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What Trump meant at Davos: “America first does not mean America alone.”
President Donald Trump veered away from his typical protectionist rhetoric at the World Economic Forum in his remarks on the benefits of global cooperation.
26 January, 2018
Trump at the World Economic Forum — Photo: FABRICE COFFRINI/GETTY
<p></p><p dir="ltr"><span>President Donald Trump walked a fine line between globalization and his trademark protectionism on Friday while addressing global political and business leaders at the World Economic Forum in Davos, Switzerland.</span></p> <p></p><p dir="ltr"><span>His main selling point: American is back in business.</span></p> <p></p><p dir="ltr">“There has never been a better time to hire, to build, to invest, and to grow in the United States,” he said during his <a href="https://www.whitehouse.gov/briefings-statements/remarks-president-trump-world-economic-forum/" target="_blank">15-minute speech</a>. “America is open for business, and we are competitive once again.”</p> <p></p><p dir="ltr"><span>Elsewhere in the speech, Trump touted himself as the first true businessman president, extolled recent Republican tax cuts, said he favored free trade but warned the U.S. would no longer “turn a blind eye” toward unfair trade practices, and argued for a merit-based immigration system.</span></p> <p></p><p dir="ltr"><span><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODI0MTEwMS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTU5NTM0NTMzMX0.xunW-0SS-oIqA1r9YyHw3HEo6dC0RmBLlcFnus0bk2I/img.jpg?width=980" id="277fb" class="rm-shortcode" data-rm-shortcode-id="a9566996638b1d489436540a4207ae28" data-rm-shortcode-name="rebelmouse-image"><br></span></p> <p></p><p dir="ltr"><em>Photo: Fabrice Coffrini/<span>Getty</span></em></p> <p></p><p dir="ltr"><span>But the most notable part of Trump’s address came when he veered away from his typical hardline protectionist rhetoric, saying </span><span>“America first does not mean America alone.” </span></p> <p></p><p dir="ltr"><span>“When the United States grows, so does the world,” he said.</span></p> <p></p><p dir="ltr">The message more or less fit the general tone of the forum, which has traditionally hosted speakers who promote globalization, praise diversity, and decry climate change — issues with which Trump has sometimes been at odds, as the <em>New York Times</em> <a href="https://www.nytimes.com/2018/01/26/business/davos-world-economic-forum-trump.html" target="_blank">notes</a>.</p> <p></p><p dir="ltr"><span>German Chancellor Angela Merkel said at the forum that “</span><a href="https://www.cnbc.com/2018/01/24/germany-has-difficulties-and-polarization-that-we-havent-seen-for-decades-merkel-tells-davos.html"><span>protectionism is not the proper answer.</span></a><span>” Other world leaders echoed the sentiment.</span></p> <p></p><p dir="ltr"><span>Trump has repeatedly criticized multilateral trade agreements and argued for more isolationism in the past. In early 2017, he withdrew the U.S. from the Trans-Pacific Partnership, originally a 12-nation </span><span>agreement among the U.S. and Pacific rim countries that was designed partially to temper </span><a href="https://www.cnbc.com/china/"><span>China’s</span></a><span> rising dominance in the region, because he thought it would encourage domestic companies to ship jobs overseas.</span></p> <p></p><p dir="ltr"><span>But in January 2018, the president said he would consider rejoining the agreement if the U.S. got a “substantially better” deal. It’s likely too late, considering the 11 remaining TPP countries have already moved forward in the agreement without the U.S.</span></p> <p></p><p><span>Trump’s change of tone in Switzerland comes in the wake of slowed economic growth back home. The annualized GDP growth rate dropped to 2.6 percent in the last quarter of 2017 — up from the year before, but still below the </span><a href="http://www.latimes.com/business/hiltzik/la-fi-hiltzik-gdp-growth-20180126-story.html"><span>3 percent mark the Trump administration had repeatedly predicted</span></a><span>. </span></p> <p></p><p><span id="docs-internal-guid-9b5511fb-33d3-58a7-0416-fd4df5e08654"> </span></p> <p></p><p dir="ltr"><span>But that could change if global business leaders believe what <span id="docs-internal-guid-9b5511fb-33d8-1c28-43eb-b6055945ce0b"><span>Trump said in Davos:</span></span></span></p> <p></p><p dir="ltr">“Now is the perfect time to bring your business, your jobs and your investments to the United States.”</p> <p></p><p dir="ltr">--</p>
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Warren Buffett’s surprising forecast for the American economy
The genius investor hits an optimistic note in a time of dire fiscal predictions.
