Trump Election Not Like December 2014

Clinton lost partly because she neglected too big a segment of American voters and thought a bit like she did in 2008 that 1600 Pennsylvania Avenue was hers for the taking. That was a big contrast with Trump who was very efficient in appealing to the reptilian brains of enough voters who don't understand for example that his proposed 15% flat tax is going to hurt them the most. These voters seem to be oblivious to how Reaganomics increase US debt from one to four trillion dollars in twelve years back in the 1980s. And what threw America into its worst recession in almost eight decades in 2008.

So that's very different from what happened here in 2014. It looks a lot more like the June 1982 elections when voters were not sophisticated enough to compensate for the lack of relevant information to take the decision that was in their best interests. But we've become increasingly smarter since then as a careful study would show. Intelligent enough to reject the wicked plan of a scheming trio two years ago.

Nobel Puts Feet in Mouth

By making vague pronouncements on a subject he knows very little about: Mauritius. He also came on TV and said we're doing fine because our unemployment rate is apparently 2% lower than the one in America. Nuances of the kind we expect from a Nobel were totally missing. 

Given that he was locally marketed as one of the architects of the successful Clinton years it's a real pity that he failed to connect some basic dots. Isn't that a case of the great man's disease?

Sithanen's New Model is Actually Old Crap

Here's how the Doctor's special medicine was supposed to work: cut tax rates sharply and you'll get growth rates that will be so robust that you won't need to reduce any government expenditure to balance your books -- Laffer, according to Krugman, incidentally promised that revenues would increase. For example Federation 2 produced average growth rates of 4.33% when taxes were about 25-30%. Now if you cut tax rates by about 50% by flattening the tax structure you obviously need much higher growth rates to compensate for the now-lower tax rates. Makes sense, right?

The snag is that with the tax rates flat at 15% Sithanen only managed to deliver average growth rates of 4.32%. That's the worst performance in 25 years in case you're wondering. Trouble is that's too little growth for a 15% tax rate (his growth rate is already lower than that of Federation 2). Which would explain why he came with special levies on bank profits for two straight years and a funny 2% contraption called CSR. And why he's been budgeting billions without actually spending them. He's also been borrowing like crazy specially in foreign currency while telling us at the same time that he's fought hard to prevent Mauritius from going into the ICU of the IMF.

When the supply-side crap was first tried in the US -- top tax rates fell from 36.5% in 1980 to 26.7% in 1989 -- robust growth never arrived causing the Federal debt to increase from a little less than $1 trillion to $4 trillion from 1981 to 1992. What it did produce was a lot of inequality and a lot of poverty. Doesn't that sound familiar?