Recep Tayyip Erdogan, president of Turkey, whose success in getting away with obvious corruption by politicizing law offers a disturbing preview of how Trump may become the authoritarian ruler he clearly wants to be. Not surprisingly, Trump, who basically seems to like dictators in general, has expressed admiration for Erdogan and his regime... Both also have contempt for expertise... Erdogan has presided over an actual economic boom. Investors and markets don’t seem to mind the craziness at the top... The fact that economic policymakers have no idea what they’re talking about doesn’t seem to make any difference.
.. run-of-the-mill policies like changes in tax law, even if they’re pretty big and clearly irresponsible, rarely have dramatic effects.
.. aside from fueling an unprecedented wave of stock buybacks, the tax cut is having little discernible effect, good or bad. There’s no sign of the investment boom advocates promised, but there’s also no sign that investors are losing faith in U.S. solvency.
.. Someone looking at U.S. growth in G.D.P. or employment over the past few years who didn’t know we’d had an election in 2016 would have no reason to suspect that anything important had changed.
.. Even if the quality of economic leadership matters a lot only during crises, you might expect markets to think ahead and incorporate the risk of badly handled future crises into stock and bond prices. Somehow, though, that almost never happens.
.. What we get instead are long stretches of complacency followed by sudden panic.
.. Rudiger Dornbusch): “Crises take longer to arrive than you can possibly imagine, but when they do come, they happen faster than you can possibly imagine.”
.. Although America borrows a lot abroad, it borrows in its own currency, which means that it isn’t vulnerable to a classic emerging-markets crisis.