The 2016 Election Policy Threesome: Inequality, Trade Shocks, and Monetary Policy

Transcription

1 The 2016 Election Policy Threesome: Inequality, Trade Shocks, and Monetary Policy Douglas L. Campbell Assistant Professor, New Economic School Democrats Abroad Seminar March, 2016 Douglas L. Campbell Inequality, Trade, and Money 1 / 44

2 (Select) Major Election 2016 Policy Issues Inequality. Rise of the 1%. Trade. Free trade the enemy? Monetary Policy. Other main election economic policy issues: clean energy/immigration/free college education/single payer/minimum wage/infrastructure investment/social Security are either far from my specialty, or not so interesting to discuss. Douglas L. Campbell Inequality, Trade, and Money 2 / 44

3 (Select) Major Election 2016 Policy Issues Inequality. Rise of the 1%. Trade. Free trade the enemy? Monetary Policy. Other main election economic policy issues: clean energy/immigration/free college education/single payer/minimum wage/infrastructure investment/social Security are either far from my specialty, or not so interesting to discuss. Douglas L. Campbell Inequality, Trade, and Money 2 / 44

4 (Select) Major Election 2016 Policy Issues Inequality. Rise of the 1%. Trade. Free trade the enemy? Monetary Policy. Other main election economic policy issues: clean energy/immigration/free college education/single payer/minimum wage/infrastructure investment/social Security are either far from my specialty, or not so interesting to discuss. Douglas L. Campbell Inequality, Trade, and Money 2 / 44

5 (Select) Major Election 2016 Policy Issues Inequality. Rise of the 1%. Trade. Free trade the enemy? Monetary Policy. Other main election economic policy issues: clean energy/immigration/free college education/single payer/minimum wage/infrastructure investment/social Security are either far from my specialty, or not so interesting to discuss. Douglas L. Campbell Inequality, Trade, and Money 2 / 44

6 The Rise of Inequality, the US top 10-5 top 1 *Data from Piketty/Saez World Top Incomes Database Douglas L. Campbell Inequality, Trade, and Money 3 / 44

7 Theories on the Rise of Inequality Skill-Biased Technological Change. Robots. Trade Shocks. Rise of China. NAFTA. Labor Market Institutions Especially top marginal tax rates, and the mimimum wage Others: Education (supply of skilled workers). Increasing rent-seeking/monopolization (Robert Reich) Douglas L. Campbell Inequality, Trade, and Money 4 / 44

8 Theories on the Rise of Inequality Skill-Biased Technological Change. Robots. Trade Shocks. Rise of China. NAFTA. Labor Market Institutions Especially top marginal tax rates, and the mimimum wage Others: Education (supply of skilled workers). Increasing rent-seeking/monopolization (Robert Reich) Douglas L. Campbell Inequality, Trade, and Money 4 / 44

9 Theories on the Rise of Inequality Skill-Biased Technological Change. Robots. Trade Shocks. Rise of China. NAFTA. Labor Market Institutions Especially top marginal tax rates, and the mimimum wage Others: Education (supply of skilled workers). Increasing rent-seeking/monopolization (Robert Reich) Douglas L. Campbell Inequality, Trade, and Money 4 / 44

10 Theories on the Rise of Inequality Skill-Biased Technological Change. Robots. Trade Shocks. Rise of China. NAFTA. Labor Market Institutions Especially top marginal tax rates, and the mimimum wage Others: Education (supply of skilled workers). Increasing rent-seeking/monopolization (Robert Reich) Douglas L. Campbell Inequality, Trade, and Money 4 / 44

11 Paul Krugman s Chart of the Year for 2014 From Lakner and Milanovic (2013) Douglas L. Campbell Inequality, Trade, and Money 5 / 44

12 US, Trade vs. Inequality Top 1% Income Share Imports/GDP Top 1% Income Share Exports/GDP Douglas L. Campbell Inequality, Trade, and Money 6 / 44

