Anarchic Economics

 So, Argentina just made a choice, likely a bad one. They got in their time machine and went back to 2016 and elected a right wing populist who's more interested in "move fast and break shit" than in actually making a measured decision about economic matters. The ultimate own goal of the right wing populists was Brexit, which the country is still struggling with. However, as Yglesias lays out, we got a look at Trumpist economics and it sure looks like we got a little lucky.

As Yglesias points out, Trump's basic economic message is highly inflationary. Tariffs, immigration restrictions, tax cuts...these all lead to inflation, and prior to Covid, that was fine. We got lucky, sorta, because that was a time of low interest rates. Enter Covid and the energy crisis from Ukraine and suddenly we have to care a bit more about quelling inflating prices. He notes, accurately, that higher interest rates have a disproportionate impact on both housing and the federal debt. The government has to pay the same high interest rates as consumers do.

Trump's economic plan for a second Trump administration would be awful. It would add jet fuel to inflation, right as we appear to be getting it under control. (The paradox of the moment is that the high interest rates designed to tamp down inflation seem to be fueling inflation in the housing sector by restricting supply.)

Where I disagree with Yglesias and agree with Martin Longman's analysis of Argentina is that macroeconomics are hard to understand. The basic idea that a president has control of interest rates or rising energy prices is a good example of the disconnect between perception and reality. Paul Campos has something he calls the Ariana Grande theory of politics. The gist of it is that few people really pay attention to politics, in much the same way a middle aged man pays little attention to current pop music. Just as he sorta knows who Grande is, he really doesn't now her oeuvre or what makes her popular. For most people, that's how they approach politics.

Put more succinctly, people vote vibes, not white papers on economic policy. In this telling, Argentina's baffling decision to elect ANOTHER right wing populist nutjob with terrible hair does make sense, because Argentina has been misgoverned and in economic turmoil for a long, long time. Javier Milei's promise to shatter economic orthodoxy is likely going to end poorly for Argentina, but for the average person, the status quo is really, really bad. (We are planning a trip down there this winter, and I'm a bit conflicted now.)

The question that needs answering by the Biden re-election team is what measures they can take to get people to see what's GOOD about Bidenomics as much as it is to scare them about the looming catastrophe of Trumponomics. The fascism stuff, the abortion stuff...yeah, hammer that. But people think the economy was better under Trump. It sorta was, but for reasons that had little to do with Trump, and his current plan looks awful.