The Global Trump : Structural US Populism and Economic Conflicts with Europe and Asia

"This book is able to explain and analyze what has eluded both scholars and thought leaders in business and the media - how and why populism has grabbed center stage. Highly recommendable." -David B. Audretsch, Indiana University Bloomington, USA "Welfens provides valuable insight into US politics and describes the strategic options for Europe going forward." -Barry Eichengreen, University of California, Berkeley, USA "With great skill Welfens traces the implications of US populism for the global economic system." - Jeffrey D. Sachs, Columbia University, USA "This critique of Trump ́s fiscal and international trade policies and their weak intellectual basis deserves the attention of US and European readers alike" -Richard H. Tilly, University of Münster, Germany What lies behind the Trump victory of 2016 and the US' new raft of economic policies? Is a populist presidency in the United States likely to be a temporary phenomenon or a structural long-term challenge? In an era of declining multilateralism, what can the US still stand to learn from Europe, where several countries have effective lifetime economic welfare equal to that of the US - and what can the EU learn from the US in return? Furthermore, what international economic dynamics can be expected from the Sino-US trade conflict and can globalization be maintained? In this timely volume, Paul Welfens provides a rare, clear-sighted and scholarly analysis of the global problems created by Trump's protectionism and economic policy. He leverages his understanding of these problems to make concrete policy suggestions that could help prevent the world economy from falling back into a variant of the Great Powers regime of the late nineteenth century. The Global Trump Preface Contents List of Figures List of Tables About the Author Part I: The Background to Trumpism and Economic Explanations 1: Introduction References 2: Inequality, US Survey Results and Economic Analysis: The Case for Structural Trumpism Tax Avoidance Problems, Foreign Direct Investment and G20 Income Dispersion Economic Inequality Approach Versus Cultural Backlash Hypothesis Relative Income Shares and Absolute Income Levels US Survey of Consumer Finances: Analysis by Janet Yellen Effective Real Per Capita Income and Health System Problems What Drives Health-Care Costs in the US? Council of Economic Advisers: Biased Per Capita Consumption Comparison of the US with Europe CEA Conjectures on a Comparison of Per Capita Income Between US and Nordic Countries Measuring Economic Performance Child Poverty in the US Versus Child Poverty in Switzerland Policy Priorities in an Open Economy: The Case of Switzerland What Causes Rising Inequality in OECD Countries? US Policy Aspects Populism and the Internet Political Polarization Two Destabilizing Mechanisms of the International Economy: Nationalism and Excessive Banking Deregulation References 3: Protectionist US Policy and Expansionary Fiscal Policy: Ongoing Contradictions The Political Debate About Trade and Globalization Trade, Protectionism and Production in a National and Global Perspective Trump’s Fiscal Impulse Inconsistent Views on the US International Trade Position What Is the Problem with Globalization? Globalization and Trade in an International Perspective US Mid-term Elections 2018 Taking Back Control: Wishful Thinking and the International World References Part II: Transatlantic Economic Relations 4: Trade, Employment and Transatlantic Policy Aspects The NAFTA Trade Conflict, New NAFTA and the US-China Tariff War in a Global Perspective Skills and Employment Ratios in Industrialized Countries Heterogeneous Firms, Trade and Employment The Size of the Transatlantic Effective Per Capita Income Gap US Imports of EU Cars as a Threat to US Security? New Trade Conflicts and the Reform of International Organizations National Economic Policy and Globalization Plus China’s Growth Common Populism Denominator in the USA and the EU? Populism in Italy Inequality Perception Trumpism and the Conte Government in Italy References 5: EU Reform Problems and the Rise of Populism in Europe Trumpism and Brexit Brexit and Financial Market Perspectives US Brexit Perspectives Regulatory and Security Perspectives References Transatlantic Economic Relations Appendix Part II: Adapted from Welfens (2018c), EIIW Discussion Paper No. 252 What Is Free Trade and How Will Protectionism Affect Income Per Capita in the Long Run? Protectionism and Long-Run Per Capita Income: Perspectives in a New Growth Model Capital Market Dynamics in the Context of Brexit and Related US Aspects Part III: US-Asian and Global Economic Perspectives 6: US-Asia-EU Perspectives The US-China Tariff Conflict and Its Impact on the EU27, the UK and Asia US Protectionist Trade Policy Vis-à-Vis China Is China a Challenge for the EU? Indeed, via a Destabilization of the US APEC Challenges and Asian-EU Perspectives References 7: China Risks and Challenges New Global Governance Issues References