidy and crop insurance payout)
            ! simple arithmetic”

          2. 2slugbaits

            CoRev WASDE estimated price for remaining ~1/2 2018/19 harvest ~$9.35?Bu (from latest WASDE Report)

            Not sure where you are getting that $9.35/bushel number, but last Friday’s WASDE report projected a 2018/19 average price of $8.90/bushel, which was down $0.35 from last month.

            Price received for ~1/2 of the 2018/19 harvest $10.05

            You should also think about what it means to calculate an average. For example, if half the 2018/19 crop is at $10.05 and the average price for the entire crop is $8.90, then the other half must average $7.75.

            before any Fed subsidy and crop insurance payout

            I’m quite sure that subsidy and crop insurance payouts are very important to the farmer, but they should not be included in an economic analysis. A crop insurance payout should only cover idiosyncratic risk and should be funded by insurance premia without subsidies. Anything above that amount is simply welfare for farmers.

          3. CoRev

            2slugs, thank you for finding my error. In my calculations I was trying to be conservative in all price sources, and you made made the calculation area of my mistake more so. The 9.35 price was from the correct table but wrong year, 2017/18 and not 2018/19.

            With that change we have: “Typical profit/loss on ~1/2 2018/19 harvest -~$0.572/Bu!” and not ~-.12/Bu.

            I did not use your $7.75 average as it is not supported by any evidence. Even your favorite Iowa site has today’s price at $8.10
            “US 1 Yellow Soybean Prices were mostly 28 cents higher for a state average of 8.10.” and that would be for 2017/18 soybeans not 2018/19. Moreover the WASDE does not report the hedged prices, but does estimate an average crop price of:for Aug “7.65 – 10.15”. Which BTW is how they get the $8.90 estimate.

            Your last paragraph is just more of your BS. At least you now recognizing that Crop Insurance can cover Income Protection. No one yet even knows how the subsidy will be calculated. Or one of my points for doing the math exercise, if it will even be needed. BTW, even with the changes using the most conservative numbers available (except the 7.75) aveerage farmers are still on the positive side of the ledger.

    1. pgl

      Does PeakStupidity ever read his own links? It clearly notes with the big shots in the last meeting – nothing got done. Now we will have people at the lower levels and something is supposed to happen? Of course not having the ever corrupt Wilbur Ross is always a good thing!

  10. pgl

    After Omarosa was fired at the White House, Team Trump offered her $180,000 a year in hush money. This sounds a lot like a campaign finance violation.

    Angella Reid was the only other black person working in the White House for Trump to my knowledge. First female usher I think. But she was fired. Omarosa now reveals why – Trump was not entirely happy with his daily tanning bed sessions. For real! Rumor has it that Melanie so hates hubby’s tanning bed obsession that she no longer sleeps with him!

  11. CoRev

    Pgl (fish in a barrel), are you following today’s market move? Did you notice the news release that the Mexico/US NAFTA negotiations are near a break through? Can you remember the negative comments about bi-lateral versus multi-lateral trade agreements?

    Here’s a test for you. Two positive announcements regarding US- China and Mexico bi-lateral negotiations and the markets, stock and futures, dive or jump?

    1. 2slugbaits

      CoRev The market move was almost entirely due to the US inviting China to come her to negotiate. That’s good news for the market, but there’s no evidence that it would do anything more than return to the ex ante position before Trump started his little trade war. In other words, the market is thrilled that Trump is looking for a way to back down. And the market should be thrilled. As to NAFTA, there’s not much real news today other than a USTR statement expressing optimism without actually being able to point to any real reasons for that optimism. The main issue is the sunset clause that Trump wants. Canada and Mexico have both called that a deal breaker. And then there’s the reality that Trump can’t get a new NAFTA deal without congressional approval, and that’s not going to happen and Trump knows it. Even his GOP senators are telling Trump to just drop the nonsense and take a symbolic victory by agreeing to the technical updates to NAFTA that everyone supports:
      Canada and Mexico are holding the line on their most sensitive issues. Mexico rejects the idea of a sunset clause. Canada wants to maintain the settlement-dispute systems in the agreement, and doesn’t want to bow to U.S. demands to dismantle its dairy sector.
      Congress has also caused headaches for the administration. With midterm elections looming in November, lawmakers in Trump’s own Republican Party have warned that a protectionist turn would hurt businesses and consumers, including in states that were key to his 2016 victory. In a letter in May, senators including John Cornyn of Texas, the second highest-ranking Republican in the upper chamber, warned Trump not to take a “take-it-or-leave-it” approach with lawmakers.

