Looking In On The Real Paul Ryan–The Retiring Speaker of House


April 19, 2016

Looking In On The Real Paul Ryan–The Retiring Speaker of  House

he mistake about Paul Ryan, the one that both friends and foes made over the years between his Obama-era ascent and his just-announced departure from the House speakership, was to imagine him as a potential protagonist for our politics, a lead actor in the drama of conservatism, a visionary or a villain poised to put his stamp upon the era.

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Paul Ryan, Party Man

 

This Ryan-of-the-imagination existed among conservatives who portrayed his budgetary blueprints as the G.O.P.’s answer to the New Deal, among centrist deficit hawks who looked to him to hash out their pined-for grand bargain, and among liberals for whom Ryan was the most sinister of far-right operators, part fanatic and part huckster — a Lyle Lanley with “Atlas Shrugged” in his back pocket, playing everyone for suckers while he marched the country into a libertarian dystopia.

It existed among the donors who wanted him to run for President, the pundits who encouraged Mitt Romney to choose him as a running mate, the big names who pressured him into the speakership. And it existed among anti-Trump conservatives, finally, who looked to Ryan to be the Republican of principle standing athwart Trumpism yelling stop.

But the real Ryan was never suited for these roles. He was miscast as a visionary when he was fundamentally a party man — a diligent and policy-oriented champion for whatever the institutional G.O.P. appeared to want, a pilot who ultimately let the party choose the vessel’s course. And because the institutional G.O.P. during his years was like a bayou airboat with a fire in its propeller and several alligators wrestling midship, an unhappy end for his career was all-but-foreordained.

This is not to say that he lacked principles. The frequent descriptions of Ryan as a Jack Kemp acolyte — a supply-side tax cutter and entitlement reformer and free trader who imagined a more immigrant-welcoming and minority-friendly G.O.P. — were accurate enough; there was no question that the more a policy reflected Ryan’s deepest preferences, the more Kempist it would be.

But even there, he came to those principles at a time when they were ascendant within the party — in the period between the supply-side ’80s and the late-1990s window when centrist liberals seemed open to entitlement reform. And then as Republicans moved away from them, tacking now more compassionate-conservative, now more libertarian, now more Trumpist, his resistance to the drift was always gentle, eclipsed by his willingness to turn.

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Thus the Ryan of the George W. Bush era cast votes for the pillars of compassionate conservatism, No Child Left Behind and Medicare Part D. Then the Ryan of the Tea Party era championed austerity, talking about “makers and takers” and tossing out the Ayn Rand references that persuaded many liberals that he was an ideological fanatic. But that Ryan gave way to Ryan the dutiful running mate, which gave way in turn to the more moderate Ryan of Obama’s second term, who negotiated a budget deal with Democrats and moved toward so-called “reform conservatism” in his policy proposals at a time when that seemed like that might be the party’s future.

Then came the 2016 election, in which Ryan temporarily resisted Trump and then surrendered lest he break the party (which a party man could never do), and after that the Trump administration, in which Ryan has obviously steered Trump toward standard Republican policies — but has just as obviously been steered as well. Most of Ryan’s past big-picture goals (entitlement reform, free trade, minority outreach) are compromised or gone, and while he attempted Obamacare repeal and achieved a butchered version of corporate tax reform, he’s accepted spending policies that make a mockery of any sort of libertarian or limited-government goal.

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If you look at all this and see an obsessive ideologue working tirelessly for Randian ends, I think you’re being daft. But it’s equally daft to see this as the story of a great visionary brought low by Trump. The truth is that Ryan probably could have thrived as a legislator in a variety of dispensations: As a Reaganite if he’d been born early enough; as a Kempian or compassionate conservative if the late-1990s boom had continued; as a bipartisan dealmaker in a world where his base supported compromises (the blueprints he drew up with Democrats like Ron Wyden were usually interesting); as some sort of reform-conservative-inflected figure under a President Rubio or Kasich.

But in a dispensation where the G.O.P. was leaderless, rudderless, yawing between libertarian and populist extremes, he was never the kind of figure who could impose a vision on the party — nor would he would break with the party when it seemed to go insane.

