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Noah Smith 🐇
@Noahpinion
, 15 tweets, 5 min read Read on Twitter
1/Today's @bopinion post is a review of how Trump's protectionism has performed.

Basically, it has been an economic loss, but the longer-term geopolitical and ideological consequences are harder to know.

bloomberg.com/opinion/articl…
2/Fiscally, the trade war has cost more in farm bailouts alone than it has made in revenue.

cfr.org/blog/130-perce…
3/And yet even those bailouts haven't stopped U.S. farms from hurting.
4/Meanwhile tariffs haven't really helped U.S. manufacturers and have probably hurt them.

bloomberg.com/professional/b…
5/Even the industries the tariffs were specifically designed to help, like steel, have suffered.

cfr.org/blog/trumps-ta…
6/And manufacturing employment has risen a little, but emphasis on "a little" here.
7/Manufacturing output is also looking unspectacular.
8/And who paid for the tariffs?

American consumers.

princeton.edu/~reddings/pape…

econ.ucla.edu/pfajgelbaum/RT…
9/So economically the trade war has been a loss for the U.S.

But what if we think of the trade war less as an economic policy, and more as...a war?

bloomberg.com/opinion/articl…
10/China is slowing down, and part of this is probably due to the trade war.
bloomberg.com/news/articles/…

Manufacturing investment in China has taken a big hit, maybe because Chinese manufacturers don't know how much they'll be able to sell to the U.S.
11/Meanwhile the U.S.' more shadowy war against Chinese tech companies has been pretty devastating:

reuters.com/article/us-hua…
12/So maybe the trade war is hurting China more than it's hurting us, and maybe that's the point?

But even more importantly, Trump's protectionism has broken the intellectual hegemony of the idea of free trade.

bloomberg.com/opinion/articl…
13/The right may embrace industrial policy once again.

nymag.com/intelligencer/…
14/And the left's suspicion of free trade may now harden into opposition to many trade deals.

bloomberg.com/news/articles/…
15/In the long term, the most important effect of Trump's trade war may be that it broke the dam that was holding back protectionist and industrial-policy ideas.

The intellectual hegemony of free trade is over, and won't be coming back again soon.

(end)

bloomberg.com/opinion/articl…
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Noah Smith 🐇
@Noahpinion
Not only did the WSJ compare real to nominal, it looks like they also treated a multiple as a percent change (i.e. they treated "290% of previous levels" as "a 290% increase", when actually it's a 190% increase).
The WSJ cites Adam Levitin for their housing and tuition cost numbers.

I found this recent book by Levitin with the following figure:
books.google.com/books?id=SmxuD…

It appears both errors are originally Levitin's!!
These errors are from Levitin's book "Consumer Finance Law: Markets and Regulation".

amazon.com/Consumer-Finan…

@AAndriotis @shaneshifflett @kenbrown12 check it out! Levitin is obviously making two big (and very simple) errors in how he describes this data.
Read 4 tweets
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Noah Smith 🐇
@Noahpinion
Oh my God. The WSJ is comparing housing and tuition prices to REAL income instead of NOMINAL.

That needs a correction.
In case you're interested in what these numbers should look like, here is a graph.
Alright, now that I'm back at a keyboard, let's take a look at what these numbers really SHOULD look like.
Read 12 tweets
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Noah Smith 🐇
@Noahpinion
"We should be scared of unions and minimum wages because they'll cause faster automation" is one of the wackiest takes I regularly see on this website.

Imagine being scared of policies that raise wages because those policies might also cause faster technological progress.
If robots are going to make some segment of the populace totally unemployable, and unions accelerate that process by a few years, what we need is not de-unionization, it's Universal Basic Income. Because in that case, the robots WILL be take over soon enough no matter what.
That said, Germany, Japan, Sweden and Denmark have a lot more robots than we do, plus stronger unions, and their human workers aren't going obsolete, so I'd say that if this is a worry, it's a worry for the far future.
Read 3 tweets

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