Economy

Britain Will Leave the Single European Market

Prime Minister Theresa May says Britain will leave the EU’s single market — but will “seek greatest possible access to it” — as it exits the trade bloc, the New York Times reports.

May said she wanted Britain to be part of a customs union agreement with the other EU states, and remove as many trade barriers as possible. She did not provide details, but said she had an “open mind” on how to do it.

8 Billionaires Own the Same As Bottom Half

“Inequality is so stark that a small group of men own the same wealth as half the world, say campaigners ahead of the high-profile World Economic Forum in Davos,” Sky News reports.

“According to research by Oxfam, the eight billionaires, including Bill Gates who tops the list, have riches equivalent to the wealth of the world’s 3.6 billion poorest people.”

Most Economists Are Worried About Trump

Justin Wolfers was at the annual conference of economists last weekend in Chicago and notes the major theme was a sense of anxiety about the incoming Trump administration.

“Over three days of intense discussions, I didn’t encounter a single economist who expressed optimism that Mr. Trump’s administration would be good for the economy. The optimists were those who thought Mr. Trump would not have the energy to actually implement his agenda; the pessimists’ thoughts veered toward disaster.”

Republicans Grow More Skeptical of Free Trade

Pew Research: “About two-thirds of Republicans and Republican-leaning registered voters (68%) say free trade has been a bad thing for the U.S., while only 24% say it has been good for the country. These views, which have shifted starkly since May 2015, when 51% of Republican voters said free trade was a good thing for the U.S. and 39% said it was bad, came as President-elect Trump criticized free trade throughout the 2016 election cycle. Democrats, on the other hand, remain largely positive about free trade.”

Ford Cancels Mexico Auto Plant

“Ford is canceling plans to build a new plant in Mexico. It will invest $700 million in Michigan instead, creating 700 new U.S. jobs,” CNN reports.

“Ford CEO Mark Fields said the investment is a ‘vote of confidence’ in the pro-business environment president-elect Donald Trump is creating. However, he stressed Ford did not do any sort of special deal with Trump.”

Trump Picks Lighthizer for Top Trade Post

“President-elect Donald Trump is expected to name Robert Lighthizer, a veteran trade attorney and supporter of Trump’s defensive view of trade, as his pick for the next U.S. trade representative,” Politico reports.

“The longtime trade lawyer, who served as deputy U.S. trade representative under Ronald Reagan in the 1980s, was an early supporter of Trump and had been advising the incoming administration on its transition efforts at the trade-negotiating agency.”

Expectations Could Trip Up Trump

Charlie Cook: “In short, at least a size­able num­ber of Amer­ic­ans are quite hope­ful that things will get bet­ter over the next year, at least in part be­cause of Trump’s elec­tion. It also might be worth not­ing that the sur­veys showed that much of the op­tim­ism was among older Amer­ic­ans. With the stock mar­ket run­ning pretty much at re­cord highs since Novem­ber, and older Amer­ic­ans gen­er­ally more in­ves­ted in the stock mar­ket than young­er people, this op­tim­ism may be re­lated to or caused by the mar­ket’s per­form­ance.”

“But it’s not quite clear which is the cart and which is the horse. Are people feel­ing bet­ter be­cause the stock mar­ket is do­ing well, or is the stock mar­ket do­ing well be­cause people are feel­ing bet­ter, or maybe both?”

‘Death by China’ Author to Lead Trump Trade Office

“Donald Trump plans to create a National Trade Council inside the White House to oversee industrial policy and is appointing a China hawk and one of the architects of the populist economic message to run the new group,” the Financial Times reports.

“Mr Trump has chosen Peter Navarro, a Harvard-trained economist, to head the NTC… The author of books such as Death by China and Crouching Tiger: What China’s Militarism Means for the World has for years warned that the US is engaged in an economic war with China and should adopt a more aggressive stance.”

Exchange of the Day

President-elect Donald Trump was interviewed by Chris Wallace on Fox News:

TRUMP: It’s so easy to do and we’re going to have to impose a major tax on companies that leave, build their product and think their going to sell it right through out border like we’re a bunch of jerks.

WALLACE: But what about the free market, sir?

TRUMP: That is — that’s not free market when they go out and they move and they sell back into our country.

WALLACE: But that’s the free market. They made a decision and it makes —

TRUMP: No. That’s — that the dumb market, okay? That’s the dumb market. I’m a big free trader, but it has to be fair.

Barely Half of 30-Year-Olds Earn More Than Parents

“Barely half of 30-year-olds earn more than their parents did at a similar age, a research team found, an enormous decline from the early 1970s when the incomes of nearly all offspring outpaced their parents. Even rapid economic growth won’t do much to reverse the trend,” the Wall Street Journal reports.

“In 1970, 92% of American 30-year-olds earned more than their parents did at a similar age, they found. In 2014, that number fell to 51%.”

Trump Taps Puzder for Labor Secretary

President-elect Donald Trump is expected to name fast-food executive Andy Puzder as labor secretary, the Wall Street Journal reports.

Puzder, chief executive of the parent company that runs Carl’s Jr. and Hardee’s burger chains, “has been a vocal advocate for cutting back regulations he says have stifled growth in the restaurant industry” and “has criticized the Affordable Care Act and has argued against raising the federal minimum wage higher than $9 an hour.”

For members: Here’s Trump’s Cabinet So Far

Corporations Unnerved Over Trump’s Unpredictability

Washington Post: “It was a day of big pronouncements and few details, leaving many wondering whether this would be the unusual and unpredictable way that Trump will govern when he takes office next month.”

“That style, including his opaque personal financial dealings and his sudden shots at certain companies, has helped unnerve a corporate America that traditionally craves stability. Some business leaders and economists have worried whether executives can speak their minds about the president-elect or his policies without fear of facing Trump’s rage.”

The Stunt Presidency

Julia Turner: “The Carrier deal is a triumph for Donald Trump, and it’s one that should terrify those concerned about what his presidency might bring (and how long it may last). The incident shows how keenly Trump understands the power of a concrete example. The Carrier deal will be good for the workers whose jobs will stay in Indiana, yes, but it functions primarily as a stunt that expertly reinforces Trump’s brand. As a candidate, he promised to use his deal-making skills to improve the lot of the American worker. Now, nearly two months before he even takes the oath of office, he has delivered. No matter what happens on Trump’s watch—to Carrier, to the manufacturing sector, to employment numbers overall—there will be some set of voters, and not just Trump fans, who vividly remember this moment, thanks to its clarity, to its tangibility.”

“Each critique of the Carrier deal requires the listener to hold in his or her head several levels of abstraction: ideas about how systems and incentives work, ideas about cause and effect, ideas about how corruption can unfurl or how policy can affect millions of people. And so each critique has less impact than the sturdy story: Last week in Indiana, Donald Trump saved a thousand jobs.”