3 ms·

So the NAFTA whiners of the 90s were right? https://m.sevendaysvt.com/vermont/sanders-why-i-oppose-nafta/Content?oid=2435080 https://m.sevendaysvt.com/vermont/

• gregwebs 6y ago
  Unfortunately it has little to do with NAFTA. The naive American view of trade is that goods are cheaper to produce in other countries so all production inevitably moves there. What is supposed to happen in a global economy is that currencies strengthen and weaken to exert a balancing effect on trade. Because the dollar is the global reserve currency there is an artificial demand for dollars so the balancing never occurs. We have a monetary policy that is the invisible hand shaping the entire US economy. The massive trade deficits it caused are now leading to populism and civil unrest. And yet there is no discussion of this root cause and almost no awareness of it.
  • dls2016 6y ago
    I don't understand, how does this have "little to do" with NAFTA? Whose naive view is it that production will move? I mean, call me naive, but we could also make laws that say production won't be moved. The monetary policy works hand-in-hand with NAFTA and immigration policies so that capital is free to wander the globe, sloshing around and popping off asset bubbles while workers feel the boot. Again... my naive view.
    • gregwebs 6y ago
      I agree that trade is required for trade deficit and freer trade (e.g. NAFTA) is an accelerator. I say "little to do" because to me the important issue is whether we have a system where the currency ensures trade means trade deficit or a system where currency helps to balance trade.