13 The Rise of Inequality, Anglo Countries Top 1% Share of Income USA Australia UK *Data from Piketty/Saez World Top Incomes Database Douglas L. Campbell Inequality, Trade, and Money 7 / 44

14 Top 1% Share of Income, Other Countries Top 1% Share of Income France Japan Germany Douglas L. Campbell Inequality, Trade, and Money 8 / 44

15 France, Trade vs. Inequality Top 1% Income Share Imports/GDP Top 1% Income Share Exports/GDP Douglas L. Campbell Inequality, Trade, and Money 9 / 44

16 Skill-Biased Technological Change? Top 1% Share of Income France Japan Germany Douglas L. Campbell Inequality, Trade, and Money 10 / 44

17 Skill-Biased Technological Change? Increasing Returns to College Education? Top Top.1% Douglas L. Campbell Inequality, Trade, and Money 11 / 44

18 Douglas L. Campbell Inequality, Trade, and Money 12 / 44

19 Douglas L. Campbell Inequality, Trade, and Money 13 / 44

20 US Top 1% Share of Income Top Marginal Tax Rate Top 1% Share of Income Top Marginal Tax Rate Douglas L. Campbell Inequality, Trade, and Money 14 / 44

21 UK Top 1% Share of Income Top Marginal Tax Rate Top 1% Share of Income Top Marginal Tax Rate Douglas L. Campbell Inequality, Trade, and Money 15 / 44

22 Australia Top 1% Share of Income Top Marginal Tax Rate Top 1% Share of Income Top Marginal Tax Rate Douglas L. Campbell Inequality, Trade, and Money 16 / 44

23 Germany Top 1% Share of Income Top Marginal Tax Rate Top 1% Share of Income Top Marginal Tax Rate Douglas L. Campbell Inequality, Trade, and Money 17 / 44

24 France Top 1% Share of Income Top Marginal Tax Rate Top 1% Share of Income Top Marginal Tax Rate Douglas L. Campbell Inequality, Trade, and Money 18 / 44

25 Japan Top 1% Share of Income Top Marginal Tax Rate Top 1% Share of Income Top Marginal Tax Rate Douglas L. Campbell Inequality, Trade, and Money 19 / 44

26 Top Marginal Tax Rates and the Top 1% Share of Income: Sweden Top 1% Share of Income Top Marginal Tax Rate Top 1% Share of Income Top Marginal Tax Rate Notes: 1% Share and Top MTR data from the World Top Incomes Database, supplemented with other sources Douglas L. Campbell Inequality, Trade, and Money 20 / 44

27 Inequality: Summing Up Changes in the top marginal tax rate almost certainly drove increases in the Top 1% share of income (Piketty/Saez/Stantcheva 2013, Campbell/Lusher 2016) This operates in part via bargaining, which is why changes in the top MTR affect the trajectory of the top 1% share. Implication: Raise top rates! Caveats likely small impact on labor supply but possibly larger impact on avoidance. Implication: Go after loopholes (carried interest). We also know that trends in CEO pay largely explained by luck (Bertrand and Mullainathan, 2001) Douglas L. Campbell Inequality, Trade, and Money 21 / 44

28 Inequality: Summing Up Changes in the top marginal tax rate almost certainly drove increases in the Top 1% share of income (Piketty/Saez/Stantcheva 2013, Campbell/Lusher 2016) This operates in part via bargaining, which is why changes in the top MTR affect the trajectory of the top 1% share. Implication: Raise top rates! Caveats likely small impact on labor supply but possibly larger impact on avoidance. Implication: Go after loopholes (carried interest). We also know that trends in CEO pay largely explained by luck (Bertrand and Mullainathan, 2001) Douglas L. Campbell Inequality, Trade, and Money 21 / 44

29 Inequality: Summing Up Changes in the top marginal tax rate almost certainly drove increases in the Top 1% share of income (Piketty/Saez/Stantcheva 2013, Campbell/Lusher 2016) This operates in part via bargaining, which is why changes in the top MTR affect the trajectory of the top 1% share. Implication: Raise top rates! Caveats likely small impact on labor supply but possibly larger impact on avoidance. Implication: Go after loopholes (carried interest). We also know that trends in CEO pay largely explained by luck (Bertrand and Mullainathan, 2001) Douglas L. Campbell Inequality, Trade, and Money 21 / 44