08 January, 2018
<p dir="ltr">Despite the <a href="https://www.cnbc.com/2014/12/31/dont-worry-about-the-us-economyuntil-2018-economist.html" target="_blank">gloomy forecasts</a> of some fiscal analysts in recent years, Warren Buffett predicts Americans will enjoy economic prosperity for generations to come.</p><p>In an <a href="http://time.com/5087360/warren-buffett-shares-the-secrets-to-wealth-in-america/" target="_blank">editorial</a> for <em>Time</em>, Buffett outlines an argument for why he believes annual GDP growth of 2 percent, the rough average of recent years, will “work wonders” for the American public over the long term. (Most recently, the New York Federal Reserve <a href="https://www.reuters.com/article/us-usa-economy-nyfed/n-y-fed-raises-u-s-fourth-quarter-gdp-growth-view-to-near-4-percent-idUSKBN1E9292?il=0" target="_blank">estimated</a> in December 2017 that the U.S. GDP in the fourth quarter was about 3.98 percent.) The reason has to do with <strong>population growth relative to GDP. </strong></p><p><strong><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODI0MDg0MC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYyMTQyNjMzMX0.DswsHYp3amJ_zpfTT6bufw3M_68MZalmW9Bt5jNdr1k/img.png?width=980" id="476b4" class="rm-shortcode" data-rm-shortcode-id="b3e0a6c010498b525f730105a0fcd9ea" data-rm-shortcode-name="rebelmouse-image"><br></strong></p><p>For example, 2 percent annual GDP growth should be alarming if population growth were to outpace it, say, at 3 percent. But given that the U.S. population will likely increase by about .8 percent annually, according to the birth and immigration rates in Buffett's projection, we can expect <strong><em>GDP per capita </em>to increase by 1.2 percent annually.</strong> </p><blockquote>
<p>"In 25 years—a single generation—1.2% annual growth boosts our current $59,000 of GDP per capita to $79,000. This $20,000 increase guarantees a far better life for our children," Buffett <a href="http://time.com/5087360/warren-buffett-shares-the-secrets-to-wealth-in-america/" target="_blank">wrote</a>. </p>
</blockquote><p><span>Buffett, who was born in 1930, goes on to illustrate how virtually all modern Americans have access to luxuries—entertainment, medicine, education—that even the richest Americans didn't have a century ago. </span></p><p><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODI0MDg0MS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0ODQyNzY2MX0.2FTxgvPW4YPYaTfu9w70X3HqK_J8vEbpHxu2f5COeGo/img.jpg?width=980" id="bb30c" class="rm-shortcode" data-rm-shortcode-id="f88acef69bba2b94cf69b68ba7153379" data-rm-shortcode-name="rebelmouse-image"><br>This massive increase in standard of living was the result of innovation and productivity, Buffett wrote. But it came at a cost.</p><blockquote>
<p><span><span>"To all this good news there is, of course, an important offset: in our 241 years, the progress that I’ve described has disrupted and displaced almost all of our country’s labor force," Buffett wrote. "If that level of upheaval had been foreseen—which it clearly wasn’t—strong worker opposition would surely have formed and possibly doomed innovation. How, Americans would have asked, could all these unemployed farmers find work?"</span></span></p>
</blockquote><p>Here, Buffett seems to be drawing an implicit connection to modern Americans' <a href="http://bigthink.com/articles/a-world-without-work-robotic-automation-wont-be-as-bad-as-we-think" target="_blank">fear of losing jobs to automation</a>.</p><p><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODI0MDg0Mi9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY0MTg5OTAxMn0.FAMLWyz8blQRcduGcW5K1j1ksU9NljB7Qv48hzsKKAo/img.png?width=980" id="b20ea" class="rm-shortcode" data-rm-shortcode-id="f0997717db8acaedea332bfc0fe7de45" data-rm-shortcode-name="rebelmouse-image"></p><p><em><a href="http://blogs.edweek.org/edweek/high_school_and_beyond/2017/08/are_you_helping_students_prepare_for_jobs_that_will_be_lost_to_automation.html" target="_blank">Source: edweek.org</a> </em></p><p>Buffett goes on to suggest that disruption is what allows standards of living to improve drastically over time.</p><blockquote>
<p>"We know today that the staggering productivity gains in farming were a blessing. They freed nearly 80% of the nation’s workforce to redeploy their efforts into new industries that have changed our way of life.</p>
<p>You can describe these developments as productivity gains or disruptions. Whatever the label, they explain why we now have our amazing $59,000 of GDP per capita."</p>
</blockquote><p>Still, disruptions in industry and labor have left large swaths of the American workforce in relative stagnation, Buffett argues:</p><blockquote>
<p>"The market system, however, has also left many people hopelessly behind, particularly as it has become ever more specialized. These devastating side effects can be ameliorated: a rich family takes care of all its children, not just those with talents valued by the marketplace.</p>
</blockquote><blockquote>
<p>In the years of growth that certainly lie ahead, I have no doubt that America can both deliver riches to many and a decent life to all. We must not settle for less."</p>
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The Gross Failures of Gross Domestic Product
The world economy is often measured in terms of money, but is this the best method?
