Why a Trade War Won’t Happen…But We Would Win If It Did

There has been lots of talk of the danger of “trade wars” in newspapers in recent months. The Trade War Alarmists are likely wrong. 

Economic Analysis: Fixing The Bloated Dollar

Bretton Woods Hotel, site of 1944 monetary conference

As President Trump moves to implement economic policies aimed at increasing U.S.-based production, incomes, and jobs, there’s a growing risk that the dollar will become further overpriced.  The dollar is already way too high, as evidenced by our 41 consecutive years of trade deficit.  

More Economists and Leading Politicians Recognize the Trade Problem

German Finance Minister Schauble admitted euro undervalued for German economy.

Sometimes the victories come so thick and fast, you have to sit down, take a deep breath, and count them. 

And sometimes your victories come wrapped in so many layers of pious self-justifying twaddle that you don’t even recognize them.

U.S. Drug-Related Deaths Soar, And It’s a Problem for Industry Too

David Taylor: "People need a reason to get up in the morning"

Random shootings and police shootings are again in the news. However, out of the spotlight, there are other death statistics that are equally shocking—and larger in scale. In 2014, Americans who died from drugs hit 49,714. That’s up 62% since 2004. Drug-induced deaths have surpassed deaths from firearms and deaths from car accidents. as you can see in Figure 1. (Deaths at the hands of the police totaled far less, 990 last year.) Drug-related deaths are caused by a variety of drugs, notably amphetamines, opioids, and heroin. But it is heroin-related deaths that have seen the most dramatic increase, up 594% between 2001 and 2014, according to the Centers for Disease Control.

Towards a Post-Globalization World

Britain, Brexit, and a New Economic Direction

In a recent New York Times article, a reporter visited Wigan in the north of England to try to understand why Britain voted to leave the European Union. He spoke to a 61-year-old pro-Brexit voter, a worker at a canned food factory named Colin whose weekly income had fallen by 52% in the last three years, from $665 (£443) to $318 (£212). For Colin, that was painful. Still worse, he told the newspaper, was that the factory had moved from standard full-time contracts to “zero hour” contracts where the company decides each day how many hours Colin is needed. “It is basically slave labor,” Colin told the Times. This decline in wages and labor relations for semi-skilled and unskilled workers is partly due to increased competition from eastern European workers. The reporter interviewed a Pakistani and a Polish immigrant in Wigan, each of whom expressed strong views in favor of restricting immigration to benefit current residents’ access to jobs and social services. Another interesting report, a video in the Guardian made the same case, interviewing voters in seven different cities who attributed economic and social service problems to immigrants from eastern Europe. Another powerful story in the (London) Times visited the former coalmining village of Grimethorpe in Yorkshire to find voters angry about the local warehouse firm recruiting unskilled labor in Poland to work in Grimethorpe while turning down local residents who applied for jobs. One woman said that on polling day, she went around the village urging at least 50 friends and family to remember to vote and vote “Out”.  These are not “irrational” voters as London commentators, who lately like to call themselves the “cosmopolitan elite” suggest. Voters are acutely rational and aware when it comes to effects on their own livelihoods.

Secrets of Israel’s High-Tech Economic Success

Israeli Consul Gili Ovadia

Israel has one of the most vibrant high-tech economies in the world. Every major U.S. tech company has acquired important technology by acquiring Israeli startups and that list of acquirers includes Google, Facebook, EMC, Cisco, Intel,  and IBM, to name just a few. Last year, Microsoft alone acquired no less than five Israeli startups. According to a study by accounting firm PwC, in 2015 Israel, a small country of 8 million people, saw 62 tech companies acquired for a total value of $7.2 billion, Among European nations, only Germany and Britain did better.  As Table 1 shows, in terms of deals per population, Israel stands alone, with 7.8 deals per million people, double the figure of Sweden and five times the level of Germany or Britain.

An Alternative American View: Obama is Wrong and Britain Should Vote For Brexit

President Obama eloquently expressed American interests on his recent visit to Britain. It’s in America’s interest that Britain stays within the European Union. But is it in Britain’s? I don’t think so. I have a different view from our president. I think Britons should vote for Brexit in June.

Here’s a thought experiment: imagine we in the US said to the Canadian government, we’ll invite you to join the US and become our 51^st state. We’ve run the numbers and we believe that if you joined us, your exports to the US would go up by 10%, and your GDP might go up by around 4% per person, so it would be worth some $2000 to every man, woman, and child in Canada. What do you say?  My guess is that the Canadians would probably say thanks for the offer, but no thanks. They’d probably say: we’ve thought it over and we prefer our Canadian way of life, with our health care system, our mounted police, our politeness, our cute little capital in Ottawa and all the rest.  In other words, the Canadians might vote to keep their sovereignty and their culture.  And Canada’s only got 150 years of culture and history. Let’s be honest, the culture up there is a bit thin. Why then is Britain so eager to trade 1,000 years of rich culture for an institution like the European Union?