Latest / Bloomberg Intelligence / Princeton's Krueger Sees 'Moderation in Globalization' (Audio)

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Princeton's Krueger Sees 'Moderation in Globalization' (Audio) · Bloomberg Intelligence

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  Speaker 1: Broadcasting live to New York Bloomberg eleven, to Washington, d
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  Speaker 1: and Bloomberg Got Gone. This is taking stock. I'm Kathleen
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  Speaker 1: Hayes Long pim Blos for broadcasting live the Bloomberg Markets
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  Speaker 1: Most Influential Summit at our Bloomberg World headquarters. Globalization. Where
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  Speaker 1: is it heading? Have we reached the end of globalization?
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  Speaker 1: This is one of the topics here at Bloomberg Markets
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  Speaker 1: Most Influential PIM And we're going to be speaking to
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  Speaker 1: a panelist shortly to talk about, you know, maybe Donald
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  Speaker 1: Trump shouldn't be so worried the trade is actually shrinking
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  Speaker 1: in the global economy. Yes, our guests tub will be
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  Speaker 1: Alan Krueger, a Princeton University professor of economics and public affairs,
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  Speaker 1: former head of the Council Economic Advisors in the administration.
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  Speaker 1: Right now, that let's Charlie Pellet in the Blue of
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  Speaker 1: News Corporder Business left and I think it very much
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  Speaker 1: to begin with crude oil today surging four point four percent,
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  Speaker 1: OPEC cutting production for the first time in eight years,
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  Speaker 1: according to a delegate briefed on the matter, sending oil
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  Speaker 1: prices up as Saudi Arabia and Irrong or Iran wrong
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  Speaker 1: footed traders who expected a continuation of the pump and
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  Speaker 1: Will policy Group adopted it in two thousand fourteen. Crude
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  Speaker 1: oil up now by four point four percent, rallying two
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  Speaker 1: dollars of the barrel to forty six sixty three. California,
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  Speaker 1: Goal down six sixty, the Ounce down five tenths of
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  Speaker 1: one percent, the tenure down to thirty seconds, Zeal one
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  Speaker 1: point five seven percent, SMP five index up six again.
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  Speaker 1: There of three tenths of one percent, and right now
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  Speaker 1: three thirty two on Wall Street. Let's take a look
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  Speaker 1: For the first time in his presidency, Congress has voted
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  Speaker 1: quote an adult in the White House. Israel is mourning
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  Speaker 1: This is Bloomberg, Charlie, and we thank you, but again,
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  Speaker 1: keeping an eye on crude oil. West Texas Intermediate up
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  Speaker 1: now by four point four percent, a barrel of w
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  Speaker 1: gain of three tenths of one percent. I'm Charlie Pellett.
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  Speaker 1: Thatath's a Bloomberg business flash. You're listening to Taking Stock
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  Speaker 1: with Kathleen Mays and Pim Fox on Bloomberg Radcroft broadcasting
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  Speaker 1: live today for the liver Market's most Influential Summit at
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  Speaker 1: our world headquarters here in New York. Take a look
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  Speaker 1: at globalization and where are the world is heading now,
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  Speaker 1: particularly in this election year when there are so many
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  Speaker 1: debates around trade, trade deals and more. Joining us now
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  Speaker 1: is Alan Krueger, who's former head of the Council of
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  Speaker 1: Economic Advisors, professor at Princeton University, and he's faring to
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  Speaker 1: you talk about his panel today. Whether the sun is
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  Speaker 1: setting on globalization? So Ellen, is it? Uh? Is it
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  Speaker 1: twilight for globalization? Or is it just some dark clouds
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  Speaker 1: obscuring the sun, so it feels like like the sun
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  Speaker 1: is setting. The word I used was moderation. I think
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  Speaker 1: we're seeing a moderate ration and globalization when it comes
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  Speaker 1: to trade as well as when it comes to immigration.
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  Speaker 1: Is this a bad thing or a good thing? I
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  Speaker 1: think it was a somewhat inevitable thing in that there
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  Speaker 1: was enormous rush of globalization when the Soviet Union collapsed
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  Speaker 1: and Eastern Europe joined the modern world, the capitalist system, uh,
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  Speaker 1: and then when China joined the world trading system, and
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  Speaker 1: I think that that led to a long period of
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  Speaker 1: expanding trade. And now we're reaching more of an equilibrium
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  Speaker 1: point where wages have been driven up in China, the
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  Speaker 1: infrastructure has been driven down to the point that they
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  Speaker 1: are really quite stretched in terms of their infrastructure. We're
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  Speaker 1: seeing companies bring more work back to the US. In fact,
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  Speaker 1: we're seeing companies re shoring UH some work in the US,
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  Speaker 1: and I think that trend will probably continue. The same
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  Speaker 1: thing with immigration. I think we saw very rapid immigration
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  Speaker 1: to the US, particularly from Mexico when we had our
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  Speaker 1: housing bubble, and since then we've actually had a net
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  Speaker 1: autmoinigration to Mexico. Professor Krueger, there's so much I want
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  Speaker 1: to answer, so I just want to throw out some
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  Speaker 1: topics and maybe get your maybe you can connect them.
