Bankers and Economists Fear a Spate of Threats to Global Growth
Referring to the founding father of the economic analysis of trade, Mr. Blinder said, “We economists think
that David Ricardo got it mostly right 200 years ago, and a lot of people think he got it badly wrong, and we haven’t convinced them in 200 years.”
But there is an emerging mountain of evidence that economists also have significantly
and systematically understated the disruptions caused by increased trade for workers, particularly in manufacturing, their families and their communities.
Congressional leaders and administration officials insist
that the necessary legislation will pass before the government reaches its borrowing limit sometime in October, but President Trump on Thursday described the situation as a “mess.”
Mr. Powell, a Republican who helped persuade his party to raise the debt ceiling in 2011 and 2013, warned in a pair of interviews on the financial networks CNBC and Fox Business
that a default would deliver “a major shock to the economy.” That is “not something we need right now,” he added dryly.
— In the decade since the financial crisis, economic policy makers, professors
and protesters have gathered here every August to argue about the best ways to return to faster economic growth.
“The backlash reflects that trade makes some individuals worse off.”
The idea that developed nations should focus on reaping the benefits of trade,
and then worry about offsetting the costs, has produced large benefits, particularly for the wealthy — and large uncompensated costs, particularly for the workers.