      And the USTR said: “We’re either going to do a fair NAFTA for us or we’re not going to do NAFTA at all,” Trump said. “If you can’t make the right deal, don’t make it.”

      Keep in mind that “walking away” sounds like tough talk, but effectively it means that Trump has to swallow hard and accept the status quo, which is just fine with Mexico and Canada. Again, that’s good news for the market; but make no mistake about it, the reason it’s good news is because it means Trump is losing his trade war. And that’s good for US businesses.

      Regarding bilateral negotiations, those are always inferior to multilateral negotiations.

      1. CoRev

        2slugs, “Regarding bilateral negotiations, those are always inferior to multilateral negotiations.” And yet we’ve had a whole series of articles explaining ACTUAL trade as mostly bi-lateral, China and US soybeans for a general example, and the Peak Pegasus for a specific example. Or we could consider the CA/US auto and dairy tariff differences under NAFTA. Making such a statement implies that negotiations to improve NAFTA are unnecessary

        I’ve shown examples of the exceptions to “ALWAYS inferior” under NAFTA, a prime example of a multilateral agreement. Show us your examples multilateral agreements “ALWAYS” being superior. Making blanket statements of fact are nearly always false. As was yours.

        1. 2slugbaits

          CoRev I think you’re confusing actual trade (which is obviously always bilateral) and trade agreements like NAFTA, CAFTA and TPP. There’s a whole literature (albeit highly technical) that explains why multilateral trade agreements are always superior to bilateral agreements…as Britain is learning to its horror. Trade agreements cover the overarching rules and regulations that govern actual trade between two countries. The Peak Pegasus is an example of a trade contract, not a trade agreement.

          1. CoRev

            2slugs, if the purpose of trade agreements, multi or bilateral, is to improve and/or ease trade restrictions, and “actual trade (which is obviously always bilateral), then you have failed to make your case for superiority. I also think you misspoke here: ” Trade agreements cover the overarching rules and regulations that govern actual trade between two countries.” as you are defining bilateral agreements, and not multilateral agreements. The difference(s) should define why one is better than the other.

            Either type of agreement filters down to actual trade contracts, and there should be another list of differences that should define why a contract under one is better than the other.

            I think we are again on a track discussing the difference in world views. I usually look bottom up, farmer, contract, etc., versus your Economics -based top down view. Correct me if I’m wrong here.

          2. 2slugbaits

            CoRev This is an econ blog, so when people talk here about trade agreements you should know the context. Examples of trade agreements include NAFTA, the TPP and the GATT/WTO. Those are agreements between nations, not private entities. They govern the rules of trade, not the contractual terms between private entities. An analogy to international trade agreements like NAFTA and GATT/WTO would be the Uniform Commercial Code agreement between states.

            The superiority of multilateral versus bilateral agreements has been known and understood since at least the 1930s. There’s a entire literature on the subject. And if you’re a large country, then the case for multilateral agreements is even stronger. Part of the problem is that people tend to apply bad game theory to the problem; i.e., the kind of game theory they likely learned on the playground in which the tough kid could bully the weak kid standing alone, but not the weak kids standing as a group. So as an individual you want to be the big tough kid and deal with small kids one-on-one. That’s a bad analogy to apply in international trade. One of the reasons you go to college is to get beyond what you learned on the playground. In fact, it turns out that the bigger you are the more it’s to your advantage to pursue multilateral agreements over bilateral agreements.

          3. CoRev

            2slugs, why the throw away comment this is an economics blog blah, blah? Much of the time comments are political and not economics, well except when the personal attack is being used that is of no classification but childish.

            All I asked is: “I think we are again on a track discussing the difference in world views. I usually look bottom up, farmer, contract, etc., versus your Economics -based top down view. Correct me if I’m wrong here.” and you confirmed it by providing analogies and general references when examples were requested or at least expected.

            You claimed a wealth of literature, but have yet to provide one reference. That is a failure.

