Tag: Wile E. Coyote
Nov 18 2010
Oct 16 2008
A long time ago, in an economic universe far, far away, people cared about the trade balance. When the U.S. trade deficit passed $100 billion for the first time, there was much wailing and gnashing of teeth. Doomsayers warned of an imminent ”hard landing” in which a crashing dollar would precipitate economic crisis. Even calmer types regarded the unprecedented red ink as a warning sign.
But a funny thing happened on the way to the 21st century: people lost interest in the trade balance. In January, the Commerce Department announced last week, the United States set a new world record: the biggest monthly trade deficit ever. (Is this a great country, or what?) Measured as a share of G.D.P., last year’s current account deficit (the broadest measure of the trade gap) was wider than ever before. But the markets couldn’t have cared less. They were more interested in the accounts of MicroStrategy (a high-flying tech stock that lost two-thirds of its value in one day when it adopted a new accounting standard) than in those of the United States.
The Pony Party is an Open Thread. Please do not REC the party!