Trump’s Most Chilling Economic Lie
By Joseph E. Stiglitz – February 17, 2017
Donald Trump has threatened to upend the post-World War II geopolitical order. What he finds most vexing about that order is the rise of China. Today, China is the largest trading economy in the world. In terms of purchasing-power parity, it actually became the largest economy in the world in September 2015. Like it or not, there is simply nothing that Trump can do to change these facts. What he can do is make America’s economic position worse – possibly far worse.
President Trump sees the world in transactional and zero-sum terms—if something is good for China, it must be bad for the U.S. By contrast, economists see the world in much more nuanced ways: if globalization is well-managed, it can be a positive-sum game, where both the U.S. and China gain; if it is badly managed, it can be negative-sum. So, too, for a retreat from globalization: the erection of barriers to trade and the movement of people and ideas more likely than not will be one in which the U.S. almost surely will lose. And depending on how China manages things, it is possible, even likely, for China to gain.
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