Nice essay, Jim. I await the followup on exchange controls.
You raise this question in the post to which I'm responding:
what have we gained if US exporters can compete, but we have $3 gasoline, milk at $4, lumber goes up another 50%, cement is nowhere to be found, spot shortages are prevalent, corporations deal with vanished profit margins, and little ability to raise prices since China is still in our effing faces
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Your essay tells me you know that's a rhetorical question. I'd say that to decision makers, the "we" in "what have we gained?" is just the nation--an artificial construct that is easier to synthesize as: my supporters. Putting the national interest ahead of constituents/supporters, and trying to get and keep office based upon long term thinking, is usually a prescription for a new career.
So I'd say there will be plenty of room for price controls, tariffs, and outright exclusion of foreign goods as needed to assure that U.S. companies stay afloat to be the "we" in that question. Actually, I'm in the stagflation camp, so I think necessities will eventually be higher and mostly domestically supplied (except for oil), while optional purchases will be cheap and Chinese. I too think the crumbling of the debt pyramid will take prices down, and the Fed will expand the monetary base like never before to keep the financial sector intact and the game going. |
