And to demonstrate the worse bureaucratic condition of Israeli politics compared to the US, their Attorney-General says to the PM and Knesset in effect “Stop! You can’t fire him! Because I say you can’t!”
Sing it with “em, people:
Hey, hey, ho, ho, Baharav-Miara has got to go!
New post, in which I respond the the frequently-made assertion that manufacturing doesn’t matter all that much and that we should focus on ‘high-tech’ instead.
I think with few exceptions in the occidental world, a country’s enemies are to be found in its chattering classes:
== https://www.msn.com/en-us/news/world/de-colonizing-shakespeare-experts-blame-white-supremacy-for-playwright-s-fame-as-hometown-museum-vows-change/ar-AA1B2ea3
==
Quite frustrating as usual in that the perpetrators are never named. The one person named does not work there. She’s a faculty snot at Birmingham City University (not the University of Birmingham). The executive director left in November and the position is vacant. The chairman of the board is an elderly and well-connected homewrecker known by her former courtesy title ‘Lady Cobham’, aka the ‘quango queen’.
27% – MSNBC’s Steve Kornacki calls out Dems low favorability – Video UPDATED with more winning!!!
(Actually, I believe that the answer to your query—“…how it could be that…”—is in the last paragraph of the excellent dissection:
…In a healthy country, no respectable publisher would touch a book so profoundly dishonest. Ours is not a healthy country. In the absence of factual truth, political discourse and civic harmony are impossible. Historians like Heather Cox Richardson use partisan narratives as blunt instruments, the academic equivalent of the lawfare being waged by our politicized justice system. The national sickness this reflects cannot and will not last. But that is hardly to predict a happy future.
)
[Emphasis mine; Barry M.]
One hopes that the current administration and those that follow in its steps will be able to rally, pinpoint and prioritize fixing the most lethal threats and heal the pervasive and profound sickness.
Heather Cox Richardson another progressive fabulist/fraudster? Shocked!
Very windy here in CO, not so cold, but the wind. chill is.
So, I just made myself a bowl of Irish Oatmeal.
Tonight, Corned Beef, Cabbage, Colcannon.
Got the Colcannon recipe from a cooking class, teacher got it from her Grandmother.
Basically, here it is
Butter, Mashed Potatoes, Butter, Kale – sweated in Butter, Butter, Leaks – cooked in heavy Cream, Butter.
Shakespeare was about other cultures like cinthios tales of venice that inspired othello, holinsheds tales about the scottish play the danish chronicles et al
On “decolonizing” Shakespeare, Glenn Reynolds comments at Instapundit: “When you seek to suppress a country’s native culture, you’re not decolonizing it. You’re colonizing it.”
@SHIREHOME:Colcannon
I guess we have that about once a week; easy way to get kids to eat kale.
Well did you ever make colcannon,
made with lovely pickled cream
With the greens & scallions mingled
like a picture in a dream
Did you ever make a hole on top
to hold the meltin’ flake
Of the creamy flavoured butter
that our mothers used to make
Oh you did, so you did
so did he and so did I
And the more I think about it
sure the nearer I’m to cry
Oh weren’t them the happy days
when troubles we knew not
And our mothers made colcannon
in the little skillet pot
so what about the other 150 years, the truth about heathers’ little screed is the reverse, the Depression was the Progs, ‘never letting a crisis go to waste’ for their own reason, the 1965 iteration, was another opportunity, because tall man Goldwater, of course they blame the war, as a failure to expand the government more, an opportunity they really had under obama, although the Camel’s nose was under the tent, with Clinton, as well, of course their solutions, like the CRA revisions only cause more crises down the road, Obamacare didn’t really solve the problem of insurance, neither did the ARRA solve shortfalls in infrastructure, it wasn’t meant to, it was to allow the government to take over financial institutions even some manufacturing concerns like auto companies,
consortium like black rock spread the so called ‘woke
virus, inside corporate America, a way to’fundamentally transform’ the country from within,
the most recent experiments seems to have been employed to create this new
blue majority, that teixeira predicted, through mass immigration, that was Jeffrey Sach’s little known recipe, from 2001,
Here’s a sampling of what has been posted today by a grassroots democrat just to confirm the nuttiness is not limited to the higher ups in the party. This is not in any way unusual; they seem to actually believe this. When a large percentage of the public is in such a disturbed mental state, I assume violence can’t be far behind.