30 Inequality: Summing Up Changes in the top marginal tax rate almost certainly drove increases in the Top 1% share of income (Piketty/Saez/Stantcheva 2013, Campbell/Lusher 2016) This operates in part via bargaining, which is why changes in the top MTR affect the trajectory of the top 1% share. Implication: Raise top rates! Caveats likely small impact on labor supply but possibly larger impact on avoidance. Implication: Go after loopholes (carried interest). We also know that trends in CEO pay largely explained by luck (Bertrand and Mullainathan, 2001) Douglas L. Campbell Inequality, Trade, and Money 21 / 44

31 Inequality: Summing Up Changes in the top marginal tax rate almost certainly drove increases in the Top 1% share of income (Piketty/Saez/Stantcheva 2013, Campbell/Lusher 2016) This operates in part via bargaining, which is why changes in the top MTR affect the trajectory of the top 1% share. Implication: Raise top rates! Caveats likely small impact on labor supply but possibly larger impact on avoidance. Implication: Go after loopholes (carried interest). We also know that trends in CEO pay largely explained by luck (Bertrand and Mullainathan, 2001) Douglas L. Campbell Inequality, Trade, and Money 21 / 44

32 Inequality: Summing Up No Evidence that Trade Liberalization affects the Top 1% Share of Income... Trade Imbalances not correlated Imports/GDP not correlated Trade with China/Developing Countries not correlated A caveat: There is some evidence that the Rise of China had compositional effects on Workers (Autor/Dorn/Hanson/Song, 2014) using Social Security data CPS MORG data tell a slightly different story manufacturing workers with no college but high wages suffered the most (Campbell, 2016) Little Evidence for Skill-Biased Technological Change or Robots. No hard evidence for the Reich thesis Douglas L. Campbell Inequality, Trade, and Money 22 / 44

33 Inequality: Summing Up No Evidence that Trade Liberalization affects the Top 1% Share of Income... Trade Imbalances not correlated Imports/GDP not correlated Trade with China/Developing Countries not correlated A caveat: There is some evidence that the Rise of China had compositional effects on Workers (Autor/Dorn/Hanson/Song, 2014) using Social Security data CPS MORG data tell a slightly different story manufacturing workers with no college but high wages suffered the most (Campbell, 2016) Little Evidence for Skill-Biased Technological Change or Robots. No hard evidence for the Reich thesis Douglas L. Campbell Inequality, Trade, and Money 22 / 44

34 Inequality: Summing Up No Evidence that Trade Liberalization affects the Top 1% Share of Income... Trade Imbalances not correlated Imports/GDP not correlated Trade with China/Developing Countries not correlated A caveat: There is some evidence that the Rise of China had compositional effects on Workers (Autor/Dorn/Hanson/Song, 2014) using Social Security data CPS MORG data tell a slightly different story manufacturing workers with no college but high wages suffered the most (Campbell, 2016) Little Evidence for Skill-Biased Technological Change or Robots. No hard evidence for the Reich thesis Douglas L. Campbell Inequality, Trade, and Money 22 / 44

35 Inequality: Summing Up No Evidence that Trade Liberalization affects the Top 1% Share of Income... Trade Imbalances not correlated Imports/GDP not correlated Trade with China/Developing Countries not correlated A caveat: There is some evidence that the Rise of China had compositional effects on Workers (Autor/Dorn/Hanson/Song, 2014) using Social Security data CPS MORG data tell a slightly different story manufacturing workers with no college but high wages suffered the most (Campbell, 2016) Little Evidence for Skill-Biased Technological Change or Robots. No hard evidence for the Reich thesis Douglas L. Campbell Inequality, Trade, and Money 22 / 44

