or else what? More tariffs and trade barriers?

Not quite the foreign policy of Nixon and Kissinger. Congress didn’t like China then either, so they snuck over there and cut a deal. While we were allowing Japan to put our tool and dye companies out of business by subsidizing them, and dumping steel from factories we rebuilt after we blew them up, China was emerging from a communist dictatorship to become a quasi-capitalist nation. Now, Japan is here to help us defeat our new enemy, China, and we are welcoming Japan with open arms, except of course, not allowing Japan to buy US Steel. I’m sure we could let them have Youngstown Sheet & Tube at a healthy discount. What goes around, comes around?

There has been something terribly wrong with our foreign policy for a long time. It was not wrong to open up our markets, it was the failure to regulate it that created the problem. The laws to protect American workers were on the books, but the bureaucracy to enforce the laws failed. However, the result was the greatest period of economic growth the world has ever seen. So, did globalization really fail, or was it big government bureaucracies that failed? I suggest it was, and is, the latter. Now we are in act 3, or as Ray Dalio would say, stage 5 of a 6 phase economic cycle. The $64 trillion dollar question is, how do we get out of the mess, governments for the past 20 years have created, and continue to create?

There is only one group that is capable of doing this, the people who provide the funding for the politicians to get elected, who then appoint the bureaucrats, who create the mess. Elect people who know how to run a business successfully, who understand that you get the money first, and then you invest it, to make a profit, not to just provide jobs. Deficit spending is not a solution. It just creates a bigger problem. Do what is best for the country first, the people second, and yourself, last. Get rid of all the people who have that sequence reversed.

I expect this will be my last publication. I am working on a Generative AI model for my students at Stanford, to access 24/7 to talk with my Avatar. They are located all over the world, in different time zones, and I would like to provide them a way to get their questions answered. If you would like access to this chatbot, just send me your email address. Thank you for your interest in my life’s work. Let’s change the world, and make it better for everyone, not just ourselves.

Frank Sortino, Professor Emeritus in Finance