“The Panama Canal was just an excuse to invade Panama
The tariffs were just a way to soften up Canada and Mexico before invading them both;
National Security was just an excuse to invade Greenland;
The Alien Enemies Act was just an excuse to detain Canadians and British citizens
The attacks on universities and the free press were just a way to scare the public into silence and submission before calling for Martial Law and instituting a draft
The President is deeply compromised. Trump does not work for the American people. He works for Elon Musk.
Bottom line: Elon Musk is Donald Trump’s Russian handler, and he is working alongside JD Vance to destroy Europe, and with Trump to end democracy, abolish the Constitutional Republic, and invade at least all of Central and North America”
Paranoia strikes deep, as the song goes.
Macron is calling for European countries to stop relying and buying US Military gear. I say go for it
I was watching the real world as one of my granddaughter’s volleyball team won the silver bracket at a fairly large tournament this weekend. I have three granddaughters currently playing club volleyball, soon to be four. Both my daughters played volleyball into college, so it was inevitable.
But back to the virtual world. Don Boudreaux has been a free trade advocate for years. I would have more respect for his positions, if his hypotheticals and statistics included tempering data that represent both the positive and negatives to unfettered free trade.
Case in point. One of his posts points out that a trade deficit totaling over $20 trillion since 1975 hasn’t reduced American’s net worth. And he shows that by the growth of American’s net worth over the years to an astounding $1.2 million. Ignoring monetary inflation, that figure includes an inflated stock market.
While the stock market may be valued at $62 trillion, that’s an imaginary number. Suppose everyone decided to sell their shares at the same time. What would be the total sold value?
In the case of a market crash, the upper income brackets would be hardest hit.
The bottom 50% of American’s only has 13% of their net worth in stocks.
The middle 40% has 20-25% of their net worth in stocks.
The top 10% has 35-40% in stocks while the top 1% has over 50% in stocks.
Since some/much of the gains in the market has benefited with “free” trade and the outsourcing of American production to cheap labor countries, it stands to reason they would have the most to lose if we adopted a reciprocal trade standard to tariffs, along with targeted tariffs on industries vital to economic and military security.
I see two goals to Trump’s trade agenda. Produce more internal economic activity that raise revenue to the government without punitive taxes that would stifle that activity, and create more good paying jobs for that bottom 50% of Americans most left behind by the policies of the last 30-40 years.
As to Phil Gramm, his policies enacted in the late 90’s proved wrong and contributed (specifically CDS) to the Great Recession, along with the FED, CRA, Fannie and a whole host of bad policy.
So I don’t think either of these economists should be our guide for economic policies going forward.
”Macron is calling for European countries to stop relying and buying US Military gear. I say go for it”
How does making Europe set up a heavily subsidized competitor to our largest exporting industry make America better?
Unless “wealth” and “currency” are being confused (or deliberately conflated), it doesn’t seem that a “trade deficit” can be bad. It’s a term created to SOUND bad.
The worst imaginable “trade deficit” would be another country bringing goods to this one, and never taking any goods in return. In that case, our country would obviously be wealthier; we’d be getting something for nothing. Since the worst possible trade deficit makes us richer, it’s hard to see how a lesser trade deficit makes us poorer, and I’ve never seen anyone make the mathematical proof that there’s a less bad trade deficit that reverses the sign of the change in wealth from trade, I’ve just seen hand-waving and arguing about auxiliary assumptions; favorite ones being that manufacturing and agriculture are somehow more healthy or virtuous, or that fiat currency is the problem, or that we’re being “financialized”.
Of course, the other country would be taking currency of some kind in exchange, but currency is not wealth, which is why I’m pretty sure that those who say trade deficits make us somehow poorer are confusing or conflating currency and wealth, if not making some other error. The Spanish Empire improverished itself by importing gold and silver from the Americas, to the point of being proverbial: “In Spain everything is expensive except gold and silver”.
