Friday, December 9, 2016

Trump Tells Crowd at Rally That U.S.-China Relationship Must Improve

President-elect Donald Trump said on Thursday the United States needed to improve its relationship with China, which he criticized for its economic policies and failure to rein in North Korea.

"One of the most important relationships we must improve, and we have to improve, is our relationship with China," Trump told a rally in Iowa. The United States and China are the world's two biggest economies.

"China is not a market economy," he said. "They haven't played by the rules, and I know it's time that they're going to start."

Continuing to display his ignorance of the Law of Comparative Advantage, Trump repeated his campaign message that he planned to prioritize the United States and American workers over global interests.

The Trump administration, which takes office on Jan. 20, would focus on two rules: "Buy American and hire American," he said, adding he would keep pressuring companies not to move jobs overseas.


Also see: The BS Stops at Mar-a-Lago

Prince Charles is Shown Bank of England's 400,000 Gold Bars

The aim of a visit to the Bank of England by Prince Charles was, ostensibly, to 'recognise and celebrate the Bank's mission to promote the good of the people of the UK by maintaining monetary and financial stability', reports The Daily Mail.

During his tour of the building, Charles was given a private viewing of more than £100 billion (USD$126 billion) worth of gold.

The underground vault at the bank contains around 400,000 gold bars, each weighing around 13kg and worth £366,501 ($USD461,644) at today's price.


(via ‏Smaulgld)

Trump's Three Best Cabinet Picks So Far

I have been very critical of most of Donald Trump's picks for his Cabinet and senior staff.

With so many war-hungry generals and Goldman Sachs insiders, there is a lot not to like.

That said, there are three picks that I consider promising for anyone who appreciates freedom and free markets. Those three are Labor Secretary nominee Andy Puzder,  EPA nominee E. Scott Pruitt and Housing and Urban Development nominee Ben Carson.

Andrew Puzder, who heads the company that owns Carl's Jr. and Hardee's, was tapped Thursday to head the Labor Department by Trump.

Puzder has been outspoken about his views that too much regulation is hurting the restaurant industry and that a significant increase in the minimum wage would lead to job losses or prompt companies to look for ways to automate tasks more quickly. This is just plain truth Puzer speaks. Given the minimum wage is evil and puts mostly young black kids out of work, this is promising.

And the feminstas are already objecting to this interview he gave (via AP):
Here's what Puzder had to say about the ads at that time. Answers are trimmed and edited for clarity.

Q: How did these ads start?

A: It started with an ad agency we used to have called Mendelsohn Zien, and a guy named Jordin Mendelsohn. He came up with the idea to use Paris Hilton in an ad and make it a very cutting edge ad, where she was washing a Bentley.

Actually, he tried to chicken out. He called and said, "I don't think we should do this ad, I want to talk to you." But I called him back and I said, "I want to do the Paris Hilton ad."

This was 2005.

(Mendelsohn says he didn't like the initial ad his team developed, but didn't object to the final version he worked on.)

Q: How do you get women to do the commercials?

A: We have a history of picking these young women before they hit their peak. We put Kate Upton in an ad a month before she got the cover for Sports Illustrated. At the time we picked her, we just said, "This is a beautiful woman."

We just did an ad with (model and actress) Charlotte McKinney, which kind of created Charlotte McKinney. It was her walking through a farmer's market. You think she's naked until the end, and you see she's got clothes on. It's for the all-natural burger.

Q: Do models now see Carl's Jr. ads as a platform?

A: We did an ad last summer where (Sports Illustrated model) Hannah Ferguson was washing a big Ford pickup truck for the Texas barbecue burger. We did an event in Texas and I was talking to her. She said, "All us girls at Sports Illustrated, we all talk about who's going to do the next Carl's Jr. ad and how can we be the model that does the next ad?"

(A representative for Ferguson says she never made the statement.)

And Padma's manager contacted us. You know who Padma is?

Q: Padma Lakshmi?

A: Yeah, Padma actually put in one of her cookbooks how when she was modeling as a teenager, her parents moved to Los Angeles. They couldn't eat meat, right? But she would sneak out to a Carl's Jr. and get a Western Bacon Cheeseburger, and then lick the barbecue sauce off her fingers when she got home, so her parents couldn't tell.

Padma's manager called and said, "Did you see this in the book?"

So we put her in an ad where she eats a Western Bacon Cheeseburger.

