EconAir

President Trump Might Washington, like Rome, fall victim to imperial overstretch? Could military force abroad eventually have to be withdrawn because of bankruptcy at home? Might the whole idea of America eventually be challenged and destroyed by some charismatic new faith: some fundamentalist variant on Christianity? Or will nature disrupt America’s new world order? Robert Harris, "Does Rome's fate await the US?," The Mail on Sunday , October 12, 2003 (1) INTRODUCTION:  FOREIGN POLICY AND DOMESTIC POLITICS This post will discuss American foreign policy, with an emphasis on economic aspects. It will focus on the structure of America's trade treaties and policies, and the interaction of America's foreign economic policies and domestic politics. The companion post,  "Pax Americana": The World That America Made , the will discuss America's projection of global power and influence through military power, security arra

INTRODUCTION For background, see prior post on The Limits of Negotiation . ECONOMIC NEGOTIATIONS Basic game theory works best in economic negotiations.    The players have the same assumptions (act rationally, make money), enter into the negotiations voluntarily and negotiate which positive payoff matrix they will agree on.   Economists usually assume that people are playing a positive sum (win – win) game.   That is, how to divide up the monetary or utility gains. Game theory indicates there is a better chance at cooperation or reaching good faith agreements if the players know they will be playing the game repeatedly or if both players see an advantage to a long-term agreement. Economic rationality implies that an agent will not agree to an outcome if the individual will be worse off than not negotiating.   The alternatives are not to negotiate or find another party with whom to reach a positive or better agreement.   A competitive economy, however im

INTRODUCTION Much of the political news is about negotiations.   American politicians, in both domestic and foreign disputes, don’t seem to know much about negotiation strategy.   Maybe a little applied game theory would help. IS NEGOTIATION POSSIBLE?   The first question is whether or not negotiation is possible or just a waste of time and effort. Negotiations will be fruitless if at least one party believes there are no possible outcomes that are better than not negotiating.   Compromise is impossible.   Fanatics, true believers, proponents of “Victory at any cost” or “Give me victory or give me death” or parties who believe their opponents are evil are not likely to negotiate. Sometimes leaders act to limit their options or those of their followers.   The famous historical example is when Cortes burned his boats that brought him and his men to Mexico.   Returning to Cuba was no longer an option.   Cortes forced his men to make the “credible” commitment to conq

Carrie Nation - Prohibitionist INTRODUCTION The recent acrimonious debate over the debt ceiling and possible U.S. government default is way out of proportion to the issue involved.   This is common in American history.   Examples include a small tax on tea and whether the U.S. should have silver coins.   What is often at stake is something much more fundamental. RELIGION IN AMERICA There is an interesting dynamic in the history of Protestantism in America .   As different Protestant churches became the “established” or mainstream churches, Americans have turned away to form and join more evangelical or Pentecostal churches and sects.   The large and sudden popularity of Baptists and Methodists in the first half of the 19 th century was partly a reaction to the less fervent Puritan (Congregational) and Episcopal churches.   As Methodist and some Baptists groups became less evangelical and more “mainstream,” there were numerous breakaways to found evangelic