In reality what is being exchanged in trade is value. If I have a pair of shoes that I can’t wear, and you have a pair that you can’t wear, and we trade, and now we both have shoes that fit, then we have both got richer even though the number of shoes and the identities of the people are still the same.
Few of us complain of our trade deficits with our grocery stores: not once has any store I patronized ever purchased anything from me, yet I keep giving them money and they keep giving me stuff. Clearly I’m getting screwed…
Niketas, let’s use your scenario and say that Freedonia exports $100 billion of goods to us, and buys nothing from us, which would leave us with a $100 billion trade deficit. But Freedonia would have $100 billion of our currency. Currency is not unlimited. We can certainly make more of it, but that raises our indebtedness.
Yes that may not show up as reduced wealth, but it certainly reduces our net worth.
Freedonia could buy an American company with that $100 billion or invest it in the stock market, which would mean the wealth of the country remained static, but each year that occurs and we ship $100 billion in currency to Freedonia to buy that $100 billion of goods shipped to the country, eventually we run out of currency, unless we borrow another $100 billion.
We could always just print more of the currency we use– dollars, but that would debase/deflate it’s value.
Either way, the net worth of the country declines.
I agree with your analogy of trading shoes, but the effect is a trade deficit of zero.
Here’s is Boudreaux’s post on trade deficits and net worth.
A sample of why I find Boudreaux’s economics of diminished value.
Contrary to countless careless or uninformed assertions, it’s simply untrue that a $1 increase in the U.S. trade deficit necessarily results in a $1 decrease in Americans’ net worth – a decrease in net worth brought about either through a $1 increase in American indebtedness to foreigners or a $1 decrease in Americans’ net ownership of assets.
He needs to account for the the times it does result in a $1 decrease in Americans’ net worth.
RE: “There will always be an England.”–Notes from England’s cultural suicide watch–
England’s Shakespeare National Trust has now determined that Shakespeare and all his works, even his historic house, are instances of
of “White European Supremacy,” and will have to be “decolonized.”*
Niketas…”Few of us complain of our trade deficits with our grocery stores: not once has any store I patronized ever purchased anything from me, yet I keep giving them money and they keep giving me stuff.”
If the only grocery store in range was run by somebody that was hostile to you and threatened to cut off your groceries if you did something he didn’t like, would that still be okay with your?
David Foster, I read your post about the WSJ opinion piece, but I didn’t read the original story, since it’s behind a paywall, so I could only comment on Boudreaux’s positions on trade based on his blog.
I enjoy reading your posts and really like the variety of comments you produce, it’s great to read reactions from all types of perspectives.
As to “high tech”, so they really mean the Magnificent 7 on Wall St?
@Brian E:Yes that may not show up as reduced wealth, but it certainly reduces our net worth.
Confusing/conflating currency with wealth, check, with bonus contradiction between one clause and the next.
@David Foster:If the only grocery store in range was run by somebody that was hostile to you…
Arguing about auxiliary assumptions, check.
Brian E…it would be nice to hear what they really do mean by ‘high-tech’…There wasn’t really all that much to the original story. They object to Trump’s use of the McKinley analogy, saying:
“Mr. Trump’s policy turns the traditional meaning of reciprocal trade on its head. He wants to achieve reciprocity only by raising tariffs, almost certainly triggering retaliation. Reciprocal trade policy as envisioned by President William McKinley, whom Mr. Trump often cites as his role model, recognized that by the dawn of the 20th century America had emerged as an economic colossus capable of producing an abundance of products that could be profitably exported. As McKinley explained, “the expansion of our trade and commerce is the pressing problem. Commercial wars are unprofitable.”
McKinley’s reciprocal trade policy was aimed at opening markets for U.S. products with agreements that lowered tariffs on imported products proportionately as other countries lowered theirs on U.S. products. President Franklin D. Roosevelt used reciprocal trade policies to back the world out of the Smoot-Hawley tariff. His successors used reciprocal trade to lift the majority of the world’s population out of poverty and achieve 75 years of peace and prosperity.”
I think it’s odd to focus *only* on trade as the engine of lifting much of the world’s population out of poverty…technology had a lot to do with it (with a broad definition of ‘technology’, not just ‘computer stuff’) as did stable legal systems and the relative absence of feudal or regulatory barriers.