28 January, 2017
Is this enough to judge an economy by?
<p dir="ltr"><span>“</span><strong>The economy stupid</strong><span>”. These words skyrocketed James Carville to political fame and helped to elect Bill Clinton in the 1990s. The state of the economy is one of the most important questions there is economically, politically, and socially, and how well the economy is doing is often listed as the most pressing issue for the public in opinion polls.</span></p> <p dir="ltr"><strong>But, how do we measure the overall state of the economy?</strong></p> <p dir="ltr"><span>The most common method of measuring an economy as a whole is by means of </span><strong>GDP</strong><span>, or Gross Domestic Product. </span><span><a href="https://www.quora.com/Is-GDP-a-good-measure-of-economic-growth-Why-or-why-not" target="_blank">GDP</a> </span><span>is simply the total value of all goods and services produced in a country in a given period of time, most often a year. Brought to the forefront of global economics in 1944 by the </span><a href="http://bigthink.com/econ201/more-than-footnotes-in-economic-history" target="_blank"><span>Bretton Woods Conference</span></a><span>, it continues to be the primary means of measuring a country’s economic health.</span></p> <p dir="ltr"><span>It is a very general measure, often difficult to make, that can be interpreted in many ways. It is extremely useful when you are trying to grasp a lot of information in a single figure, like how exports and imports affect an economy, how two countries compare in overall wealth, and so on.</span></p> <p dir="ltr"><span>Here is a map of the world colored by GDP. You can see China and the United States are far richer than most other countries, that nations in the south are often poorer than those in the north, and smaller nations generally have less money than their larger neighbors as well. </span></p> <p dir="ltr"><span><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODQwOTQ5MC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYzNTkxOTkxMn0.QQcgOWaX0fUf2ykeFt8CF-IzFMMRnVsL-b7LZwXoxvY/img.png?width=980" id="1481a" class="rm-shortcode" data-rm-shortcode-id="d8f9360f45498db2200698098a02b853" data-rm-shortcode-name="rebelmouse-image"></span></p> <p><br><br></p> <p dir="ltr"><strong>Is this everything there is to see?</strong><span><br class="kix-line-break"></span><span><br class="kix-line-break"></span><span>Well, no, and there lies the problem. Here is a map of<strong> GDP</strong></span><strong> per person</strong><span> in any given country. </span></p> <p dir="ltr"><span><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODQwOTQ5MS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYxODgyODM1OX0.id9daD6e2kQzGIuu4gh9JTJ57pCsakSZ4pTv_KHbvN0/img.png?width=980" id="058e3" class="rm-shortcode" data-rm-shortcode-id="f04735df6e2f0b097885d219bb71e48b" data-rm-shortcode-name="rebelmouse-image"></span></p> <p dir="ltr"><strong>In this image, the darker the color, the higher the GDP per person, black being highest. Light blue is the lowest end of the scale. <span id="docs-internal-guid-b330885d-e337-f0b4-ce7f-721a39ac19dc"><span>Notice the changes in apparent wealth in Asia.</span></span></strong></p> <p dir="ltr"><span>As you can see, the values change a lot. China, the second richest nation in the world, becomes a middle-tier country on this map, while little Luxembourg in Europe, which has less money than Warren Buffet, has a remarkably high GDP per capita, showing that its population is better off, on average, than most other countries in the world.</span></p> <p dir="ltr"><span>Neither of these maps, however, show us the actual distribution of wealth. It is possible in both maps for one person in each country to have all of the money to themselves. This is another failure of GDP: it tells us only the general facts about how much money there is, and little more.</span></p> <p dir="ltr"><strong>Are there any alternative measures to use, ones that might give us a better picture?</strong></p> <p dir="ltr"><span>There are a slew of alternative measures for a nation’s welfare and economic health that give more detail than GDP or GDP per capita does. One of the more interesting is the </span><a href="https://en.wikipedia.org/wiki/Capability_approach" target="_blank"><span>Capability Approach</span></a><span> pioneered by Indian economist and philosopher </span><a href="https://en.wikipedia.org/wiki/Amartya_Sen" target="_blank"><span>Amartya Sen</span></a><span>.