We get a lot of actresses, whose names I won't tell you, who contact us, who we don't end up using in the ad because they're not right for the brand.

Q: What are some examples without saying names? Are they not the right age?

A: Some of it may be age relevant. Although, Heidi Klum is no spring chicken.

It depends on a lot of interlocking factors, and what products we're promoting. First of all, you really need to be able to eat the burger like you're loving it. We don't want somebody that's going to go out there and say, "Well, I don't eat burgers."

You really have to go at it. You really have to attack it.

Q: Has there been a problem with that?

A: We used Kim Kardashian in an ad. But Kim really couldn't eat the burgers. Luckily, we had a salad we were promoting, so we used Kim in the salad ad. But if we had not been promoting a salad, we probably never would've done an ad with Kim, because she wasn't good at eating the burger. She's too tiny. She's really little.

(A representative for Kardashian disputed the account and said a salad ad was chosen because Kardashian had a fitness DVD and wanted to eat something that fit with her brand.)

Q: Do you get a lot of complaints about the ads?

A: They'll send out an email blast. I won't name the organization, but there are a couple organizations that do that.

One of these groups is headed by a very nice woman who I met at the Republican Convention in 2012. And she came up and said, "Andy, I read your stuff, I read what you write, and I agree with you politically. But I want you to know I'm the head of X organization and we do these email blasts because we really don't like your ads."

I grabbed her hand and said, "Thank you." And she said, "What do you mean?"

I said, "If you guys don't do an email blast with one of our ads, I run into the head of marketing and say, 'What's the matter with the ad?'"
In other words,  Puzder could be interesting. Here's one of his ads.

With regard to Pruitt, he is a mixed bag,  Atlantic Magazine puts it best:
In a certain light, [E. Scott Pruitt, the attorney general of Oklahoma] is an inspired choice to lead the EPA, as he has made fighting the agency a hallmark of his career.... Trump will likely use the powers of the presidency and the legal expertise of Pruitt to block or weaken the Obama administration’s attempts to fight climate change...And Trump will be able to try for more than that. For what distinguishes Pruitt’s career is not just his opposition to using regulation to tackle climate change, but his opposition to using regulation to tackle any environmental problem at all. Since he was elected Oklahoma’s attorney general, in 2010, Pruitt has racked up a sizable record—impressive in its number of lawsuits if not in its number of victories—of suing the EPA.

Many of these suits did not target climate-related policies. Instead, they singled out anti-pollution measures, initiated under previous presidential administrations, that tend to be popular with the public.
Thus, in addition to being anti- wacko climate change legislation, he is pro big business when it comes to plain old pollution. Atlantic again:
In 2014, for instance, Pruitt sued to block the EPA’s Regional Haze Rule. The rule is built on a 15-year-old program meant to ensure that air around national parks is especially clear. Pruitt lost his case.

Last year, he sued to block a rule restricting how much mercury could be emitted into the air by coal plants. He lost that, too.

And early in his tenure, he sued to keep the EPA from settling lawsuits brought by environmental groups like the Sierra Club. That one was dismissed.

He has brought other suits against EPA anti-pollution programs—like one against new rules meant to reduce the amount of ozone in the air—that haven’t been heard in court yet. While ozone is beneficial to humans high in the atmosphere, it can be intensely damaging when it accumulates at ground level, worsening asthma and inducing premature deaths. The American Lung Association calls it “one of the most dangerous” pollutants in the United States.
Pollution becomes a complex issue when it is managed by government. The free market alternative would be much preferable. Pro big business would go out the window. See  Economics and the Environment: A Reconciliation for how this would work. HINT: It wouldn't be Pruitt lording over the options.

Ebeling and Hornberger were tough on Carson in a recent video, but I think there might be hope for Carson at HUD.

Democracy Now reports:
HUD is a $48 billion agency, which oversees public housing, ensuring low-income families have access to safe homes and neighborhoods... He’s been a vocal critic of HUD’s fair housing rule, which requires local communities to assess patterns of income and racial discrimination in housing. Carson has described the rule as a, quote, "mandated social-engineering scheme." Carson said, quote, "This is just an example of what happens when we allow the government to infiltrate every part of our lives. This is what you see in communist countries."
HUD needs to be shutdown, with this kind of thinking by Carson something close to that may occur.

Time will tell.