36 Inequality: Summing Up No Evidence that Trade Liberalization affects the Top 1% Share of Income... Trade Imbalances not correlated Imports/GDP not correlated Trade with China/Developing Countries not correlated A caveat: There is some evidence that the Rise of China had compositional effects on Workers (Autor/Dorn/Hanson/Song, 2014) using Social Security data CPS MORG data tell a slightly different story manufacturing workers with no college but high wages suffered the most (Campbell, 2016) Little Evidence for Skill-Biased Technological Change or Robots. No hard evidence for the Reich thesis Douglas L. Campbell Inequality, Trade, and Money 22 / 44

37 How About Trade? Progressives skepticism of FTAs often portrayed as idiocy or pandering to labor unions. Don t you understand comparative advantage? Anti-free trade Trump: Just zenophobic? Bashing trade is now quite popular on the campaign trail... In Michigan, only 30% of Democratic primary voters believe trade creates US jobs (Clinton won these, 54-44), while 57% believe it takes away jobs (Sanders won these 56-41). Douglas L. Campbell Inequality, Trade, and Money 23 / 44

38 How About Trade? Progressives skepticism of FTAs often portrayed as idiocy or pandering to labor unions. Don t you understand comparative advantage? Anti-free trade Trump: Just zenophobic? Bashing trade is now quite popular on the campaign trail... In Michigan, only 30% of Democratic primary voters believe trade creates US jobs (Clinton won these, 54-44), while 57% believe it takes away jobs (Sanders won these 56-41). Douglas L. Campbell Inequality, Trade, and Money 23 / 44

39 How About Trade? Progressives skepticism of FTAs often portrayed as idiocy or pandering to labor unions. Don t you understand comparative advantage? Anti-free trade Trump: Just zenophobic? Bashing trade is now quite popular on the campaign trail... In Michigan, only 30% of Democratic primary voters believe trade creates US jobs (Clinton won these, 54-44), while 57% believe it takes away jobs (Sanders won these 56-41). Douglas L. Campbell Inequality, Trade, and Money 23 / 44

40 How About Trade? Progressives skepticism of FTAs often portrayed as idiocy or pandering to labor unions. Don t you understand comparative advantage? Anti-free trade Trump: Just zenophobic? Bashing trade is now quite popular on the campaign trail... In Michigan, only 30% of Democratic primary voters believe trade creates US jobs (Clinton won these, 54-44), while 57% believe it takes away jobs (Sanders won these 56-41). Douglas L. Campbell Inequality, Trade, and Money 23 / 44

41 How About Trade? Is there any truth to the view of voters that free trade has been bad for them? Yes. It may be even worse than Bernie/Trump says... And, if so, does this mean that we should try to reverse NAFTA and pntr with China? No. Though I would try to make a better deal with China. I would not touch NAFTA though. Let me explain... Douglas L. Campbell Inequality, Trade, and Money 24 / 44

42 How About Trade? Is there any truth to the view of voters that free trade has been bad for them? Yes. It may be even worse than Bernie/Trump says... And, if so, does this mean that we should try to reverse NAFTA and pntr with China? No. Though I would try to make a better deal with China. I would not touch NAFTA though. Let me explain... Douglas L. Campbell Inequality, Trade, and Money 24 / 44

43 How About Trade? Is there any truth to the view of voters that free trade has been bad for them? Yes. It may be even worse than Bernie/Trump says... And, if so, does this mean that we should try to reverse NAFTA and pntr with China? No. Though I would try to make a better deal with China. I would not touch NAFTA though. Let me explain... Douglas L. Campbell Inequality, Trade, and Money 24 / 44

44 How About Trade? Is there any truth to the view of voters that free trade has been bad for them? Yes. It may be even worse than Bernie/Trump says... And, if so, does this mean that we should try to reverse NAFTA and pntr with China? No. Though I would try to make a better deal with China. I would not touch NAFTA though. Let me explain... Douglas L. Campbell Inequality, Trade, and Money 24 / 44

45 The Collapse in Manufacturing Employment Millions 22 American Manufacturing Employment Share 12% employment (left axis) share of population (right axis) 10% 8% 6% 4% % Autor, Dorn, Hanson (2013) and Campbell (2013, 2016) suggest collapse due to trade Douglas L. Campbell Inequality, Trade, and Money 25 / 44

