British Trade Boost Shows Currency Devaluation Works

Car assembly at Nissan UK

Establishment free traders often claim trade policy reform is futile, urging us instead to simply trust the free market. Recent experience in Britain shows that one trade policy—currency devaluation—does work, and pretty quickly too. Despite imports growing more expensive, both consumption and exports increased.

China Targets World Leadership in Microchips

The decision last month by microchip manufacturer GlobalFoundries to build a chipmaking plant in China reinforced fears in the U.S. technology industry over China’s ambitious plans to become a major player in the world semiconductor industry. 

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.