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Quotation of the Day…

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… is from page 125 of Milton and Rose Friedman’s 1984 book, Tyranny of the Status Quo [2]:

Unknown-2Double-entry bookkeeping is a marvelous device.  The two sides of a balance sheet, or a cash flow account, must balance.  So, too, the total of dollars bought for foreign currencies must equal the total of dollars sold.  If many of those dollars bought are in turn used to buy stocks or bonds or other property in the United States, they cannot be used to buy U.S. goods for export.  A so-called surplus on capital account – more capital coming in than going out – must be balanced by a so-called deficit on current account – a larger dollar volume of imports than exports.

DBx: Trump and his trade triumvirate [3] – despite at least one of them (Peter Navarro) having a PhD in economics – do not grasp this basic economic point.  They mistake dollars not coming back to America on America’s current account for dollars not coming back to America at all.

Once again, ignorance of economics isn’t criminal, but it is criminal to use force to prevent people from buying and selling peacefully.  And the offense only worsens when the intelligence of informed people is continually insulted by the idiotic justifications given for these trade restrictions.

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