Neither Keynes, Trump, Pumps Nor Priming

Then-President Trump was eager to talk in May 2017. Having been elected in 2016 by giving voice to what he called the “fake” unemployment rate on the campaign trail, and therefore mobilizing millions of the disaffected uncounted by that official ratio’s official definitions, it was enough to put him just barely over the top. To continue with the agenda, to keep his promise (or appear to; depending upon your affiliation), one of his first priorities had been what everyone calls “pump priming.”

Trump sat down with The Economist magazine in May 2017, early in his term, for a lengthy interview selling them on what was to be his “stimulus” plan. It quickly devolved into a war of interpretation between the President and the mainstream media adamantly opposed to him, focused entirely on the words used during the discussion rather than the substance of what had been discussed.

Worded clumsily, sure, and Trump was thereby accused of claiming that he came up with the expression “prime the pump” as if he had been expecting an interviewer from the orthodox, Keynesian The Economist to not know the idiom or its common use.

Ironically, it did not come from John Maynard Keynes, either. Though the phrase is most often associated with his name – correctly – Keynes never wrote it in his General Theory.

Nowadays, Economists have another term they generally use for basically the same deficit: hysteresis.

Either way, however, articulated, the concept is universal and relatively simple (and thus doesn’t really need the fancy wording). It’s akin to inertia, as I described a long time ago in piecing together why there would be a President Trump in the first place:

That was the entire point of the “Q” in QE; suggesting to the public that there was mathematical “science” to the whole thing. Monetary experts wielding enormous technical knowledge could precisely recite and then harness forces to defeat and overcome hysteresis – the idea that an economic factor or even the whole economy requires a “push” in order to get it moving. Thus, QE was proclaimed as the precise calculation that would both figure exactly the resting force on the economy keeping it down and then the means and quantity of force (monetary) required to overcome it.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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