Driving to War in a Ford Fiesta!

That’s the rationale, according to the Association of Global Automakers, as quoted in Car and Driver! Mr. Trump declares Section 232 tariffs for automobiles.

Thus, the Secretary found that American-owned automotive R&D and manufacturing are vital to national security.  Yet, increases in imports of automobiles and automobile parts, combined with other circumstances, have over the past three decades given foreign-owned producers a competitive advantage over American-owned producers.

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Phill Swagel to Head CBO

That’s the news, according to Roll Call:

Senate and House budget leaders have chosen Phillip L. Swagel, a University of Maryland economist and former Treasury official in the George W. Bush administration, as the next director of the Congressional Budget Office, according to several sources with knowledge of the discussions.

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Tools of monetary policy

I just finished a new paper on current U.S. monetary policy operating procedures. Here’s the abstract:

The Federal Reserve characterizes its current policy decisions in terms of targets for the fed funds rate and the size of its balance sheet. The fed funds rate today is essentially an administered rate that is heavily influenced by regulatory arbitrage and divorced from its traditional role as a signal of liquidity in the banking system. The size of the Fed’s balance sheet is at best a very blunt instrument for influencing interest rates. In this paper I compare the current operating system with the historical U.S. system and the procedures of other central banks. I then examine strategies for transitioning from the current system to one that would give the Federal Reserve better tools with which to achieve its strategic objective of influencing inflation and output.

Here’s a link to a video of my presentation of the paper at a conference at Stanford last week.

Caligula Trump Asks Who Will Rid Me of These Troublesome Economists

I have been remiss in not bringing people’s attention to this purge. From Politico:

Economists in the Agriculture Department’s research branch say the Trump administration is retaliating against them for publishing reports that shed negative light on White House policies, spurring an exodus that included six of them quitting the department on a single day in late April.

If you do not see a pattern in the bullying of Census, the extreme nontransparency of rules at BIS (Bureau of Industry and Security), and the attempt at Board-stuffing at the Fed, then you are blind.