</span></p> <p dir="ltr"><span>This method is focused on the “</span><strong>capability</strong><span>” of individuals to </span><strong>“to achieve outcomes that they value and have reason to value</strong><span>”, including <strong>“</strong></span><strong>the ability to live to old age, engage in economic transactions, or participate in political activities</strong><span>”.</span></p> <p dir="ltr"><span>This method is put to use in the </span><strong>Human Development Index</strong><span>, based on data compiled by the </span><span><a href="http://hdr.undp.org/en/countries" target="_blank">United Nations</a>, w</span><span>hich measures a cross section of societal details such as education opportunities, healthcare access, and expected wealth, to give us an idea of the welfare of the individuals in a given nation. Here is the world map for </span><a href="https://en.wikipedia.org/wiki/Human_Development_Index#Origins" target="_blank"><span>HDI</span></a><span>. </span></p> <p dir="ltr"><span><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODQwOTQ5Mi9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYxMTE1MjA1NX0.avFsWGugzJs77LOdBAT3AjKUJN8-nEjTfneeGtnNLiw/img.png?width=980" id="5b4fc" class="rm-shortcode" data-rm-shortcode-id="3b719f0891d77d5b2f05da6ac99f45c0" data-rm-shortcode-name="rebelmouse-image"></span></p> <p dir="ltr"><strong>The darker the green, the better the HDI, and the higher the welfare for a typical citizen. Red and yellow, not so much. Credit to <a href="https://en.wikipedia.org/wiki/List_of_countries_by_Human_Development_Index#/media/File:UN_Human_Development_Report_2015.svg" target="_blank">wikicommons</a>.</strong></p> <p dir="ltr"><span>Again, this index can suffer from generalization. There does exist, however, a corrective version of this for inequality, termed </span><strong>IHDI </strong>(Inequality-adjusted Human Development Index). By the <a href="http://hdr.undp.org/en/content/inequality-adjusted-human-development-index-ihdi" target="_blank">UN's definition</a>, "the difference between the IHDI and HDI is the human development cost of inequality, also termed – the loss to human development due to inequality." Shown here:</p> <p dir="ltr"><span><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8xODQwOTQ5My9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYzOTIzMjk4NH0.ROpyRJDXpvwdJqghJt8tBFfhku8b6i8S1Tl612XczCE/img.png?width=980" id="12b9a" class="rm-shortcode" data-rm-shortcode-id="951ace1412f54ba9c850dc9a26f094d4" data-rm-shortcode-name="rebelmouse-image"></span></p> <p dir="ltr"><strong>The darker the green, the better the IHDI. Red and yellow, not so much. Credit to <a href="https://en.wikipedia.org/wiki/List_of_countries_by_inequality-adjusted_HDI#/media/File:Inequality-adjusted_Human_Development_Index_2014.svg" target="_blank">wikicommons</a>. As you can see, the benefits of development are not evenly shared across the world.</strong></p> <p dir="ltr"><span>This measure attempts to make up for the failures that GDP can have in measuring how strong an economy is, by trying to tell us how well off the people in a country actually are. There is a great deal left out if one focuses only on how much wealth a nation produces. </span><span>Perhaps </span><span><a href="https://bigthink.rebelmouse.com/english-lessons/lesson-19-rfk-the-language-of-atonement-and-classical-references" target="_blank">Robert F. Kennedy</a> </span><span>said it best about the predecessor to GDP, when he described the </span><a href="https://www.theguardian.com/news/datablog/2012/may/24/robert-kennedy-gdp" target="_blank"><span>shortcomings of GNP</span></a><span>.</span></p> <blockquote><p dir="ltr"><span>“<strong>Gross national product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials… it measures everything in short, except that which makes life worthwhile.</strong>”</span></p></blockquote> <p dir="ltr"><span>The key problem of our key economic indicator is that it can only measure money. This is a useful tool, but not the only one. Is it time to switch the world’s major countries over to a system that relies on HDI or IHDI? Is there a better option than that? Or is our current tendency to report GDP as the most important statistic fine as it is?</span></p> <div><span> </span></div><div class="video-full-card-placeholder" data-slug="patrick-byrne-what-are-the-greatest-issues-facing-the-united-states-today" style="border: 1px solid #ccc;">
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