Stubborn Attachments!

Stubborn Attachments!

Photo credit: Janet Donovan

Stubborn Attachments – no, not those kind – is about economic growth. So says prolific economic author and professor Tyler Cowen who was hosted at a book party in his honor at the Kalorama home of Juleanna Glover and Christopher Reiter.

Tyler Cowen

“Growth is good. Through history, economic growth, in particular, has alleviated human misery, improved human happiness and opportunity, and lengthened human lives. Wealthier societies are more stable, offer better living standards, produce better medicines, and ensure greater autonomy, greater fulfillment, and more sources of fun. If we want to continue on our trends of growth, and the overwhelmingly positive outcomes for societies that come with it, every individual must become more concerned with the welfare of those around us. So, how do we proceed?”

“Tyler Cowen, in a culmination of 20 years of thinking and research, provides a roadmap for moving forward. In this new book, Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals, Cowen argues that our reason and common sense can help free us of the faulty ideas that hold us back as people and as a society. Stubborn Attachments, at its heart, makes the contemporary moral case for economic growth and delivers a great dose of inspiration and optimism about our future possibilities.”  Stripe Press

Cowen chatted with Hollywood on the Potomac and answered the question that is on everyone’s mind:  “How is the economy going and when is the next possible crash?”

“Not soon,” he responded.  “We’re close to full employment. Inflation is still at a modest level. Growth has been at about 3.5% yearly. I don’t see major patches of trouble. I think growth will decelerate somewhat as we truly move out of the recovery phase. But, I’m cautiously and modestly optimistic as I ought to be. But, some people think, well you’ve had so many years of recovery, like you’re due for a recession. But, in the data that’s not the tendency. Recoveries can just keep on running and until you do something stupid, probably you can keep the recovery you have. We have yet to do anything really stupid. I’m against the trade war, I think it’s a bad idea. But, it’s mostly a bad idea for foreign policy reasons. It probably won’t cause a recession.”

We asked him to speculate on companies in the cross-hairs right now like GM.  “How does the trade war affect GM?”

“GM has not been an economical producer for a long time,” he answered.  “The troubles they had right after the financial crisis reflected that. It was not just a liquidity issue. So, they were bailed out, those problems have come back. There are better car producers in the world for many kinds of vehicles. I’m not surprised by this. It’s not great news, but it’s not new news. I would say it’s not news really.”

“What about coal,” we asked.  “Isn’t coal over? Shouldn’t they be training them for other jobs?” 

“I agree completely but, it’s an electoral thing. Those are states where Trump did better than people thought, and he wants to keep them in his camp, and just show that he cares about them in different ways. Coal is one way of doing that. I think it’s a big mistake. But, those coal jobs are going to leave no matter what Trump does.”

Advice: “Every day you should look at data. You should talk to people.All the numbers that are put out by BLS or the Fed, or Bureau of Economic Analysis. Look at all the numbers that come out. Study economic theory, talk to other economists, like almost every day. Travel around the world, and see also other countries. Just like talk, absorb, interpret, and update all the time, and realize how likely you can be wrong.”

Suzanne and David Chavern Juleanna Glover

About the Canada, Mexico agreement: “Is that good or bad?”

“Well, I’m worried the house won’t pass it. It’s great that we have an agreement. Trump started off on the wrong foot, alienating everyone, but he actually got the thing through, great. Now we need to pass it.”

“What about the comments that Macron made during the G20? He gave a few snide remarks.”

“People have domestic [institutions] who don’t like Trump and they will play to those constituencies. Let them do it, it doesn’t matter that much. Trump has higher approval ratings than Macron. Right now it’s the streets of Paris that are on fire, and DC is totally calm. Protests here are not a big deal. Macron is not very popular and it’s not clear to people what he stands for and he’s being blamed for everything. The fact that he doesn’t really have a party or establishment behind him, that’s really starting to count.”

“What kind of things as a consumer should I look for? How do you know when to pull out of the stock market, or when to invest? Or when to buy a house?”  “You don’t know. Try to have a long term time horizon when you can. It’s not always possible. Realize you’re not going predict the twists and turns. But, stick with good common sense and save a lot of money. Invest in equity, and have faith in the future, I would say.”

David Brooks introduced Cowen to guests after a round of Champagne and Sushi. “He is our favorite columnist in The New York Times, and a man who holds the bearer of moderation. I occasionally go to lunch with Tyler. We tend to go to like the 14th best Tibetan restaurant. He is truly a universal man, a renaissance man. And I have to say, and I say this sincerely, in the last two or three years going to Marginal Revolution has been like a moral bath for me. ‘Cause involved in bait that fishes where nobody’s actually interested in ideas, and interested in truth. Where curiosity is not high on people’s radar.’ To go to Marginal Revolution has been just to go back to a time when people really cared about interesting stuff. And a time of intellectual honesty and intellectual integrity. And so Tyler has embodied that. He’s also the author of his 15th book. And this is his best. It over values the value GDP growth, but we can talk about that some other time. I just hold up Tyler as a model of, frankly, what we should all try to be. And someone who really cares about ideas, spreads ideas, and does it in the best possible humane spirit, with the best possible implied author behind it, Tyler Cowen.”