Trade Deficits and other Disasters

During the presentation yesterday, Mallikarjuna wrote on chat:

Trade deficits are bad. China runs huge trade surplus for itself with almost every other country. That is killing the local industries (silk producers, primarily.)

And

Cheap/Cost-Effective Exports with malware (USA Printers in mid-east, telecom & electrical equipment by Chinese) … How to get over this? Is it beyond economics?

I gave a very brief response during the session. This is an elaboration. I appreciate the concern that he has for his family’s silk production business. Continue reading “Trade Deficits and other Disasters”

Facts don’t matter, emotions do

Frank H. Knight (1885 – 1972), Univ of Chicago economist, taught economics to Nobel laureates Milton Friedman, George Stigler and James M. Buchanan. Knight said:

“The serious fact is that the bulk of the really important things that economics has to teach are things that people would see for themselves if they were willing to see. And it is hard to believe in the utility of trying to teach what men refuse to learn or even seriously listen to.”