Current global bailouts may put off global busts for quite some time. But they will weaken output and employment gains. People's standard of living will stagnate or even fall, even in the short term. With this comes impoverishment and perhaps even social unrest.
Politicians and pundits have a blind spot when it comes to international economic transactions. They ignore a portion of trade! In particular, they ignore trade in claims on future income—that is, stocks and bonds.
Politicians and pundits have a blind spot when it comes to international economic transactions. They ignore a portion of trade! In particular, they ignore trade in claims on future income—that is, stocks and bonds.
Protectionists think China is a geopolitical threat. I get that. But their (weak) arguments about China don't apply at all to the rest of the world.
Trump clearly views trade in a zero-sum, mercantilist manner, with the country possessing a deficit “losing” and “down.” But continuing the trade war only makes recession more likely for both sides. Luckily China is stalling on committing to a trade agreement.
Whether we're talking about the Trump years or not, the idea that the United States embraces unconditional free trade at all costs—while being victimized by foreign protectionists—is based on fantasy.
Most "free trade" agreements are really just ways to expand the regulatory state and rob the consumers of the benefits they might have gotten from actual free trade.
The national trade account balance is of little economic significance and is a sterile concept. But the government’s attempts to "fix" it can have many harmful effects.
Like Trump, I want China to stop manipulating its economy. But not for the same reasons Trump does.
Innovations aren't very useful unless they serve consumers in the marketplace. Otherwise, we're pursuing innovation for its own sake, and that isn't progress.
