The upshot is that Peter Navarro, ominously the chief economic advisor to President Trump, is wrong – very wrong – on the relationship between deficits in traded goods and services, and the growth rate of the U.S. economy. The historical record suggests that the relationship is almost exactly the opposite of the one he posits. That he is a graduate of Harvard and a professor of economics makes one wonder whether he is simply mistaken or attempting to mislead the public. After all, it is difficult to stand out in a discipline as crowded and filled with brilliant people as economics. But if one happens to be the one trade-sceptic in the whole pack, one might well gain the favour of a U.S. President who, more than any other since the time of Herbert Hoover, is led by protectionist and nativist instincts.
As Hayek warned in The Road to Serfdom, in government, the worst often get on top.
What lessons can we draw from the competitive market for cosmetic medical procedures? Mark Perry has the answer.
Giovanni Peri reports important facts about recent immigration and U.S. economic growth. (HT Anthony Onofreo) A slice:
The immigrant inflow in the labor force has been rather gradual (about 0.5 percent of the labor force per year) and predictable. Therefore, the increased contribution of immigrants to employment did not reduce the capital intensity of the U.S. economy allowing firms to expand and adjust. There is little evidence that it has produced job displacement. However, immigration’s contribution to labor force growth has grown in importance over the past decade as the baby boom generation began to reach retirement age, increasing the share of workers ageing out of the workforce.