Jamesian Philosophy Refreshed

Here’s a key point about trade. A bilateral trade deficit is NEVER by itself a policy issue. Consider a microeconomic parallel. I have a severe bilateral trade deficit with my barber. I’m a content provider for websites and my barber doesn’t even HAVE a website. He has no need for my services at all. But I regularly need my hair cut. So the trade between us is one way. I pay him cash, he provides a service to me. Is this alarming? No. Why not? First, because I do need the hair cuts and my barber does a good job of providing them. Second, because the price he charges is fair. If it weren’t fair, there would be other barbers in the world to whom I could turn. Third, because trying to cut my own hair would be an unproductive waste of my time — time better spent preparing content for websites. Likewise, there is nothing alarming if the US sells little to the People's Republic of China, and China sells a lot of stuff to us.  In that case, China is the barber.  Now, if I ...

At  this time of year I ask myself what were the biggest stories of the past twelve months in business/financial news.  Here are the twelve stories, by month, that especially caught my attention and that in retrospect I recommend to yours. I'll make no effort to rank their importance against one another, so I will simply order them by month.  January: Multilateral Trade Agreement. The Trans-Pacific Partnership reconstituted itself despite the US withdrawal, in an agreement announced on the 23d. This is a fine example of a broader and (for the US) an unfortunate trend. The US is locking itself out of free trade areas. To the extent free trade does work to stimulate economic productivity, the US is withdrawing from that. February: Offshore natural gas. A dispute between Cyprus and Turkey over offshore drilling rights for natural gas nearly became a war as the Turkish navy obstructed a drilling vessel.  This, too, I take as a token of a broader develo...