Morrison makes a decent fist of trade war

Nice scoop today from The Diplomat alumnus Hans van Leeuwen at the AFR with ScoMo on the trade war:

“There are clearly challenges in the global economy, and that means there are conflicts and challenging issues to discuss. I wouldn’t confuse that with tension. We’re dealing with pretty complex issues at the moment,” he said.

“You’ve got a global economy that for many years was built around the development of China to the economy the size of which it is today. And that was done on the basis of a series of rules and engagements. And now that China has reached effectively that goal, well, we now need the rules to be enforced that will guide the next phase. That’s fundamentally what this is all about,” he said.

…So this is not about Mr Trump’s splenetic personality or his Make America Great Again politics? “It’s totally structural. It’s a history issue. We’re finding ourselves in a new phase. And we don’t have to place or characterise people’s motives in any of this, it’s just this is the juncture we’re at and we have to deal with it.”

That’s a pretty decent formulation. Good job.

The question is, how do we deal with it? Not by doing everything to to re-inflate house prices as soon as, and as high as, possible by:

  • running a fiscal surplus despite weak aggregate demand, forcing the RBA to slash and print;
  • misallocating fiscal resources into demand side housing pump priming;
  • lying about cutting mass immigration while running it full tilt, and
  • corrupting regulators to ensure more credit.

Rather, you should insitute:

  • a royal commission into university corruption;
  • a federal ICAC to root out corrupt CPC cash;
  • deep cuts to immigration to ensure CPC influence does not get worse;
  • and a entirely new economic reform model to boost non-Chinese exports.

If you get it, ScoMo, then act like it.

David Llewellyn-Smith
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