Trump Should Be Welcomed IN Pittsburgh. Another Rant.

Once again we have many faces.
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Listen up. The act of free speech is being subjected to a variety of pressures:
https://www.youtube.com/watch?v=WJzDmZDfQI8+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Amen. (See 1 below.)

Meanwhile, the displeasure of President's Trump's visit to Pittsburgh by some, so called,  Pittsburgh Jewish Leaders is, in my opinion, understandable but not right.. They assume they speak for the entire community but have engaged in a disservice both to the community and the office of the presidency. I do not believe Trump is coming for political reasons but as a representative of the nation.  Had he not come, the mass media would attack him for insensitivity.

One of the problems liberal Jews have with Israel and Israelis is they cannot come to grips with the fact that Israelis are in a difficult position, have to defend themselves and have become outstanding in doing so.  Because Israelis are called upon to defend themselves, they wind up killing those who attack them  and this upsets liberal Jews who cannot  reconcile this with their basic passivity. Second, because Israel is in the news and mostly viewed in a negative light it exposes Jews , Liberal Jews would like to avoid this unwilling attention. Finally, Liberal Jews,like liberals in general, are more willing to seek appeasement and Israelis do not have the luxury of letting their guard down.

I understand these comments are broad generalizations.  What is a solid fact is Liberal Jews align with Democrats and Democrats have been taken over by radicals and no longer are as supportive of the American-Israeli relationship.

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Another Rant. (See 2 below.)

I suspect the market will  now begin to stabilize and do better for the rest of the year.

https://www.realclearmarkets.com/articles/2018/10/30/alan_greenspans_splendid_overview_of_capitalism_in_america_103470.html

Interesting article. (See 3 below.)
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This from a dear friend, a fellow memo reader:

THE 10 COMMANDMENTS'

The real reason that we can't have the Ten Commandments posted in a courthouse is this --

you cannot post 'Thou Shalt Not Steal'

'Thou Shalt Not Commit Adultery' and

'Thou Shall Not Lie'

in a building full of lawyers, judges and politicians,

it creates a hostile work environment.

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Dick

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1) Finley: Anti-Semitism fight begins on campus 
By Nolan Finley

If you're hunting for the places where anti-semitism thrives in America, you'd be better off looking on its college campuses than in the White House.

Just two days after the slaughter of Jewish worshippers inside a temple in Pittsburgh, the University of Michigan staged a teach-in dedicated to the nationwide drive to prod universities to shun Israel.

The Boycott, Disinvest and Sanction (BDS) Movement condemns the Jewish state as an apartheid government for its treatment of Palestinians, and pressures colleges to break ties with Israel.

It has a vigorous presence at UM, and that's caused discomfort for Jewish students who have traditionally found a welcoming environment on the Ann Arbor campus. It's a thin line between demonizing Israel and dehumanizing Jews. 

Former student Molly Rosen, writing in The Tower magazine in 2014, said when she arrived at UM, "I was not prepared to be told that, if I cared about human rights, I could not support Israel. I was not prepared to be told that my community was racist.

"I was not prepared to see my fellow students attacked with anti-Semitic slurs." 

Recently, two UM professors faced discipline for refusing to write reference letters for students wishing to study in Israel.

The potential of the BDS effort to morph from attacks on Israel to discrimination against Jewish students worries Andrea Fischer Newman, a UM regent. 

"Professors certainly have the right to their personal opinions, and are free to express them," she says. "But they can't allow personal political views to deny educational opportunities to our students."

Newman is a leader on the UM board in battling the BDS movement, noting the university has a number of very positive relationships with Israel. Earlier this month, UM received a $20 million gift from the D. Dan and Betty Kahn Foundation to fund joint research with the Techion-Israel Institute of Technology and the Weizmann Institute of Science in Israel.

While she objects to the BDS aims, Newman supports the right of the group to hold the teach-in, paid for in part by university departments. "The freedom to discuss difficult issues is central to our role as a university."

Newman says the discussion should be two-sided, though, and pro-Israel sentiments should receive a fair airing.

But Rosen writes that the anti-Israel activists tend to hold the field. As a student government representative, she says, "Every week certain individuals would urge students to take action against 'the racist, Nazi state of Israel'; and every week I would sit there feeling utterly helpless."

The punditry quickly cited President Trump's divisive rhetoric as a possible motivator of the Pittsburgh shooter, who turned out to be not much of a Trump supporter. 

The anti-Jewish rhetoric on college campuses stemming from the BDS movement also holds the potential for danger. Yet college anti-semitism is rarely called out because campuses are the purview of the left, which also gives refuge to such Jew-haters as Louis Farrakhan and Linda Sansour. 

As Newman suggests, the best way to counter this is for pro-Israel voices to speak louder on college campuses. 