Instead, he only knew how to work within the system, which because the system had turned into a madhouse meant that his career could only end where it ended this past week: in a record of failure on policy and principle that he chose for himself, believing — as party men always do — that there wasn’t any choice.

Nicholas Kristof is off today.

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Trump is right on China-US Trade


April 9, 2018

Trump is right on China-US Trade

by  Dr. Fareed Zakaria

https://www.washingtonpost.com/people/fareed-zakaria/?utm_term=.b9d5085da8fd

Ever since the resignation of top advisers Gary Cohn and H.R. McMaster, it does seem as if the Trump White House has gotten more chaotic, if that is possible. But amid the noise and tumult, including the alarming tweets about Amazon and Mexico, let’s be honest — on one big, fundamental point, President Trump is right: China is a trade cheat.

Many of the Trump administration’s economic documents have been laughably sketchy and amateurish. But the Office of the U.S. Trade Representative’s report to Congress on China’s compliance with global trading rules is an exception worth reading. In measured prose and great detail, it lays out the many ways that China has failed to enact promised economic reforms and backtracked on others, and uses formal and informal means to block foreign firms from competing in China’s market. It points out correctly that in recent years, the Chinese government has increased its intervention in the economy, particularly taking aim at foreign companies. All of this directly contradicts Beijing’s commitments when it joined the World Trade Organization in 2001.

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President Donald Trump’s Trade Policy: Getting Tough on China

Whether one accepts the trade representative’s conclusion that “the United States erred in supporting China’s entry into the WTO,” it is clear that the expectation that China would continue to liberalize its markets after its entry has proved to be mistaken.

Washington approached China’s entry into the world trading system no differently from that of other countries that joined in the mid-20th century. As countries were admitted, the free world (especially the United States) opened its markets to the new entrants, and those countries in turn lowered barriers to their markets. That’s how it went with such nations as Japan, South Korea and Singapore. But there were two notable factors about these countries: They were relatively small compared with the size of the global economy, and they also lived under the American security umbrella. Both factors meant that Washington and the West had considerable leverage over these new entrants. Singapore had 2.2 million people and a gross domestic product of $19 billion when it joined the GATT (the precursor to the WTO), while South Korea had 30 million people and a GDP of $41 billion. Japan was larger, with 90 million people and a GDP of under $800 billion. (All GDP figures are adjusted for inflation.)

And then came China, with 1.3 billion people and a GDP of $2.4 trillion when it joined the WTO in 2001. That was almost a fifth of the U.S. economy. The Chinese seemed to recognize that once they were in the system, the size of their market would ensure that every country would vie for access, and this would give them the ability to cheat without much fear of reprisal. Moreover, Beijing was never dependent on Washington for its security. It had fought a war against American troops in the 1950s with some success and had grown into a great power in its own right.

The scale and speed of China’s integration into the world trading system made it a seismic event. The distinguished economist David Autor, along with two colleagues, has published study after study on the impact of the so-called China Shock. They conclude that about a quarter of all manufacturing jobs lost in the United States between 1990 and 2007 could be explained by the deluge of Chinese imports. Nothing on this scale had happened before.

Look at the Chinese economy today. It has managed to block or curb the world’s most advanced and successful technology companies, from Google to Facebook to Amazon. Foreign banks often have to operate with local partners who add zero value — essentially a tax on foreign companies. Foreign manufacturers are forced to share their technology with local partners who then systematically reverse engineer some of the same products and compete against their partners. And then there is cybertheft. The most extensive cyberwarfare waged by a foreign power against the United States is done not by Russia but by China. The targets are American companies, whose secrets and intellectual property are then shared with Chinese competitors.

China is not alone. Countries such as India and Brazil are also trade cheats. In fact, the last series of world trade talks, the Doha Round, was killed by obstructionism from Brazil and India, in tandem with China. Today the greatest threat to the open world economy comes from these large countries that have chosen to maintain mixed economies, refuse to liberalize much more and have enough power to hold firm.

