The US trade deficit in goods jumped a solid $80 billion per year in 2018 to $878 billion, a net increase of 10% over 2017. This rather abstract figure is naturally spun to reflect either a rebuke of Trump and his policies or as a sign that the economy is particularly strong, depending on your perspective. From the point of view of China, it’s a sign that they might well be “winning” a trade war.
Is that what any of it means? The long answer is no, of course, but it begs the question as to what any of it actually does mean. It’s important to put the trade deficit into context and reach a deeper understanding of the flow of money around the world. The resulting analysis does show that there is a problem in the world, a fundamental imbalance, but does not tell us how much we should be worried about it.
What has been called “The best job market in half a century” is reason enough to revisit this piece from three years ago.
Is technology a net creator or destroyer of jobs? The question is as old as the Industrial Revolution, when workers in mills found themselves put out of work by large industrial looms. In France, they threw their shoes (sabots) into the weaving machines to destroy them – the origin of the term “sabotage”. The protests didn’t stop the machines, however, and the workers had to find something else to do in an ever-changing economy where machines did more and more work.
Today, the pace of technological change is faster than ever, with new gadgets coming into our lives constantly. Automation is also transforming our lives, with new robots and artificial intelligence replacing workers constantly. Are today’s productivity gains tomorrow’s unemployment? Increasingly those who study technology in our lives and the popular media are coming to the conclusion that yes, workers are net losers in the race against tech. And this is not a partisan issue.
Wall Street is cheering as trade talks with China progress. A full-on trade war may be averted. Is this reason to celebrate?
While it’s always good to avoid any kind of war, there is still reason to be concerned. Two very different nations with different economies still have to come to some kind of terms over the long haul. More to the point, it’s not about the differences in the economies but different approaches to very basic aspects of being a nation-state, including law.
Leaders sitting down and working out a deal seems like a good thing. But as always, the nature of the deal itself is very important.
Is it possible for a nation to rapidly modernize, joining the fully developed first world in just one generation?
The answer to that is clearly, “Yes,” but it comes with a lot of conditions and warnings. China, in its drive to be a great power and assume its rightful place in the world almost immediately, is paying attention to none of them.
That’s a harsh assessment, and it’s not quite correct. But there are far, far too many issues with the rapid rise of China that are not being dealt with appropriately. More importantly, given one quarter of the planet’s population, how this proceeds is going to affect everyone, everywhere.
Governor Newsom has officially ended California’s main high speed rail effort, cutting the project to the small section currently under construction. It’s a sad day for those of us who are supporters of high speed rail across the US for many reasons.
The most important reason to find this announcement upsetting is that it simply had to happen. This line, as conceived, planned, and implemented was dangerously flawed. Moving forward with this as the standard of rail in the US would cripple implementation across the nation.
It’s better off dead. We’re all better off with it being dead.
This article, a repeat from seven years ago, is actually more relevant today as the federal debt spirals out of control without even a solid crisis to explain it.
Those of you who are regular readers know that one of the basic principles of Barataria is that over the long haul there are very few surprises. Great empires come and go, economies hum along and then break, and new technologies add sparkle to our lives – but people are still people. When we take a strong half-step back, far enough for some perspective but not so far back we can’t keep our hands dirty, just about anything starts to make sense.
Today’s piece is a small summary of one small part of a breathtaking interview with Dr. Lacy Hunt of Hoisington Investment Management, conducted by Kate Welling and published by John Mauldin. The original article is a must read, but it takes hours to read, digest, and re-read. But there is one part that demands more discussion – and has a killer graph.
With the federal government open again, there’s a little less uncertainty in the economy. Things are back to normal and everyone is happy again. Right?
Unfortunately, the effects of the record shutdown are still hard to predict. As with any economic data, we won’t know until the quarter is over just what happened. We do have a few clues, however, and a few things that we can watch to know just where it’s going.