It’s important to distinguish between trade which reflects the inherent comparative advantage of various locations (raising oranges in Spain, for example) versus trade which is mainly about wage and regulatory arbitrage.
Niketas, what is your definition of wealth and net worth.
David Foster, Trump has made it very clear the imposition of reciprocal tariffs is to encourage/force the trading partner to reduce their tariff, at which point we will reciprocate.
That does align with McKinley’s policies.
He does talk about tariffs as a tool to raise revenue, but that, IMO, is just to reinforce that we’ll maintain a tariff if the trading partner agrees to reduce theirs.
It’s my understanding our trading partners already, and for years, have had protective tariffs on our goods, or use other trade barriers. Reciprocal tariffs may not be a perfect remedy, but it will get their attention.
Brian E:
But Freedonia would have $100 billion of our currency. Currency is not unlimited. We can certainly make more of it, but that raises our indebtedness.
——————————————
I do not understand when people talk like this about “currency”.
Another one is “the money supply”.
These terms seems like mental relics from when dollar bills were backed by gold.
My entire life has been lived in fiat currency.
I get my salary and pay most of my bills and purchases electronically. Haven’t had a printed salary check for or been paid in cash for decades. I use a check when I want a record of a transaction in addition to my credit card statement.
In what way is this “currency” not unlimited – how is it related in any way to the government printing bills, loaning money, or other people borrowing money and holding bills?
Fiat currency is scrip with fancy printing and a bit more security for actual paper transactions. It is used by people to conduct business with no promises from the government, and no obligations by the government, to cover anything.
The amount of electronic fiat currency in circulation does not seem to me to be “limited” in any way. Unless artificially by a central bank.
What am I missing?
@Brian E:Niketas, what is your definition of wealth and net worth.
If I do that, we’ll spend all day arguing definitions. I think it’s more productive to go to the example where we almost agree:
I agree with your analogy of trading shoes, but the effect is a trade deficit of zero.
OK, let’s include some currency into this and see what happens. Suppose the shoes are identical other than fit and the need is purely fit. A one-to-one trade is easy then, and as you say, the “trade deficit” is zero. I don’t disagree with that.
OK, suppose there’s something different in the need. Suppose you have a pair of wingtips that don’t fit you and I have a different-sized pair that don’t fit me. But suppose our needs are different. Maybe I like brown shoes better and these are black. I might be less inclined to trade with you (rather than with someone else who has what I really want) and you might throw in something else, like $5 let’s say, to give me a reason to trade with you. I agree and we trade.
So, before the trade, the things that were there were two pairs of shoes of different sizes and $5. After the trade, the things that are there are the same two pairs of shoes, on different feet, and the same $5, in a different wallet.
Both us got richer; we each saw an increase in value. The amount of stuff didn’t change, it’s just in different hands. But you would go further and say that you had a “trade deficit” of $5.
I don’t dispute that there is such a thing as “trade deficit” and that it is measured in money. What I dispute is that the “trade deficit” makes you poorer. It’s a thing that is measured, but it is not inherently good or bad.
To focus on the “trade deficit” is to ignore the increase in value that we each received. You wanted (a pair of shoes that fit) more than you wanted (a pair that doesn’t fit and $5). I wanted (a pair of shoes that fit and $5) more than I wanted (a pair that didn’t fit). We both got what we wanted and we both got more than we had, in terms of our own values. The “trade deficit” is calling attention to one part of the transaction that, in this case, was the least valuable thing involved (it only came up because I wanted brown shoes a little more than the black I traded for), and identifying the change in value of the entire transaction with it.
That’s why I say “confusing/conflating wealth with currency”. Currency is a part of the change in value for both sides in the transaction, but the net flow of currency is not identical to the changes in value.
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At long last Ronen Bar is about to be fired, over a year too late:
https://www.jns.org/netanyahu-to-seek-dismissal-of-shin-bet-director/
And to demonstrate the worse bureaucratic condition of Israeli politics compared to the US, their Attorney-General says to the PM and Knesset in effect “Stop! You can’t fire him! Because I say you can’t!”