46 Real Exchange Rates and Trade Goods Trade Balance ex Oil, Share of GDP RER Indices Goods Trade Balance ex Oil, Share of GDP Divisia (CPI) WARP Note: WARP is a measure of the trade-weighted Real Exchange Rate for the US Douglas L. Campbell Inequality, Trade, and Money 26 / 44

47 The Rise of China (which has lifted millions of people out of poverty) Douglas L. Campbell Inequality, Trade, and Money 27 / 44

48 The Rise of China Douglas L. Campbell Inequality, Trade, and Money 28 / 44

49 Adverse Trade Shocks: RER Movements Import Penetration/Export Share Weighted Average Relative Unit Labor Costs Import Pen./Export Share WARULC Notes: WARULC = Weighted Average Relative Unit Labor Costs (from Campbell, 2015), Import Penetration = Imports/(Shipments + Imports - Exports); Export Share = Exports/Shipments Douglas L. Campbell Inequality, Trade, and Money 29 / 44

50 Adverse Trade Shocks: RER Movements, Impact on Employment WARULC Most Open: Top 25% Least Open: Bottom 50% 2 s.d. Error Bounds Rel. ULC Index Notes: WARULC = Weighted Average Relative Unit Labor Costs, Import Penetration = Imports/(Shipments + Imports - Exports); Export Share = Exports/Shipments Douglas L. Campbell Inequality, Trade, and Money 30 / 44

51 Adverse Trade Shocks: RER Movements, Impact on Employment WARULC Most Open: Top 25% Least Open: Bottom 50% 2 s.d. Error Bounds Rel. ULC Index Notes: WARULC = Weighted Average Relative Unit Labor Costs, Import Penetration = Imports/(Shipments + Imports - Exports); Export Share = Exports/Shipments Douglas L. Campbell Inequality, Trade, and Money 31 / 44

52 Exposure to Import Competition and Employment Growth, by Sector Change in Import Penetration, Log 10 year change, Employment Fitted values Notes: Import Penetration = Imports/Shipments + Imports - Exports Douglas L. Campbell Inequality, Trade, and Money 32 / 44

53 Manufacturing Jobs Exposed to Import Competition, 1979 These areas suffered declines in wages, employment, population, and increases in disability benefits The evidence suggests that areas worst hit by import competition never recover Douglas L. Campbell Inequality, Trade, and Money 33 / 44

54 Manufacturing Jobs Exposed to Import Competition, 1979 These areas suffered declines in wages, employment, population, and increases in disability benefits The evidence suggests that areas worst hit by import competition never recover Douglas L. Campbell Inequality, Trade, and Money 33 / 44

55 Manufacturing Jobs Exposed to Import Competition, 1979 These areas suffered declines in wages, employment, population, and increases in disability benefits The evidence suggests that areas worst hit by import competition never recover Douglas L. Campbell Inequality, Trade, and Money 33 / 44

56 Estimates of the Total Jobs Lost Estimates of Total Jobs Lost Due to Trade Competition Estimates (Millions) of Total Job Losses due to: China, Direct China, Add IO Linkages All Shocks, Direct All Shocks, Add IO Linkages All Shocks, Add Local Impact Acemoglu/Autor/Dorn/Hanson, Campbell, * * 10.3* Bernie Sanders, Campaign Literature 3.0 *Indicates that the Campbell direct estimates are combined with the AADH multipliers Notes: Acemoglu et al. used an extremely conservative methodology to calculate the total jobs lost. Campbell s estimates include exchange rate movements, end of MFA quotas, and China s accession to the WTO Douglas L. Campbell Inequality, Trade, and Money 34 / 44

