In 1991, when David Duke, late of the Ku Klux Klan, ran for governor of Louisiana against the famously corrupt incumbent Edwin Edwards (who was subsequently sentenced to ten years in prison on a racketeering charge), the state was flooded with bumper stickers that said:
If somebody’s still got a warehouse full of those things, it might be time to pull them out.
I’m not actually sure that Hillary *is* a crook.
I can’t recall her committing any clear wrong.
I do remember a gazillion fabulist tales from the GOP propaganda machine, all of which appear to have melted away when exposed to the sunlight.
What, specificially, do you have in mind?
I remember you were not too bothered by the email kerfluffle.
@Advo,
One of the big ones (there may be others) was the cattle futures scheme.
But Nixon isn’t running, is he?
The cattle thing is definitely slimy. It’s also come out that Clinton is using her Victory Fund to essentially launder money for her campaign through state-level party offices and claiming that she is helping down-ballot candidates while she actually hurts them be decreasing the amount of money that will be available to them. There are also the outright lies like her famous “sniper fire” comments, and the whole email scandal, where she has also lied about the level and timing of her compliance and has been misleading about every single aspect of the investigation on an ongoing basis.
I had *exactly* the same thought, but held up on posting because of the ambiguity. Which Crook should you vote for?
Admittedly this could be resolved by adding some language:
VOTE FOR THE CROOK
(who at least has the minimum decency of pretending that she is not a crook)
But that lacks a certain bumperstickish conciseness.
Admittedly, the original Edwards v. Duke race had the same ambiguity: Both men eventually ended up in federal prison for corruption. But at the time, at least, Duke was only known for being vile, not crooked.
We live in an era of casual miracles: there are multiple websites on the internet where a thousand custom bumper stickers are just a click and a credit card away.
And speaking of miracles: I have finally lived long enough to find Dr. Landsburg and myself supporting the same presidential candidate, and with probably roughly equal amounts (if predictably opposite reasons) of nose-holding. Trump is a uniter after all!
Ok. The cattle trading thing does look kind of bad.
Guys…
Do we really know if Steve is referring to Hillary?
Just sayin’…
So did the crook turn out to be a better governor? Is there any evidence that this advice was worthwhile?
The cattle futures was a long time ago.
The argument goes that she took a bribe. What did she have to offer in return? That her husband was attorney general of the state was about all she had. Was it really worth Tyson or one of its employees to bribe the AG of the state? Maybe it was, but the whole thing seems absurd.
You really need to look at all of the graft that goes on in politics. It is amazing what we still consider legal.
Many Senators and governors got very rich by “investing” in all sorts of things that weren’t available to the public. That is the way things worked back then. Maybe that is the way things will work again too.
I guess after the Supreme Court clears the former governor of Virginia then even more will be legal.
What are Trump’s chances of victory? We’ll have a new measure tomorrow.
That because Trump just proposed to reduce the national debt by persuading the holders of US bonds to accept something less than full payment.
Today, people lend money to the Feds on very low terms because they anticipate that there’s no risk. Once Trump’s in office, all bets are off. How much will it cost to finance the national debt then? There’s no telling — but presumably investors will demand a higher return to compensate them for the added risk. Unless they don’t think there will be any added risk because they don’t think Trump could ever get elected.
So check bond rates tomorrow. If they don’t rise, that tells you that the investor class is persuaded that Trump has no chance of victory.
p.s. It may go without saying, but I’ll say it anyway: Jesus fucking Christ….
@ nobody: Another measure of Trump’s chances. Actual betting odds.
http://www.paddypower.com/bet/politics/other-politics/us-politics?ev_oc_grp_ids=791149
Yes this is a measure of how gamblers feel about things rather than investors but it’s somewhat more direct. Also if it looks wrong based on bond rates, one could profit.
Also yeah wtf.
@nobody.really:
I thought that of the two GOP candidates, *CRUZ* was the crazier one, what with his plan to go back to the 19th century in so far as the monetary and regulatory environment for the financial industry was concerned.
With this comment, Trump has somewhat changed my perspective on the comparative disastrousness of a Cruz presidency compared with a Trump presidency.
I still believe Cruz would have been a more dangerous choice for president than Trump, but after this insane comment I’m much less certain.
So did the bond market crash? Nope. Just another crazy anti-Trump scare story.
