TALES OF THE “UNEXPECTED”

I have been working through a textbook called “Zombie Economics” by Professor John Quiggan. Although it is probably seen now as older book (published by Princeton University Press in 2010) it might just as easily now be seen the playbook for President Trump’s walking dead, tried and failed recycled economic theories. As the professor reminds us, these are the standard ideas that have traditional appeal, fall short on their promise, refuse to die and which time after time traditionally attract the economically illiterate.

Help the rich and you will get trickle down ….but every time that one has been tried, the wealth coagulates at the top and refuses to trickle. Privatization, efficient markets hypothesis, dynamic stochastic general equilibrium and so on…..(OK it is true these imagined novelties would be long words for Mr Trump but he seems to be fixated on such hoary and deservedly well and truly dead ideas even when he doesn’t know what they are called!). Unfortunately history teaches that every one of these ideas which resurfaces for every generation, sooner or later will fail yet again. Bash your trading partners, strange that they are so ungrateful to look as for trade elsewhere and offer those cheap goods to some other competitor. Reduce taxes… golly, where did my history book say that had already been tried? And surprise, a few days before the Government has gone broke yet again we realise the taxes were actually being used to keep society ticking over ….. In short to misquote one cynic, when we look in awe at recent developments at the White House, “Is there no beginning to this man’s talents?”

Well, America, we look at this week’s news. And don’t lay the blame entirely on the man at the top. Presumably lots of those attracted to Zombie Economics, together with someone called Gerry Mander, voted him in. And that brings us to this week’s edition of our future. We see that America has just blocked the UN from the latest plan to bring about peace in Yemen…hang onto those armament shares and prepare to repel (unexpected?) refugees fleeing from the recurring daft notion that money spent on armaments doesn’t have a down side. Oh and by the way, UN aid has been pruned back. Where did that (unexpected?) increase in communicable disease come from?

Bring those jobs back home by using tariffs to force the factories back to home soil. “Made in America” – another oldie but a goodie. Were those advisors asleep at the wheel when they forgot to warn the President that the reason why the factories were shifted in the first place was that in places like China the factories are cheaper to build and staff, and even raw materials are cheaper so products could arrive cheaper in the American shops to compete for the diminishing money at home. Now it turns out that the factories are even more expensive to build in America because some construction steel now arrives with an in-built tariff. To make matters worse the cars that some of those American factories were going to produce now have to be partially made with tariff benighted steel.

In a way it is hardly surprising that a newcomer to the curious world of trade and international relations might be led astray by dimly remembered historical antecedents. Centuries of bullying colonial power centres gave the strong nations freedom to impose their will on the weak and one sided trade deals could be – and were – put together or demolished at will. However the modern world is far less predictable or controllable. The geographical divisions no longer apply because the lightning fast communications and the complex supply chains now make the traditional approach of looking after one’s own interests curiously redundant.

Leaving those rivers in Asia pouring plastic waste from third world countries into the oceans no long seems such a great idea to defend with the Trumpian argument that it is just their problem. Sooner or later the great ocean currents or for that matter, the polluted air nations doesn”t respect national boundaries and surprise (?) – it makes the third world problems our problems. Diseases, allowed to spread unchecked in foreign places, haven’t the sense to stay within the geographical boundaries, but we are too busy with programmes like making America great to notice that it might have something to do with our failure to help. And surprise (?), it seems we can’t keep the diseases at a safe distance when some of the disease carriers are a day’s jet flight away. In short there is a hard lesson waiting to be noticed that even aid for non fellow country citizens coincides with our self-interest and in short, if we don’t help those refugees or distant victims of our own greed, recent history assures us that sooner or later they will turn up on our own doors steps and walls on borders will seems laughably inadequate when the trickle turns to a flood.

For those unaccustomed to studying economics is so simple. To the newcomer taking his or her first look at the latest theory, training in any form of business, say… real estate… is all that is needed to elbow the current advisors aside. Oh dear. Could what we see now be a slight bump in Dorothy’s journey down the Yellow Brick Road? We see that Mr Trump “slightly” misunderstood (!!!) what China was actually offering at the G20 (or should that be G19?) so what happened to his self advertised infallible brain? A few months back, if I have understood the man correctly, he was saying while it is true that it sometimes takes a while for truly great ideas …by which he seems to mean whatever failed last time, to kick-in, so eventually the last President’s ideas can be replaced. It is now starting to happen. Are we happy?

Well here we are, entering Mr Trump’s Promised Land. I hope you won’t think me too crass if I choose to remember Donald Trump’s irritation at the end of last year when he went on TV to announce that people had failed to notice that the then buoyant Stock Market was really all entirely due to Mr Trump’s doing. Fair is fair, let’s first follow the man’s wishes and acknowledge Mr Trump’s part in bringing about today’s stock market position, before quietly asking the wee question about the sort of economic wisdom that allowed this week’s disasters to happen.

We might also acknowledge the GOP for their part in the current set of totally expected disasters, because as a consequence of the support from the red hats, Mr Trump has been allowed to further develop his rediscovered Zombie-like, ill-fated ideas (not from his brain he insists, but from his gut!). I guess this means if all else fails he might even shift the blame to Diet coke.

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