Rule, Britannia

Nelson Fraser, editor of the Spectator, had a nice op-ed in the Wall Street Journal yesterday. He points out that none of the calamities forecast from Brexit have come to pass. Quite the opposite, employment is up, consumer spending and confidence is up, GDP is up. The political elite had determined that Brexit was a bad thing and therefore it would have terrific consequences.

Fraser doesn't let them off the hook: "How could so many great minds get it so wrong? It is a case study of unconscious bias in forecasts. Too many economists assumed that the public would react to a Brexit vote in the same way that they themselves would: Run for the hills and wait for the sky to fall. So they made guesses—about consumer spending, investment, productivity—and entered them into computer models that came up with nonsense figures."

In particular, the resilience of London as a financial center has confuted the prophets of doom. Fraser has some good zingers. "What’s the point of earning more money in Frankfurt if you have to spend it in Frankfurt? London’s advantages—the time zone, the language, its fintech pre-eminence, the financial ecosystem—are still very much in place. Its biggest rivals are Hong Kong, New York and Singapore, all of which manage just fine outside the EU." London was a great financial center long before the EU and will be one long after.

It's just another reminder how thoughtless and shallow most political rhetoric is. The media are at fault, too, but they are only taking their cue from the sources who by now know how to manipulate them for their own agenda.

NEC director

At best. the director of the National Economic Council is useless, and more often than not harmful. The country would be better off if Bill Clinton had never created the post and much better off had he not named Robert Rubin its first occupant.

Good riddance to Gary Cohn, the Goldman Trojan Horse dispatched by the globalists to infiltrate an administration dedicated to nationalist economics. Now Donald Trump, who with good reasons distrusts economists, wants to name another business executive, Christopher Liddell, as his replacement. Liddell has served primarily as CFO at Microsoft and GM, perhaps well, but not for very long. His government career has been distinguished by a lack of distinction. He would presumably rise to the level of useless as NEC director, which may be exactly what Trump wants.

But for the free traders at the Wall Street Journal Liddell is a bad choice because he has "bad policy instincts" -- that is, policy instincts at variance with the dogmatic editorialists at the Journal. The only thing worse, in their blinkered view, would be Peter Navarro, Trump's ascendant guru, who is virulently anti-China and anti-"free trade."

Free trade is a myth and a typical euphemism for what is really a license for corporation to exploit labor vulnerabilities worldwide. Like the perverse concept of "shareholder value," free trade pretends that the only stakeholder in a company -- and by extension, the economy -- is the corporation, and the investors who back it. These concepts ignore the fact that workers, communities and customers, too, all have a stake in a company. The result of that fatal misconception is visible across the country in boarded-up downtowns, poverty and homelessness, and a crisis in opioid addiction.

The Journal editorialists made fun of Liddell's remarks about the day of "unbridled free markets" being over, as if that was a wacky, misguided notion. But corporate license is not the highest good, and Liddell's recognition of that makes him smarter than the journalists who have been brainwashed by years of rubbing elbows with those corporates. And, unlike the unlamented Cohn, puts him on the same page as Trump.

Hiring Boom

The biggest news in the February unemployment report was that 800,000 joined the labor force during the month. The Wall Street Journal honored this with the (print) headline "Hiring Boom Draws Workers Back."

It was impressive that the economy created 313,000 jobs in the month -- well above forecasts -- but this reduction in "labor slack" was even better evidence of a boom mentality taking hold. It is evidence, too, of a momentum that will have political implications in November when Americans go to the polls to throw out those Republicans who are doing so much damage to our country.

Democrats and the media spent so much time telling the public how useless and harmful the tax reform was and now that fake economics is rebounding against them. No amount of liberal carpetbagging -- money and volunteers going into Republican districts to flip them blue -- will be able to overcome the reality of a booming economy.

Even the Chicken Little hysteria about inflation and an overheating economy is belied by the growth in the labor force. Unemployment remained at 4.1 percent, and wages rose only 2.6 percent year on year, a smaller increase than last month.

Real Economy

Mainstream media has not only moved to fake news in general but now puts out almost exclusively fake economics. The disjunction between what is reported in the media and what is happening in the real economy grows wider by the day.

The term "real economy" traditionally is used to mean the production of goods and services, without the financial sector component that has inflated macroeconomic accounts. I'd like to use real economics in a wider sense -- that is, the opposite of the fake economics in the media. That is what this blog will be about.