57 Estimates of the Total Jobs Lost Estimates of Total Jobs Lost Due to Trade Competition Estimates (Millions) of Total Job Losses due to: China, Direct China, Add IO Linkages All Shocks, Direct All Shocks, Add IO Linkages All Shocks, Add Local Impact Acemoglu/Autor/Dorn/Hanson, Campbell, * * 10.3* Bernie Sanders, Campaign Literature 3.0 *Indicates that the Campbell direct estimates are combined with the AADH multipliers Notes: Acemoglu et al. used an extremely conservative methodology to calculate the total jobs lost. Campbell s estimates include exchange rate movements, end of MFA quotas, and China s accession to the WTO Douglas L. Campbell Inequality, Trade, and Money 34 / 44

58 Estimates of the Total Jobs Lost Estimates of Total Jobs Lost Due to Trade Competition Estimates (Millions) of Total Job Losses due to: China, Direct China, Add IO Linkages All Shocks, Direct All Shocks, Add IO Linkages All Shocks, Add Local Impact Acemoglu/Autor/Dorn/Hanson, Campbell, * * 10.3* Bernie Sanders, Campaign Literature 3.0 *Indicates that the Campbell direct estimates are combined with the AADH multipliers Notes: Acemoglu et al. used an extremely conservative methodology to calculate the total jobs lost. Campbell s estimates include exchange rate movements, end of MFA quotas, and China s accession to the WTO Douglas L. Campbell Inequality, Trade, and Money 34 / 44

59 The Great Employment Sag of the 2000s Douglas L. Campbell Inequality, Trade, and Money 35 / 44

60 Women Lost Ground in the Naughties Douglas L. Campbell Inequality, Trade, and Money 36 / 44

61 But, wait. It gets worse... 1 Small trade shocks probably have no aggregate jobs impact. The Fed decides aggregate employment. 2 But, rise of China, RER movements, and the Great Reserve Accumulation led to... 3 The Collapse in Manufacturing and low interest rates. Fueled the housing bubble. 4 Thanks to poor regulation, when the bubble burst, this led to the world financial crisis, the Great Recession, a liquidity trap, and a slow-growth trajectory 5 The Federal Reserve (and other central banks), have not been very aggressive about getting the US economy back on its long-run growth path. Douglas L. Campbell Inequality, Trade, and Money 37 / 44

62 But, wait. It gets worse... 1 Small trade shocks probably have no aggregate jobs impact. The Fed decides aggregate employment. 2 But, rise of China, RER movements, and the Great Reserve Accumulation led to... 3 The Collapse in Manufacturing and low interest rates. Fueled the housing bubble. 4 Thanks to poor regulation, when the bubble burst, this led to the world financial crisis, the Great Recession, a liquidity trap, and a slow-growth trajectory 5 The Federal Reserve (and other central banks), have not been very aggressive about getting the US economy back on its long-run growth path. Douglas L. Campbell Inequality, Trade, and Money 37 / 44

63 But, wait. It gets worse... 1 Small trade shocks probably have no aggregate jobs impact. The Fed decides aggregate employment. 2 But, rise of China, RER movements, and the Great Reserve Accumulation led to... 3 The Collapse in Manufacturing and low interest rates. Fueled the housing bubble. 4 Thanks to poor regulation, when the bubble burst, this led to the world financial crisis, the Great Recession, a liquidity trap, and a slow-growth trajectory 5 The Federal Reserve (and other central banks), have not been very aggressive about getting the US economy back on its long-run growth path. Douglas L. Campbell Inequality, Trade, and Money 37 / 44

64 But, wait. It gets worse... 1 Small trade shocks probably have no aggregate jobs impact. The Fed decides aggregate employment. 2 But, rise of China, RER movements, and the Great Reserve Accumulation led to... 3 The Collapse in Manufacturing and low interest rates. Fueled the housing bubble. 4 Thanks to poor regulation, when the bubble burst, this led to the world financial crisis, the Great Recession, a liquidity trap, and a slow-growth trajectory 5 The Federal Reserve (and other central banks), have not been very aggressive about getting the US economy back on its long-run growth path. Douglas L. Campbell Inequality, Trade, and Money 37 / 44

