On Donald Trump, Elizabeth Warren, Corporate Short-Termism, and Populism

Here’s my favorite story about corporate short-termism: it’s the late 1990s, the Internet boom is in full swing and it’s the last day of the quarter. The CEO of one of the largest computer networking companies is standing on the company’s loading dock, supervising his men as they frantically load boxes of product onto trucks for delivery to customers. A friend of the CEO strolls past the loading dock and shouts over the noise to the CEO: “How is the quarter looking?” The CEO looks at his watch, which reads exactly noon. He shouts back to his colleague: 

Update: Tariff Job Gains Exceed Losses by 20:1

11,100 Job Gains vs. 514 Job Losses So Far 

We’ve had a very positive response to our CPA Tariff Job Creation Tracker, published earlier this week showing gains of 11,100 jobs in four major sectors affected by tariffs. Following requests by readers, we’ve now expanded it into the CPA Tariff Job Tracker (TJT) to track both job gains and job losses. 

The Untold Story: Tariffs Are Driving Job Creation

It’s just six months since the first of the Trump administration’s tariffs went into effect and the job gains are already visible.

Overexposed

Summary: This article looks at China’s heavy dependence on - or overexposure to - the US for their trade surplus and their exports. It examines different ways of counting the China trade surplus, finding that on one alternative measure it could be as much as twice as large as China’s own published reports. Finally, reasons for the disparities in different trade data reports are examined.

The struggle to reduce America’s trade deficit with China is still in its beginnings, but the early signs are that America may be winning the battle. 

The US Should Sign a UK Free Trade Agreement Now

The Trump administration should make it a top priority to sign a free trade agreement (FTA) with the United Kingdom as soon as possible.  Although Donald Trump and many of his key advisors are rightfully highly skeptical of FTAs, the UK at this moment presents a different sort of opportunity. A US-UK FTA would be good for the US economy, good for the international economy, good for US foreign policy, potentially good for the UK economy, and ultimately (although they may not admit it) good for the European Union.

Breaking from the Cage: Italy’s Not-So-Secret Plan For Leaving the Euro

Paolo Savona

The Trojan War was caused by Prince Paris’s brutal kidnapping of Helen, wife of the King of Troy, said to be the most beautiful woman in the world.  Last week, the greatest crisis in Italian democracy since 1945 was triggered by the nomination of an 81-year-old semi-retired academic economist, Paolo Savona, as Finance Minister in the new Italian populist government. Savona has advocated that Italy quit the euro currency. For a couple of days, Italy was on the brink of the peacetime equivalent of the Trojan War, a dispute between an unelected president and an elected Parliament. The populist parties that won the election attacked Italian President Mattarella for frustrating the right of the election victors to name a government of their choosing. The president countered that Italy could not leave the euro without a referendum. 

Free-Trade Economists Begin To See the Light on Trade and Globalization

The great economist John Maynard Keynes once observed that people who think themselves practical and realistic are often slaves of “some defunct economist.” One long-dead economist who is poised to become very defunct is old David Ricardo. His free trade views have dominated thinking on international trade for decades. But the tide is beginning to turn among economists, as some highly respected academic economists move away from their doctrinaire position that all free trade is always good everywhere and begin to acknowledge that free trade and large trade deficits have inflicted substantial harm to the US economy.