The United States hit the pause button on tariffs on Canadian aluminum today, agreeing to withdraw current penalties — at least until after the presidential election in November.

The move came right as Canada was set to impose a wide range of retaliatory measures that would have hit some politically inconvenient targets for President Donald Trump as he seeks re-election.

 R_P wrote:
 
If you think only tariffs are coming on Chinese products, you haven't been paying attention to the news.

WTO rules US tariffs on Chinese imports broke global trade rules
Rebuke likely to increase Trump administration’s animosity towards trade body

How's that trade war going?
U.S. trade deficit increased to $𝟓𝟒 𝐛𝐢𝐥𝐥𝐢𝐨𝐧 in September (reported today)
• 4th straight month of increase
• 7-month high
• Imports hit a record ($218 billion)
• Imports from China increased, pushed the trade gap up 4.3% to $40.2 billion — highest on record

Intellectual property — John H. Cochrane

Cochrane ridicules the notion that American companies operating or seeking to operate in China are 'forced' to transfer technology.  Nobody is forcing those companies to sign those contracts.

The Chinese currency manipulation story is old news.  The technology issue is real.   Though the answer appears simple if we follow Cochrane's suggestion: Just say no.

As for the Chinese distorting their own and global markets through an active, interventionist industrial policy — that is real.  

The best response would be public ridicule and active discrimination against Chinese financial activities in North American markets.  Block the Chinese from taking control of companies.

The Holy Grail of foreign direct investment (FDI) is the technology transfers — usually from the perspective of the host country.  Dumb capital is dumb capital and is relatively easy to come by.

Expertise is the key.  As most Chinese companies have little or nothing to show their North American peers, the social interest of Chinese buy-outs should be zero.   The Chinese severely restrict the activities of foreign multinationals operating on their soil, we should do the same with their multinationals on our soil.  Allow a minority interest at the outside.  

Foreign investment policy should not be predicated on simply making individuals richer.   In fact, the Chinese appear interested in buying foreign multinationals in order to acquire technology.  Some of the premiums the Chinese National Oil Companies (NOCs) have paid are fabulous.  The premium is being paid IMO to secure the technology and the opportunity for Chinese nationals to learn by doing, not the resource per se.  A simpler cheaper route would be to buy refined products in the global markets.

Still waiting for Lazy8 to quit holding back and tell us what he REALLY thinks about Paul Krugman.

 black321 wrote: 
Which is perhaps the best reason not to endorse it. Governments are notoriously bad at picking winners. I understand the grievance of the intetllectual property theft institutionalised by China, and agree there should be some push-back in that regard, but China has pursued this policy for decades. Years ago I remember a German manager half-joking that Germany had a technological lead over China in his field of about two months, not more.  In the end it is what you do with the expertise and how efficiently you apply it. Some countries still seem better than others just as some companies seem better than others. In the end it is going to be issues of corruption and nepotism that will place the biggest brake on economic output and that will hold as true in China as it does in the USA or anywhere else.

 NoEnzLefttoSplit wrote: 

 Lazy8 wrote: 
Sounds like he could be an economist.

 westslope wrote: 

 Lazy8 wrote: 

Agreed, Krugman has put out a lot of excellent, insightful op/eds since George HW Bush.

Mango Mussolini is good.  La Trumpette constantly has me asking:  is this corporate fascism?
 
The mistakes that Krugman has made and the criticism he has received figure importantly among the reasons that most academics eschew popular writing.  It detracts from research for peer review journals and the frequency of output means ex ante a higher probability of misses.   

Look at main stream journalism regardless of the period or the country.  Journalists are always making mistakes.  Comes with the pressure to create content on a daily or weekly basis.  There is no conspiracy here. 

When I was very active in the 1980s peace and disarmament movement and closely followed the press, particularly media agenda setters I often wondered if up to 15% of the content was somehow wrong.  The nature of the beast that is all.  

Which in some respects is too bad. Look at the US cultural wars become even more polarized with the election of la Trumpette.   The USA has some of the most educated best brains on the planet and yet we constantly talk about American Exceptionalism which is code for the following.

Other rich, developed countries pay close attention to US policy experts and scientists while many US voters ignore them or go so far as to support policies diametrically opposed to the recommendations of hated experts.  

 westslope wrote:

 Lazy8 wrote: 
That is off the mark. 

The "Dems" came into power right after the 2008 Great Recession started.  When the GOP candidate was elected president, 9 years had elapsed since the Great Financial Recession and the US economy was already growing strongly.  

I can't think of anything in Krugman's writing that would have him sympathizing with the President la Trumpette's pro-cyclical Marxist Keynesian fiscal policy.  

 Lazy8 wrote: 
You're right, I was paraphrasing, and shouldn't have used quotes. Your exact statement was "He's all for trade wars...when Democrats get to wage them". My apologies.

July 20, 2018 11:35 a.m. ET

President Donald Trump is steering U.S. economic policy in a radically new direction. From trying to revive steelmakers with tariffs to vetoing Chinese technology investments, he is using the federal government to direct which industries prosper and which don’t.

https://www.wsj.com/articles/trumps-emerging-economic-policy-picking-winners-and-losers-1532100935?mod=hp_lead_pos4

 westslope wrote:

Lazy8,

You are correct in much of your criticism of Paul Krugman.  I recall post Great Recession feeling really angry towards Krugman. In particular because of the NYT September 2009 article that you posted.  I also recall stopping reading Krugman on a regular basis after that.  

I agree that some of the name calling is childish and provocative in an unproductive way.  He writes like he is having a heated seminar discussion with colleagues that he knows well.

The Neo-Classical Keynesian synthesis may no longer be taught in graduate in schools but it is still taught at the under-graduate level and is pervasive in the media/business press.  

Krugman's obsession with the liquidity trap was unconvincing.

His advice to run bigger deficits after 2008 was not one that many agreed with given the exceptionally loose, stimulative monetary policy at the time.  But certainly in hindsight, the US had the room to increase deficit-financed expenditures.   For better or worse, Krugman's prescription fits with traditional Keynesian macroeconomic management.  

Krugman's call for increased deficit financing post 2008 does not fit with Conservative Keynesian macro management which emphasizes the use of automatic fiscal stabilizers and eschews discrete fiscal stimulus or discrete fiscal withdrawal.  

A couple of more comments:

- this discussion is more insightful than many of the comment pages on economic blogs by heavy hitters.  You Lazy8 and others are to be commended.

- just because Paul Krugman is off-side on the professional economist consensus on some issues and just because Krugman can be prickly and child-like on occasion does not mean that everything he writes is irrelevant or should be ignored.  

- as a general rule, when 'experts' stray outside their area of immediate expertise, they tend to make a lot of mistakes.  

 aflanigan wrote:

 Proclivities wrote: 
agreed. You need more beer. It is also far too early to tell yet. Just wait till the higher costs hit the consumers.

 aflanigan wrote: 
I have a libertarian bent but also have a lot of respect for Krugman. I find him weakest in the macroeconomic sphere but he is still most worthwhile.  

The Austrian school had/has some interesting ideas but insufficient empirical support for many ideas.  

Krugman has been critical of the Israeli nation-building process and has lamented the difficulty of discussing the Israeli project.   I trust everybody knows what happens to "Bad Jews" or "Soft Jews".  

Ring, ring!   At 2:00 AM.   "Hello?"   "You are going to die."