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The Trump administration may not have chosen the wisest course forward — focusing on steel, slapping on tariffs, alienating key allies, working outside the WTO — but its frustration is understandable. Previous administrations exerted pressure privately, worked within the system and tried to get allies on board, with limited results. Getting tough on China is a case where I am willing to give Trump’s unconventional methods a try. Nothing else has worked.

Reimagining Security and Rethinking Economics


April 7, 2018

Reimagining Security and Rethinking Economics

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US President Donald Trump signs trade sanctions against China–Making a Non-Issue  into a Global Probem–Trump’s Economics

Economic and financial issues nowadays tend to be discussed in intellectual silos, by specialists who give little mind to security concerns or the interplay between national and international objectives. But sooner or later, economists will realize that global security demands a new approach, just as it did in the interwar period.

PRINCETON – Now that the world is facing a trade war and the growing possibility that the West could find itself in a real war, we would do well to reconsider the lessons of the interwar period.

Many of today’s economic and security disorders are frequently attributed to the 2008 global financial crisis. In addition to exposing the flaws in conventional economic policies, the crisis and its aftermath accelerated the global rebalancing from the Atlantic to the Asia-Pacific region, while fueling political discontent and the rise of anti-establishment movements in the West.

Image result for Reimagining Security and Rethinking EconomicsDr Buckminster  Fuller is a creative genuis, thinker and builder

Likewise, the Great Depression of the 1930s is usually thought to have produced a seismic shift in economic thinking. According to the conventional narrative, policymakers at the time, having vowed never to repeat the errors that led to the crisis, devised new measures to overcome their economies’ prolonged malaise.

The conceptual and institutional reordering of economics that followed is usually credited to one towering figure: the British economist John Maynard Keynes, who published The General Theory of Employment, Interest, and Money in 1936. Keynes also orchestrated the 1944 Bretton Woods conference, which led to the creation of the World Bank, the International Monetary Fund, and the post-war global monetary order.

According to Keynes’s collaborator and biographer Roy Harrod, Keynes enjoyed a god-like presence at the Bretton Woods talks. But some of Keynes’s other contemporaries, notably the British economist Joan Robinson, always doubted that he deserved so much credit for ushering in the new order.

 

After all, the real reason that Keynesian thinking took hold was that its method of calculating aggregate consumption, investment, and savings proved invaluable for American and British military planning during World War II. With consistent national accounting, governments could make better use of resources, divert production from civilian to military purposes, and curtail inflationary pressures, thereby maintaining consumption and staving off civil unrest.

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The same tools turned out to be just as useful in reorienting the post-war economy toward higher household consumption. But the point is that the revolution in economics, followed by the economic miracles of the post-war era, was a product of wartime calculation, not peacetime reflection. Pressing security concerns and the need to ensure domestic and international stability made policymakers more willing to challenge longstanding economic orthodoxy.

This era holds important lessons for the present. Nowadays, many economists complain that the financial crisis did not prompt a serious rethinking of conventional economics. There are no modern-day equivalents to Keynes. Instead, economic and financial issues tend to be discussed in intellectual silos, by specialists who give little mind to security concerns or the interplay between national and international objectives.

Still, as in the interwar period, there are security threats today that will make rethinking economic assumptions necessary, if not inevitable. Though the financial crisis did not lead to a holistic intellectual reckoning, three broader challenges to the liberal international order since 2016 almost certainly will.

The first challenge is the existential threat of climate change, which will have far-reaching geopolitical consequences, particularly for areas already facing water shortages, and for tropical countries and coastal cities already experiencing the effects of rising sea levels. At the same time, some countries will enjoy temporary gains, owing to longer growing seasons and increased access to minerals, hydrocarbons, and other resources in polar regions.

Ultimately, reducing the amount of greenhouse gases in the atmosphere will serve the common good. But, without an international mechanism to compensate those most at risk of a warming planet, individual countries will weigh the trade-offs of reducing greenhouse-gas emissions differently.