Part IV: Policy Innovations and Systemic Reforms 8: Policy Conclusions for International Organizations Differentiated Economic Globalization References 9: International Policy Conclusions Perspectives Further Perspectives Why Defending the Western Liberal Order Is Crucial—New Proposals Policy Innovation for Unbiased Ratings References 10: Canada, the US and Eurozone: Implications for US Reforms Some Further Conclusions Transatlantic and Transpacific Health-Care Dialogue—and New Prospects Selected EU Problems and OECD Perspectives A View on the OECD Improving the Digital Economy Crucial New Prospects for Cooperation in Climate Policy Post-Trump Perspectives References Appendix Appendix A: National Income Shares in Selected World Regions and Countries, 2016 Appendix B: Full Price Discrimination∗ Welfare Loss from Taxation (and Import Tariffs) Appendix C: IMF World Economic Outlook, October 2018 Appendix D: The Sorcerer’s Apprentice (Original from Johann Wolfgang von Goethe, English Version: Translation by PJJ Welfens) Appendix E: Tariffs and Counter-Tariffs—An Overview of the Trade Conflict in 2018 Appendix F: Recent Research on Inequality Dynamics and Skills Appendix G: OECD Health Indicators: Infant Mortality and Life Expectancy Appendix H: US Civilian Population/Total Number of Households, 1984–2017 Appendix I: Transfers and Openness—Traditional and Value-Added (2007, 2009, 2011) Appendix J: US Protectionism and the US-Sino Trade Conflict: Optimum Import Tariff of a Big Country with Inward-FDI Appendix K: China’s Overseas Direct Investment Flow and Stock, 2007/8–2016, US $ References Index "This book is able to explain and analyze what has eluded both scholars and thought leaders in business and the media - how and why populism has grabbed center stage. Highly recommendable." -David B. Audretsch, Indiana University Bloomington, USA "Welfens provides valuable insight into US politics and describes the strategic options for Europe going forward." -Barry Eichengreen, University of California, Berkeley, USA "With great skill Welfens traces the implications of US populism for the global economic system." - Jeffrey D. Sachs, Columbia University, USA "This critique of Trumpþs fiscal and international trade policies and their weak intellectual basis deserves the attention of US and European readers alike" -Richard H. Tilly, University of Münster, Germany What lies behind the Trump victory of 2016 and the US' new raft of economic policies? Is a populist presidency in the United States likely to be a temporary phenomenon or a structural long-term challenge? In an era of declining multilateralism, what can the US still stand to learn from Europe, where several countries have effective lifetime economic welfare equal to that of the US - and what can the EU learn from the US in return? Furthermore, what international economic dynamics can be expected from the Sino-US trade conflict and can globalization be maintained? In this timely volume, Paul Welfens provides a rare, clear-sighted and scholarly analysis of the global problems created by Trump's protectionism and economic policy. He leverages his understanding of these problems to make concrete policy suggestions that could help prevent the world economy from falling back into a variant of the Great Powers regime of the late nineteenth century "This book is able to explain and analyze what has eluded both scholars and thought leaders in business and the media - how and why populism has grabbed center stage. Highly recommendable." -David B. Audretsch, Indiana University Bloomington, USA "Welfens provides valuable insight into US politics and describes the strategic options for Europe going forward." -Barry Eichengreen, University of California, Berkeley, USA "With great skill Welfens traces the implications of US populism for the global economic system." - Jeffrey D. Sachs, Columbia University, USA "This critique of Trump's fiscal and international trade policies and their weak intellectual basis deserves the attention of US and European readers alike" -Richard H. Tilly, University of Munster, Germany What lies behind the Trump victory of 2016 and the US' new raft of economic policies? Is a populist presidency in the United States likely to be a temporary phenomenon or a structural long-term challenge? In an era of declining multilateralism, what can the US still stand to learn from Europe, where several countries have effective lifetime economic welfare equal to that of the US - and what can the EU learn from the US in return? Furthermore, what international economic dynamics can be expected from the Sino-US trade conflict and can globalization be maintained? In this timely volume, Paul Welfens provides a rare, clear-sighted and scholarly analysis of the global problems created by Trump's protectionism and economic policy. He leverages his understanding of these problems to make concrete policy suggestions that could help prevent the world economy from falling back into a variant of the Great Powers regime of the late nineteenth century