65 But, wait. It gets worse... 1 Small trade shocks probably have no aggregate jobs impact. The Fed decides aggregate employment. 2 But, rise of China, RER movements, and the Great Reserve Accumulation led to... 3 The Collapse in Manufacturing and low interest rates. Fueled the housing bubble. 4 Thanks to poor regulation, when the bubble burst, this led to the world financial crisis, the Great Recession, a liquidity trap, and a slow-growth trajectory 5 The Federal Reserve (and other central banks), have not been very aggressive about getting the US economy back on its long-run growth path. Douglas L. Campbell Inequality, Trade, and Money 37 / 44

66 GDP Below Trend Douglas L. Campbell Inequality, Trade, and Money 38 / 44

67 And yet inflation below target... Douglas L. Campbell Inequality, Trade, and Money 39 / 44

68 In part because of ZLB, Fed has done little. Tightening without inflation Douglas L. Campbell Inequality, Trade, and Money 40 / 44

69 Fed Total Assets. Two years in between MP changes... Douglas L. Campbell Inequality, Trade, and Money 41 / 44

70 The Fed has decided the economy is sick... Actual RGDP Growth vs. Fed's Forecasts April, 2009 Forecast April, 2010 Forecast Actual GDP Growth April, 2011 Forecast April, 2012 Forecast April, 2013 March, 2014 Forecast March, 2015 Dec., Douglas L. Campbell Inequality, Trade, and Money 42 / 44

71 The recent tightening has led to another dollar appreciation... Douglas L. Campbell Inequality, Trade, and Money 43 / 44

72 Conclusions for Policy 1 There was massive harm from trade. But with better regulation/mp, perhaps no aggregate job losses... 2 Presidents need to intervene at times to ensure countries don t have a trade advantage. Now the Fed is the culprit... 3 Military impact of cutting off trade with China? (Good or bad?) 4 Democratic activists need to focus on monetary policy. Need better appointees (recent choices, e.g., Lael Brainard, much better than early Obama-admin appointees Dan Tarullo/Jeremy Stein/Jerome Powell were disasters. How many vacant seats now?) 5 Circa , we should have pressured China hard to devalue. Now, China is actually propping up its own currency. There are still plenty of issues to push China on. Mostly, these are pushing the interests of US corporations in China pirating, facebook in China, etc. 6 Need better trade assistance to regions which have been wrecked by trade shocks. Create tax havens? Outmigration doesn t help these areas. Douglas L. Campbell Inequality, Trade, and Money 44 / 44

73 Conclusions for Policy 1 There was massive harm from trade. But with better regulation/mp, perhaps no aggregate job losses... 2 Presidents need to intervene at times to ensure countries don t have a trade advantage. Now the Fed is the culprit... 3 Military impact of cutting off trade with China? (Good or bad?) 4 Democratic activists need to focus on monetary policy. Need better appointees (recent choices, e.g., Lael Brainard, much better than early Obama-admin appointees Dan Tarullo/Jeremy Stein/Jerome Powell were disasters. How many vacant seats now?) 5 Circa , we should have pressured China hard to devalue. Now, China is actually propping up its own currency. There are still plenty of issues to push China on. Mostly, these are pushing the interests of US corporations in China pirating, facebook in China, etc. 6 Need better trade assistance to regions which have been wrecked by trade shocks. Create tax havens? Outmigration doesn t help these areas. Douglas L. Campbell Inequality, Trade, and Money 44 / 44

74 Conclusions for Policy 1 There was massive harm from trade. But with better regulation/mp, perhaps no aggregate job losses... 2 Presidents need to intervene at times to ensure countries don t have a trade advantage. Now the Fed is the culprit... 3 Military impact of cutting off trade with China? (Good or bad?) 4 Democratic activists need to focus on monetary policy. Need better appointees (recent choices, e.g., Lael Brainard, much better than early Obama-admin appointees Dan Tarullo/Jeremy Stein/Jerome Powell were disasters. How many vacant seats now?) 5 Circa , we should have pressured China hard to devalue. Now, China is actually propping up its own currency. There are still plenty of issues to push China on. Mostly, these are pushing the interests of US corporations in China pirating, facebook in China, etc. 6 Need better trade assistance to regions which have been wrecked by trade shocks. Create tax havens? Outmigration doesn t help these areas. Douglas L. Campbell Inequality, Trade, and Money 44 / 44