The second global challenge is artificial intelligence and its foreseeable disruption of labor markets. AI threatens not just employment but also security, because it will render obsolete many technologies that states use to defend their populations and deter aggression. It is little wonder that larger powers like the United States and China are already racing to dominate AI and other big-data technologies. As they continue to do so, they will be playing an increasingly dangerous and unstable game, in which each technological turn could fundamentally transform politics by rendering old defenses useless.

The third challenge is the monetary revolution being driven by distributed-ledger technologies such as block chain, which holds out the promise of creating non-state money. Since Bretton Woods, monetary dominance has been a form of power, particularly for the US. But alternative modes of money will offer both governments and non-state actors new ways to assert power or bypass existing power structures. Cryptocurrencies such as Bitcoin are already disrupting markets, and could someday alter the financial relations on which modern industrial societies are based.

In the new political geography, China, Russia, India, and others see each of these challenges as opportunities to shape the future of globalization on their own terms. What they envision would look very different from the model of the late twentieth century. China, for example, regards AI as a tool for recasting political organization through mass surveillance and state-directed thinking. By replacing individualism with collectivism, it could push global politics in a profoundly illiberal direction.

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Fortunately, there are alternative paths forward. In rethinking economics and security, we will need to develop an approach that advances innovation within a framework of coordinated deliberation about future social and political arrangements. We need to apply human imagination and inventiveness not only to the creation of new technologies, but also to the systems that will govern those technologies.

The best future will be one in which governments and multinational corporations do not control all of the information. The challenge, then, is to devise generally acceptable solutions based on cooperation, rather than on the destruction of competing vision.

*Harold James is Professor of History and International Affairs at Princeton University and a senior fellow at the Center for International Governance Innovation. A specialist on German economic history and on globalization, he is a co-author of the new book The Euro and The Battle of Ideas, and the author of The Creation and Destruction of Value: The Globalization Cycle, Krupp: A History of the Legendary German Firm, and Making the European Monetary Union.

GE-14: What is the Economic Agenda?


April 4, 2018

GE-14: What is the Economic Agenda?

by Dr.  Shankaran Nambiar (received via e-mail)

WHAT is at stake in the next general election? There are accusations and counter-accusations being traded. Scandals are being hung for all to see – on both sides of the divide.

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Can one expect a major shift in the economic policy framework? It is not certain if the next government is going to cut the size of the civil service. Or if we are going to have high quality state-financed healthcare as in Norway, Finland or the United Kingdom. Or if higher education is going to be entirely a public sector affair as in the UK or Australia.

It seems that the fundamental economic model is set and will not change. Nevertheless, all political parties are strongly convinced of the importance of free trade, regional integration and the role of foreign direct investment. The implementation and details will vary with each party.The devil, as usual, is in the details.

But there is no doubt that the country needs a clear agenda for economic progress. The principles guiding economic reform have to be re-visited and a framework will have to be designed.

One such list of priorities could be as follows:
» Rolling down government involvement in business
» Prioritising efficiency and the achievement of outcomes
» Creating adequate opportunities for all groups, particularly the disadvantaged
» Ensuring the economic neutrality of the country
» Affirming good governanceImage result for Malaysia in Troubled Times

From One Malaysia to Malaysia TN50–Quo Vadis, Malaysia

A little elaboration is in order. First, government participation in business cannot be ruled out. As economic theory suggests, government participation is necessary in areas that are not attractive to the private sector. The government’s involvement is usually welcome if security issues are at stake; or if the investment is risky but necessary for the public good.

The rationale for government-linked companies to invest in hospitals or private universities is a bit of a puzzle. Why should the government (even if indirectly) get in the business of healthcare and education when it should be supporting the provision of these services?

Second, the efficiency of the public sector has to be further upgraded. This includes public delivery systems (where there has been tremendous improvement in many areas) and it should also include public procurement and the decision-making on projects (particularly mega projects).

Third, the responsibility of the government should be to ensure the fair distribution of opportunities. Prioritising opportunities entirely on the basis of ethnicity can create inefficiencies. It can also de-incentivise targeted agents. People who have been selected to receive benefits can lose the motivation to maximise their performance.