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  Speaker 1: For for us UM, one of your earliest pieces of
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  Speaker 1: research has to do with the restaurant industry and minimum wage.
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  Speaker 1: You've written books about wage inequality. We've also written a
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  Speaker 1: book about terrorism. Wondering if there's a way to connect
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  Speaker 1: all those things in the context of trade agreements and
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  Speaker 1: what they will ultimately do in a variety of ways,
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  Speaker 1: because trade is not just about stuff, it's about people.
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  Speaker 1: And supposedly, if you actually know somebody, chances are you're
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  Speaker 1: gonna feel less aggressive towards them, uh, because you're gonna
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  Speaker 1: know something rather than just hear it or think it
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  Speaker 1: or get that information that might not be true. Well,
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  Speaker 1: there are a lot of crosscurrents are not So I'll
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  Speaker 1: do I'll do my best. The point I think which
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  Speaker 1: is underappreciated about trade agreements is they are as much
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  Speaker 1: international relations policy as they are economic policy. And if
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  Speaker 1: you look at NAFTA, for example, in our eighteen trillion
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  Speaker 1: dollar economy in the US, NAFTA had very little effect
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  Speaker 1: one way or the other in terms of our economic growth,
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  Speaker 1: or wages. I think it was positive on that. I
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  Speaker 1: think that's why the economy did so well in THEES
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  Speaker 1: after NAFTA. But I would have to acknowledge that was
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  Speaker 1: pretty small. But it did help our relationship with Mexico
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  Speaker 1: and Canada. And now when returning to the other parts
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  Speaker 1: of the world, do we want to have better relations
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  Speaker 1: but the rest of the world or worst relations? I
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  Speaker 1: think when it comes to our national security, it's better
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  Speaker 1: to have better relations. So I think one aspect of
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  Speaker 1: trade agreements is that it helps to further our national
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  Speaker 1: security interests. And if you have a candidate who says
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  Speaker 1: I'm going to tear up agreements that we have, I
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  Speaker 1: think that works in reverse. And I think it makes
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  Speaker 1: it very difficult to negotiate agreements that are in the
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  Speaker 1: interests of the US, both economically and in our international
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  Speaker 1: security interests. If we have bluster coming from politicians about
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  Speaker 1: withdrawing from agreements which we have previously negotiated in good faith,
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  Speaker 1: as we make future trader greaments, assuming that that happens. Uh.
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  Speaker 1: Is it important though, to see that our experience with
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  Speaker 1: China was not altogether good. Our our relationship with our trade,
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  Speaker 1: our trade relatestions and the fact that they pegged their
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  Speaker 1: currency for so long helped all about manufacturing in this country.
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  Speaker 1: There's I think it's hard to dispute that also they've
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  Speaker 1: blocked intellectual property, they stolen intellectual property. Is there some
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  Speaker 1: way in future trade agreements that will makes sure that
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  Speaker 1: free trade is fair trade. I think you raised very
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  Speaker 1: important points and also recognized it was not trade agreement
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  Speaker 1: that led to China's expansion in the US. UM, we
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  Speaker 1: don't have a trade agreement with China. And one of
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  Speaker 1: the arguments that President Obamas maybe I think is exactly
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  Speaker 1: right is t p P UH would prevent China from
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  Speaker 1: writing the rules of the road when it comes to
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  Speaker 1: the economic relations in Asia. UH, it will be US
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  Speaker 1: standards that would protect intellectual property. For example, we solved
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  Speaker 1: them a lot of treasuries. That was something that we
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  Speaker 1: did that they that they bought from us. Well, I
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  Speaker 1: think they bought treasuries from US because they recognize that
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  Speaker 1: we are the strongest, most responsible country in the world
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  Speaker 1: UH and a good place to invest UM. And I
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  Speaker 1: think we are now at a point where China's currency
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  Speaker 1: is roughly valued appropriately. I think for a long time
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  Speaker 1: it did um a weekend its currency. But I think now,
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  Speaker 1: given how poorly China has fared over the last few
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  Speaker 1: years and how much better the US has grown, you
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  Speaker 1: would see a reversal. UH. So, I think it's very
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  Speaker 1: hard to say that the currency manipulation UH is causing
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  Speaker 1: a lot of damage to this economy today. Now, I
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  Speaker 1: think that's something you need to monitor very closely going forward.
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  Speaker 1: I want to thank you very much for coming in
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  Speaker 1: and spending time with us. Alan Krueger. He is the
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  Speaker 1: former head of the Council of Economic Advisors, currently a
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  Speaker 1: professor at Princeton University, and the author of many books,
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  Speaker 1: one Quality Education and Terrorists. You're listening to taking Stock,
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  Speaker 1: I'm pin Fox my co host Kathleen Hayes. This is Bloomberg.
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