Prince Charming

The U.S. celebrates a pre accord with the UK whereby America will keep 10% tariffs but exclude cars from the list. More details will arise on that deal. In the meantime the world awaits the clash of titans in Switzerland between China and the U.S. to rebalance global trade. In broad terms rebalancing means consume less and produce more goods. The chart below shows the share of U.S. manufacturing over U.S. GDP. And you can see that ”made in the USA” has been shrinking from 28% in the 50’s to 10% today. This was a programmed demolition, not an accident. A few thoughts on this issue: (1) Globalization and free trade are the flip side of that chart. (2) the U.S. wants to bring “manu - facturing” (made by hand), but only 20% of Americans think they’re better off if we do so. And there will be few human hands in the new manufacturing, as robots work 24-7 and don’t unionize (at least not yet). (3) We want to bring production back to US under a protectionist agenda without losing the privileges of globalization. (4) we don’t want immigration on the lower end of the social pyramid, which is the one willing to work on a factory. (5) How and when is the US going to fix the budget deficit problem? Because intentionally or not we’ll reverse the “petrodollar system”that finances our huge deficit. In other words, and as a summary: who is going to tell the American people Prince Charming doesn’t exist?

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