Category Archives: Drumpf

THE WHARTON FOLLIES

Wharton Follies is an annual Spring comedy show written, produced, and performed by Wharton MBA students. A certain graduate of Wharton…from its undergraduate school, not its MBA program…has brought this follies idea onto the national stage and it is a 24 hour a day 7 days a week production with only occasional unscheduled but very brief intermissions. It is, of course, headquartered at 1600 Pennsylvania Avenue in Washngton, D.C. which provides the primary stage but its road companies are legion and come in a variety of packages for your entertainment.

They may be presented as a political rally before a decidedly less than capacity Pennsylvania Farm Show Arena which somehow was “record attendance” or at Town Halls across the country where the legislative provocateurs who kowtow to that certain graduate have been drawing nearly uniformly panning reviews, to even the bushes at the White House where the chief spokesman for that certan graduate took to hiding from reporters seeking an explanation of that day’s performance.

Now, the Wharton School at the University of Pennsylvania has a mostly deserved reputation for churning out top business leaders. But this certain graduate, one could conclude, is the exception that proves the rule. For his economic beliefs and ideas are decidely a bunch of hogwash. They defy facts, logic, and a rational thought process.

In his personal life he has demonstrated that a teeny tiny loan of just $1,000,000 from his father, and the use of that same father’s name and connections and  loan guarantees and the provision of other financing, as well as that certain graduate’s ultimate inheritance of possibly as much as $200 million from his by then dead father can be built into an empire worth much less than if it had been invested in an index fund and he could have avoided the ignonimy of six bankruptcies, a failed football franchise, a failed airline, a university that was both a fraud and a failure, and at least one year—1995—in which he lost over NINE HUNDRED MILLION DOLLARS from all his multiple enterprises.

Along the way he excoriates NAFTA and any notion of international trade that takes jobs away from the United States to foreign climes while simultaneously shipping production of his own line of clothing overseas and purchasing steel from China to build at least his Las Vegas hotel if not other of his edifices. (And his daughter is equally adept at these same business maneuvers.)

And the hell of it all is that his Follies play to an audience that gets no bang for their bucks.

Nevertheless he persists. In an interview with The Economist, partially recounted here

http://www.slate.com/blogs/the_slatest/2017/05/11/donald_trump_thinks_he_invented_the_phrase_priming_the_pump.html

that certain graduate inexplicably lays claim to coining the phrase “priming the pump” as a metaphor for cutting taxes to stimulate the economy.

Yes.
We have to prime the pump.

It’s very Keynesian.
We’re the highest-taxed nation in the world. Have you heard that expression before, for this particular type of an event?

Priming the pump?
Yeah, have you heard it?

Yes.
Have you heard that expression used before? Because I haven’t heard it. I mean, I just…I came up with it a couple of days ago and I thought it was good. It’s what you have to do.

The phrase itself dates to at least as early as 1840 in reference to pumping water from the ground but economist John Maynard Keynes used the term beginning almost a century ago when describing how government spending, in times of economic distress, could put money in people’s hands so that the economy would improve. Of course this certain graduate perverts the term in the sense that he speaks of tax cuts for the already rich, not the expansion of government spending that will “prime the pump”. So not only did he NOT coin the phrase, he does not even understand its meaning.
If you can stomach the entire desultory interview have at it.

http://www.economist.com/Trumptranscript

I note that, as usual, the certain graduate is either grossly misinformed or outright lying in his statements on a regular basis. I would have fact-checked but my time is limited. I’m preparing for my 100th birthday in thirty years and have not the time to spare.
However, some real facts about our trade with Mexico provide some enlightenment. There is no denying that we run a deficit in our trade with Mexico. For instance in 2016 that deficit was just over $63 Billion. We exported $231 Bn and imported $294 Bn worth of goods. But, predating NAFTA, in 1985 that deficit was $5.5 Bn but with a total of slightly less than $33 Bn in total trade between the two. In other words the total volume of trade between the U.S. and Mexico in 31 years increased 16 times while the deficit in trade increased only 12 times. Of course there are differences from year-to-year but the U.S. Census Bureau provides this handy chart to trace the history of such trade.
Trade with Canada in the same period has been more of a roller coaster ride. From a deficit of $21 Bn in 1985 to just over $11 Bn in 2016 seems like a huge improvement under NAFTA with a four-fold increase in volume but, beginning in 2000 through 2008 that deficit ranged from $48 Bn to $78 Bn. However, since 2009 it has never been more than roughly $36 Bn. Hmmm, what do those years coincide with?
With regards to Mexico, furthermore, experts like to point out a key fact: 40% of the parts in a typical Mexican product originate in the United States, according to the Commerce Department. And that’s a key reason why 6 million U.S. jobs depend on trade just with Mexico, according to the U.S. Chamber of Commerce.
Can we thus assume that this certain graduate was not exposed to an examination of facts during his Wharton years that would have led him to contrary approaches to economics than he now espouses? Or can we thus assume this certain graduate is simply fact averse under any and all circumstances.
What is clear is that the value of a Wharton education is bigly lost on some of its graduates.
Sad.
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