Efficiency and the achievement of outcomes cannot be pushed aside. There is a debate in economics on outcomes versus opportunities. In practical terms, one cannot indefinitely defend creating an opportunity-rich environment with no regard for outcomes.

Fourth, good governance covers a range of issues including institutional integrity, the freedom to voice one’s opinions, being free from violence, transparency and zero tolerance for corruption.

The Rule of Law is a key pillar of good governance. It should stand above position, title, religious belief and political association.

Fifth, it is essential that Malaysia retain its independence and sovereignty.

Razeen Sally, a prominent academic and Sri Lanka observer, is known to have remarked at a conference that Sri Lanka should not become a vassal state of China. The same cautionary comment could be made in a different and perhaps a more general context. Malaysia should resist any attempt to reduce itself into being a vassal state of any superpower.

Politicians claim that Malaysia needs foreign direct investment and that it does not matter where this comes from. This is a naïve argument. There is a difference between an investment made for commercial reasons and one that is made so that a superpower can exert its sphere of influence.

A careful examination is necessary to decide on the economic viability of any foreign investment.

A set of criteria should be established to assess whether foreign investment should be accepted: the rates of return should be acceptable, the use of foreign labour should be allowed subject to need, there should be transfer of technology, and the terms on which loans are offered should not be unfavourable.

Malaysia has to remain economically and politically neutral, a state that is free to pursue its own agenda.If Malaysia is to be a star it needs to develop a more liberal culture in the economic and social spheres.

Dr Shankaran Nambiar is a senior research fellow at the Malaysian Institute of Economic Research. He is author of Malaysia in Troubled Times. Comments: letters@thesundaily.com

Jomo : What’s Different about Trump’s Tariffs?


April 4, 2018

What’s Different about Trump’s Tariffs?

KUALA LUMPUR, Malaysia, Apr 3 2018 (IPS) – At Davos in January, US President Donald Trump warned that the US “will no longer turn a blind eye to unfair economic practices” of others, interpreted by many as declaring world trade war. Before the US mid-term elections in November, Washington is expected to focus on others’ alleged “massive intellectual property theft, industrial subsidies and pervasive state-led economic planning” pointing to China without always naming names. With the Republican Party already united behind his tax bill, Trump senses an opportunity to finally unite the party behind him and to continue his campaign for re-election in 2020.

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Dr. Jomo Kwame Sundaram

Since January, Trump has taken steps threatened in his mid-2016 election economic policy document, drafted by US’s National Trade Council head Peter Navarro and Commerce Secretary Wilbur Ross. In particular, he has imposed tariffs and other restrictions on imports to revive US manufacturing. Import tariffs of 25% and 10% on steel and aluminium respectively have been imposed by invoking Section 232 of the US 1962 Trade Expansion Act, allowing unilateral measures to protect domestic industries for “national defence” and “national security”.

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When in trouble, go to Ohio

Trump’s action was supported by a US Department of Commerce Bureau of Industry and Security report, released earlier. It made the case for imposing import tariffs on both metals for national security reasons as “national security can be interpreted more broadly to include the general security and welfare of certain industries, beyond those necessary to satisfy national defense requirements…”

Trade war memories

After his announcement, several major trading countries and blocs retaliated or threatened to retaliate against US imports, raising the prospect of a trade war. The resurgence of US trade protectionism poses two threats. The US has a long history of using ‘anti-dumping measures’, especially on steel. Earlier, imports of washing machines and solar panels were restricted by Trump after the US International Trade Commission declared that they unfairly hurt domestic manufacturers.

The US President has also threatened to impose “reciprocal taxes” against countries imposing tariffs on US exports. This threat has invoked references to the 1930 Smoot-Hawley Tariff Act. Its Republican sponsors, Senator Reed Smoot and Congressman Walter Hawley then argued that it would protect US jobs by shielding American industries from import competition by imposing tariffs on over 20,000 imported goods.

