We Do Have Proof Trump’s Trade Policies Aren’t Working

If you were a mercantilist – if you were wrong but I repeat myself – then you would be thinking that throwing up tariff barriers to imports would perhaps reduce the trade deficit. You would, if you thought that, be wrong. At least you would in a world where other people can also play silly games about trade at the same time.

The problem with Trump’s trade war thing is not only that he’s wrong. The whole point of trade is to have those imports, cutting ourselves off from them is just silly.…

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How Big? The Stimulus I Mean – No, The Economic Stimulus

So, as and when we get our next recession how big should the stimulus be to get us out of the recession? And what exactly should be done? I don’t agree with part of this paper here. I am convinced that even assuming the aggregate demand argument is correct that tax cuts are the way to go. But that’s a prejudice driven by my suspicion of the efficiency with which government spends money. The other part of the argument here I agree with.

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Fascinating Idea From Ghana – Impeach Finance Ministers For Deficit Of 6% Of GDP

This is an interesting little piece of macroeconomic management being proposed in Ghana. If the Finance Minister allows a budget deficit of over 5% – so, therefore, of 6% – of GDP then Parliament should impeach him or her at the beginning of the next calendar year. What’s even more interesting about it is that it’s not an attempt to simply deny Keynesian economics, nor to stop the politicos blowing the lot on diversity advisers or whatever.…

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Of Course The US Trade Deficit Is Up – The US Economy Is Booming

A nice little story showing how wrong so many are about trade and the economy – worries that the US trade deficit is expanding. Well, yes, obviously enough, the US economy is expanding mightily, so of course the trade deficit is increasing. This is what normally happens – we’re all buying more stuff and the rise in what we’re buying is going up faster than local production is. Thus we end up buying more from foreigners.…

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As Is Quite Obvious, Trump Has No Clue About The Economics Of Trade

We have this statement from Donald Trump about trade:

This is wrong, entirely so, wrong to the level of being both drivel and harmful drivel.

I should note here that I didn’t, because as a foreigner I can’t, support The Donald at the last election. But I didn’t support Hillary even more.…

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Moody’s To India – Oil Excise Duty Changes Not A Good Idea

Moody’s, the ratings agency, is telling India that cuts in oil excise duties aren’t a good idea – not unless spending gets chopped too. And that’s the political difficulty, isn’t it? Cutting taxes is popular, cutting spending isn’t.

It’s also true that cutting such duties just because oil is expensive at the moment isn’t a good idea either.

Rating agency Moody’s has sounded a note of caution that any reduction in excise duty on petrol and diesel would adversely affect fiscal deficit unless it is matched by a commensurate cut in expenditure.

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Gary Cohn’s Right Here, Not Trump – Trade Deficits Don’t Matter

Economist keep telling everyone that trade deficits don’t matter. The only person with an economics PhD who disagrees is Peter Navarro – our problem being that Navarro’s in the White House advising Trump. Still, it’s good to have Gary Cohn speaking out on this:

Former Trump advisor Gary Cohn could care less about trade deficits.

“Look, I have always said a trade deficit doesn’t matter,” the ex-White House chief economic advisor said during a Washington Post interview Thursday.

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Pat Buchanan Doesn’t Understand Trade, Tariffs Nor Even History

Pat Buchanan has been going on for decades about how wondrous tariffs are and if only they were brought back then things would be just peachy. Sadly, this all seems to be based on his not understanding trade, tariffs, nor apparently even history. That’s not a good set of recommendations for a policy about trade and tariffs, one that has been tried many a time in history.

Now, it is entirely true that if we returned to a more Hamiltonian policy era then we’d all be richer.…

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How The Heck Does Wilbur Ross Think The Chinese Economy Works?

Wilbur Ross has made a larege fortune in business. This does not mean that he understands how trade works. Good evidence of which is his insistence that China should sign large and long term deals to purchase American goods in order to close the trade gap. The problem with this being that it’s not actually China that trades with the US. It is people located in China who trade with people who happen to be in the United States.…

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US China Agreement – But Countries Don’t Trade With Each Other, People Do

This latest announcement about the trade spat between the US and China shows a certain lack of understanding of the basics here. For they’ve gleefully stated that China will buy more US goods, thereby closing that bilateral trade deficit. The problem here being that it isn’t actually countries that trade with each other. Sure, of course, actual governments do buy things but that’s not what we’re talking about here at all. Rather, it’s the people who happen to live within certain lines on the map who trade with people who live within certain other lines.…

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