Hofmeister: “The next decade could see negative growth thanks to our foolhardy fondness for “free market” philosophies that tell us it’s OK to export all our jobs. The U.S. is down to four world leading industries: entertainment, out of Los Angeles (heavily indebted to Democrats); information technology, out of the Bay Area (likewise); energy, out of Houston (heavily indebted to Republicans); and financial services, out of New York (indebted to both parties). That’s it, folks. We’re otherwise second- or third-rung suppliers across the range of manufactured products—except for biotech, a small industry—and we can still (mostly) feed ourselves. Even aerospace has suffered.”

A handful of readers were moved to comment, and they were not especially happy. Said one: “One man’s ‘industrial policy’ is another man’s Stalinist command economy.” Said another: “Just think… with an industrial policy in place, our economy would look like Japan’s: moribund.”

Well, yes — Japan has gone through a “lost decade” — but did its economy never achieve anything? Just asking….

“The ‘American elite’ has ‘no idea’ what fatal consequences a revaluation of the yuan could have, says political commentator Liang Jing, adding that it would lead to a collapse in Chinese exports and ’cause a worsening in domestic income distribution.’

“What that means in plain language is that Chinese factories would need to lay off many workers and the divide between rich and poor would quickly grow wider — potentially plunging the country into social unrest.

“And if the Chinese government were to start allowing money to flow freely across its borders, something Washington is also pushing for, it would mean an ‘unprecedented exodus’ of capital from the country, the commentator says.”

“The ‘American elite’ has ‘no idea’ what fatal consequences a revaluation of the yuan could have, says political commentator Liang Jing, adding that it would lead to a collapse in Chinese exports and ’cause a worsening in domestic income distribution.’

“What that means in plain language is that Chinese factories would need to lay off many workers and the divide between rich and poor would quickly grow wider — potentially plunging the country into social unrest.

“And if the Chinese government were to start allowing money to flow freely across its borders, something Washington is also pushing for, it would mean an ‘unprecedented exodus’ of capital from the country, the commentator says.”

“An example of foreign policy cleverness missed by the Economist had to do with tire tariffs against China, which the Economist (stupidly) dedicated a front cover article to, predicting that the U.S. had just ignited a trade war. As we now know (it was actually obvious in retrospect) the U.S. had actually cleverly outmaneuvered China, which could not afford to retaliate. As China exports so much more to the U.S. than vice-versa, any retaliation would harm China more than Americans, so out of wisdom China had to puff out its chest, complain, and then quietly retreat….”

“If you go on track record, the Economist has an embarrassing habit of underestimating Obama….”

Yes, indeed — we simply must knuckle under to “the people in the think tanks.” Regarding free trade, I once asked a professor of economics — whose thinking was representative of that found in the “think tanks” — what if everybody became an itinerant? I wasn’t especially impressed by the answer — “Aw, it’d never get that bad….”

Maybe it never would get that bad — but the question was intended as a sort of thought experiment. If the result of the workings of the free marketplace was that it did get that bad — well, then, according to free-market theory, that result must be the best of all possible worlds. It may indeed bring wonderful benefits to “the consumer” — but “the consumer” is an abstraction, since most every consumer also has to work for a living, and if the economic centrifuge does not follow up your job today, just wait until tomorrow or next week….

We do indeed garner considerable benefits from international trade — up to a point. The trouble with the “think tank” people is that they leave out the “up to a point” — because they’re ideologues. A proportionate policy would balance the benefits of trade against the deleterious effects of the economic centrifuge….

Alas, the Wall Street Journal reports Friday from Hangzhou, China: “The U.S. and China agreed to relax restrictions on agriculture, technology, travel and other trade restrictions ahead of President Barack Obama’s first visit to Beijing next month….”

I blogged on the following remark from a public debate in New York City, in the wake of the tire tariff announcement: “Is China not pushing its tires here? Of course they are. Let’s stop isolating this economic theory from the real world. Don’t think [the other] side is fighting an uphill battle. They won. They’ve won for decades….”

I suppose it’s a huge concession for him even to mention that this is “sad for workers.” Fundamentally, he’s a market-ideologue who views every departure from market-ideology as a scam. It’s true that there is overcapacity in global automobile manufacturing, so from a strictly economic perspective it would make the most sense to have all automobiles manufactured in the Japan-Korea-China region and simply shut down the entire industry in North America. I guess that’s what Jenkins wants, along with the repeal of the Wagner Act and the busting of the UAW.

You can’t get a hearing for the notion that a prosperous blue-collar workforce would be a good thing; it’s all their fault for having priced themselves out of the world market. Supposedly they should’ve taken the news that their “market value” had been cut in half, overnight as they were, with impunity.

Here’s what Robert Samuelson had to say about it just under a year ago, with a General Motors bankruptcy looming: “No one knows what further havoc a GM bankruptcy might inflict…. Why run these risks when the 6.5 percent unemployment rate seems headed toward 8 percent and almost a quarter of the 10 million jobless have been out of work for six months or longer? Just to satisfy a purist ‘free market’ ideal? It doesn’t make sense….”

You won’t get anything else but elaboration of the “purist ‘free market’ ideal” from Jenkins and his editorial page, of course. “We speak for free markets and free people … against confiscatory taxation and the ukases of kings and other collectivists.” Congratulations, unemployed NUMMI line workers; you’ve been lumped in with “kings and other collectivists.”…