Larry Summers, onetime Treasury Secretary, President of Harvard (who left under a gaff cloud) and now a cable-news chattering head, last week poo-pooed President Trump's attempt to re-balance our international trade. He said on CNBC that he buys lots at his supermarket but it buys nothing from him ... and this is not a disaster. Thus, h, a renowned economist, is implying that our huge trade deficits with China are not a worry.
To hear such liberal tripe from such a powerful voice in American policy making shocked me to the core ... and suggest why our country has been asleep at the switch for the last 25 years. Now, I am not a PhD. in economics, but I do know that Summer's has his bubble-head in the clouds on at least this issue ... for these reasons:
- Summer's supermarket analogy is misusing microeconomics. Asserting that this micro conclusion applies to macroeconomics is another gaff by one who clearly should know better.
- If Summers were employed by the supermarket he shops at ... and it bought his services as the other half of his analogy, then let's finish this lesson. If Summers spent much more there than he earned (like the current China trade analogy) them this supermarket would be the classic "company store" ... to which Larry would soon "owe his soul."
- The U.S. has been running growing trade defies with China for decades ... last year totaling about $375 billion. China then uses this sovereign wealth to but American assets. It would not take many more years of such an imbalance before China would effectively own the United States -- not a circumstance any of us (including Summer's I assume) would want to impose on our issue.
QED: Larry Summers is a savant idiot.
Where is it written that USA must be Number one?
ReplyDelete"Dreams for My Father"?
DeleteYour "gaff cloud" dismissal conveniently misrepresents what happened. His statement was factual, but the snowflakes didn't like it. Like the finance guy who correctly used the word "niggardly" but had to apologize to the morons who thought it was a racist term.
ReplyDeleteI am too, I guess. All trade is micro. Washington doesn't buy from China, Walmart and Christmas Tree Shops buy their stuff from Chinese manufacturers, and Americans buy it because it is cheaper.
ReplyDeleteTrying to control the production of goods and services via tariff and tax is just a few bus stops from totalitarianism. I thought conservatives were for small government.
For the first 140 years d out existence, our major source of national income was tariffs.
DeleteCarry your opening argument to its natural conclusion ... when China takes over, we will be a nation chock full of tsochikies.