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2)Pittsburgh once again proved that even after 5,000 years, hatred of Jews has not changed much. Just look at the far left BDS movement on campus which is blatantly anti-Semitic to see that it is not just a far right issue, but it lives on both sides. Trump did not cause this horrible act- the guy hated Trump as well. Blaming him is simply disgraceful political rhetoric which minimizes the anti- Semitism that still exists. Did they blame Obama when that guy walked into the black church and murdered those people.

The stock market decline makes no sense. Nothing really negative happened to the economy, other than a slowdown in housing, which may be partly due to the hurricane,  and partly due to high prices and needing 20% cash down on the higher price.  GDP performed better than consensus, and better than average over the past 50 years. A lot of analysts focused on AMZN missing on revenue. Reality check- AMZN Revenue was still up 29%, N America sales up 35%, AWS up 46% and the new advertising group up 123%. Net income was 11 times same period last year. Operating income was $3.7 bill vs expected $2.8.  My point is, the results were terrific, yet the analysts and press said they were a big disappointment. How many companies of any size have these percentage increases, especially coming off such a high level  base,  and spectacular growth in prior periods. Ignore the Wall St pundits, and look at how well most companies did. 80% beat on net income. So 32% did not meet revenue forecasts. They just missed by a little in most cases.   They did not crash. They still had very strong growth. Just because the analysts got their projections wrong by a few dollars does not make a downturn or crisis. Boeing is knocking it out of the park on defense contracts and backlog, but the stock got crushed because of tariffs on China which will not likely impact Boeing aircraft sales to China. The economy is not declining. Sales and profits cannot continue growing at 22% per year forever. The higher the base each quarter, the harder to maintain record growth percentages every quarter, but the actual dollar growth, and EPS are rising well. Keep things in perspective, and ignore the child analysts. The economy has at least another 6-12 months of solid growth ahead, and earnings growth will also continue. For now I plan to ride out the decline in stocks and to wait to see what happens next week.

The one risk is the election. If you care about your portfolio, go vote, and vote Republican. Make sure all your friends vote. The key is turnout in close contests like AZ, MI, MO and IN. Picking up seats in the Senate is most critical because then he can push through a new AG, and dozens of new judges, especially on the 9th circuit. That is much more critical than the House.

Oil is down 12%.  Good for consumer spend going into the holidays, and now the Saudis have committed to keep prices stable- likely as payback for not forcing out the prince for the murder. Good trade. Consumer spending was just announced as up 4% this past month.  That bodes well for Christmas. The personal Consumption Expenditure, which is the best inflation measure, was still only up 1.6%, well below 2%, and that is what the Fed  looks at, not CPI which is not accurate. It is possible the Fed will not raise in March, or maybe June if the stock market does not recoup all its recent loss, and if housing does not recover.  Pressure is building on the Fed to think carefully.

The EU Brussels and Italy, are now in full scale confrontation, and one has to back down, or there will be a real crisis as to who really runs budgets, the EU, or individual nations. This will be a crucial test of how the EU goes forward, and who is in real control. It may get messy just as Brexit comes to a head in the next few weeks, and as Merkel is weakened by the crushing election loss this past Sunday, and finally announcing her coming retirement in 2020. The EU is in decline and political dysfunction.

China and India are suffering major stock market declines and currency declines as well. There are now indications that some companies are believing the trade fight with China will go for a long time, and so they are moving plants out of China, thereby making the China slowdown worse. India is quickly becoming a major competitor vs China for trade with other Asian nations. Japan, S Korea, Australia, are all pushing to trade much more with India, and to reduce dependence on China as an assembly and manufacturing base.  The US is pushing this very hard to help India be the counter weight to China. This is a major shift that India is in  a position to push hard, and it will have a negative impact on the Chinese economy over the next few years. This is a potential major shift away from China which has pushed the envelope too hard with its aggressive IP theft, forced JV’s, Belt and Road infrastructure push, and South China Sea policy. China might be at the start of a shift away from them, which could become a real problem over time. It also gives Trump a further strong hand with China. We are just at the start of this situation.  Several major nations are meeting to see what to do about the WTO. Neither China nor the US were invited to the meetings, which is interesting since they are the bulk of the WTO, and the US controls the vote on WTO judges which come to term late next year. Pretty much everyone agrees WTO does not function and needs reform, but from there, little agreement exists. This will take many months. Trump is right on both China and WTO not working for anyone but China.

For those who think Trump has caused the country to become more violent and to encourage bombers and violence, I refer you to 1968, which makes now look tame. Maybe you are not old enough to recall the images of the Democratic convention.

Even if the Republicans lose the House by one or two seats, it is a win of sorts because they were supposed to lose in a wave of 20-30 seats. If the Dems do take over, they will create disgust with voters as they try to relitigate the whole collusion story, and to accomplish nothing but disruption. They will guarantee a Trump and Republican wave in 2020 if they do what they plan.