This aggressive protectionism then precipitated the collapse of global trade, as its trade partners then restricted US export access into their own markets. The ensuing trade war undoubtedly exacerbated the Great Depression. Recent developments have understandably revived fears of a new trade war, with similar consequences.

Undermining trade multilateralism

The US’s unilateral actions have seriously challenged the multilateral framework of World Trade Organization (WTO) trade rules. The Trump administration has been challenging post-Bretton Woods rules-based trade multilateralism, which sought to develop international trade regulation. Besides many rhetorical attacks on the multilateral trading system, the Trump administration has largely avoided engaging with the WTO while also avoiding violating the letter of existing trade agreements.

Undermining the WTO and its rules is hardly new for the Trump administration, but what is rarely acknowledged is that it also represents continuity with previous presidents including his arch-nemesis, Obama’s. Both administrations have blocked appointing WTO Appellate Body (AB) members, effectively undermining the WTO’s dispute settlement process. The AB should have seven members, but will soon only have three members left, undermining its functioning. Aggrieved WTO members wishing to challenge alleged violations of its rules have no redress without a functioning AB.

Advocates of international trade liberalization have long claimed that it boosts growth and makes everyone better off in the long run, although many acknowledge shorter term casualties in ‘uncompetitive’ economic activities. With successful political mobilization around growing doubts over such claims, these claims have lost credibility, feeding the tide of ethno-populist-nationalism in the West.

Freer trade has widely distributed benefits in terms of lower consumer prices while seemingly concentrating costs on displaced producers. Conversely, tariffs meant to protect particular industries have concentrated benefits while widely distributing costs. Thus, even without considering the consequences of retaliatory trade measures by others, some (e.g., US steel) jobs may be saved while consumers pay more for ‘downstream’ products, threatening related jobs downstream. Consumers, however, are unlikely to act politically because they have to pay a little more for some goods, whereas workers are more likely to be mobilized if their livelihoods are threatened by foreign import competition.

Is Trump all that different?

Trump has long complained about US and foreign trade policies. He seems to believe that trade is a zero-sum game in which the goal is to export more and to eliminate the US trade deficit. Importing from another country implies that country has “won” and the United States has “lost”. Thus, his version of US ‘sovereigntism’ links trade to national pride. Thus, he accuses others, especially China, of “laughing at us”. As trade issues are about US jobs, pride and dignity, costs or losses become “a small price to pay”. Thus, imposing tariffs will show foreigners that the US is strong, and cannot be taken advantage of.

With this logic, “winning” may involve losing although the tariffs will benefit relatively few workers in protected industries at the expense of the vast majority of other workers in downstream industries and consumers. But longstanding economic imbalances and inequities are unlikely to be well addressed by protecting a few politically influential industries.

For half a century, the US has gone back and forth with trade liberalization, often coming dangerously close to trade warfare. President Ronald Reagan’s 1980s protectionism is rarely acknowledged as he is now the paragon of US economic neoliberalism. (Current US Trade Representative Robert Lighthizer earned his reputation in Reagan’s administration.) His trade restrictions used loopholes in trade agreements to raise tariffs and limit many imports besides forcing political allies to accept “voluntary restraints”. Dani Rodrik has argued that Reagan’s protectionism “let off political steam”, enabling the US economy to recover and globalization to accelerate.

International economic liberalization or globalization since Reagan has also transformed the international context and the consequences of Trump’s recent measures. Unlike Reagan who arm-twisted political allies to accept his demands as necessary concessions during the Cold War, Trump’s ‘US sovereigntism’ is based on ‘victimhood’, invoking the image of an ex-hegemon, and makes no pretensions of being mutually advantageous or reciprocal.

Yet, prematurely ‘crying wolf’ about trade war may also accelerate trade war momentum as it remains unclear how international policy is made and changed in Trump’s White House. While possibly ominous of much more to come, premature, exaggerated criticism of his unilateral trade measures may become ‘self-fulfilling’, given the political need for continued ethno-populist and nationalist mobilization against enemies, real or imagined.