Sing it with “em, people:
Hey, hey, ho, ho, Baharav-Miara has got to go!
New post, in which I respond the the frequently-made assertion that manufacturing doesn’t matter all that much and that we should focus on ‘high-tech’ instead.
https://chicagoboyz.net/archives/73514.html
I think with few exceptions in the occidental world, a country’s enemies are to be found in its chattering classes:
==
https://www.msn.com/en-us/news/world/de-colonizing-shakespeare-experts-blame-white-supremacy-for-playwright-s-fame-as-hometown-museum-vows-change/ar-AA1B2ea3
==
Quite frustrating as usual in that the perpetrators are never named. The one person named does not work there. She’s a faculty snot at Birmingham City University (not the University of Birmingham). The executive director left in November and the position is vacant. The chairman of the board is an elderly and well-connected homewrecker known by her former courtesy title ‘Lady Cobham’, aka the ‘quango queen’.
27% – MSNBC’s Steve Kornacki calls out Dems low favorability – Video UPDATED with more winning!!!
https://commoncts.blogspot.com/2025/03/27-msnbcs-steve-kornacki-calls-out-dems.html
ps. could you please add CC to your blogroll? thanks!
Oh never mind
https://x.com/StephenM/status/1901313739242062149
Whether it’s AutoPen-Apocalypse or AutoPen-Armageddon it will be hilarious fun to watch the riots which ensue.
Boasberg is atrocious.
– – – – – – – – – – – –
And for those who haven’t quite “gotten it” yet….
The Orwellian progessive view of Free Speech:
https://evebarlow.substack.com/p/shamrocks-and-shenanigans
H/T Powerline blog.
I guess they gotta keep those lies comin’…
Kind of an “identity” thang, I guess.
Neo has yet to offer her assessment of how it could be that the premier substacker in the United States is one Heather Cox Richardson. For an assessment of one of Richardson’s more recent books:
==
https://claremontreviewofbooks.com/in-the-absence-of-factual-truth/
That’s quite a link.
What a KOOK.
(Actually, I believe that the answer to your query—“…how it could be that…”—is in the last paragraph of the excellent dissection:
)
[Emphasis mine; Barry M.]
One hopes that the current administration and those that follow in its steps will be able to rally, pinpoint and prioritize fixing the most lethal threats and heal the pervasive and profound sickness.
Heather Cox Richardson another progressive fabulist/fraudster? Shocked!
Very windy here in CO, not so cold, but the wind. chill is.
So, I just made myself a bowl of Irish Oatmeal.
Tonight, Corned Beef, Cabbage, Colcannon.
Got the Colcannon recipe from a cooking class, teacher got it from her Grandmother.
Basically, here it is
Butter, Mashed Potatoes, Butter, Kale – sweated in Butter, Butter, Leaks – cooked in heavy Cream, Butter.
Category error is an art
https://thefederalist.com/2025/03/17/the-era-of-presuming-liberal-moral-superiority-is-over/
Shakespeare was about other cultures like cinthios tales of venice that inspired othello, holinsheds tales about the scottish play the danish chronicles et al
On “decolonizing” Shakespeare, Glenn Reynolds comments at Instapundit: “When you seek to suppress a country’s native culture, you’re not decolonizing it. You’re colonizing it.”
@SHIREHOME:Colcannon
I guess we have that about once a week; easy way to get kids to eat kale.
There’s a song about it. Maybe more than one, but I know of this one.
so what about the other 150 years, the truth about heathers’ little screed is the reverse, the Depression was the Progs, ‘never letting a crisis go to waste’ for their own reason, the 1965 iteration, was another opportunity, because tall man Goldwater, of course they blame the war, as a failure to expand the government more, an opportunity they really had under obama, although the Camel’s nose was under the tent, with Clinton, as well, of course their solutions, like the CRA revisions only cause more crises down the road, Obamacare didn’t really solve the problem of insurance, neither did the ARRA solve shortfalls in infrastructure, it wasn’t meant to, it was to allow the government to take over financial institutions even some manufacturing concerns like auto companies,
consortium like black rock spread the so called ‘woke
virus, inside corporate America, a way to’fundamentally transform’ the country from within,
the most recent experiments seems to have been employed to create this new
blue majority, that teixeira predicted, through mass immigration, that was Jeffrey Sach’s little known recipe, from 2001,
Here’s a sampling of what has been posted today by a grassroots democrat just to confirm the nuttiness is not limited to the higher ups in the party. This is not in any way unusual; they seem to actually believe this. When a large percentage of the public is in such a disturbed mental state, I assume violence can’t be far behind.