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3) The Fantasy of Fiscal Stimulus

It turns out Keynesian policies are correlated with slower, not faster, economic growth.

By 

Edmund Phelps

America’s economy has fully recovered from the Great Recession and is now in a boom phase. But the prevailing explanation of that recovery is not satisfactory, and neither is the understanding of the boom.

Generations of Keynesian economists have claimed that when a loss of “demand” causes output to fall and unemployment to rise, the economy does not revive by itself. Instead a “stimulus” to demand is necessary and sufficient to pull the economy back to an equilibrium level of activity.

Among economists and policy makers it is widely thought that fiscal stimulus—increased public spending as well as tax cuts—helped pull employment from its depths in 2010 or so back to normal in 2017. The new tax cuts on personal income are thought to be increasing demand further.

But is there evidence that stimulus was behind America’s recovery—or, for that matter, the recoveries in Germany, Switzerland, Sweden, Britain and Ireland? And is there evidence that the absence of stimulus—a tight rein on public spending known as “fiscal austerity”—is to blame for the lack of a full recovery in Portugal, Italy, France and Spain?

A simple test occurred to me: The stimulus story suggests that, in the years after they hit bottom, the countries that adopted relatively large fiscal deficits—measured by the average increase in public debt from 2011-17 as a percentage of gross domestic product—would have a relatively speedy recovery to show for it. Did they?

As the accompanying chart shows, the evidence does not support the stimulus story. Big deficits did not speed up recoveries. In fact, the relationship is negative, suggesting fiscal profligacy led to contraction and fiscal responsibility would have been better.

Isn’t this a fluke? Don’t history and theory overwhelmingly support stimulus? Well, no. First, the history: Soldiers returning from World War II expanded the civilian labor force from 53.9 million in 1945 to 60.2 million in 1947, leading many economists to fear an unemployment crisis. Keynesians—Leon Keyserling for one—said running a peacetime fiscal deficit was needed to keep unemployment from rising. Yet as the government under President Harry S. Truman ran fiscal surpluses, the unemployment rate went down (from 3.9% in 1946 to 3.1% in 1952) and the labor-force participation rate went up (from 57.2% to 58.9%).

Standard economic theory points to other ill-effects of fiscal stimulus. Economist Franco Modigliani showed in 1961 that fiscal deficits have a negative impact on both the supply of labor and the supply of saving. I explored this territory further in a 1965 book on “fiscal neutrality.” The deficit may cause people to feel richer, and thus to work and save less. The Keynesian James Tobin showed in 1955 how consumer demand can simply crowd out investment demand. Another possibility, suggested by Robert Mundell’s early work, is that the effect of a country’s fiscal stimulus is diffused over the global economy, so that the deficit-running country itself feels little of the effect.

If fiscal stimulus is not effective in combating a recession, what about monetary stimulus—increasing the supply of money or reducing the cost of money in relation to the return on capital? We can perform a similar test: Did countries where monetary stimulus in the years after they hit bottom was relatively strong—measured by the average quantity of monetary assets purchased by the central bank from 2011-17—have relatively speedy recoveries? This is a complicated question, but preliminary explorations do not give strong support to that thesis either.

If the Keynesian tool kit of fiscal and monetary stimulus is more or less ineffective, what did drive the relatively speedy recoveries of the U.S. and Northern European economies after the 2008 crash?

One answer is very old. Franklin D. Roosevelt took office at the height of the Depression in March 1933 amid many radical economic ideas. But John Maynard Keynes warned him to keep up “business confidence.” Perhaps Italy has failed to recover in part because its fiscal profligacy has damaged confidence. Iceland, it is said, recovered rapidly once it won confidence among international investors. But confidence alone may not suffice.

Another answer is dynamism: the desire and capacity to innovate. A nation with an enthusiasm for new products, methods and technologies, and with zeal to develop and market them, will be relatively quick to take advantage of the empty shops, closed plants and discharged workers that abound after a downturn. We should expect that the relatively dynamic economies—the U.S. and the U.K., Sweden and Germany—to achieve a relatively rapid recovery, regardless of stimulus.

As it turns out, there is a strong relationship between the speed of recovery and a proxy for this dynamism—the long-term growth rate of total factor productivity from 1990 to 2007. Some countries have pre-existing social institutions and cultural capital that enables them to bounce back from an economic downturn. Much credit for the U.S.’s relatively speedy recovery is owed to this country’s endemic culture of innovation and enterprise.

—Mr. Phelps, the 2006 Nobel laureate in economics, is director of the Center on Capitalism and Society at Columbia University and author of “Mass Flourishing” (2013) and “Rewarding Work” (2007).

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