Pk sings the downer blues "So, the probable outlook is for not too great growth and deindustrialization. Not quite what people expect."
"Trump deficits won’t actually do much to boost growth,
rates will rise and there will be lots of crowding out.
a strong dollar and bigger trade deficit, like Reagan’s morning after Morning in America."
Crowding out ? De industrialization ?
Notice The fed plays ogre here by sadistically raising rates that lift forex and increase the trade gap
Even as the higher borrowing costs and forex smothers investment in additional domestic output capacity
But why assume a baleful Fed ?
Wage push inflation ..commodity bottle necks ....etc etc
Pk just loves that team of frauds among frauds with their sanctimonious
Phillips curve ish modeling toys
a devilish wage rate accelerator lurking beneath 5% ...or around 4 % UE
regardless of EPOPs
Ability to increase inflow of job seekers as prospect brighten
We just might hang in the mid 4's while employment grows rapidly
If the fed doesn't or can't squelch
the demand impact of a trump deficit surge
Given about 4 points of slack in the present EPOP
We got the latent output potential