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Good news for Trump

Summary:
In 1979, Margaret Thatcher was elected Prime Minister of the UK. This proved to be a leading indicator of politics in the US, as Reagan was elected a year later. In June 2016, British voters opted to leave the European Union. Here’s what I said the very next day: Of course this is good news for Trump, as it suggests a groundswell of nationalism. It’s also good news (for Trump) in the sense that the Brexit vote was greater than predicted by either polls or betting markets. I think at some level Brexit voters understood that their decision was destructive (even if justified in the long run) and hence they were more reluctant to reveal this “politically incorrect’ view to pollsters. Maybe the same will be true for Trump voters. Unfortunately, in October 2016 I was

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In 1979, Margaret Thatcher was elected Prime Minister of the UK. This proved to be a leading indicator of politics in the US, as Reagan was elected a year later.

In June 2016, British voters opted to leave the European Union. Here’s what I said the very next day:

Of course this is good news for Trump, as it suggests a groundswell of nationalism. It’s also good news (for Trump) in the sense that the Brexit vote was greater than predicted by either polls or betting markets. I think at some level Brexit voters understood that their decision was destructive (even if justified in the long run) and hence they were more reluctant to reveal this “politically incorrect’ view to pollsters. Maybe the same will be true for Trump voters.

Unfortunately, in October 2016 I was seduced by the polls and predicted that Clinton would win.  The Brexit vote turned out to be a precursor of the Trump win.

And now Boris Johnson’s Tories have won a huge victory over the Labour Party.  There are two differences that make this a bit less worrisome for the Democrats.  There is no “Brexit” issue in the US, and the Democrats are not nearly as bad as Jeremy Corbyn’s Labour Party.  Nonetheless, the surprising scale of the Conservative victory is certainly bad news for the Democratic Party.  I notice that the betting markets are gradually raising the probability of a Trump win.  That’s where I’d put my money.

Good news for Trump

Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment". In May 2012, Chicago Fed President Charles L. Evans became the first sitting member of the Federal Open Market Committee (FOMC) to endorse the idea.

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