“The Panama Canal was just an excuse to invade Panama
The tariffs were just a way to soften up Canada and Mexico before invading them both;
National Security was just an excuse to invade Greenland;
The Alien Enemies Act was just an excuse to detain Canadians and British citizens
The attacks on universities and the free press were just a way to scare the public into silence and submission before calling for Martial Law and instituting a draft
The President is deeply compromised. Trump does not work for the American people. He works for Elon Musk.
Bottom line: Elon Musk is Donald Trump’s Russian handler, and he is working alongside JD Vance to destroy Europe, and with Trump to end democracy, abolish the Constitutional Republic, and invade at least all of Central and North America”
Paranoia strikes deep, as the song goes.
Macron is calling for European countries to stop relying and buying US Military gear. I say go for it
I was watching the real world as one of my granddaughter’s volleyball team won the silver bracket at a fairly large tournament this weekend. I have three granddaughters currently playing club volleyball, soon to be four. Both my daughters played volleyball into college, so it was inevitable.
But back to the virtual world. Don Boudreaux has been a free trade advocate for years. I would have more respect for his positions, if his hypotheticals and statistics included tempering data that represent both the positive and negatives to unfettered free trade.
Case in point. One of his posts points out that a trade deficit totaling over $20 trillion since 1975 hasn’t reduced American’s net worth. And he shows that by the growth of American’s net worth over the years to an astounding $1.2 million. Ignoring monetary inflation, that figure includes an inflated stock market.
While the stock market may be valued at $62 trillion, that’s an imaginary number. Suppose everyone decided to sell their shares at the same time. What would be the total sold value?
In the case of a market crash, the upper income brackets would be hardest hit.
The bottom 50% of American’s only has 13% of their net worth in stocks.
The middle 40% has 20-25% of their net worth in stocks.
The top 10% has 35-40% in stocks while the top 1% has over 50% in stocks.
Since some/much of the gains in the market has benefited with “free” trade and the outsourcing of American production to cheap labor countries, it stands to reason they would have the most to lose if we adopted a reciprocal trade standard to tariffs, along with targeted tariffs on industries vital to economic and military security.
I see two goals to Trump’s trade agenda. Produce more internal economic activity that raise revenue to the government without punitive taxes that would stifle that activity, and create more good paying jobs for that bottom 50% of Americans most left behind by the policies of the last 30-40 years.
As to Phil Gramm, his policies enacted in the late 90’s proved wrong and contributed (specifically CDS) to the Great Recession, along with the FED, CRA, Fannie and a whole host of bad policy.
So I don’t think either of these economists should be our guide for economic policies going forward.
Boudreaux’s blog:
https://cafehayek.com/
”Macron is calling for European countries to stop relying and buying US Military gear. I say go for it”
How does making Europe set up a heavily subsidized competitor to our largest exporting industry make America better?
Unless “wealth” and “currency” are being confused (or deliberately conflated), it doesn’t seem that a “trade deficit” can be bad. It’s a term created to SOUND bad.
The worst imaginable “trade deficit” would be another country bringing goods to this one, and never taking any goods in return. In that case, our country would obviously be wealthier; we’d be getting something for nothing. Since the worst possible trade deficit makes us richer, it’s hard to see how a lesser trade deficit makes us poorer, and I’ve never seen anyone make the mathematical proof that there’s a less bad trade deficit that reverses the sign of the change in wealth from trade, I’ve just seen hand-waving and arguing about auxiliary assumptions; favorite ones being that manufacturing and agriculture are somehow more healthy or virtuous, or that fiat currency is the problem, or that we’re being “financialized”.
