No. of Recommendations: 19
The time to halt this trading of assets for consumables is now, and
I have a plan to suggest for getting it done. My remedy may sound
gimmicky, and in truth it is a tariff called by another name. But this
is a tariff that retains most free-market virtues, neither protecting
specific industries nor punishing specific countries nor encouraging
trade wars. This plan would increase our exports and might well lead to
increase overall world trade. And it would balance our books without
there being a significant decline in the value of the dollar, which I
believe is otherwise almost certain to occur
This is so painful to read. It is, of course, the macroeconomic equivalent of pseudo-science. I am so embarrassed for him. It's a fine demonstration that skill in one area does not translate to skill in another. Family analogies do not work in macroeconomics, you have to follow the identities. If your population doesn't save, you'll have a trade account deficit and a capital account surplus.
Admittedly it has the advantages he claims: it does not cause distortions by fixating on specific industries nor countries. It also has the advantage of targeting the balance overall, not bilateral balances. It seems (?) to include services as well as goods, though that isn't made clear (the US runs a huge trade surplus in services). These are all head and shoulders above recent developments. But the notion that it would increase world trade is eyebrow raising ("barking mad"), and skipping the observation that would cause a global depression is a bit of an oversight. (a depression is a viable way to cut consumption, but might not boost savings if the cut to incomes is just as big). It is provincial and protectionist in all the most blind ways: lamenting the ownership of US businesses by foreigners while not noticing that US investors own very comparable amounts of all non-US businesses, for example, and thus skipping the rather startling observation that US investors reap very much higher returns on their non-US investments than non-US investors do on their US investments.
One could go on, but there are Bollywood dance videos on TikTok with better economic advice.
Jim
