My trip to Israel

I was very pleased to have been sponsored by the Friedberg Economics Institute, who were wonderful hosts and put together great audiences on my behalf.

Here is my interview with Globes, which they helped to arrange, excerpt:

“We started this trade war with China by shooting in all directions. It would have been much wiser to form our alliances first, and then consider doing something versus China. I believe that the current trade war with China is unavoidable. It would have taken place even without Trump as president. There are too many cases of unfair trading by China, of Chinese companies operating unfairly and even spying, of stealing of US ideas, and preventing US or Western businesses from operating in the country. This dam had to burst sooner or later.

“What is happening now is not good for any country: not for the US, not for China, and also not for Israel, which like many other small countries will be harmed by the trade war. We’re in a situation in which everyone loses.

“The US is pressuring, and will pressure, Israel not to cooperate with China. It has already begun, and it will get worse. You can understand Washington – if you have the Sixth Fleet in Haifa and China controls part of the port, US concern is understandable. On the other hand, China depends on oil from the Middle East. It needs reliable partners in the region in order to ensure its regular supply, and Israel is the only country that meets this criterion. Imagine a future in which China exerts strong pressure on Israel to help it conduct its foreign policy. I think that it will be harder and harder for Israel to cope with Chinese pressure on the one hand and US pressure on the other.”

A variety of other topics are covered at the link.

Comments

Not so sure that the Israeli public is in favor of Trump, with all of his faults... as opposed to appreciating the way he deals with Israel.

I am not sure Israel can be a reliable partner to China in any way shape or fashion. Israel is in a shooting war with Syria and Iran, both considered neutral by China.

I am not sure Israel can be a reliable partner to anyone. Notwithstanding the fact they're ostensibly on "our side", they're behavior is as "rogue state" as it gets.

Fun fact: Israel conducts more espionage on the US than China does.

Exactly. Yet, https://www.google.com/search?client=tablet-android-samsung&ei=Ao3_XIWqGv-u5OUPn_WlmAk&q=dare+call+it+treason&gs_ssp=eJzj4tFP1zc0Sso1rzAqMTZgBAAeYwPH&oq=dare+call+it+treason&gs_l=mobile-gws-wiz-serp.1.1.46i39i19i275j46i203j0i22i30l6.6006.7910..9744...0.0..1.514.3473.0j11j3j1j0j1......0....1.........33i160j33i22i29i30.k47T3qUmsnQ

The best way to think about Israel is to realize they have no foreign policy, only domestic policy.

Israel is one of those places that generally does the opposite of what the cognitive elites say it should, and they seem to do quite well by it.

Because American non-cognitive elites let them. https://en.m.wikipedia.org/wiki/Jonathan_Pollard

Let us be blunt: there is no moral difference between the Zionist Entity, the Soviet Union and Nazi Germany.

Sir,

Israel pursues an Israel First policy, like the one blessedly adopted by Brazil under President Captain Bolsonaro.

Israel has no resemblance to that imperial absurdity known as the Soviet Union or that pseudo-Prussian anthill known as the Third Reich.

Brazil does not spy on its allies. Brazil does not sponsor terrorism. Brazil does not murder its allies.

https://en.m.wikipedia.org/wiki/King_David_Hotel_bombing

https://en.m.wikipedia.org/wiki/Jonathan_Pollard

"I believe that the current trade war with China is unavoidable. It would have taken place even without Trump as president. "
Naah. God Emperor Trump fought hard for this and now you NeverTrumpers think you invented it. Admit it, Trump is right!

I find the whole debate interesting. The reason Walmart imports from Chinese producers rather than domestic producers is because Chinese workers are way, way cheaper. And they're cheaper because China doesn't have the raft of workplace protections and wage and hour laws that make American workers so much more expensive. These workplace protections were enacted by our legislators, we were told, as the necessary standards for a civilized country. But for some reason there's no objection to Walmart importing from polluted, grim, discriminatory China. And when Trump purports to put the thumb on the scale on the end of American producers and their workforce, apparently China's lack of environmental and workplace protections don't matter.

This tells me that the trade debate is really more of the continuing battle of the Intellectual Goods versus the Deplorable Bads rather than any lofty economic principle. Who, Whom, gussied up as "comparative advantage" and "free trade."

There are no Chinese products sold in Walmart that you cannot buy elsewhere. And there is a plethora of products sold in Walmart that are made in the U.S. Whenever someone uses the "Walmart/China" link they are either biased or ignorant.

Trolling again. Your IP address...

Regardless, Anonymous / bear / etc

The whole liberal Jew Hatred is getting old.

We know you hate us, you were the instigators of the pogroms and the Holocaust. Trust me, Anonymous/Bear, we get it.

You want all of us dead.