Of course, the other country would be taking currency of some kind in exchange, but currency is not wealth, which is why I’m pretty sure that those who say trade deficits make us somehow poorer are confusing or conflating currency and wealth, if not making some other error. The Spanish Empire improverished itself by importing gold and silver from the Americas, to the point of being proverbial: “In Spain everything is expensive except gold and silver”.
In reality what is being exchanged in trade is value. If I have a pair of shoes that I can’t wear, and you have a pair that you can’t wear, and we trade, and now we both have shoes that fit, then we have both got richer even though the number of shoes and the identities of the people are still the same.
Few of us complain of our trade deficits with our grocery stores: not once has any store I patronized ever purchased anything from me, yet I keep giving them money and they keep giving me stuff. Clearly I’m getting screwed…
Niketas, let’s use your scenario and say that Freedonia exports $100 billion of goods to us, and buys nothing from us, which would leave us with a $100 billion trade deficit. But Freedonia would have $100 billion of our currency. Currency is not unlimited. We can certainly make more of it, but that raises our indebtedness.
Yes that may not show up as reduced wealth, but it certainly reduces our net worth.
Freedonia could buy an American company with that $100 billion or invest it in the stock market, which would mean the wealth of the country remained static, but each year that occurs and we ship $100 billion in currency to Freedonia to buy that $100 billion of goods shipped to the country, eventually we run out of currency, unless we borrow another $100 billion.
We could always just print more of the currency we use– dollars, but that would debase/deflate it’s value.
Either way, the net worth of the country declines.
I agree with your analogy of trading shoes, but the effect is a trade deficit of zero.
Here’s is Boudreaux’s post on trade deficits and net worth.
A sample of why I find Boudreaux’s economics of diminished value.
He needs to account for the the times it does result in a $1 decrease in Americans’ net worth.
Do U.S. Trade Deficits Reduce Americans’ Net Worth?
https://cafehayek.com/2025/03/dd-11.html
RE: “There will always be an England.”–Notes from England’s cultural suicide watch–
England’s Shakespeare National Trust has now determined that Shakespeare and all his works, even his historic house, are instances of
of “White European Supremacy,” and will have to be “decolonized.”*
* See https://www.americanthinker.com/blog/2025/03/the_shakespeare_national_trust_determines_that_shakespeare_is_not_to_be.html
Brian E…I responded to the Boudreaux & Gramm column here:
https://chicagoboyz.net/archives/73514.html
Niketas…”Few of us complain of our trade deficits with our grocery stores: not once has any store I patronized ever purchased anything from me, yet I keep giving them money and they keep giving me stuff.”
If the only grocery store in range was run by somebody that was hostile to you and threatened to cut off your groceries if you did something he didn’t like, would that still be okay with your?
David Foster, I read your post about the WSJ opinion piece, but I didn’t read the original story, since it’s behind a paywall, so I could only comment on Boudreaux’s positions on trade based on his blog.
I enjoy reading your posts and really like the variety of comments you produce, it’s great to read reactions from all types of perspectives.
As to “high tech”, so they really mean the Magnificent 7 on Wall St?
@Brian E:Yes that may not show up as reduced wealth, but it certainly reduces our net worth.
Confusing/conflating currency with wealth, check, with bonus contradiction between one clause and the next.
@David Foster:If the only grocery store in range was run by somebody that was hostile to you…
Arguing about auxiliary assumptions, check.
Brian E…it would be nice to hear what they really do mean by ‘high-tech’…There wasn’t really all that much to the original story. They object to Trump’s use of the McKinley analogy, saying:
“Mr. Trump’s policy turns the traditional meaning of reciprocal trade on its head. He wants to achieve reciprocity only by raising tariffs, almost certainly triggering retaliation. Reciprocal trade policy as envisioned by President William McKinley, whom Mr. Trump often cites as his role model, recognized that by the dawn of the 20th century America had emerged as an economic colossus capable of producing an abundance of products that could be profitably exported. As McKinley explained, “the expansion of our trade and commerce is the pressing problem. Commercial wars are unprofitable.”
McKinley’s reciprocal trade policy was aimed at opening markets for U.S. products with agreements that lowered tariffs on imported products proportionately as other countries lowered theirs on U.S. products. President Franklin D. Roosevelt used reciprocal trade policies to back the world out of the Smoot-Hawley tariff. His successors used reciprocal trade to lift the majority of the world’s population out of poverty and achieve 75 years of peace and prosperity.”
