Trump’s America First economic strategy looks a lot like the import substitution economic development strategy that was so popular several decades ago—notably in Latin America and South Asia.. But it only had limited success, especially compared to the export led growth strategy followed in East Asia. Import substitution tended to produce fragmented, inefficient and low […]
Last week Timothy Taylor at Convertible Economist did a very good post on gross vs net capital spending. Declining US Investment, Gross and Net He showed that in recent years the more rapid growth of high tech spending has had an unanticipated impact. The new high tech equipment has a much shorter life span that […]
President Trump is not alone in blaming NAFTA for the decline in US manufacturing employment over the last several decades. Many people on all sides of the political spectrum believe the same thing. But as this chart demonstrates the economic data tells a very different story. In the decade after NAFTA came into being, […]
Dear Americans
It is leap year and Wall St. is having its usual discussion of which candidate will be better for the stock market. I do not know, but it is interesting to look at the historic record. Starting with Truman makes a good comparison as Republican and Democrats have served almost the same number of years […]
I regularly see people comment about the decline in the importance of industrial production but I never see any data on how much it has declined. Finally, I saw a libertarian blogger talk about as a point in his argument but he also revealed that he had not idea what had happened to industrial […]
If you look at the federal deficit as a share of GDP by presidential administration an interesting pattern emerges. Every Republican administration left office with a larger deficit than they inherited. Every Democratic administration left office with a smaller deficit than they inherited. Why should we pay any attention to anything any Republican says about […]
With the earlier discussion of investments I thought a chart would be of interest. As you can see, investments grew until the Republicans started cutting taxes, supposedly to increase investments. (Cutting taxes to grow investments)
Both bulls and bears are examining wage growth for signs of incipient inflationary pressures. The current debate seems to assume that wages are completely determined by how much slack there is in the labor market and overall economy. Both conservatives and liberals seem to believe that if employment fall below current levels that wage growth […]
The recent stock market fall appears to be in reaction to weakness in foreign economies, not domestic developments in the US. One measure to watch is world trade. from December to May world trade volume fell -3.4%. Interestingly, in the first five months of the 1971 decline trade fell -3.5%, essentially the same […]