Trump  is trying to fix a problem that wouldn't have happened if the US had listen to Keynes at Bretton Woods.

In 1944, at Bretton Woods, 44 countries agreed to make the US dollar the world's reserve currency. This decision inflated the dollar's value, making American exports expensive and imports cheaper. Donald Trump is now addressing this imbalance with tariffs on countries with high trade surpluses. Steve suggests that adopting Keynes's proposal for a neutral Bancor currency might have been better, while Phil wonders if it's time to reintroduce it, perhaps calling it “Trump” to appeal to the President’s ego.

Trump is half way to Keynes’s answer to deficits

There are examples from history where a US president has tried to impose hefty tariffs, and lost. How long before Trump follows the same path?

It’s clear that President Trump lied to the American people about his reciprocal tariffs. Many of the countries he is imposing tariffs do not impose anywhere near those numbers on imports from America. As Phil points out, some countries, like Cambodia, that sell cheap goods to the US don’t buy from the US because they can’t afford to on their low wages. You can only have trade equalisation if you have similar income levels. Steve takes us through the formula that was sued to calculate these ‘reciprocal’ tariffs. The only resolution to the issue, says Steve, is a new currency for international trade. An idea the Americans knocked back at Bretton Woods.

Trump. Has he lost his mind?

Gary Stevenson says taxing the rich will take away their ability to take greater control  of assets But  is it practucal?

It’s often the easy excuse on how to fix the problems of wealth inequality - just tax the rich more. Former trader turned YouTuber economist Gary Stevenson argues regularly that it’ll fix a lot of the problem. He’s right that the wealthy own assets and the richer they become the more the price of those assets increases. Take land as an example. The government is on a push to build more houses to benefit lower income earners. But who owns the land those houses will be built on? The rich? So, who wins from the demand for more land? Gary’s argument is if you tax hard enough the rich&nbsp;&nbsp;will be forced to sell assets which will bring the price down. Steve’s less convinced, simply because the uber-wealthy have always found a way to avoid taxation.&nbsp;But he thinks the argument also ignores (or isn’t aware of) the fact that government deficits create money. Perhaps the focus should be ore on where that deficit spending ends up. Maybe we should get Gary on the podcast.

Should we tax the rich?

Trump wants to tariff countries with VAT or GST. Is this a good time to look  at  alternate taxes?

It’s likely that many countries around the world will face import tariffs in retaliation for imposing a value-added-tax on American goods sold in their own country&nbsp;- &nbsp;alongside other goods, taxed equally, that are not from America. As Steve outs it this week, “What tortured brain cells have communicated to other tortured brain cells to make a proposition that VAT on imports from America is discriminatory”. Still, it looks like it might happen. And how do you resolve that situation. Do you get rid of a value added tax? Phil asks whether that could be a good thing. It’s unfair, complicated, bureaucratic and easily avoided.&nbsp;Would we all be better off with a transaction tax?

Will Trump drive us to a better tax system?

We'renot replacing fossil fuels with  renewables. The evidence is,  we're just  using more energy. That's not going to help  the planet.

Are we kidding ourselves when we talk about an energy transition? Sure, we are using more renewables than ever before, but the planet is also using more fossil fuels than ever before. Phil asks Steve whether part of the problem is that we pout faith in incumbent energy companies managing that transition. The way BP and others have switched focus back on fossil fuel exploration shows how ill-conceived that expectation was. But, irrespective of who drives the transition, is it too much to expect that we will leave energy untapped. If renewables provide a new source of energy, won’t we just use up more energy, because the more there is the greater the productivity, the better off we are. Watch the video of the podcast here: https://www.youtube.com/watch?v=ArfsehlKMo8&amp;t=2s

There is no energy transition happening

Phil  asks Steve if Trump's plans to make America great again  will reach a point of peak supremacy

Donald Trump is doing everything he can think off to improve the US economy. Tariffs, cutting government spending, bringing manufacturing back home, accessing more resources and lowering the cost of energy. Will it work? And, if it does, Phil wonders whether there’s a ceiling to how far the US economy can grow. Or does it grow at the expense of other countries/ In other words, Phil wants Steve Keen to explain what happens as the US, the world’s leading economy, tries to heighten its supremacy.

Is there a ceiling to economic supremacy?

When  it comes to  bringing manufacturing home, does the US need to  be more like Japan?

In a recent podcast Phil suggested that bringing manufacturing home to America won’t necessarily create jobs, because most factories will be automated.&nbsp;They just need one man and a dog, he said. The man to turn the machine on, and the dog to make sure he doesn’t touch anything else. That touched a nerve with Brian Hanley has spent his life refining manufacturing processes. The key ingredient suggests, is people. Elon Musk was the latest to try the lights out approach and realised it didn’t work. Instead, if the US wants to succeed with a competitive manufacturing sector,&nbsp;it needs to&nbsp;look&nbsp;to post-war Japan. Workers were an integral part of the refinement and adaptive nature of manufacturing processes, in part&nbsp;&nbsp;because of the company-based (rather than industry-speciifc) union structure. Listen in to find out how Japan’s adaptive approach is what’s needed if the US is to develop a successful manufacturing sector. Two books related to this, that Brian says should be required reading or every economist:-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Kanban Just-in Time at Toyota by Japan Management Association-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Sayings of Shigeo Shingo by Shigeo Shingo

Bringing manufacturing home, the Japanese Way

Is the US President's climate change denial the last nail in the coffin for a world that isn't moving fast enough to fix the problem.

Donald Trump, as the world’s highest profile climate change denier, has famously said, repeatedly, that he wants to drill baby drill, to make US energy even cheaper. It’s already half the price of Europe, and all the productivity benefits that provides. Phil and Steve talk about whether this the final nail in the coffin in a world which is paying lip service to the changes required. Is nuclear our only way to fast track a workable solution?

Are we giving up on climate change?

There might be a case for protectionism, but not the haphazard way Trump  is applying it, says Steve

Reciprocal tariffs could be coming to every OECD country if we believe everything Donald Trump says. He sees VAT as a tariff imposed on US imports, which means he wants to impose the same amount on those countries for goods they export to America. That would apply to every OECD country and, supposedly, the President has said there will be no exceptions. Does this mean a global trade war is just about to happen? Steve has been a supporter of protectionism as a way to aid growth, and understands the need for America to bring jobs back home, but not with the “bull in&nbsp;the&nbsp;China shop approach” that Trump is taking. But Phil asks whether the horse has already bolted. The web of international supply chains is well established and difficult to break. Haven’t we all benefited from lower cost goods? And even if you brought back production functions would automation mean few new jobs would be produced?&nbsp;In short, is Trump too late to make a difference. Will he just create chaos?

The trade war has begun

Economist Steve Keen talks to Phil Dobbie about the failings of the neoclassical economics and how it reflects on society.

Debunking Economics - the podcast

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