While the rhetoric during the current presidential election has taken a decidedly personal and ugly turn, the perennial election campaign issue of international competitiveness is never very far away. Both candidates throughout these elections have taken a decidedly more protectionist tone than that exhibited by the current administration, or indeed, several of the ones before it. Blaming a country’s own domestic economic failures or difficulties on international competition is an incredibly seductive argument for many politicians, rather than looking inward at their own inefficiencies. This would require more difficult, often radical, and always politically contentious solutions, which will inevitably divide voters and therefore risk losing at least some of them. As a result, it is much easier to blame those not in the room, whether they should actually share some of that blame or not. In this week’s Economics Weekly we look at the issue of international competitiveness and economic performance.
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Richard de Chazal, CFA is a London-based macroeconomist covering the U.S. economy and financial markets.