Maybe if Zionists went back to their country, there wouldn't be anti-Zionists incidents.

by the time some other president acted against china it would have been too late...their strategy is clear...subdue the enemy without fighting...Trump didn't give them that luxury and deserves credit....finally america has a president with executive skills

Wasn’t it economists like Alex Tabarrock and Tyler Cowen who spent years and years telling Americans that all the trade with a China and China’s development was a great thing?

"What is happening now is not good for any country ... We’re in a situation in which everyone loses."

Taiwan is winning.

Fine with me. I’d like to see some Hong King winning too.

Tragedy. Hong Kong's future is a jackboot stamping on a human face - forever.

So what?

"the US will lose less [in a trade war], because China is a poorer country with a positive balance of payments."

The US might lose less, but it also has a much lower political capacity to absorb economic hardship. Politicians want to be re-elected after all. The US will lose the trade war game of chicken because its politicians will blink first. Authoritarian surveillance-state China can play the long game and wait out a second Trump term. Xi has abolished his own term limits.

Trump gets the blame for the trade war flare-up, but what triggered him was China walking back a bunch of concessions that they had initially offered. It may be that Xi is the one who is driving events here, with a ruthless calculation and a gamble.

The counterpoint would be that the US has pretty high standards of living and Chinese imports and exports have a fairly low impact on them. The 19th-20th century also shows the US policy consensus (and establishment) is capable of holding and pursue policies, including protectionist polices, over long scales of time.

Many China watchers also think the Chinese government is not that united or in agreement over long time scales, and not that good at long term planning.

Still, granting the assumption, how much of an advantage is being able to play the long game anyway? The trend across Asia is towards growth to much higher per capita levels - https://tinyurl.com/y382f9pb. Even a "lost decade" for China would mean that they would lose their position of being the "elder brother" of other Asian countries, able to boast of a more effective system at delivering growth, and that competing on tech and military strength within Asia would become much more difficult. Even 10-15 years of tech isolation might make China a bit of a Galpagos in its tech.

Now the question then is whether that is possible (Is Asian economic growth outside of China dependent on growth within China? How much would limiting exports to the West really affect Chinese economic growth?). It may be too late and this really should have been something Obama would have to have led on and nothing is possible at this point.

Keeping the US as the world'd largest economy is a dead duck. But consider more narrowly that lot of this is about breaking the spell that China has an alternative and "more effective" government model to offer (justifying authoritarianism), breaking or limiting their relative economic power against their Asian neighbours, and demonstrating to the US economic and foreign policy elite and to an extent the general public that they won't actually suffer that much and can bear the cost. Might not need a long time to do that, Trump followed by some centrist Democrat who is to Trump on China trade as a Obama was to Bush's wars might be enough.

" Even 10-15 years of tech isolation might make China a bit of a Galpagos in its tech."

This is a metaphysical impossibility.

Metaphysical or physical? I'm using Galapagos in the sense of "isolated ecosystem with a restricted range of environments" more than "relatively small population size separate ecosystem" which is of course pretty much not possible!

'and put together great audiences on my behalf'

That is an amazing observation. And one that just might be disturbing to someone with a bit of self-awareness.

The arranged interview part is far less disturbing .- one can be confident that the Mercatus Center PR department arranges as many interviews as it can, after all.

'It needs reliable partners in the region in order to ensure its regular supply, and Israel is the only country that meets this criterion. '

Best satire site on the web. Israel is not an oil exporter, of course, and those countries which are major oil exporters would all love to (re)claim Al Quds. A desire which is a major part of the instability in the region, or between countries like KSA and the Islamic Republic.

if china's economic circumstances weaken materially and millions of chinese experience hardship we will see about xi's permanent reign...Trump has plenty of power cards to play with widespread support at home...America has far more potential as an autarky than China...

Exactly.

What is happening now is not good for any country: not for the US, not for China, and also not for Israel, which like many other small countries will be harmed by the trade war.

Seems to be good for Vietnam which is getting many businesses that are moving out of China.

In many ways the trade war between the US and China is unraveling the same way the mid-East has unraveled.

Cowen: "It would have been much wiser to form our alliances first, and then consider doing something versus China." Yes, beginning with the TPP, and then reinforcing our alliances with Canada, Mexico, and the EU.

It occurred to me that Trump is employing what might be called a neo-Fisherian approach to trade/foreign policy: he stirs the pot, conducts a few high profile meetings, claims victory, and moves on. By claiming victory, he has won, whatever the outcome may be. In neo-Fischerian economics, one stirs the pot, conducts a few high profile meetings, claims victory, and moves on, the victory being the self-fulfilling prediction of glorious future economic events. The question is whether it works in trade/foreign policy like it works in economics. Of course, "works" is subject to many interpretations, including self-deception: if one actually believes it works, then by God it works.

