The Rising Price of Trump’s Border Wall

Simon Johnson

Simon Johnson, a former chief economist of the IMF, is a professor at MIT Sloan, a senior fellow at the Peterson Institute for International Economics, and co-founder of a leading economics blog, The Baseline Scenario. He is the co-author, with James Kwak, of White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You.

AUG 31, 2017 Project Syndicate

WASHINGTON, DC – As a candidate, Donald Trump insisted on one signature issue above all: the United States will build a wall along its border with Mexico, and Mexico will pay for it. Seven months after taking office, however, Trump has made no progress on either front: political support for a new wall is diminishing, and the chance that Mexico will pay anything for it is essentially zero and seems to be off the agenda.

Now, Trump is doubling down – and threatening to shut down the government, or even default on the federal debt, unless Congress provides funding for a wall that he promised would cost US taxpayers nothing. If Trump escalates this confrontation, the costs for Americans – in terms of economic uncertainty and slower growth – are likely to pile up.

German ‘Economic Juggernaut’ Sends Domestic Stocks Surging Above Exporters

Date: 02-09-2017
Source: The Wall Street Journal

While a stronger euro weighs on Germany’s export champions, companies exposed to the domestic economy are having a stellar year

The German economy is famous as an export powerhouse–but this year, in the country’s stock markets, the companies closest to home are outperforming their internationally-focused peers by a mile.

The country’s flagship equity index, the DAX, is up by just 5% for 2017 so far. Meanwhile, the FTSE Local Germany has returned 23% since the year began.

The growing strength of the euro and the still-improving picture for the German domestic economy have both helped drive a wedge between the two indexes.

Don’t Blame the Robots

Date: 01-09-2017
Source: Foreign Affairs

How Housing Prices and Market Power Explain Wage Stagnation
By Sahil Mahtani and Chris Miller

Six months ago, Microsoft’s Bill Gates proposed a robot tax, on the grounds that if workers pay taxes, so too should the machines that take their jobs. Such a policy would, in Gates’s words, “slow down the speed” of automation, thereby allowing societies to “manage [the] displacement” of workers. The idea speaks to a widespread sense that the labor market isn’t working like it used to.

But since Gates made his statement, it has become clear that taxing technology entails a comically large number of problems. One is that robots can both reduce and increase the demand for human labor. Search algorithms reduced the need for travel agents, but Uber increased demand for drivers. It is impossible to determine ex ante which robots to tax.

Saving the International Economic Order

Paola Subacchi

Paola Subacchi is Research Director of International Economics at Chatham House and Professor of Economics at the University of Bologna. She is the author of The People’s Money: How China is Building an International Currency.

SEP 1, 2017 Project Syndicate

LONDON – This autumn, the International Monetary Fund and the World Bank will once again hold their annual conference in Washington, DC. At a time when the liberal world order that these institutions underpin is under threat, they cannot afford to stick with business as usual. Instead, they must consider deep reforms – and that will require abandoning the paternalistic, even hostile, tone that has often dominated discussion of the topic.

Since the election of Donald Trump as US president last November – the culmination of an upsurge in nationalist-populist sentiment across the Western world – the weaknesses of existing multilateral frameworks have come increasingly to the fore. But the current crisis of the liberal world order has been a long time in the making.