Norbert J. Michel

Vice President and Director, @CatoCMFA, @CatoInstitute, Thoughts are my own. @NichollsStCBA @Saints and @LSU fan for life.

[Norbert J. Michel @norbertjmichel]

Have you heard this narrative? The middle class has been hollowed out because of an overreliance on free markets. Americans can’t compete with low-cost labor and imports, so all the good jobs in America have disappeared, especially those in manufacturing. It’s a dismal argument that many politicians, even some on the right, have spent the past few years spinning. They say that the American Dream is dying and that only wealthy Americans have been successful for the past few decades. Supposedly, free trade, immigration, and unabated technology have resulted in an economy that no longer works for Americans. The problem with this bleak story is that it is completely wrong.

[Dominic Pino @DominicJPino]

The GOP starting point in the fiscal consolidation conversation is "we won't cut any spending on the two largest government programs (SS and Medicare), will massively increase spending on the third (defense), and the only taxes we'll raise are tariffs."

The Democratic starting point is "we, too, will not cut any spending on the two largest programs, will create a bunch of new programs to spend more on health, education, infrastructure, etc., and the only taxes we'll raise are on 1,000 rich people."

In other words, there is not a fiscal consolidation conversation right now.

Meanwhile, interest payments on the national debt cost about $1 trillion per year, more than defense and soon to be more than Medicare.

[Nick Anthony @EconWithNick]

"Most arguments for government intervention put the cart before the horse. They begin by asking whether a restriction might be useful rather than whether anyone has the right to impose it." - @CatoInstitute's @PaulMeany2 https://t.co/nfWPawWBK4

[Nick Anthony @EconWithNick]

The @ecb says, "The digital euro guarantees the maximum level of privacy that technology can offer."

Yet, this can't be true. 🧵

[Norbert J. Michel @norbertjmichel]

Ontario Premier Doug Ford is taking on Trump in the U.S.-Canada trade fight, adding volatility to Canada’s negotiating strategy https://t.co/WhgvakrTxP via @WSJ

[Norbert J. Michel @norbertjmichel]

"In some ways, Ford is an unlikely person to lead the anti-Trump resistance in Canada. During last year’s provincial election campaign, he was caught on a hot mic telling firefighters that he was happy when Trump won the 2024 election."

It would be fun to compile a full list of people with buyer's remorse.

[Marian L Tupy @Marian_L_Tupy]

"Americans now pay 75% more for aluminum than the rest of the world, and 64% more for steel."

https://t.co/YGWkS4P7yL

[Norbert J. Michel @norbertjmichel]

https://t.co/830IR1fQ5t

[Norbert J. Michel @norbertjmichel]

No central committee, cabinet secretary, or forecaster, can outsmart economic reality. Market prices and interest rates represent the collective decisions and expectations of millions of people.

The Fed and Treasury should do less to disrupt that price discovery.

[Romina Boccia @RominaBoccia]

One of the strangest things is happening in America right now:

Too many people are trying to make the 21st-century United States conform to a 1950s mental model of economic power.

And it’s undermining the very advantages that made us so powerful.

[Jon Brooks @jonbrooks]

Does this look like a "housing shortage" to you ?

[Norbert J. Michel @norbertjmichel]

@MikeFellman I'm basically in the middle somewhere. I think the evidence rejects both theories in pure form, and even though expectations theory explains a good bit of variation, people can have preferences that change and maturity premiums can vary. So...I guess that's not a great answer. ? While I see your point on the Fed having so much to do with setting long rates (I'm assuming here - assuming that you mean b/c they have so much to do with short rates, the averages, using expectations, gets you the long rates), I still think the Fed has less to do with setting the short rates than most people believe. I'm not even completely sold on the QE studies, for what it's worth. (Not trying to criticize, just my view.)

[Norbert J. Michel @norbertjmichel]

"The glaring ideological problem with the buyback program is that Washington can treat the interest rate as something to manage rather than a price set by the market...

When the 30-year yield comes in higher than the government hoped, it reports on the government’s own finances and poor policies, and the remedy is to repair them rather than suppress the signal. Until Congress and the administration confront their own culpability, upward pressure on yields will keep returning as it did this week, and no amount of interventionist fine-tuning will stop it."

@JaiKedia

[John Wake @JohnWake]

"How Measurement Choices Shape the Housing Debate
– Michel, Famularo. CATO.

For example, economists often cherry-pick the start date of their analysis to get the results they want.

[Norbert J. Michel @norbertjmichel]

https://t.co/830IR1fQ5t

[Norbert J. Michel @norbertjmichel]

Warsh hit the nail on the head: central bank forecasts have been abysmal, and adding more "dots" won't fix it. You can’t fine-tune an economy in normal times, much less in the middle of a massive tech shock and persistent inflation.

More simple rules, less discretionary guesswork. That’s what’s needed. @JaiKedia @CatoCMFA @CatoInstitute

[Marian L Tupy @Marian_L_Tupy]

Tariffs and quotas are idiotic!

"Previously, only 697,000 metric tons of beef could be imported from countries other than Mexico and Canada under a modest duty of 4.4 cents per kilogram. The administration is allowing 300,000 more metric tons under this quota for three months — coincidentally through the midterms. Above the quota, beef imports are subject to a 26.4 percent tariff."

[John Wake @JohnWake]

A deep dive into the history of FHA seller-funded down payment assistance (DPA).

"These loans defaulted at roughly two to three times the rate of comparable FHA loans where borrowers put up their own money"

"seller-funded downpayment assistance loans ultimately cost the agency more than $16 billion... Behind that dollar figure were tens of thousands of families who lost homes"

[Cato CMFA @CatoCMFA]

What's going on @CatoCMFA?
-----------------
Events:
- Sept. 24 - Money, Markets, and the American Experiment: 250 Years of Financial Opportunity - https://t.co/rz40gAK1MU

Articles:
- Answering Objections to the Clarity Act - Ryan Chan-Wei https://t.co/xdfYhoQpsa

[Norbert J. Michel @norbertjmichel]

President Trump will fire his first tariff salvo on Saturday against those notorious American adversaries . . . Mexico and Canada.

https://t.co/MLoKFudADT via @WSJopinion

[Norbert J. Michel @norbertjmichel]

"Leaving China aside, Mr. Trump’s justification for this economic assault [a 25% border tax on Mexican and Canadian goods] on the neighbors makes no sense."

No trade wars make sense, and nothing about any of this administration's trade policies make sense.

[John Wake @JohnWake]

Implications of a Persistent Slowing in Housing Demand
– Mortgage Bankers Association

"We argue that the post-financial crisis narrative of a persistent housing shortage may no longer accurately describe market conditions over the decades ahead."
https://t.co/r3cvZKxiiF