America’s monopolistic and dysfunctional health care costs eat up double the percent of gross national income that they do in Europe, some 17 percent. Several years ago, I wrote how Canadian auto workers’ health insurance costs were just 10 percent of what American car companies pay. Every American worker is costing his or her employer some $10,000 for health insurance plus now they must pay all sorts of co-pays and deductibles. Ford pays some $15,000 per year per worker.
.. Jon Basil Utley is publisher of The American Conservative.
Arguments against Free Trade are Deeply Flawed
Sanders says that he believes in “fair trade.” What he means is that we can’t be expected to do business with countries that pay their workers a lot less than we pay our workers. He suggested to the New York Daily News this week that we should have free trade only with countries that have the same wages and environmental policies as us, which is another way of saying we shouldn’t trade with poor countries.
.. In practical terms, Sanders wants to keep billions of (non-white) people poor — very poor. If America were a flea market, his policy would be akin to saying, “Poor people of color cannot sell their wares here, even if customers want to buy them.”
.. One irony to this all of is that despite all the textbooks that claim nationalism and socialism are opposites, the reality is that when translated into policy, they’re closer to the same thing. The rhetoric may be different, but the economic program of nationalism is socialism, and the emotional underpinnings of socialism boil down to nationalism. For instance, Sanders wants socialized medicine. Well, what is the difference between socialized medicine and nationalized health care? Spelling.
The Trade Deficit Isn’t a Scorecard, and Cutting It Won’t Make America Great Again
Imagine a world where there are only two countries, and only two products. One country makes cars; the other grows bananas.
People in CarNation want bananas, so they buy $1 million worth from people in BananaLand. Residents of BananaLand want cars, so they buy $2 million of them from CarNation.
That difference is the trade deficit: BananaLand has a $1 million trade deficit; CarNation has a $1 million trade surplus.
.. But this does not mean that BananaLand is “losing” to CarNation. Cars are really useful, and BananaLandites got a lot of them in exchange for their money.
.. If you want to think of it in terms of winners and losers, in fact, you could justifiably reverse Mr. Trump’s preferred framing: “Those losers in Mexico gave us $58 billion more stuff than we gave them last year. Ha, ha, ha. We’re winners.”
.. Unfortunately, how countries use these capital inflows is not always so good. In the United States, the influx of foreign capital in the mid-2000s went in large part to fuel an unsustainable housing and mortgage bubble. Greece’s capital inflows in the same time period went to fund bloated public spending.
.. When a Malaysian company does business with a German company, in many cases it will do business in dollars; when wealthy people in Dubai or Singapore’s government investment fund want to sock away money, they do so in large part in dollar assets.
That creates upward pressure on the dollar for reasons unrelated to trade flows between the United States and its partners. That, in turn, makes the dollar stronger, and American exporters less competitive, than they would be in a world where nobody used the dollar for anything except commerce involving the United States.
.. In the mid-20th century, the economist Robert Triffin warned that the provider of the global reserve currency would need to run perpetual trade deficits to keep the world financial system from freezing, with those trade deficits potentially fueling domestic booms and busts.
Campaign Trade Wars
Around that time, in a televised debate, Trump complained that the T.P.P. favored China. It fell to Senator Rand Paul, then still in the race, to point out that China was not a party to the agreement. Indeed, one of the T.P.P.’s main purposes, according to its American proponents, including President Obama, is to serve as a counterweight to China’s burgeoning economic power in the Pacific.
.. Trump—his trash talk, inconsistency, threats, and straight-up ignorance. In a meeting last week with the editorial board of the Times, he deplored the fact that the United States, after helping to create the Iranian nuclear agreement, was being beaten out by other countries in the scramble for new, post-sanctions business deals with Tehran. He clearly did not know that Congress, by declining to lift sanctions, is keeping the United States out of that game.
.. He even introduced legislation, in the House, to require his fellow-representatives to lower their own salaries, if they passed NAFTA, to the pay level of Mexican politicians.
.. On the day of the San Bernardino shootings, reflecting on the Paris attacks three weeks before, which left a hundred and thirty dead, he told CNN, “Whenever there’s a tragedy, everything goes up, my numbers go way up.”)