There was an interesting CFR (Council on Foreign Relations) YouTube Video titled: “A Conversation With Adam Smith,” which is note-worthy – in watching this intellectual panel discussion it occurred to me that maybe Washington DC needs a reboot, and CFR ought to consider their future policies in all of this too. In the video there was a bit of Trump trampling and a persnickety tone of arrogance. Okay so, here are some of my thoughts on this:
Actually Trump’s concept on foreign trade is very clear. “Free and Fair” – not lopsided trade deals merely to grab a client nation at the expense of free and fair trade. He’s a billionaire with business dealings around the world. I almost think that CFR is showing their anti-Trump stance (it’s getting old) and yet, CFR propped up Obama and Clinton which led to corruption and bad choices. Maybe CFR might need to look in their mirror, recent history and see just how bad much of their advice was. Additionally, CFR is continually touting the UN which always seems to make things worse, never solving much of anything.
One Washington DC economic policy adviser notes: “The economics on trade is very opaque: fewer barriers to trade are better than more, even if the trading partner raises its own barriers. As far as we understand the economy, this is true.”
Yes, agreed, but when every nation we trade with we find ourselves in an unfair position, today nearly all of our trade is lopsided, somewhere along the line we hurt ourselves economically. We cannot purposefully be at a disadvantage on every trade deal and still come out better off. Yes, we gain client nations, and yes, it is nice to make the rules of how the international community intermingles, and yes, it’s nice to have the world playing with US dollars allowing us to print more – but when we lend money into existence and the US citizen is on-the-hook for that debt, we need the money to circulate here too, if it doesn’t that’s not good. And with regards to what’s good for us and for them – consider this: when we hyper-inflate other nations due to giving them tremendous trade surpluses or free flowing borrowed monies, we end up building them up and collapsing them, then they don’t trust trade, the West or capitalism.
Further, when those foreign investors race to invest that money here in a safe-haven motif – we bloat our economy and banks’ reserves then we lend more in-house to our citizens over extending them and making risky loans, then we have boom and bust cycles – now those boom and bust cycles are world-wide, that is not a good thing for stability – politically, economically, or peacefully speaking.
If we are going to have trade rules, everyone should agree to free and fair trade, otherwise in the end the flows are unbalanced and we set ourselves and/or our trading partners up for wild swings and chaos. Not wise.