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Michael Pettis Profile picture
@michaelxpettis
Aug 19, 2019 • 6 tweets • 2 min read • Read on X
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Yes, agrees. Ironically democracy seems historically to be “in crisis” precisely when it is most proving its superiority to other systems, i.e. when it is managing us through a difficult, messy adjustment. The books cited here seem to worry that democracy is in trouble because...
...the electorate isn’t just, disinterested and well-informed, but I think this would only be a problem if the purpose of a political system were to express deep political truths. In fact I’d argue that nothing is more dangerous than such a political system: what we need is...
...one that allows our institutions to adjust, however clumsily, as conditions change, and unfortunately because there are times, like today, when change is extremely messy, chaotic and hard to predict, the best we can hope for is to adjust in a messy, chaotic and...
...unpredictable way. Like in the 1930s and the 1970s, I think the populism and “crisis of democracy” that we are experiencing today is just democracy doing what it is supposed to do. It is the non-democracies that are not adjusting, and while this may look like purpose and...
...stability, in fact I think it just reflects institutional rigidity. Jefferson is supposed to have wanted a bloody revolution every fifty years to drive institutional change, but while that may be more aesthetically pleasing, perhaps our way is better.
tabletmag.com/jewish-news-an…
I meant to paste this:
monticello.org/site/research-…

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More from @michaelxpettis

Michael Pettis Profile picture
Apr 3
1/12
Caixin: "For the first time, China has embedded a dedicated plan to raise household incomes into a top-level national policy document, signaling a change in priorities as policymakers grapple with persistently weak consumer spending."
caixinglobal.com/2026-03-30/cov…
2/12
"The diagnosis is widely shared," the article notes, as it quotes Yang Weimin, a former deputy director of the CFEAC, that “The reason for China’s low share of consumption in total demand is mainly the low share of residents’ income in national income.”
3/12
This isn't new. A few of us have been arguing for 10-15 years that China's trade and investment imbalances and its soaring debt are all the result of a highly distorted distribution of income in which households directly and indirectly retain an astonishingly low share. Image
Read 12 tweets
Michael Pettis Profile picture
Apr 1
1/6
 FT editorial: "Other governments have not done much to play the role the US once did of seeking to anchor the world trading system. Mark Carney, Canada’s prime minister, and others have been talking about an alliance of middle powers seeking to save...
ft.com/content/0ed61c…
2/6
 multilateral trade. So far, this has mainly been conspicuous by its absence."

Of course it has. That's because for all the huffing and puffing, "the world" is not looking for someone to bring order to the world trading system.
3/6
 It is looking for someone to stabilize the rising volatility in global trade by permanently absorbing – as the US has done for decades – the bulk of the huge and highly distorting trade imbalances created by aggressively mercantilist policies in trade-surplus countries.
Read 6 tweets
Michael Pettis Profile picture
Apr 1
1/12
On the centennial of Britain's 1926 general strike, the FT reviews three new books that discuss and explain the events that year. I haven't read them (although I'd love to do so), but it is worth noting what those events tell us about current conditions.
ft.com/content/ab0875…
2/12
Although most stories of the general strike discuss it in terms of good guys and bad guys (mine owners or workers, depending on your political preferences), in fact both sides were caught up in a structural trap that neither could resolve.
3/12
In the 1920s, Britain remained the world's largest coal producer, but it was increasingly uncompetitive with German, American, Polish and Soviet coal. The main reason may have been the seriously overvalued currency (which also undermined British manufacturing at the time.)
Read 12 tweets
Michael Pettis Profile picture
Mar 26
1/9
 Reuters: "China said that Mexico's trade measures against it, including tariff increases, ​constitute trade and investment barriers and that it had ‌the right to take countermeasures."
rld/china/china-says-it-has-right-retaliate-against-mexicos-tariff-hikes-2026-03-25/
2/9
 This story was predicted by, and can be explained through, the insights of both Michael Kalecki and Joan Robinson.

In the former case, it illustrates the Kalecki Paradox as it applies to global trade.
3/9
 Kalecki pointed out that while an individual firm can raise its profits if it lowers its wages (i.e. relative to the productivity of its workers), if all firms do that, total profits will be lower for everyone. This is because when one firm does it, it reduces demand for...
Read 9 tweets
Michael Pettis Profile picture
Mar 25
1/5
 This new paper by the Fed concludes that China's export success stems from weak domestic demand "rooted in structural features of China's economy and financial system—particularly those that constrain household consumption."
federalreserve.gov/econres/notes/…
2/5
 "As China's export share has increased, exporters in advanced economies have experienced widespread losses in global market share. Losses are evident across most sectors and are particularly pronounced in economies with strong manufacturing bases, such as Japan and Germany."
3/5
 "Sectors with more policy interventions experienced faster export growth over the 2017 to 2024 period. The relationship is especially pronounced in motor vehicles and battery-related products, where extensive policy support coincided with rapid export expansion."
Read 5 tweets
Michael Pettis Profile picture
Mar 9
1/6
 China's deflationary environment continues to improve, with high-than-expected numbers in February. CPI inflation was 1.3% year on year and 1.0% month on month. Month-on-month inflation has been positive since December and mostly positive since July.
english.news.cn/20260309/3fc64…
2/6
 The Spring Festival always makes January and February data noisy, but ever since Beijing decided to go after the problem of involution last May and June, we've seen deflationary pressures ease. But we also saw investment growth decelerate sharply. This isn't just coincidence.
3/6
 Involution was largely caused by the post-2022 shift in investment growth out of property and into favored manufacturing sectors. Beijing's move to cut excess capacity in involuted industries reduced both total investment and defllationary pressure.
carnegieendowment.org/posts/2025/08/…
Read 6 tweets

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