Monday, August 29, 2016

CONFIRMED Top Trump Economic Adviser is a Keynesian

Billionaire vulture investor and Donald Trump supporter Wilbur Ross, who is on a short list as a potential Treasury Secretary in a Trump administration, thinks that Keynesian stimulus policy works to cure the business cycle.

He writes today in the Financial Times:
Both US and European policymakers have misdiagnosed what ails the global economy. It is not a short-run, cyclical problem curable with textbook Keynesian stimuli (and exotics like quantitative easing).
He is also a trade Neandrethal. In the Finacial Times piece, he goes on to explain what "really" is ailing the U.S. and European economies from his perspective:
The broader lesson here is that while exports do indeed create jobs, it is net exports that ultimately matter. When countries like the US and continents like Europe run massive and chronic trade deficits and countries like China do not allow freely floating currency movements to balance trade, bad things will eventually happen in the forms of accelerated offshoring, slower growth, falling productivity and stagnant wages... Europe has lagged behind the US in imposing countervailing tariffs against dumping, and is now paying a very heavy price.
Bottom line: His advice is worse than that of John Maynard Keynes. Keynes was bad on the business cycle but at least understood the importance of trade. Ross is bad on both.


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