  12. Moses Herzog

    You know what I think is funny, or really actually annoys me. It annoys me because my 4 years in college (back in the dinosaur age) I saw it a lot. I’m trying to save some pennies (a 20 spot to be exact) and decided not to get the “Stock and Watson” so I found some texts online. I don’t wanna mention the ones, but I’ll just say this, the author of the one I got is in the top 5 respected texts, and maybe the top 2, and authored by one guy whose family name starts with “W”. (obviously not Watson). And this stuff really annoys the hell out of me. I read slow–and the reason I read slow is I don’t wanna miss sh*t. I’m normally not the guy who daydreams for half a sentence and misses stuff. I read glacially slow–but what I read I pick up on everything (at least if it’s ‘class” related or something). So this SOB “W”, two things he never explains that another text (that is OLDER) explains quite well. the symbol for “conditional” (you know the long vertical bar between two variables, and “expected value”, the big capital “E” before the function/variable. Now, yes, these are simple ideas, but if the author of the text thinks he is just too grand of a guy to bother explaining the symbols—it’s confusing as HELL, and it leaves you in a quandary for several pages, if not for any other related problem to those things in the book—thats why I’m reading TWO texts, in essence simultaneously right now—because I catch text writers in this crap all the time. These are Uni profs writing top 5 texts–and they can’t bother with that—when their written examples they describe like they’re teaching a Down syndrome class. I’m not a man who believes in violence–but I think if I could pop some of these guys in the face that write these textbooks, I would freaking pop them hard right in the face—and it was the East Indian dude who wrote (so far) the better text—it’s the guy who seems to have the top 5 reputation that decided he’s just too damned to cool to detail those things.

    My sophomore year of college Menzie, I was taking a class on Quality Control. the text was RIDDLED with errors. Now, I rarely spoke up in class, I was a mouse. And I raised my hand and got the entire class laughing when I looked our teacher (who was generally a really good guy) straight in the eye and asked “What the hell point is there in writing a text on quality control, when there is ZERO “quality control” on the problem sets?!?!?!?!”—-The ENTIRE class broke out in laughter because they knew I was dead right.

  13. joseph

    Today, the Pentagon came back with an estimated cost of $92 million for Trump’s little military parade in honor of himself scheduled for November. But now, the Pentagon has said they will re-schedule it for “sometime in 2019”. I’m guessing that the Pentagon, embarrassed by this pointless dog and pony show, is banking on senile Trump forgetting about it by then or else an impeachment.

    Rumor is that Trump wanted Leni Riefenstahl to do the TV production for the event but was disappointed when told she is “unavailable.”

    1. PeakTrader

      A military parade is a great idea to honor our troops and veterans, show patriotism, and inspire young Americans.

      Can’t wait to see it. Will be worth it. Screw the NFL.

      1. Moses Herzog

        You know, there is one single good thing about people like Trump coming along. When tyrants like Trump come along, we can see people like you for who you truly are Peak. Even Pontius PIlate wanted to wash his hands before killing an innocent man. Now we’ve had thousands of children carried off to ICE camps, some fed drugs, sexually abused, a good chance some deaths in there. I suppose, unlike Pilate, you’d volunteer to be an ICE agent if you were told you could contribute to the carnage, yeah Peak??

        [Matthew 2:13-18 NKJV] 13 Now when they had departed, behold, an angel of the Lord appeared to Joseph in a dream, saying, “Arise, take the young Child and His mother, flee to Egypt, and stay there until I bring you word; for Herod will seek the young Child to destroy Him.” 14 When he arose, he took the young Child and His mother by night and departed for Egypt, 15 and was there until the death of Herod, that it might be fulfilled which was spoken by the Lord through the prophet, saying, “Out of Egypt I called My Son.” 16 Then Herod, when he saw that he was deceived by the wise men, was exceedingly angry; and he sent forth and put to death all the male children who were in Bethlehem and in all its districts, from two years old and under, according to the time which he had determined from the wise men. 17 Then was fulfilled what was spoken by Jeremiah the prophet, saying: 18 “A voice was heard in Ramah, Lamentation, weeping, and great mourning, Rachel weeping [for] her children, Refusing to be comforted, Because they are no more.”

        Jesus and his parents fled to Egypt. They were “immigrants” without papers. Which ICE cage would you have put them in Peak??

