Professor Elam

THe debate continues on Chinese and US Trade Policy. 

Unions and manufacturers in the US dislike it charing it ships US manufacturing jobs overseas. This is in fact true. The other side argues it results in cheaper goods, yeah no kidding. 

I suspect the end result in a few years will be the conclusion that only manufacturing builds wealth. Service industries, trading sub prime mortgages for example, does not produce wealth. 

The overlooked component of this argument is that the US and China do many of the same things. A country like Chile with a primary agriculture economy has a positive balance of trade with China, they each need what the other produces. Meanwhile China and the US play a no win war of each trying to lower its currency to make its exports ever cheaper. No wonder gold hit a new high again yesterday.