6/1/17

So here we go again…

Readers of this Blog know that I do not like Germany.

I believe Germany is a parasite on the world stage, sucking life from its supposed allies by huge subsidies that it has been getting ever since WWII.

Read my posts “Germany” and the more recent “Trump’s First Foreign Trip.” Now comes the great WSJ and making it official that I am correct in my analysis at least as it comes to the trade issue (the WSJ was also fairly supportive of some of my other points at different times).
 
Today’s WSJ featured a front-page article by their Chief Economics Commentator, Greg Ip: “This Time, Trump Is Right About Trade.” In it, Ip states what I said in my aforementioned “Germany” post: Germany’s trade surplus is an abuse of the Euro and that other European countries suffer from it, as does the world at large.

Now, for readers of the WSJ like me, that article was a shocker. The WSJ is a staunch and relentless supporter of free trade, stating numerous times in its editorials that trade deficits do not matter and that Trump is wrong on this issue. For the WSJ to come out and actually support Trump on the matter of Germany’s (and, by the way, China’s, too) trade surplus/US deficit is astounding.

They are not admitting that they were wrong, which is a shame. They are trying to suggest that Trump is right for the wrong reasons. But we all know that Trump is simply incapable of articulating anything, let alone complex economic issues. He is the least eloquent person in the world (maybe a slight exaggeration, but he is a good contender for the title…). But, as we also know, his instincts and ability to zero in on the correct issues is legendary.

The WSJ basically states that both Germany and China (although they are suggesting that China has stopped doing it recently) have manipulated their currency. China by direct intervention and Germany by being part of the Euro. Is that not what Trump wails about all the time? Of course it is.
 
I am a staunch supporter of free trade. Absolutely. It is the lifeline of the world. But the economic theory of free trade (David Ricardo) assumed what is known in economic parlance as “perfect markets.” The markets in real life are never perfect but, at the very least, they should be free of government intervention and manipulations or, as Trump, in his simplistic ineloquent way, calls it ‘fair trade’. I agree with him and the WSJ should have joined that bandwagon a long time ago. And now that they have come out with it, they should have done a Mea Culpa and not tried to hide behind Trump’s general ignorance and lack of sophistication.
 
As was said by others many times: you have to take Trump seriously, but mot literally.
 
I highly recommend listening to the 7-minute broadcast where Greg Ip discuss this whole issue, “What Trump Gets Right About Trade.”

It is VERY educating.
 
Unfortunately, Ip is being very politically correct and instead of publicly calling out Germany and its deplorable policies leading to them being a parasite on the world stage and stating that the Euro is a total disaster, he is being very diplomatic about it.

The time has come in the current world we live in to drop diplomacy, to stop always being polite and politically correct and call a spade a spade. Maybe even a shovel!

That is what Trump is doing

P.S. There is going to be a follow-up post shortly relating to these facts, but discussing the shallowness of the public discourse.