Tuesday, May 5, 2015

Kevin A. Hassett, I have a clue for you

Kevin says:
AEI: In my last column, I showed that policy uncertainty rises as presidential and midterm elections approach and cited research that documented a strong negative statistical link between economic-policy uncertainty and economic growth. I heard back from many National Review readers who wondered whether the apparent relationship between policy uncertainty and growth might be a simple coincidence. How can it be, a critic might say, that elections in this gridlocked world matter that much? The questions motivated a deeper dive into the data, a dive that uncovered some pearls that are the subject of this month’s chart.
OK, first, congratulations for looking at the frequency and phases of the gray bars on any friggen aggregate time series of the USA since 1980. You are one of the 10 or 15 economists that can actually find simple patterns.

What does it mean, policy uncertainty?

Here is the simple answer, Texas and California cannot both fit in the DC system  we call government. These two states are too figgen big to both participate, and add in Mexico you gat a system fit problem between the SouthWest and DC.  This is a well known problem, historically, it is noticed and documented everywhere since Roman times, at least .  So Texas and California take turns in the queue, California's turn, then Texas get a run; each of us dominating the circus in DC when during the respective moments.

Now this is not the complete answer, we can break the US system into its components, get the five large states group among about 6 regional economies.  The Theory of aggregate self adaptation will easily put them all in sequence such that they are stable, and the sequence will clearly show a considerable amount of regime changing is necessary in DC.

This is not policy uncertainty, it is a certain regime change in the economy, and the gray bars are the switching costs. The two part oligarchs know exactly how this works, and they publicly plan the regime changing right before out eyes and we participate, and you kno0w from your dealing with NRO.

No comments: