Best columns: Business
The president is right on trade
The New York Times
President Trump’s trade critics have got it all wrong, said Alan Tonelson. Skeptics say that increasing automation will cancel out the president’s attempts to bring back manufacturing jobs, while his proposed import tariffs “will ignite disastrous trade wars.” They’re wrong on both points. Although cheap, labor-intensive goods often come to mind when Americans think about job-displacing imports, the reality is that manufacturing’s most technology-heavy segments have also seen their payrolls shrink because of “predatory competition” from other nations and offshoring by U.S. multinationals. Sectors like motor vehicles and parts, pharmaceuticals, telecom equipment, and industrial chemicals now account for nearly half of manufacturing’s “chronic annual trade deficit.” A recent Commerce Department report shows that trade shortfalls alone cost these industries more than 200,000 jobs in 2014. As for the “tradewar alarmists,” they ignore America’s real leverage over the global economy. The U.S. is the single largest export market for a fifth of the world’s nations, and the world’s largest consumer of foreign goods. Countries that rely on U.S. consumers, like Mexico and China, aren’t likely to attack “their biggest and best customer.” Bringing back jobs and factories from overseas will result in rich rewards for the U.S. economy. Thankfully, “America has a president who understands its ample power to reap them.”
Economists are just guessing
The Washington Post
“You knew it all along: Economists can’t forecast the economy worth a hoot,” said Robert Samuelson. A new study from the Federal Reserve concludes that most economic projections amount to little more than guesswork. Researchers studied 10 years of forecasts for major economic indicators from a mix of government and private-sector economists. By and large, the expert projections showed “huge margins of error” compared with what actually happened. If economists projected that the unemployment rate would stick at 5 percent for the next few years, the study found, there was a fair chance it might actually rise to 7 percent or fall to 3 percent.
“Worse, the gap between prediction and reality may be widening.” Forecasting mistakes have increased since the 2008 financial crisis, which few supposed experts saw coming. Since then, economists have also failed to foresee the unexpectedly slow economic recovery or the collapse in productivity. “The implications are profound.” If policymakers’ “vision of the future is blurred, their policies may blunder.” And by misreading what’s next, consumers and companies can drag down the economy by borrowing too much or spending too little. “The bedrock lesson here is as old as time: The future—not all of it, but much of it—is too complex to be predicted.” ■