 

The Danger of the Deal


April 2, 2018

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The Danger of the Deal

Even if America wins concessions, worry

Donald Trump’s trade policy is economically muddled and politically toxic

Print edition | Leaders

Mar 28th 2018

 JUST six words suffice to sum up President Donald Trump’s approach to trade (and, you may mutter, too much else): make threats, strike deals, declare victory. In recent weeks Mr Trump’s campaign-trail threats of 2016 have been turned into tariffs of 25% on imports of steel and 10% on aluminium, and proposed levies on up to $60bn-worth of Chinese goods.

Foreigners have duly queued to sue for peace. On March 26th South Korea agreed to limit its steel exports to America, and accepted an extension of American tariffs on its pickup trucks. China is said to be discussing cuts in tariffs on American cars, increased purchases of American semiconductors and the further opening of its financial industry. With many of America’s allies belatedly exempted from the metals tariffs, and consensus among policymakers and business types that China should indeed change its behaviour, stockmarkets are less fearful of an outright trade war (see Buttonwood). The man who tweeted that “trade wars are good, and easy to win” may be able to claim a string of victories with scarcely a shot fired.

Vindication? Far from it. For one thing, no deal has yet been done with China. Other countries have politics too, even dictatorships. Despite the South Korean deal, and keen as China is to avoid a trade war—keener than Mr Trump, it seems—the danger of a transpacific escalation remains real. Even if conflict is averted and China gives ground, however, the result will be a bad one for the world, and for America. That is partly because of Mr Trump’s character. If he thinks he has won one fight, he is likelier to start another. It is also because his policy is founded on wretched economics and dangerous politics.

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Take the economics first. The President is obsessed with America’s trade deficits—not just the total, of $568bn, or 2.9% of GDP, last year, but its bilateral ones, especially the yawning $375bn deficit in goods trade with China, which he wants cut by $100bn. Mr Trump’s bluster cannot change basic economic logic. America’s total trade deficit reflects the shortfall in saving by its households, companies and government—the excess of their combined spending over their income. Tariffs and quotas can bring trade into balance only if they somehow encourage national saving or reduce investment. Protectionism predicts trade balances poorly. Just look at India, where, historically, high tariffs and high trade deficits have coexisted.

Bilateral deficits, it is true, can more easily be altered by trade policy. If America slaps taxes on Chinese goods (and nothing else changes), it will buy less of them and the $375bn gap will shrink. However, unless Americans change their total spending and saving, they will buy more from elsewhere.

The tax cuts that the President signed into law in December make his fixation on trade deficits even more senseless. Boosting the budget deficit to 5% of GDP in 2019 will, other things being equal, widen the trade gap. It is hard to imagine Mr Trump blaming himself for that—and all too easy to see him making a new round of threats against foreigners.

The President’s more fundamental error is to see trade as a zero-sum game, in which exporting is for winners (or cheats, if they are foreign) and importing is for dupes. In fact, the gains from trade come from the specialisation permitted by the free exchange of goods, capital and know-how that allows, for example, Californian-designed iPhones to be assembled in China and sold worldwide by the bucket load.

So long, Geneva’s conventions

Mr Trump’s misunderstanding of economics explains why his politics are so irresponsible. Rather than join with other aggrieved countries to put legal pressure on China, Mr Trump has threatened putative allies. Rather than work within the rules-based system of trade, which America helped create and which, despite the system’s imperfections, has served the country well, he bypasses it at will. He is particularly reckless to claim that the steel and aluminum tariffs are justified by national-security concerns (a get-out-of-jail-free card under World Trade Organisation rules that should be used sparingly). If America thumbs its nose at the WTO, why shouldn’t others?

Managed trade is a mistake, not a victory. It substitutes the power of political lobbies for market forces, favouring loud, well-organised producers over silent, disparate consumers and robbing economies of the nimbleness needed to adapt to changing technological conditions. Other countries will feel freer to follow America’s example, making a trade war a repeated risk rather than a one-off danger. Mr Trump’s approach threatens to leave everyone much worse off. Some deal.

This article appeared in the Leaders section of the print edition under the headline “The danger of the deal”