Thursday, December 8, 2016

HOT Dallas Pension Fund Suspends Access to Funds

The Dallas Police and Fire Pension System's Board of Trustees suspended lump-sum withdrawals from the pension fund Thursday, staving off a possible restraining order and stopping $154 million in withdrawal requests, reports The Dallas Morning News.

The system was set to pay out the weekly requests Friday. Pension officials said allowing the withdrawals would leave them without the liquid reserves required to sustain the $2.1 billion fund.

"Our situation is currently critical, and we took action," board chairman Sam Friar said.

Never, ever trust government pension programs. They can change the rules at anytime. That goes for Social Security.


Dow industrial Hits Highest Intraday Levels on Record; The Biggest Gainer is...

The biggest winner, again, is Goldman Sachs. It is currently up more than 1.75% on the trading day.


Koch Industries Says House GOP’s Tax Plan ‘Could Be Devastating’

The Koch brothers are correct on this one, these Republican tax "cuts" are one big shell game.

Lynnley Browning reports for Bloomberg:
Koch Industries Inc., the influential private firm headed by billionaire Republican supporters Charles and David Koch, slammed a key element of the House Republicans’ plan to overhaul corporate taxes, saying it would raise prices for American consumers and “could be devastating” to the economy.
In a statement, Koch objected to the plan’s proposal to replace the current corporate income tax with a 20 percent levy on U.S. companies’ domestic sales and on their imports of foreign goods and materials. Exports under the plan would be tax-free.
The proposal, which is generally known by the term “border adjustments,” would “adversely impact American consumers by forcing them to pay higher prices on products produced in and goods imported to the U.S. that they use every single day,” the company said in the statement...Curt Beaulieu, a tax policy lawyer at Bracewell LLP in Washington, said that the adjustments “are not a tariff” and instead are a so-called “destination-based cash flow tax” -- what he called “mumbo jumbo” for taxing companies on revenues from sales in the U.S....
Retailers, who rely heavily on imports from China and elsewhere, are particularly concerned about the provision. [Rachelle Bernstein, a tax lobbyist for the National Retail Federation} said that specialty apparel stores that import 90 percent or more of their inventory could face tax bills that are much larger than their actual profits.
“It’s going to slam clothing manufacturers hugely,” said Peter Barnes, an international tax lawyer at Caplin & Drysdale in Washington and a former senior tax lawyer at General Electric Co. Prices for U.S. consumers on everything from t-shirts to imported cars would increase by 15 percent to 20 percent, he said.

Of course, the Koch brothers just want a different scam that will benefit them:
Koch’s statement made clear that the company supports a comprehensive overhaul of the U.S. tax system. 
We don't need an "overhaul" of the system which will be nothing but lobbyists getting tax breaks for their clients at the expense of the average American, we need tax cuts applied to the current system.

According to Browning,Trump hasn’t signed on to the border-adjustments plan, but has embraced other elements of a blueprint for tax policy that House Republicans released last summer: Both would cut tax rates for individuals and businesses, eliminate the estate tax and offer a corporate tax break designed to bring to the U.S. roughly $2.6 trillion in untaxed profits now held by American companies’ offshore subsidiaries.

House Republicans have been working with Trump’s transition team to meld their tax proposals as they try to pass the biggest tax overhaul in three decades next year.


US Life Expectancy Has Dropped

Doesn't surprise me. From my 2012 post: Why Life Expectancy Will Decline Under ObamaCare
 I have consistently pointed out that ObamaCare will result, within two to three years of its implementation, in a decline in life expectancy in the United States.

This is chiefly because ObamaCare looks at healthcare from the macro-position of its proportion to total GDP, without allowing for individual choice.

Because the structure of ObamaCare will be decisions at the macro-level in a structure that will be co-opted by the politically connected parts of the health care industry, the connection between patient and individual care will continue to be cut.

It will have little to do with cutting costs since the connected healthcare providers will not see their costs cut, but this will mean even more drastic cuts for those providers that are not as connected. Thus, the scale of treatments and the quantity supplied of the scaled-back treatments will decline. This will ultimately result in earlier deaths.

One By One We Are Repeating All the Mistakes of the Great Depression

Scott Sumner writes:
I spent much of my life studying the intellectual climate during the 1930s, including reading all of the New York Times from 1929-38. I can't tell you how depressing it is to see today's intellectual climate reverting back to the vulgar Keynesianism of the 1930s. To see us making all of the same mistakes.

