Monday, August 1, 2016

OMG, Now Donald Trump Turns To Herbert Hoover Economics

Donald Trump is now lifting a horrific policy phrase from the Herbert Hoover Great Depression period: priming the pump.

From NYT:
Mr. Trump himself said in a telephone interview last week that he believed more borrowing and spending would help lift economic growth, a departure from traditional Republican economics.

“It’s called priming the pump,” Mr. Trump said. “Sometimes you have to do that a little bit to get things going. We have no choice — otherwise, we are going to die on the vine.”

He added: “The economy would be crushed under Hillary. But no matter who it is, the debt is going up.”
Where the hell is Trump getting that phrase from? Is Kudlow teaching this nonsense to him?

Pump priming is an aggregate demand notion that the government needs to step in to "boost" aggregate demand. You could create  a nice career for yourself refuting all the bad economics surrounding this idea. It is often associated with John Maynard Keynes who, after Hoover, became an advocate of government aggregate demand policy.

I am going to send Ivanka Trump a copy of The Failure of the New Economics by Henry Hazlitt.

Hazlitt took a sledgehammer to Keynesian economics in this book. Maybe Ivanka can talk some sense into her father.


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