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Trump and Ocasio-Cortez Agree on One Thing (Luckily for the Economy)

Conor Sen
(Bloomberg Opinion) -- The Trump administration is showing surprising ambivalence toward Alexandria Ocasio-Cortez. Even as the president lobbed racist remarks at her, President Donald Trump's top economic adviser, Larry Kudlow, said he'd like to meet with her to talk about her thoughts on the labor market. We should welcome Republicans’ ideological openness on the topic while it lasts.Until Trump, Republicans preached fiscal conservatism even if they didn't practice it while in power. Budget deficits expanded under Ronald Reagan and both Bushes, largely through a combination of tax cuts and increases in military spending, even while the rhetoric of the party was about spending cuts, entitlement reform and sound money.Trump has continued their deficit spending – but he doesn’t pretend to care about ballooning the national debt. While Republicans in Congress have been relatively mum about this shift, there's been whiplash on the part of conservative pundits. Stephen Moore had generally advocated for tight monetary policy and sound money until there was talk that Trump would nominate him for a seat on the Federal Reserve, at which point his views flipped seemingly overnight. The same appears to be the case for Judy Shelton, whom Trump has just nominated to be on the Federal Reserve. Many of Kudlow's stances on fiscal conservatism and free trade have gone out the window since he joined the Trump administration.All of this strangely brings the current economic views of conservative pundits and policymakers in line with those of progressives like Ocasio-Cortez. The highlight of last week's hearings for Fed Chairman Jerome Powell may have been Ocasio-Cortez getting Powell to say that the link between unemployment and inflation has not been as tight in this economic cycle as previously thought, and that there may be more room to grow the economy without inflation becoming a concern. Essentially, Moore, Shelton, Kudlow, Trump and progressives like Ocasio-Cortez all want the same thing when it comes to economic growth and supporting the labor market.For at least the next 18 months, this consensus should let the U.S. economy run hot. It’s a relief that the two parties agree not to tank the economy for the foreseeable future. The labor market is the best it's been in a generation, and the odd alignment of conservatives and progressives creates a political environment for that to continue through at least the end of next year.To contact the author of this story: Conor Sen at csen9@bloomberg.netTo contact the editor responsible for this story: Philip Gray at philipgray@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Conor Sen is a Bloomberg Opinion columnist. He is a portfolio manager for New River Investments in Atlanta and has been a contributor to the Atlantic and Business Insider.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

(Bloomberg Opinion) -- The Trump administration is showing surprising ambivalence toward Alexandria Ocasio-Cortez. Even as the president lobbed racist remarks at her, President Donald Trump's top economic adviser, Larry Kudlow, said he'd like to meet with her to talk about her thoughts on the labor market.

We should welcome Republicans’ ideological openness on the topic while it lasts.

Until Trump, Republicans preached fiscal conservatism even if they didn't practice it while in power. Budget deficits expanded under Ronald Reagan and both Bushes, largely through a combination of tax cuts and increases in military spending, even while the rhetoric of the party was about spending cuts, entitlement reform and sound money.

Trump has continued their deficit spending – but he doesn’t pretend to care about ballooning the national debt.

While Republicans in Congress have been relatively mum about this shift, there's been whiplash on the part of conservative pundits. Stephen Moore had generally advocated for tight monetary policy and sound money until there was talk that Trump would nominate him for a seat on the Federal Reserve, at which point his views flipped seemingly overnight. The same appears to be the case for Judy Shelton, whom Trump has just nominated to be on the Federal Reserve. Many of Kudlow's stances on fiscal conservatism and free trade have gone out the window since he joined the Trump administration.

All of this strangely brings the current economic views of conservative pundits and policymakers in line with those of progressives like Ocasio-Cortez. The highlight of last week's hearings for Fed Chairman Jerome Powell may have been Ocasio-Cortez getting Powell to say that the link between unemployment and inflation has not been as tight in this economic cycle as previously thought, and that there may be more room to grow the economy without inflation becoming a concern. Essentially, Moore, Shelton, Kudlow, Trump and progressives like Ocasio-Cortez all want the same thing when it comes to economic growth and supporting the labor market.

For at least the next 18 months, this consensus should let the U.S. economy run hot. It’s a relief that the two parties agree not to tank the economy for the foreseeable future. The labor market is the best it's been in a generation, and the odd alignment of conservatives and progressives creates a political environment for that to continue through at least the end of next year.

To contact the author of this story: Conor Sen at csen9@bloomberg.net

To contact the editor responsible for this story: Philip Gray at philipgray@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Conor Sen is a Bloomberg Opinion columnist. He is a portfolio manager for New River Investments in Atlanta and has been a contributor to the Atlantic and Business Insider.

For more articles like this, please visit us at bloomberg.com/opinion

©2019 Bloomberg L.P.