But opposition to free trade might be the worst of all, as it's based on pure innumeracy.
Sumner  also lists 7 specific Great Depression mistakes that are being repeated now. I agree completely with 6 of the 7 mistakes he identifies:
One by one we are repeating all the mistakes of the Great Depression. We are falling prey to fallacies that were adopted in the 1930s, but rejected by the 1990s. Now they are all coming back:

  1. The view that the Fed was out of ammo.
  2. The view that interest rates measure the stance of monetary policy.
  3. The view that exchange rate depreciation is a beggar-thy-neighbor policy.
  4. The view that fiscal stimulus is needed in recessions.
  5. The view that a higher minimum wage could boost the economy.
  6. The view that mercantilist policies are justified.

Jack Lew Plotting to Stop Trump From Reversing the Harriet Tubman $20 Bill Decision

U.S. government officials say Treasury Secretary Jack Lew could release early images of redesigned $5, $10 and $20 bills in an effort to pressure the Trump Administration away from reversing their plans, reports TIME Magazine.

When the Treasury Department announced major changes, during the Presidential primary season,  to the faces of the $5, $10 and $20 bills, including the inclusion of a woman as the portrait on U.S. currency for the first time in modern history.

Trump called the move “pure political correctness” and suggested moving Tubman to a lower denomination like the $2 bill.

“Andrew Jackson had a great history. I think it’s very rough when you take somebody off the bill,” Trump said last spring.

In a statement to TIME, a Treasury Department spokesperson said the process to update the bills is well underway and the Bureau of Engraving and Printing was directed to accelerate its work on the note redesign at the time of Lew’s announcement. “That work, which could include ideas for imagery, will be documented in a way that captures the full record of the excellent progress that has been made on this project and is consistent with our primary concern for the security of our currency,” a spokesperson said. ” The process of currency redesign is complex and was always expected to extend beyond the span of one administration.”

But here is the Treasury fear according to TIME, officials fear that an early release of images could give counterfeiters a running start and could ultimately hurt plans to add a woman to front of the currency.


Wednesday, December 7, 2016

Dow Industrials, S&P and Transports Close at All-Time Highs

U.S. equities closed sharply higher today with key averages hitting record highs.

The Dow Jones Industrial Average gained nearly 300 points. The Dow Transports, meanwhile, hit their first intraday high since 2014 and closed at an all-time high. Since Nov. 8, transports have risen more than 12 percent. The S&P 500  closed up 1.3 percent to a record high.

Expect the Federal Reserve to raise rates at their FOMC policy meeting scheduled for next week. A move directly the opposite of what Austrian-lites have been suggesting would occur since last December's Fed rate hike. The Lites expected a near immediate reversal of that hike and even suggested that the Fed might have to launch another round of quantitative easing and possibly take rates negative.

Nothing of the sort has occurred and it is extremely unlikely to occur anytime in the near future.



This is not what a recession looks like.

Ebeling and Hornberger on Trump's Horrific Cabinet Picks

Fiscal Bloodbath Coming: Too Many Generals When The Pentagon Is The "Swamp"

By David Stockman

We have a simple thesis that is being reinforced by each new appointment or policy utterance of the nascent Trump Administration. Namely, there's going to be a fiscal bloodbath in 2017, not a giant Trump Stimulus. And it is in the vasty deep of the ultimate beltway swampland----the Pentagon----where the Trump Reflation fantasy will sink into oblivion.
Whatever passes for a transition process at Trump Tower has more or less harpooned the 45th President-elect by populating the national security posts with generals, hawks and Iran haters. For reasons detailed below, this fatal step easily adds $100 billion per year to defense spending, meaning that the total national security complex including atomic weapons and international security programs would amount to $8.5 trillion over the next decade.
In terms of pure fiscal math that later figure is a big number. But it gets even far bigger when you add in a decade's worth of debt service ($7 trillion) and Trump's other priorities such as enhanced medical care and benefits for Veterans ($2.3 trillion), border control, law enforcement, homeland security and the Wall ($1 trillion) and, presumably, the existing (i.e. pre-Trump) spending for highways, airports, transit and other infrastructure ($1.2 trillion).
In fact, the implicit War Hawk defense build-up plus the above Trumpian domestic priorities----including interest on the debt that he finally conceded he would pay without question----add up to about $20 trillion over the decade. That happens to be 94% of the entire $21.3 trillion of individual income tax collections---including all the Obamacare taxes----that CBO projects under current law during that period.
The problem, of course, is that this ignores upwards of $30 trillion of built-in entitlement spending---most of which Trump has ruled off-limits to cuts---- over the next 10 years; the rest of domestic government from the National Cancer Institute to the Forest Service and Patent Office ($5 trillion); and the $6 trillion of tax cuts Trump has proposed and the $1 trillion Trump infrastructure program. In short, give the generals and the hawks their war budgets and the Donald his domestic priorities and there is no headroom left for any fiscal stimulus program at all.
Actually, the full fiscal picture is much worse. If you ignore CBO's recession-free 206 months of Rosy Scenario (2009-2026) and use an economic forecast identical to the average of the last 10-years, there is $15 trillion of new deficits built-in under current tax and spending policy through 2026. That comes on top of the $20 trillion public debt we already have---half of which has been incurred since Obama took the oath in January 2009.
So attempting to shoe-horn trillions of "stimulus" into an already busted budget which labors under $35 trillion of public debt-----that is, debt already incurred or committed by law-----is a recipe for legislative and political conflagration under any circumstance.
Read the rest here.
David Stockman is the former Director of the Office of Management and Budget during part of the Reagan Administration, from 1981 to 1985. He is the author of The Great Deformation: The Corruption of Capitalism in America and The Triumph of Politics: Why the Reagan Revolution Failed.