        1. Not Trampis

          actually they were refugees which is why anyone who call themselves a Christian always has not only a great affinity but also a great sympathy with Refugees

    2. Moses Herzog

      Pretty funny Riefenstahl reference. You know she was still alive not that terribly long ago?? If she was a man how would she have been treated?? It’s not like she wasn’t agreeable to the whole deal. Yet she gets “a pass” no male in her position would have gotten. Mentally sick, but good at her job, I think we have to give her that.

      There have been some famous European clothing designers busted as anti-Semites. I’m assuming they would be in Trump’s shortlist to organize his Russian propaganda show. First Trump has to put Michael Mullen on his “enemies” list along with the NYT and WaPo. A perverted dictator has to prioritize.

    3. CoRev

      Joseph, and Mattis said that the $92M price tag reporter was smoking something illegal. More “Fake news”? Dunno, but its interesting to watch the TDS sufferers falling for and repeating such stories.

      1. 2slugbaits

        CoRev Here is the Pentagon’s official statement:
        “The Department of Defense and White House have been planning a parade to honor America’s military veterans and commemorate the centennial of World War I. We originally targeted November 10, 2018 for this event but have now agreed to explore opportunities in 2019.”

        In case you don’t speak Pentagonese, let me translate: “The parade isn’t going to happen.”

        Actually, it would have been appropriate to have some kind of commemorative event for the 100th anniversary of the 1918 Armistice. A militarist parade that glorifies war would have been utterly inappropriate given the original celebrations of Armistice Day, but some kind of serious observance would have been proper and appropriate.

        1. PeakTrader

          It may be set for Veterans or Memorial Day to commemorate the sacrifices Americans made defeating, and deterring, aggression and evil.

        2. CoRev

          2slugs, who to believe? Mad Dog Mattis or another “U.S. defense official with firsthand knowledge of the assessment had told CNBC. The official spoke on the condition of anonymity.”? Incidentally your Pentagon release is not from the Pentagon, but a CNBC interpretations of a Pentagon statement.

          I am not surprised at a large cost estimate, but not sure of the validity $92M estimate, for a largely major event largely made up of Federal employees. That event results in the majority of costs are Federal. “Sunday’s white civil rights rally and counterprotests cost the District about $2.6 million, according to preliminary estimates released by the office of D.C. Mayor Muriel Bowser.” That was a relatively small private citizen event with Govt security costs, where the majority of costs are private.

          1. 2slugbaits

            CoRev No, it was a CNBC quote of the official DoD statement.

            not sure of the validity $92M estimate,

            Good to know that you’re deeply familiar with the Army Contingency Operations Cost Model (ACM) subsystem within the FORCES Cost Model (FCM) under the Operating and Management Support Information System (OSMIS). The ACM is used to estimate the cost of moving a unit from one longitude/latitude position to another:

          2. CoRev

            2slugs, you’re showing your parochialism again: “Army Contingency Operations Cost Model (ACM” I though this was an armed forces parade. But, i must admit I did deal with the support and supply side systems. My group was more responsible for the Command and Control (CC) and Combat Support (CS) sides and was intimately familiar with providing the CINCs INTEGRATED access to the Services and Agencies data. Some even from DLA, but more often from the other direct shooter support data sets. We were some what closer to the pointy end of the spear.

            For those reading this probably funny set of colloquialisms, that really is how we talk when supporting operations. If it is not clear, operations in today’s DoD world too often involve moving our troop (point spears/shooters) into hot shooting zones. In the early days of my career that was not so common, nor was the talk quite so descriptive.

          3. 2slugbaits

            CoRev It was supposed to be an armed forces parade. Anytime you move troops you have to use that kind of cost model. Doesn’t matter whether you’re moving troops to a war zone or to a training site or a parade site. The initial estimate of $12M sounded very much like what I would have expected it to cost a battalion to move to DC for a parade, and the stuff they were planning on bringing to the parade was about a battalion’s worth. But that would be Army only. Then multiply that by the four services bringing comparably sized parade forces and you’re quickly at $50M, which is what the Pentagon’s revised estimate was. The rest included other federal agencies and the DC government. The DC government was rightly concerned about the infrastructure damage as well as traffic control.

  14. joseph

    The Dear Leader this morning: “The local politicians who run Washington, D.C. (poorly) know a windfall when they see it. When asked to give us a price for holding a great celebratory military parade, they wanted a number so ridiculously high that I cancelled it. Never let someone hold you up! I will instead…
    ….attend the big parade already scheduled at Andrews Air Force Base on a different date, & go to the Paris parade, celebrating the end of the War, on November 11th. Maybe we will do something next year in D.C. when the cost comes WAY DOWN. Now we can buy some more jet fighters!”

