Widespread Economic Cluelessness
Posted on August 12, 2016
Trump, although well known as a master cheat and repeat offending bankruptcy queen and ignoramus who never cracked a book, still outpolls Clinton on managing the economy–basically because Trump allegedly is a billionaire. That is absolutely standard.
Majorities of Americans have utterly wrong ideas about macroeconomics, based on several interrelated dumb right-wing ideas:
–that managing an economy is similar to managing a household or a business
-that, in consequence, successful businessmen know how to manage an economy and create jobs.
–that, since the Republicans are quite obviously pro-business, they must be good at macroeconomics and job creation
–that their economic skill is demonstrated by their (false) claim that balancing the budget and reducing the debt is good for the economy (since doing the same would be good for businesses and households)
–that Republicans will actually do what they say they will do about reducing debt
–that Republicans actually do have a good track record for creating jobs.
Many voters also have the false idea that cutting off benefits and health insurance for poor people will make other voters better off by cutting taxes and balancing the budget.
In reality, of course, creating jobs in an economy calls for the direct opposite policies from creating profits and jobs in a business. Indeed, the macroeconomic job of government is to always push in the opposite direction from businesses.
During a recession, businesses need to cut expenditures to stay above water; governments need to run big deficits to prime the pump.
During boom times, business need to maximize profits by borrowing and hiring and investing; governments need to raise taxes and put on the brakes to rein in inflation.
Also it is in the interest of businesses (especially but not only banks) to push for easier terms on loans and banking regulation; it is in the interests of government to crack down on banks that take excessive risks (because those risks are covered by government or the general public).