Stephen Miran, Chairman of the Council of Economic Advisers, has Trump crying Unfair!:
The desire to reform the global trading system and put American industry on fairer ground vis-à-vis the rest of the world has been a consistent theme for President Trump for decades.
At best, crying "unfair" is zero-sum economics. And Trump's unfair is far from the best.
From Chapter 24 of The General Theory:
[U]nder the system of domestic laissez-faire and an international gold standard such as was orthodox in the latter half of the nineteenth century, there was no means open to a government whereby to mitigate economic distress at home except through the competitive struggle for markets.
Little has changed since Keynes wrote those words. Laissez-faire is now called "free markets", and the international gold standard has been replaced by floating exchange rates. Things are the same as they were, except our gold standard has no gold, and our laissez-faire has a different name.
Keynes continues:
But if nations can learn to provide themselves with full employment by their domestic policy (and, we must add, if they can also attain equilibrium in the trend of their population), there need be no important economic forces calculated to set the interest of one country against that of its neighbours.
And then
there would no longer be a pressing motive why one country need force its wares on another or repulse the offerings of its neighbour ... so as to develop a balance of trade in its own favour.
Donald Trump is doing economics that Keynes rejected in 1936. Trump is setting the interests of our country against those of our neighbours, with the goal of developing a balance of trade in our own favour.
Trump's policies do seem specifically designed to set our interests against those of our neighbors. Unfortunately, we still have not learned how to provide ourselves with full employment by domestic policy. This, however, does not mean we must go with Trump's plan.
Now, on domestic policy let me start by saying that our problem is a cost problem...
2 comments:
Might be worth a read:
Why the US cannot afford to lose dollar dominance
At the Daily Beast:
Top Banker Calls BS On Trump’s Claim He’ll Make China Fold
Top banker = Jamie Dimon
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