And here is a question: When will Washington find a more suitable alternative to the law of entropy (hey, we have to be everywhere to prevent chaos and our enemies from taking over) and realize that America cannot sustain that sort of growing stress on its resources when the limits of labor and physical capital are setting the noninflationary economic growth at a pathetic 1.5 percent?
Peter Altmaier, the chief of staff at the German Chancellery (often dubbed as the most powerful man in Germany), complained, tongue-in-cheek, a few weeks ago, during a highly learned seminar, that he was just “a simple lawyer,” but that “all politicians should have some basic education (Grundbildung) in economics.”
Altmaier’s intellectual discovery reminds one of Henry Kissinger’s dismissive remark that the balance-of-power problems he was looking at all boiled down to economics, a field of study where, to put it mildly, he claimed no particular expertise.
So, a good place to start that German-style Grundbildung in Economics 101 for those lambasting the White House for alleged “trade protectionism” and “withdrawal from the world stage” would be a quick look at the foreign trade numbers for July published last week.
Here is what they would see: The U.S. foreign trade deficit in the first seven months of this year came in at $456 billion, a 7.5 percent increase from the year earlier. Not bad, one might say, for a country accused of trade protectionism and disengaging from the rest of the world.
Now, seriously, is that deficit a big deal?
Yes it is, because that would be added to America’s net foreign liabilities — which amounted to $8.1 trillion at the end of the first quarter of this year — while the money the U.S. pays to settle these trade deficits with Europe and Asia (mainly China) will be added to their net foreign assets.