As for the Israelis, they are adept at suspension of disbelief: surrounded by mortal enemies, they soldier on, choosing one mortal enemy, Saudi Arabia, as if it were an ally, to saber rattle with another mortal enemy, Iran, as if Saudi Arabia wouldn't once again turn on the Israelis once the Iranians have been dispatched. In this respect, the Israelis are like Trump supporters, who also must be adept at suspension of disbelief. The Chinese, who live in reality, must wonder whether the rest of the world has gone mad.

Agreed, except I am not sure if China lives in reality, either. Almost nobody does.

“Humankind cannot bear very much reality.”

I trust the Israelis' grip on reality more than rayward's. Certainly, there's nothing unusual about playing enemies off against one another.

And as one seems to have to keep pointing out, both Trump and Clinton opposed the TPP in 2016. There is no set of facts under which the TPP gets enacted.

ignore Never Trumpers Who Are OK With America's Enemies Winning.

"There are too many cases of unfair trading by China, of Chinese companies operating unfairly and even spying, of stealing of US ideas" - let's break this down;

What exactly is "unfair trading"? Is this about subsidies for Chinese companies? Surely we should be happy that a foreign government is prepared to subsidize our consumption? We can all work less then.

Spying - name one Government that doesn't spy. The US is hardly in a position to be all moralistic about this.

"Stealing US idea" - the US can apply it's ridiculous IP rules on imports without any new legislation. But surely no-one would say that the US has the right to impose their laws on sovereign foreign countries? Let's say I have my own country and decide on a 20 year limit to copyright - will the US then apply sanctions to me?

But the admission into WTO committed China to honoring those "imposed" IP laws. Yes, all governments spy -- but primarily on purely national security grounds -- which then limits that actions. China doesn't make that distinction and happily spy for both purely commercial/technological gains and for political/military security reasons.

So yes, "let's break this down".

If the Chinese are breaking WTO rules, why doesn't WTO take action?

Predatory pricing is illegal under domestic law, largely because of perceived long-term harm to consumers. It stands to reason that we would oppose it internationally as well.

You are kidding right? Predatory pricing bans are all about protecting incumbent companies and ripping off consumers. What consumer wants to be protected against lower prices?

Some folk believe that if a someone offers to take up owning all the production of computers, and hard industry, (and presumably anything up to and including all the weapons) in exchange for you "selling" them debt and currency (bits of data) and soybeans, then that's a "free gift" that will go on forever. (Or, it'll be totally trivial to pivot back to producing your own if they decide to stop that subsidy).

Not sure what you can really say to or about people who profess such beliefs. Odysseus would love them I guess...?

So it is the cunning plan of the Chinese to give away all their manufactured goods to the US in return for some useless bits of paper, in the hope that the Americans and the rest of the world will totally forget about how to make things and then POW, they will ramp up the price or something. Wow - clever lot the Chinese, talk about long term planning. Will be interesting to see how it works out.

Yes, in general nations do subsidize to capture market share and hold strategic dominance in important sectors and because they believe the gains of industrialisation to develop their economy are worth more than the cost of the subsidy.

You probably assume the developmental architects of China are just enormously stupid people who've not read Ricardo, or perhaps they just want to give you a "free gift" out of love?

"We can all work less then."

Those who lose their jobs or business can work a lot less. Or at least will have to. It is said to see a bunch of Judases selling out their people in exchange for cheaper trinkets.

The Israeli economy is probably unique in terms of its dramatic bifurcation. Hi-tech and related businesses have one way of operating (in terms of salaries, level of professionalism, etc.) and the rest of the economy (transportation, education, health care) are significantly different.

Not so unique actually, you can look to certain eastern European countries for a similar dynamic; tech sector taking on outsourcing/near-shoring work from western Europe, relatively dynamic, relatively high paying, and then the rest of the economy which is hopeless.

If it is truly the case where everyone looses then why is it happening. I think the answer is very clear -- some are not loosing due to the trade war and the "looser" rhetoric is all about short term thinking/view.

Perhaps think of it in a Coasean sense? We don't have a well defined set of property rights with China trade and we're defining them in reality now, no merely in "say" as was the status quo.

We started this trade war with China by shooting in all directions...

Did “we” really “start” the trade war or did “we” finally engage?

"I would tell him, 'Mr. President, be more predictable and work harder at creating alliances, and don't start conflicts,' but I don't think he listens to anybody." Thank you Captain Obvious! Waste as nothing you said in interview original

>We started this trade war with China by shooting in all directions.

Well, no.

If this trade war was inevitable, why didn't previous presidents handle it?

Kicking the can down the road is easier. See N Korea.

I never cease to be amazed that Tyler, who doesn't know enough about events at American colleges to comment on what happens at Yale or Middlebury, is so full of advice on Israel's geopolitical situation.

Neocons will let Israel do what it wishes whether Netanyahu shaking Putin's hand or Xi's and making actual deals with while still giving them billions of USD tax money and US foreign policy goodwill for their defense. Mr. Dealmaker Trump is getting a one sided deal here.

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