There is another very valuable short YouTube video Unemployment Is Created By Government And Can Only Be Solved By Government. This video is true to its headline, but did not lead to where I expected.

YouTube has a short video Real Terms Of Trade: Imports Are Good And Exports Are Bad with excellent written introduction to support the video. I’ll just quote the first paragraph of the introduction.

Warren Mosler and Professor Stephanie Kelton discussing the real terms of trade. When we import something from a foreign country, we get the thing and they get dollars. When we export something to a foreign country, they get the thing and we get their currency. Which one is better for us? Imports are goods and services that we can consume but didn’t have to work to produce, while exports are goods and services that we had to work to produce but don’t get to consume. So from the point of view of our society as a whole, exports are a cost, while imports are a benefit.

We need to stop buying the major baloney that our politicians want to feed us about trade, and start thinking about and understanding the reality.

If you are tempted to reject what this video is saying, I suggest you read the article in my previous post Ignore the Trade Balance: Concentrate on Full Employment.

The Binzagr Institute for Sustainable Prosperity has this fabulous paper Ignore the Trade Balance: Concentrate on Full Employment.

Do not attempt to discuss this unless and until you read, understand, and accept the limitations expressed in the words in the excerpts below that I have chosen to emphasize.

Monetary sovereignty involves having your own currency and central bank, not being on a gold standard, not being on any kind of fixed exchange rate system, and not having significant foreign currency debt. Under these circumstances, it is no longer clear that a current account surplus is beneficial and a deficit costly, and indeed, the opposite may be true, however provocative though the claim may appear.
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The currency in which a country accumulates net foreign liabilities over time is of vital importance. If public and private foreign debt is denominated in foreign currency, this creates the risk of national insolvency and a costly financial crisis. It also implies that the government of that country does not enjoy full monetary sovereignty, especially if the foreign currency debt is public debt, or effectively guaranteed by the public sector.

If the rest of the world has chosen to net save in the currency of a country, however, it is not clear that the resulting net foreign liabilities are a debt which needs to be repaid using real resources at all. This is at most potentially the case. The accumulation of domestic currency financial assets by the foreign sector is a portfolio decision of the foreign sector , and not something that the government can control precisely, or arguably should seek to control, except in so far as speculative c apital flows are viewed as destabilising to financial markets.

For those of us who understand the accounting identity that underlies Modern Money Theory, this result should be no surprise. However, for those of us who did not go through the process of figuring out MMT’s implications on trade balances, this is a particularly nice result to read about.

You won’t find an inkling of this logical conclusion in any of the standard wisdom about trade policy. You certainly won’t find it in the idiotic ideas of Trump or Obama or Clinton. Here they are negotiating trade deals without a clue as to the consequences of whatever agreement they are trying to get.