At Bloomberg View Tyler Cowen has noticed something about the emergent Trump Administration policies:
I’ve seen hundreds of articles on President Donald Trump and trade, but the real significance of the Trump economic revolution — for better or worse — is a focus on investment. There is no coordinating mastermind, but if you consider the intersection between what the Trumpian nationalists want and what a Republican Congress will deliver, it’s this: wanting to make the U.S. a new and dominant center for investment, including at the expense of other nations.
Read the whole thing.
That would be exactly the right policy. My dissatisfaction with present economic policy, whether taxes or trade, is that it doesn’t do enough to encourage honest to gosh domestic business investment. Where the Bush tax cuts fell short was that they proceeded under the incorrect assumption that there had been a shortfall in personal consumption expenditures. There hadn’t been. As I said at the time there was a shortfall in business investment.
Right now there are at least two gold rushes going on. One is in artificial intelligence. Another is in blockchain. I’m skeptical that either will produce the enormous economic growth that the business investment in personal computers and networking made in the 1980s and early 1990s did in the late 1990s and early Aughts but who knows? I’m darned sure that money chasing itself in the financial sector will inflate balance sheets but won’t produce the sort of economic growth that we need.