Earlier in the day, I read Professor Joe Stiglitz’ piece in ‘Project Syndicate’ on Trump and the tariff threat. Predictably, he has criticised President Trump heavily so much so that the ‘darling’ of the World Social Forum now bats for free trade – which is the pet project of his nemesis, the Fund! This is the comment I posted under his piece in ‘Project Syndicate’:
Ash Carter, in an interview to ‘Politico’ in February had said that economists had not provided real answers for dealing with China. William Galston, he served in Clinton’s first term in office, says that China is yet to ratify the Government Procurement Agreement that it agreed to do so when it joined WTO in 2001. it is about non-discriminatory opportunity in government procurement.
Joseph Stiglitz, who discovered a niche for himself, opposing free trade and all the other nice things for the Fund and for Wall Street, suddenly discovers virtue in free trade because Trump is now considering imposing tariffs on China.
One thing is clear: whether or not Trump wins, economists have both lost it are still losing it.
Later in the afternoon, I read Larry Summers in FT where he says that the world is rallying behind China and not behind Trump. My response to his piece was as follows:
Mr. Summers should worry that he is on the same page as Joe Stiglitz. He can then reflect on what binds them. Is it rationality or an irrational bias against whatever Trump does. He should read up on what Ash Carter told the interviewer from Politico on how useful (or not) economists had been to America in dealing with China. Here is the link.
Two, he can read papers by economists Peter Schott (Yale University) and Justin Pierce (Federal Reserve) on how much the conferring of ‘Permanent Normal Trade Relations’ (PNTR) status to China mattered, for the worse, for American manufacturing employment.
Three, he might do well to have a word with William Galston who served in the first Bill Clinton term. He wrote in WSJ in August 2017 that China agreed to sign the Government Procurement Agreement – a non-discriminatory government procurement regime – when it signed up to the WTO in 2001. Sixteen years later, it had not done so. Referring cases to WTO takes years for adjudication. China knows that. That is why it now pretends to have faith in the multilateral system when it had shown very little respect for its own commitments to the WTO.
Far from calling out the real bully and asking that country to make concessions such that the threat of a trade war is averted, American economists are busy running down their own President. That is evidence, if it were needed, that elite interest are divergent from national interests.
If proof were needed for my last satement above, he should check out the pages 108, 161-162 and 169-175 of the monthly Harvard-Harris poll for the month of March released late March. Here is the link.
In a pre-Trump world when no one threatened tariffs on China, inequality rose, Brexit happened, 2008 crisis happened and Trump himself got elected.
After Trump but where Trump is not in office, in Italy, Austria, France, the Netherlands, Poland and Hungary swung Right and Catalonia voted to separate from Spain.
Summers and his ilk must find answers as to why their world of free trade had no answers for these people (including for Ash Carter!) that they decided to show their helplessness, anger and frustration in the above manner.
Postscript: Indian readers might be interested to check out pages 108 and 110 of the Harvard-Harris poll. Link given above.