I wrote an article recently about how Scott Sumner, of the Mercatus Center, destroyed the FT over China. It appears that the Mainstream Media is really trying hard to plant articles showing how great tariffs are, how great “Made in America” is, to the point of propaganda.
I am not accusing Noah Smith of propaganda, but Dr. Sumner took him to task. PhD thinkers may not have all the answers. But they do have most of the logic!
Noah Smith is a professor as well (Sumner is retired), and is not saying that Trump will win a trade war. But he did say this as quoted by Sumner:
There’s no way to measure the amount of state interference that China is using to shut out foreign companies. And IP theft, by definition, happens in secret and is thus difficult to detect or to prove. China’s entire economy is centered around pervasive state intervention and skullduggery — even if it made some moves to change that model, the U.S. couldn’t verify that changes had really been made.
Of course, Scott Sumner found fault with the reasoning:
If it can’t be measured, how can we be confident that China’s entire economy is centered around this intervention and “skullduggery”? You might say, “it’s obvious”. No, it’s obvious that these things happen pretty often in China, but it’s not obvious how big a problem it is. If it were, then Smith would be wrong in claiming we can’t measure it. How do we know that the “center” of their economy is not growing rice, or building subways, or selling life insurance? For instance, China’s goods imports are about 15% of their GDP. The same is true of the US, but because the US figure is for both goods and services, I presume China’s total imports are actually a larger share of GDP than in the US. So how important are their barriers to imports? Who knows?
And:
