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Some Non-Covid Links

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My GMU Econ colleague Bryan Caplan offers further thoughts on the case for so-called “infant-industry protection. [2]” A slice:

In the debate, Daniel Hannan pointed out that almost no one who claims that wages “stagnated” (or even fell) since the 1980s would actually want to go through a one-way time machine back to 1980.  The literature on CPI bias [3] strongly backs him up.  Official statistics overstate inflation every single year (except 2020, where the opposite holds! [4]), so every year official measures of our standard of living become more and more absurdly pessimistic.

Here’s my review, in the Fall 2021 issue of the Independent Review, of Matthew Klein’s and Michael Pettis’s Trade Wars are Class Wars [5]. Two slices:

Trade Wars Are Class Wars has a few good moments, as when the authors expose the errors that underlie Peter Navarro’s fear of the U.S. trade deficit with China. But what readers get mostly is a hash of old-fashioned Keynesianism and mercantilism, flavored with milk from some modern sacred cows.

The theme is easily summarized. Rising inequality means that an ever-larger portion of income goes to the rich. Because the rich have a higher propensity to save than the nonrich, savings grow excessively as consumer spending shrinks dangerously. The resulting excess of global savings is driven chiefly by countries that run trade surpluses, such as China. Reduced consumption as a result of inequality is exacerbated by government policies—again, such as those in China—directly intended to enrich elites by taking purchasing power away from ordinary people. As a consequence, today’s global economy is glutted with production capacity that churns out excess quantities of goods year after year. The authors describe the result in words that cannot help but make any economically literate person wince: “Over the past several decades, demand for goods and services has therefore become the world’s scarcest and most valuable resource” (p. 225).

…..

Klein and Pettis complement their poor knowledge of the facts with their poor grasp of economics. Their economics is an extreme version of what used to be called “hydraulic Keynesianism.” Consider this representative passage: “The persistence of the American current account deficit can only be explained by excessive savings abroad and the U.S. role in absorbing these excess savings” (p. 214).

Throughout the book, the authors write of America “absorbing” capital and goods from abroad as if America were attached to other countries by a series of tubes through which flow savings and goods. When China and other countries save too much and produce more than their citizens are willing to consume, the excess must flow somewhere. As the theory goes, for a variety of reasons—not least of which is the dollar’s role as global reserve currency—most of this excess is pumped into America, and we Americans are forced to “absorb” all that is pumped onto our shores.

Poor us, having to “absorb” year after year after year lots of capital and goods from foreigners.

Liz Wolfe reports on Beijing’s cap on children’s video-game time [6].

Here’s Douglass Murray on the late Roger Scruton [7].

My GMU Econ colleague Pete Boettke reflects on the power of economics well-taught and well-learned [8].

Pat Lynch, rightly decrying the public-health leviathan, reminds us of the unfortunately neglected work of Clayton Coppin and my former GMU Econ colleague Jack High [9].

Art Carden celebrates the “symphonies of cooperation” that regularly feed us [10].

George Selgin analyzes David Reifschneider’s and David Wilcox’s case for a inflation-rate target three percent [11].