Entrepreneurship, the Market Economy, and Human Betterment

Richard Ebeling emails:

Dear Bob,

The free market-oriented Nassau Institute in the Bahamas has posted on their website the video of my talk on, “Entrepreneurship, the Market Economy, and Human Betterment,” which I delivered at the College of the Bahamas on October 20, 2016.

I explained and emphasized the ethical and economic importance of entrepreneurship, and the social institutions essential for a functioning and flourishing free market economy, for the material and cultural improvement of mankind.

Competitive markets guided by market-oriented entrepreneurs not only “deliver the goods” also but generate a associative environment of politeness, courtesy, reliability, honesty and respect for those with whom we voluntarily interact, making for a more tolerate and civilized society.

At the same time, the market economies existing around the world, today, are unfortunately sometimes far removed from the free, competitive, voluntary, and peaceful conception of human association. The world we live in, unfortunately, is more “crony capitalism” than free market capitalism.

But this also enables us to understand that many of the worst or most frustrating aspects of modern society are not due to a “failure of capitalism” or profit-oriented entrepreneurship but are the necessary and inescapable results of the politicizing of economic affairs through the interventionist-welfare state.

Our task is to understand the difference between free market capitalism and crony capitalism, and inform our fellow citizens about the virtues and vitality of a market society set free in place of the interventionist and politically managed and manipulated economy under which we presently live.

My talk runs for about 40 minutes with Q & A for another 30 minutes.


It's Getting Crazy: Rubio Wants Sanctions on China

Government's harassing people is never a good thing and it is doubly dangerous when harassing people who are part of the ruling elite of a nuclear military power.

This is an object lesson in getting involved in a foreign entanglement that has nothing to do with the United States.


(ht Jay Stephenson)

Does the Balance of Payments Really Balance?

TT emails:
Perhaps you can explain something that I hear over and over again, but seems to be totally incorrect.  People write that "the trade deficit doesn't matter because it is offset by a capital surplus".  I believe this is patently false and misleading and shows a deep misunderstanding of basic accounting concepts as well as cross border flows.  Consider the following example:

I, an American, own $1 million dollars in US Treasury Bonds.  I sell those bonds, and use the proceeds to buy disposable goods from a Chinese company.

Putting aside costs and so for simplicity, the Chinese company now has $1 million.  They take those dollars and buy the Treasury Bonds that I previously owned.

Under your analysis, there is no issue because our Trade Deficit of $1 million is offset by a capital surplus of $1 million.  Of course those two numbers "offset" in arithmetic terms but they are hardly equivalent.  At the end of the day the US population has transferred $1 million of wealth to the Chinese population.

As Pat Buchanan pointed out, we have a cumulative $4 trillion deficit with China, so in effect we have transferred $4 trillion of wealth to them. 
Also, the story about Trump being "clueless" about the Softbank deal is equally flawed.  Softbank is going to bring NEW money into the USA from wherever they have it now.  This will create jobs and perhaps exports (really irrelevant).  It will NOT in any way increase the trade deficit.

If I am wrong I would appreciate a detailed response to my points. You have a big following and its important that your readers are getting accurate stories. Thank you. 
 My response:
You are doing what Trump is doing looking at just one side of the equation at any given point.

