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The Trump Shift

From The Wall Street Journal, Trump May Herald a New Political Order by John Steele Gordon:

So does Donald Trump’s stunning election herald something permanent—a shift akin to those brought by Jackson, Lincoln, McKinley and FDR? That’s a fair bet, considering the GOP gains that preceded it. True, Mr. Trump did not win a plurality of the electorate. But Hillary Clinton’s popular-vote margin of 2.9 million was built on an extremely narrow base. Mrs. Clinton won only in coastal cities, academic enclaves and very poor areas such as the Mississippi Delta and the Alabama Black Belt. Subtract her margins in a mere five counties—the New York City boroughs, save Staten Island, and Los Angeles County—and she lost the popular vote in the remainder of the nation by more than 500,000.

Mr. Trump capitalized effectively on the Democratic Party’s alienation of white working-class voters, sometimes dismissed as “deplorables” or denizens of “flyover country.” That allowed him to carry Michigan, Pennsylvania and Wisconsin, states where no Republican had prevailed since the 1980s. Whereas in 2012 Mitt Romney carried Brown County, Wis., which includes Green Bay, by 1.8 percentage points, Mr. Trump’s margin was 10.7 points. The GOP advantage in nearby rural Marinette County swung even more dramatically, from 3.5 points for Mr. Romney to 33 for Mr. Trump. That was more than enough to make up for Mr. Trump’s relative weakness in affluent Republican suburbs like Waukesha County, near Milwaukee, where Mr. Trump’s margin was 7.8 points narrower than Mr. Romney’s.

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Zakaria on Illiberal Democracy

An excellent summary of the difference between constitutional liberalism and democracy.

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The Great Progressive Fallacy

from Don Boudreaux at Cafe Hayek (highly recommended) , a quote from Robert Higgs:

Nothing has done more to render modern economic theory a sterile and irrelevant exercise in autoeroticism than its practitioners’ obsession with mathematical, general-equilibrium models.  Not only does this focus result in the futile spinning of mental wheels by mathematical pseudo-economists, but it has pernicious consequences for policy formulation because, as James M. Buchanan has observed, it gives rise to “the most sophisticated fallacy in economic theory, the notion that because certain relationships hold in equilibrium [in the model] the forced interferences designed to implement these relationships [in the real world] will, in fact, be desirable.”

and a Boudreaux commentary:

Precisely.  Neither society in general, nor the economy in particular, is a machine to be engineered; instead, each is a process that emerges, along with each of their many and ever-changing specific features, as the result of human action but not of human design.  Economists whom I regard as the greatest – economists such as (to name only a few) Adam Smith, Ludwig von Mises, F.A. Hayek, Ludwig Lachmann, Ronald Coase, Armen Alchian, Jim Buchanan, Leland Yeager, Israel Kirzner, Harold Demsetz, Julian Simon, Richard Wagner, Deirdre McCloskey, and Bob Higgs – focus their attention on understanding the processes of human interactions and how these interactions generate undesigned and unintended orders.  These orders are never in a state of equilibrium, but they do feature extraordinarily complex interconnections and feedback loops that ‘knit’ together, into a society and an economy, all individuals whose actions contribute to the formation and maintenance of these orders.

and Rebel Yid’s thought:

Much of the growth of government especially in the early progressive era was predicated on advances in science that led to the great progressive fallacy: that tools of description translate simply into tools for prescription. The most notable example was the use of the science of Darwinism to justify the morally reprehensible policy of eugenics.

This is not to say that thoughtful analysis of prior events cannot be useful to avoid future calamities,  Bernanke may have avoided a more damaging outcome to the recent recession with his study of the Great Depression.  Or he may have just delayed it.

History, however, is not a process of evenly measured progress. Nor does it have a side. There are periods of great innovation and growth and periods of consolidation, even setbacks. Managing the economy by targeting a very narrow range (and definition)  of inflation, productivity, unemployment, or market exuberance may succeed in avoiding catastrophic failures or it may delay small failures leading to fewer larger disruptions. But it may also stifle innovative waves, and cost us dearly in unseen ways.

The parable of the broken window, introduced by Bastiat, and popularized by Henry Hazlitt, should remind us all to consider the whole picture.

As McCloskey disclosed in her subtitle to Bourgeois Dignity, economics (alone) can not explain the modern world.  I would add that it takes more than economics to manage it, and it is fairly useless by itself  to predict it.

Economics is an incredibly useful tool, made more so by understanding its limits.

 

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Classical and Progressive Liberals

From a book review of Conserving America? by Patrick Deneen- review by Micah Medowcroft-  Trump Didn’t Kill Conservatism in The Wall Street Journal:

The two dominant alternatives to this fixation on the present are progressivism’s focus on the future and what Mr. Deneen refers to as “nostalgism,” which “dons rose-tinted glasses in its high regard for a perfected past.” Consider, for example, the way many Republicans talk about the Reagan era. Or even the notion of “making America great again.” Such nostalgism animated much support for Mr. Trump this past year, and progressivism is easy to identify on the far left. But according to Mr. Deneen, in American politics both sides are actually liberals: classical liberals, often misnamed conservatives in the post-Cold War world, and progressive liberals. The classical liberals seek “a society of ever more perfectly liberated, autonomous individuals,” particularly in economic matters. The progressive liberals seek to build a society of “ever more egalitarian members of the global ‘community.’ ” The author believes that classical and progressive liberalism are “different sides of the same coin.”

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The Treason of the Clerisy

Yet in the late nineteenth century the artists and the intellectuals-the “clerisy,” as Samuel Taylor Coleridge and I call it-turned against liberal innovation. The treason of the clerisy led in the twentieth century to the pathologies of nationalism and socialism and national socialism, and in the twenty-first century to the pieties of radical environmentalism, and to the dismal pessimism of the union left and the traditional right. The clerisy provided the “scientific” justifications for such attitudes, as in scientific materialism or scientific imperialism or scientific racism or scientific Malthusianism or, lately, scientific neoeugenics. The scientific schemes reasserted an elite control over newly liberated poor people. Consider Mao’s Little Red Book, say, or Hitler’s Mein Kampf, which extracted from the scientific dreams of left or right a plan for an ant-colony society governed by the Party.

Deirdre N. McCloskey. Bourgeois Dignity: Why Economics Can’t Explain the Modern World (Kindle Locations 636-640). Kindle Edition.