I think it’s odd to focus *only* on trade as the engine of lifting much of the world’s population out of poverty…technology had a lot to do with it (with a broad definition of ‘technology’, not just ‘computer stuff’) as did stable legal systems and the relative absence of feudal or regulatory barriers.
It’s important to distinguish between trade which reflects the inherent comparative advantage of various locations (raising oranges in Spain, for example) versus trade which is mainly about wage and regulatory arbitrage.
Niketas, what is your definition of wealth and net worth.
David Foster, Trump has made it very clear the imposition of reciprocal tariffs is to encourage/force the trading partner to reduce their tariff, at which point we will reciprocate.
That does align with McKinley’s policies.
He does talk about tariffs as a tool to raise revenue, but that, IMO, is just to reinforce that we’ll maintain a tariff if the trading partner agrees to reduce theirs.
It’s my understanding our trading partners already, and for years, have had protective tariffs on our goods, or use other trade barriers. Reciprocal tariffs may not be a perfect remedy, but it will get their attention.
Brian E:
But Freedonia would have $100 billion of our currency. Currency is not unlimited. We can certainly make more of it, but that raises our indebtedness.
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I do not understand when people talk like this about “currency”.
Another one is “the money supply”.
These terms seems like mental relics from when dollar bills were backed by gold.
My entire life has been lived in fiat currency.
I get my salary and pay most of my bills and purchases electronically. Haven’t had a printed salary check for or been paid in cash for decades. I use a check when I want a record of a transaction in addition to my credit card statement.
In what way is this “currency” not unlimited – how is it related in any way to the government printing bills, loaning money, or other people borrowing money and holding bills?
Fiat currency is scrip with fancy printing and a bit more security for actual paper transactions. It is used by people to conduct business with no promises from the government, and no obligations by the government, to cover anything.
The amount of electronic fiat currency in circulation does not seem to me to be “limited” in any way. Unless artificially by a central bank.
What am I missing?
@Brian E:Niketas, what is your definition of wealth and net worth.
If I do that, we’ll spend all day arguing definitions. I think it’s more productive to go to the example where we almost agree:
I agree with your analogy of trading shoes, but the effect is a trade deficit of zero.
OK, let’s include some currency into this and see what happens. Suppose the shoes are identical other than fit and the need is purely fit. A one-to-one trade is easy then, and as you say, the “trade deficit” is zero. I don’t disagree with that.
OK, suppose there’s something different in the need. Suppose you have a pair of wingtips that don’t fit you and I have a different-sized pair that don’t fit me. But suppose our needs are different. Maybe I like brown shoes better and these are black. I might be less inclined to trade with you (rather than with someone else who has what I really want) and you might throw in something else, like $5 let’s say, to give me a reason to trade with you. I agree and we trade.
So, before the trade, the things that were there were two pairs of shoes of different sizes and $5. After the trade, the things that are there are the same two pairs of shoes, on different feet, and the same $5, in a different wallet.
Both us got richer; we each saw an increase in value. The amount of stuff didn’t change, it’s just in different hands. But you would go further and say that you had a “trade deficit” of $5.
I don’t dispute that there is such a thing as “trade deficit” and that it is measured in money. What I dispute is that the “trade deficit” makes you poorer. It’s a thing that is measured, but it is not inherently good or bad.
To focus on the “trade deficit” is to ignore the increase in value that we each received. You wanted (a pair of shoes that fit) more than you wanted (a pair that doesn’t fit and $5). I wanted (a pair of shoes that fit and $5) more than I wanted (a pair that didn’t fit). We both got what we wanted and we both got more than we had, in terms of our own values. The “trade deficit” is calling attention to one part of the transaction that, in this case, was the least valuable thing involved (it only came up because I wanted brown shoes a little more than the black I traded for), and identifying the change in value of the entire transaction with it.
That’s why I say “confusing/conflating wealth with currency”. Currency is a part of the change in value for both sides in the transaction, but the net flow of currency is not identical to the changes in value.