World Perspectives

Income and Deficits

Matthew Klein (Barrons) and Michael Pettis (Peking University) have authored the book, Trade Wars are Class Wars. In it, they argue that countries like Germany, Ireland, and Switzerland run trade surpluses because their domestic policies leave consumers with less disposable income, forcing their manufacturers to seek consumers elsewhere. With Germany specifically they contend that through tax increases on workers, spending cuts on public investment, and social welfare programs, consumers get squeezed and import demand gets suppressed. Looking at the Gini index for income distribution in countries and their trade surplus/deficit, this assertion does not hold up. The U.S. has the largest trade deficit but ranks worse for income distribution...

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From WPI Consulting

Weighing in on strategic realignment

WPI’s team was retained by the governing board of a U.S. industry organization to review a decision, reached by vote, to invest significant assets into the development and management of an export trading company. WPI’s team conducted a formal review of this decision and concluded that the current level of market saturation would limit the benefits of the investment. Based on WPI’s analysis and recommended actions, the board subsequently reversed its decision and undertook a strategic planning effort to identify more impactful investments. On behalf of numerous clients, WPI has not only assisted in identifying strategic paths but also advised their implementation.

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