What Donald Trump Doesn’t Know about U.S. Trade [1]
Trump fancies himself an ace negotiator, a skill that he has had some chance to hone in an embarrassing series of corporate bankruptcies, and he proposes to employ those skills to ensure trade that is “fair” by whatever ethical standards occur to this particular serial adulterer/crony capitalist/pathological liar/reality-television grotesque. While Trump himself is fundamentally unserious, the Right has witnessed a destructive reemergence of the old anti-trade populism articulated by Pat Buchanan and Ross Perot.
Read more at: http://www.nationalreview.com/us-trade-trump-gets-it-wrong
Economic liberty, free speech spook the American left
When Bernie Sanders, President Obama, or the New York Times editorial page advocate big government, it’s usually on the premise that big government is needed to protect the powerless. But look carefully, and the pattern becomes clearer. When big government oppresses the powerless, the Left is equally likely to defend big government.
John Cochrane on Too Much Debt [2]
I had hoped the world learned this lesson in the financial crisis. Equity is great. When things go bad, shareholders lose value by prices falling, but they cannot run and the firm cannot fail if it does not pay equity holders.
Financial crises are always and everywhere about debt, especially short term debt. Lending more, encouraging more bank leverage, reducing reserves and margin requirements, means that when the downturn comes a needless wave of runs and defaults follows.
Inevitably, it seems, another downturn will come, another set of books will have been found to have been cooked, and then we will find out who lent too much money to whom. US investment banks, 2008, strike one. Greece, 2010, strike 2. China, 2015, strike 3? Do we no longer bother closing the barn doors even after the horse leaves?
This story should also give one pause about the wisdom of “macro-prudential” policy, by which wise central bankers are supposed to presciently open and close the spigots of leverage to manage asset prices.
Campaign money also increases political competition. Without donations, politicians who aren’t wealthy or well known would never be able to wage a competitive campaign for the White House. A major reason this year’s Republican field is so wide and deep is because candidates have access to more donations via super PACs. Americans should want a system in which middle-class candidates like Marco Rubio [4] or Scott Walker have a chance to be President.
But it’s naive to examine his career and conclude that he lives only to serve others. It’s not clear to us why the agenda of one rich guy in Manhattan is superior to one that incorporates the views of a thousand rich guys across the U.S.