In the past, the rich used to pay higher taxes. Now, the government pays the rich interest on a swelling debt, caused largely by lower taxes on the rich. It's a big switcheroo that we need to talk about if we're going to talk about the national debt.

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Caixin: "China’s consumers remained reluctant to spend in the first three quarters, with household spending growing more slowly than disposable income. Per capita disposable income rose 5.3% year-on-year in nominal terms. Per capita consumer spending grew 3.6%." www.caixinglobal.com/2026-10-20/c...

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SCMP: "China’s hybrid car exports to the European Union tripled in September from a year earlier, with shipments expected to remain elevated before an import cap agreed during recent trade talks takes effect." sc.mp/my9nm?utm_so...

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I just finished Yoichi Funabashi's very detailed history of the events and negotiations surrounding the Plaza Accord and the subsequent Louvre Accord. What is especially interesting is that this was published in 1988, at the peak of the Japanese economic boom.

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In my latest substack post, I argue that in trade disputes the leverage between the US and the EU, on one side, and China, on the other, operates on very different times scales. michaelpettis858496.substack.com/p/trade-leve...

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