Debate: Can China Survive Trump?

a fiscal stimulus that puts more money into American shoppers’ pockets could actually boost demand for China’s exports. In Europe, anger is focused more on immigrants than trade.

.. the global economy continues to be distorted by huge trade imbalances. The worst offender is Germany, whose record-breaking surpluses just keep growing.

..  These and other large surpluses are driven not by rising productivity but rather by structurally weak domestic demand, and in most cases this weak demand isn’t being addressed except by being exported.

.. Nearly half the responsibility for absorbing foreign surpluses now falls onto U.S. consumers. That’s why, even if Trump is bluffing, this problem isn’t going away.

.. China probably has little more than two to four years in which to reverse its dependence on debt. Another credit-fueled stimulus would just give Beijing even less time.

.. Yet with household income at just over 50 percent of GDP, among the lowest in history, Beijing must raise household income even as it cuts back investment

Bannon Versus Trump

The populist ethno-nationalists in the Trump White House do not believe in this order. Their critique — which is simultaneously moral, religious, economic, political and racial — is nicely summarized in the remarks Steve Bannon made to a Vatican conference in 2014.

Once there was a collection of Judeo-Christian nation-states, Bannon argued, that practiced a humane form of biblical capitalism and fostered culturally coherent communities. But in the past few decades, the party of Davos — with its globalism, relativism, pluralism and diversity — has sapped away the moral foundations of this Judeo-Christian way of life.

Humane capitalism has been replaced by the savage capitalism that brought us the financial crisis. National democracy has been replaced by a crony-capitalist network of global elites. Traditional virtue has been replaced by abortion and gay marriage. Sovereign nation-states are being replaced by hapless multilateral organizations like the E.U.

.. In this view, Putin is a valuable ally precisely because he also seeks to replace the multiracial, multilingual global order with strong nation-states. Putin ardently defends traditional values. He knows how to take the fight to radical Islam.

It’s actually interesting to read Donald Trump’s ideologist, Bannon, next to Putin’s ideologist Alexander Dugin. It’s like going back to the 20th century and reading two versions of Marxism.

One is American Christian and the other orthodox Russian, but both have grandiose, sweeping theories of world history, both believe we’re in an apocalyptic clash of civilizations, both seamlessly combine economic, moral and political analysis.

.. “We must create strategic alliances to overthrow the present order of things,” Dugin has written, “of which the core could be described as human rights, anti-hierarchy and political correctness — everything that is the face of the Beast, the Antichrist.”

The Auto Industry: Mexico & Fuel Economy Standards

The Journal editorial board points out that there are policy moves that can be made to reduce the incentive to produce small cars in Mexico – namely corporate average fuel economy standards and trade deals that help American exports.

It’s true that auto makers have shifted production of small cars to Mexico, where wages are about 85% lower than in the U.S. But small cars aren’t profitable to make in the U.S., though they are necessary to meet the Obama Administration’s increasingly onerous fuel-economy mandates.

Some brave soul should also tell Mr. Trump that auto makers have moved production in Mexico because of its free-trade deals that provide better access to global markets. Mexico has 10 trade deals with 45 countries including the European Union and Brazil, which make up half of the global car market. The U.S. has 14 agreements with a mere 20 countries.

.. The bailout did work, for everyone except the taxpayers, who lost $10.5 billion.