On the other hand, consider the benefits of Trump’s nomination. This election will be a straight up-or-down referendum on open borders, and it looks like open borders will win by something like 55%-45%. Your position on immigration will be resoundingly affirmed and immigration restrictionists will be vanquished from the field.
Both sides will be given a full and fair chance to make their case. One the one side, Trump and his wall and Muslim ban, and on the other side, Hillary, Mitt, Jeb, etc. have all come out unequivocably for almost completely wide open borders.
Further, after this election, open borders will be set in stone by the Supreme Court. When Hillary picks the next Supreme Court Justice, the court will make it Constitutionally impossible to deport more than a tiny portion of unauthorized immigrants. (The court will simply find new Constitutionally-mandated due process rights for immigrants.) Open borders will, therefore, be Constitutionally mandated and future elections will be unable to alter the country’s course.
After this election, the immigration debate will be over and you will have won. Since open immigration is one of your most fundamental moral imperatives, you should find a deep moral satisfaction in what will be accomplished this year.
You could take this as an opportunity to expand your empathy and your humanity by trying to understand why so many of your fellow human beings supported Trump. I am personally flabbergasted that about 2/3 of Republicans and 1/3 of Democrats agree with a temporary ban on Muslim immigration. My reaction to this new information is to try to expand my thinking to understand why this is a surprise … what did I miss?
Your post about David Duke frames the Trump nomination as the aberration of a tiny minority on the lunatic fringe. Is this the best framing, or is there another framing that would increase our empathy? Perhaps it is helpful to note that Trump’s immigration policy is similar to Israel’s. Israel built a 450 mile fence to keep out immigrants, it has speedily and humanely removed unauthorized immigrants found in Israel, and it has refused to accept any Muslim refugees. Even though you disagree with Israel’s immigration policies, can you empathize with the Israeli’s who support it? Can that empathy towards the human beings in Israel be extended to the human beings in the US who support similar policies?
There is an opportunity for personal growth here.
@Roger “Just another crazy anti-Trump scare story.”
Yes, that orangutan in a suit who shows up for reclusive business genius Donald Trump at his rallies and television interviews, and apparently runs his twitter account has much to answer for. By making all these wild claims, like about defaulting on the debt, he risks imperiling Mr. Trump’s sterling reputation for probity and integrity, and even sanity.
I see Paul Krugman’s latest column has some similar anti-Trump name-calling. Anyone who gets Krugman so upset cannot be all bad. #Trump2016
@nobody.really: “presumably investors will demand a higher return to compensate them for the added risk [of a Trump default].”
@SubSpecie: “By making all these wild claims, like about defaulting on the debt, he risks imperiling Mr. Trump’s sterling reputation for probity and integrity, and even sanity.”
Help me out here. Where did Trump say he would default on US debt? Or are people making things up?
In his CNBC interview of May 5th, twice he explicitly said he would not renegotiate US debt the way distressed debt is renegotiated. Rather, he would consider buying back US debt when interest rates rise, which is not a default, but just an open-market repurchase.
Here is the CNBC transcript.
TRUMP: … I’ve borrowed knowing that you can pay back with discounts. … Now, we are in a different situation with a country, but I would borrow knowing that if the economy crashed you could make a deal.
[…]
BECKY QUICK (CO-HOST): But Mr. Trump are you suggesting that we would negotiate with the U.S. credit in such a way?
[…]
TRUMP: No, I think this — I think there are times for us to refinance. We refinance debt with longer term, because you know we owe so much money.
[…]
QUICK: But let’s just be clear, you’re not talking about renegotiating sovereign bonds that the U.S. has already issued?
TRUMP: No, I don’t want to renegotiate the bonds, but I think you can do discounting. I think, depending on where interest rates are, I think you can buy back. I’m not talking about with a renegotiation, but you can buy back at discounts, you can do things at discounts
@Roger “#Trump2016” Roger, you are better than that and you don’t deserve the humiliation when Trump betrays whatever policy attracted you, just as he has betrayed all his spouse, investors, business partners, and creditors before you.
Wait until Prez. Trump announces a yuuuge deal with Sen. Majority Leader Schumer and Speaker Pelosi on immigration reform: Just as great the Gang-of-8 bill, but with all the mean-spirited parts removed, now that there is no need for any GOP support any more.
