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July 9, 1993
Mortgage rates wandered slightly higher in a week which might as well have been canceled. It was a short week anyway, there were no meaningful economic reports, and East Coast bond traders split for the beach to beat the heat.
If the summer bond market seems dull, you should have spent the week in Tokyo.
One wonders how so many governments and news organizations could spend so much money to no useful purpose whatever.
It was hard to spot, but there was a little action in Tokyo. Bill Clinton is working up to trying to do something again, and this time he is going to fix the world economy.
Bill laid low in Tokyo, just getting ready. There was no confrontation over Japan's trade imbalance.
It would have been hard to have a confrontation, as Japan has conveniently misplaced its government at the moment of its most predatory behaviour. Work ethic fans of Japan notwithstanding, Japan is happily fleecing the rest of the world to the tune of $160 billion each year.
We have a track record on Mr. Clinton, now. He is very bright, has a tremendous amount of information, and has an equally tremendous amount of unresolved conflict among his neat ideas.
In the budget battle, Clinton could not sort out the contradiction between cutting the deficit and stimulating the economy. In the tax versus spending debate, he still doesn't understand why most people are upset that the taxes all happen now, and spending is supposed to be limited after he is re-elected.
Bill's not fibbing, you understand. He's just confused.
His next project has the same kind of built-in confusion. He is for free trade, but wants American industry and workers to have an advantage over others.
Frustrated on all domestic sides, Bill is about to try something dramatic. He is going to try to force open Japan's markets, which Japan will resist. Bill may then try to punish Japan, and the resulting trade war would be the worst possible event for the world economy.
Meanwhile, the crucial North American Free Trade Agreement is floundering for reasons of American protectionism (the very misbehaviour of which Japan is accused), inattention, and the environment, of all things.
Just about then, Bill will have his nice conference to teach the rest of the world how to create jobs. At the same time, he will be trying to create more American jobs than foreign jobs.
Foreigners may object. They are not as confused.
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