    Can we just say that we have a deranged man in the White House? It’s not a joke anymore.

    And incidentally, the $92 million taxpayers are saving by not having Trump’s little party for himself would not buy even one F-35 fighter. You would think that the World’s Greatest Businessman would know such things.

    1. 2slugbaits

      joseph go to the Paris parade, celebrating the end of the War

      Dummy Trump doesn’t even know that the Great War did not end on 11 Nov 1918. That was the date of the armistice (or cease fire) on the western front. The active fighting in the west ended on 11 Nov 1918, but the German army did not disband and the fighting in the Balkans (where the war started) continued for another four years. And it was a “world war” so there was continued fighting in east Asia and the Middle East. On the eastern front the armistice happened on 3 Mar 2018 with the Treaty of Brest-Litovsk. The armistice on 11 Nov ended fighting between the UK, France, Germany, Austria, Italy, Turkey and the US, but it did not end the fighting between other powers, especially the Balkan powers.

  15. joseph

    It’s interesting that Trump takes credit for cancelling his parade as if he’s somehow generating new revenue to buy fighters. I bet if he just schedules and cancels lots of parades, he can balance the budget. Easy peasy. The World’s Greatest Businessman.

    1. Moses Herzog

      As you’ve observed joseph, it’s easy to convince people who can’t read above a 4th grade level to believe anything, when speaking in a loud and boisterous manner, as close to John Wayne as you can:

      I heard that Peak, CoRev, and Ed Hanson all cried the first time they watched that scene, the same as they cried when they got their first MAGA panties at Wal-Mart.

  16. Moses Herzog

    Dear kids, did you think Biffy the Slip-seater had forgotten?? If I had forgotten, Clem Snide Private-A would have put cuffs on me and taken me down to the local sheriff. Then on to an ICE cage, drugged on hallucinogenics per the ICE agent “Handbook of Preferred Protocol for Children” and then shipped to Mexico with some spider mites hiding inside Lima beans rejected at the border.

    Atlanta report on the GDPnow is 4.3, holding steady.

    The Nowcast from NYFRB is now at 2.39, down from 2.57%. That seems like a pretty good drop in 1 week, and I put more weight on the NYFRB measure. But that’s coming from a non-credentialed wannabe economist, so take it for what it’s worth.

  17. Not Trampis

    Can anyone answer my question on why the CBO does not have revenue and spending as a % of GDP in their report or fi it is where it is please.

  18. David Viel

    I applaud the efforts to restore American industry and to protect it against the unfair trade practices and policies that have led to such lopsided trade balances. In particular, the use of tariffs to reduce trade deficits with nations is the right course of action to follow to create balance when trading partners will not cooperate. However, one concern I have with this policy is that the use of tariffs will take money out of the economy and thereby cause a drag or slowdown in the economy. In general, the result of imposing tariffs on imported goods is that the price to the consumer of those goods will rise by the amount of the added tariff, so that the consumer will pay more for the goods and have less to spend on other things. This alone is not a problem as the intent is to boost domestic production, which in turn increases employment and wages. Overall net the effect should be positive.

    The issue is that the added tariff takes money out of the economy and gives it to the government. Absent any other action by the government the money from the tariff ultimately gets deposited with the Treasury with the result that the Treasury then borrows less money to make its budget requirements. This is effectively taking the tariff money out of the economy. It has the opposite effect of the tax cut, which put more money into the economy.

    * My suggestion to remedy this loss of money in the economy is for the government to spend it back into the economy. And the place to do this is by spending on infrastructure as was promised in the President’s campaign platform.

    Spending all the money collected in tariffs on infrastructure would then have a neutral effect on the money in the economy. Indeed, it would likely have an extra beneficial effect as the jobs created are ones for which the employees are likely to spend all or most of their income rather than save it, thus providing the maximal benefit of the government spending to the economy.

    For example, if the government imposes $50B in tariffs on imported goods and makes no other changes, that money is removed from the economy and the economy suffers. If instead, the government spends that $50B on infrastructure then it stays in the economy and has the maximal economic benefit, while providing for the repairs and improvements that our nations infrastructure so badly needs.

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