1/ There is a growing narrative that the market's apparent confidence in Trump means all is well.http://marginalrevolution.com/marginalrevolution/2017/02/vix-show-far.html …
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Replying to @vgr
2/ It's a strong and credible narrative, and better than many extremely alarmist ones, but you have to be aware of its limitations.
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Replying to @vgr
3/ There are two main problems with the "market likes trump --> all is good" story: externalities and insurance costs.
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Replying to @vgr
4/ Externalities: what *doesn't* the market price well within its time horizons? For example lost economic value of future grad students
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Replying to @vgr
5/ (And here I don't mean just Muslim countries: reputatational damage means the US loses cream of talent from everywhere)
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Replying to @vgr
6/ Insurance costs: "things are fine" doesn't happen by magic.Checks and balances work because some pay disproportionately to ensure they do
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Replying to @vgr
7/ Taking time off from work to go protest, especially for low-wage workers etc. is part of how "checks and balances are working" happens.
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Replying to @vgr
8/ There's costs to lawsuits. There's costs to civil servants taking principled stands and resisting executive orders.
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9/ Checks and balances are a) not free b) mostly paid for as 'insurance costs' in non-priced ways c) by people who can least afford to do so
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Replying to @vgr
10/ And this is just micro-level issues with market-based narrative of 'everything is fine' there is the macro-level: fine compared to WHAT?
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Replying to @vgr
11/ The counterfactual isn't just "no nuclear war, no concentration camps, haha you liberals were scaremongering"
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