75 Conclusions for Policy 1 There was massive harm from trade. But with better regulation/mp, perhaps no aggregate job losses... 2 Presidents need to intervene at times to ensure countries don t have a trade advantage. Now the Fed is the culprit... 3 Military impact of cutting off trade with China? (Good or bad?) 4 Democratic activists need to focus on monetary policy. Need better appointees (recent choices, e.g., Lael Brainard, much better than early Obama-admin appointees Dan Tarullo/Jeremy Stein/Jerome Powell were disasters. How many vacant seats now?) 5 Circa , we should have pressured China hard to devalue. Now, China is actually propping up its own currency. There are still plenty of issues to push China on. Mostly, these are pushing the interests of US corporations in China pirating, facebook in China, etc. 6 Need better trade assistance to regions which have been wrecked by trade shocks. Create tax havens? Outmigration doesn t help these areas. Douglas L. Campbell Inequality, Trade, and Money 44 / 44

76 Conclusions for Policy 1 There was massive harm from trade. But with better regulation/mp, perhaps no aggregate job losses... 2 Presidents need to intervene at times to ensure countries don t have a trade advantage. Now the Fed is the culprit... 3 Military impact of cutting off trade with China? (Good or bad?) 4 Democratic activists need to focus on monetary policy. Need better appointees (recent choices, e.g., Lael Brainard, much better than early Obama-admin appointees Dan Tarullo/Jeremy Stein/Jerome Powell were disasters. How many vacant seats now?) 5 Circa , we should have pressured China hard to devalue. Now, China is actually propping up its own currency. There are still plenty of issues to push China on. Mostly, these are pushing the interests of US corporations in China pirating, facebook in China, etc. 6 Need better trade assistance to regions which have been wrecked by trade shocks. Create tax havens? Outmigration doesn t help these areas. Douglas L. Campbell Inequality, Trade, and Money 44 / 44

77 Conclusions for Policy 1 There was massive harm from trade. But with better regulation/mp, perhaps no aggregate job losses... 2 Presidents need to intervene at times to ensure countries don t have a trade advantage. Now the Fed is the culprit... 3 Military impact of cutting off trade with China? (Good or bad?) 4 Democratic activists need to focus on monetary policy. Need better appointees (recent choices, e.g., Lael Brainard, much better than early Obama-admin appointees Dan Tarullo/Jeremy Stein/Jerome Powell were disasters. How many vacant seats now?) 5 Circa , we should have pressured China hard to devalue. Now, China is actually propping up its own currency. There are still plenty of issues to push China on. Mostly, these are pushing the interests of US corporations in China pirating, facebook in China, etc. 6 Need better trade assistance to regions which have been wrecked by trade shocks. Create tax havens? Outmigration doesn t help these areas. Douglas L. Campbell Inequality, Trade, and Money 44 / 44

78 Conclusions for Policy 1 There was massive harm from trade. But with better regulation/mp, perhaps no aggregate job losses... 2 Presidents need to intervene at times to ensure countries don t have a trade advantage. Now the Fed is the culprit... 3 Military impact of cutting off trade with China? (Good or bad?) 4 Democratic activists need to focus on monetary policy. Need better appointees (recent choices, e.g., Lael Brainard, much better than early Obama-admin appointees Dan Tarullo/Jeremy Stein/Jerome Powell were disasters. How many vacant seats now?) 5 Circa , we should have pressured China hard to devalue. Now, China is actually propping up its own currency. There are still plenty of issues to push China on. Mostly, these are pushing the interests of US corporations in China pirating, facebook in China, etc. 6 Need better trade assistance to regions which have been wrecked by trade shocks. Create tax havens? Outmigration doesn t help these areas. Douglas L. Campbell Inequality, Trade, and Money 44 / 44