As to Trump’s CNBC comments, whether Trump understands it or not, he is threatening default. If I hold a long US treasury with a fixed rate, there are only two circumstances under which I am willing to sell it back to the treasury at a substantial discount to par:
1. The US is threatening to default on the bonds, unless I knuckle under. That is how the various Argentinian/Greek/etc. deals went down.
2. The US has (or has threatened to) increase inflation substantially above the level expected when the bonds were issued. This is the soft default option available only to sovereigns who issue debt in a fiat currency they control. But economically it has the same effect as a hard default.
So, if Trump thinks he can reduce the US debt by renegotiating the bonds, or by buying them at a discount, he is contemplating the threat of default, soft or hard.
@SubSpecie: “If I hold a long US treasury with a fixed rate, there are only two circumstances under which I am willing to sell it back to the treasury at a substantial discount to par:”
There is a third way. If interest rates move upwards (not because the US intentionally increased inflation) then the bonds will sell in the open market at a discount. This happens all the time. Indeed, right now the 2046 Treasury Bond is selling at a discount, and nobody thinks there has been a default, soft or hard, on the 2046 bond.
Most economists think that interest rates will rise in the future and that many Treasury Bonds will sell at a discount. Nobody has characterized this as a default, soft or hard.
Trump is explicitly thinking about this scenario. He said “I think, depending on where interest rates are, I think you can buy back. I’m not talking about with a renegotiation, but you can buy back at discounts, you can do things at discounts.”
Indeed, many economists think the Fed SHOULD intentionally try to increase inflation. None of these economists characterize this as a default, soft or hard.
@Zazooba
Yes, market prices on bonds fall when interest rates rise. However, that does not create a scenario in which it would be advantageous to buy back bonds at below par. Why?
Let’s say that there is a volume of 30-year treasuries outstanding at 3%. Then rates on these treasuries rises to 6%. Will the treasury be able to buy back these bonds at less than par? Quite probably.
Would it be to its advantage? No, because it would have to finance the purchase of these 3% bonds by selling 6% bonds. The exact same mechanism which would induce holders of 3% bonds to sell them at less than par, makes it non-advantageous to buy them, even at less than par.
The only way to advantageously repurchase bonds is if you can distress them, either by explicit threats of hard default or implicit threats of devaluing them through excess inflation.
@SubSpecie:
“Yes, market prices on bonds fall when interest rates rise. However, that does not create a scenario in which it would be advantageous to buy back bonds at below par. Why?”
Agree.
That’s why the real criticism of Trump’s plan is that it is pointless. At most, it reduces the face value of debt without reducing the debt burden. Since some people are obsessed by the debt level, it might mollify them, but it wouldn’t accomplish anything real.
Distressing the debt with default threats probably wouldn’t be advantageous either because you have to turn around and issue new debt, which will be at very high interest rates. In the worst case, you won’t be able to issue debt at all.
@Zazooba Glad we have been able to come to agreement on the basics of how bond markets work! :)
20-24
Let’s say I have a $100 bond that pays a fixed $1 per year for 10 years and then repays the face value of $100. Are you willing to pay me $100 for this bond if interest rates are at 5%? I think you will ask for a discounted price. Where is the default?
Bonds almost never trade at the face price, and if interests rates change the value of your bond changes. If rates drop you can sell your bonds at a premium over what you bought them for. Is that a reverse default?
No doubt The Donald will next suggest some kind of debt-for-equity swap.
Robert Shiller actually had some ideas along these lines, but only for developing nations, if I remember correctly.
@Ken B Yes, bond market prices float inversely with interest rates. However, a mere change of nominal interest rates (without an accompanying change in inflation rates and expectations) does not make such repurchases at a discount profitable. It is not a default.
However, if you are a sovereign, debase the currency, and thereby raise inflation rates and expectations above those at issuance, you can profitably repurchase bonds. In fact, you can achieve all advantages of hard default without officially repudiating your notes by means of excess inflation. That is why it is commonly called soft default.
Charles Blow just “channeled” Dr. Landsberg
http://www.nytimes.com/2016/05/23/opinion/election-from-hell.html?&moduleDetail=section-news-2&action=click&contentCollection=Opinion®ion=Footer&module=MoreInSection&version=WhatsNext&contentID=WhatsNext&pgtype=article