You write: "At the end of the day the US population has transferred $1 million of wealth to the Chinese population."

But this occurred only because we received $1 million in goods which was the only way the Chinese gained the funds to buy the bonds.

You write: "Softbank is going to bring NEW money into the USA from wherever they have it now.  This will create jobs and perhaps exports (really irrelevant).  It will NOT in any way increase the trade deficit."

US dollars, aside from being held as physical cash, must be used in the US, either on investments or consumption goods. If Softbank acquired the funds because of earlier goods sold overseas (Or otherwise, if it was a US investment overseas it is really a US deal), it means that much was spent on trade and because the money received from that trade is used to invest in the US as opposed to purchasing goods or service it creates a trade deficit.

Note: This also is a response to the comment left by at the post, Clueless Trump Just Hails a $50 Billion Increase in the Trade Deficit. writes:

You assume that the $50 billion dollars that is to be invested within the USA would otherwise have been used to purchase $50 billion dollars of US goods and services, which is an absolutely ridiculous assumption to make. Your Trump Derangement Syndrome at work again.
It is not absurd, it requires complex thinking to understand but it is an identity that by definition is correct.

Let me try to make it clear one more time via Investopedia:
A capital account shows the net change in physical or financial asset ownership for a nation and, together with the current account, constitutes a nation's balance of payments. The capital account includes foreign direct investment (FDI), portfolio and other investments, plus changes in the reserve account...
A country’s balance of trade is part of its balance of payments. For example, the balance of payments in the United States is composed of three subaccounts: the current account, the capital account and the financial account. Each has its own types of inflows and outflows.
Greg Mankiw in Principles of Macroeconomics explains it this way:
An important but subtle fact of accounting states that, for an economy as a whole, net capital outflow (NCO) must always equalt net exports (NX): 
This equation holds because every transaction that affects one side of the equation affects the other side by exactly the same amount, This equation is an identity--an equation that must hold becasue of the way the variables in the equation are defined and measured.
Not everyone is going to understand this but it is a fact.

That said, its usefulness is another thing. And we have Murray Rothbard to point this out:


Venezuela: Currency Worth So Little Shopkeepers Weigh Piles of Notes

This is what hyperinflation looks like.

Caleb Stephen at reports:

Inflation in Venezuela is projected to soar to 720 percent this year with the largest bolĂ­var bill now worth just five US cents on the black market.
Shopkeepers are reportedly weighing rather than counting the wads of cash customers hand them, and standard-size wallets have become all but useless in the socialist South American state. Now instead of a wallet, you literally need a backpack to haul around your sizeable load of cash (that’s if you have any).

Larry Summers: Donald Trump is Practicing Presidential Extortion of Companies for Symbolic Political Gain

It is interesting when you see lefties, who are all about central planning, coming out against interventions, but former Treasury Secretary Larry Summers is correct here:
Last week, I was sharply critical of President-elect Donald Trump’s effort to pressure Carrier into keeping jobs in Indiana, on the grounds that it was a step toward degrading American capitalism from being rules-based to being deals-based. The Carrier case has generated much discussion, so I want to follow up and make clear why my concerns are now considerably greater than they were even last week.

First, no one should be confused: This was more of a mugging than a bribe. The tax incentives offered by Indiana total $7 million over 10 years, or less than $1,000 per job-year. Incentives at this level would be standard in any business location decision. So, given the stakes involved, the decision was surely based on a reasonable judgment by United Technologies (the parent company of Carrier) that it did not want to be on the wrong side of the incoming president.

Second, the president-elect made clear that he wanted the deal to be seen as a precedent and would plan on pursuing policies of this kind in the future. It polled well and was hailed by some, such as Peggy Noonan and Steven Pearlstein, as successful symbolic politics. On the current trajectory, micro-intervention policies are surely likely to grow, so the question of their ultimate consequences is not a small one.

Third, apart from the process and values questions stressed in my distinction between rules and deals capitalism, there is a certain incoherence in the economics here. If it is cheaper to produce air conditioners in Mexico than in America, won’t Mexican production by non-American companies ultimately render Carrier in Indiana noncompetitive? If Carrier does not export capital to Mexico, won’t Mexico run a larger surplus with America? And isn’t this what the president-elect sees as bad? If foreign companies are allowed to run production chains that include Mexico and American companies are not, won’t American employment ultimately suffer?