The False economy

The coverage by CNN Money of Donald J. Trump (DJT)’S remarks on the creation of a ‘false economy’ is very interesting, even if wholly unsurprising.

(1) DJT is spot on with his comment.

(2) It has been said by many other learned commentators too – Kevin Warsh (former FOMC member), Michael Spence, John Taylor at Stanford, Stanley Druckenmiller and Bill Gross, to name just a few.

(3) Jon Hilsenrath’s article in WSJ in the third week of August, around the time that central bankers from around the world met in Jackson Hole, spoke of the low popularity of the Federal Reserve now.

So, DJT is echoing public sentiments actually, rather than going up against it.

(4) Mervyn King’s book (‘The End of Alchemy’) says exactly the same thing – economic growth created by borrowing and borrowing and wasting it, leaves the future barren. It is false growth.

Postscript: I discovered Cliff Asness of AQR Capital Management on Twitter last night. One of his tweets captured the attitude of many of us who do not have a vote in the U.S. elections. It was something to the effect that the one-sided coverage of the U.S. Presidential elections almost made him a ‘Trump-ster’ (or, words to that effect). But, guess what? His tweets are not available this morning, less than twelve hours later! He seems to have closed his Twitter account.

 

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