Focusing on China’s trade deficit with the United States is largely misguided. Yes, China subsidizes various exports to the rest of the world in a number of ways. But if the United States succeeds in stopping the subsidies or blocking the subsidized products, the result will be that companies will shift production to Vietnam and other low-wage countries—not create good jobs in the United States.

There are many kinds of innovation that allow the production of more or better output with less labor input. Autonomous vehicles will likely be safer than ones driven by humans. Robotics already help surgeons perform certain operations better than they can on their own. Online reservation systems are faster and more convenient than travel agents. Moreover, because of emulation and competition, innovators capture only a small part of the benefit of their innovation. It follows that there is as much a case for subsidizing as taxing types of capital that embody innovation. Why pick on robots?

Lawrence H. Summers remembers his uncle, Nobel Prize-winning economist Kenneth Arrow.

The reality is that the impact of trade and globalization on wages is debatable and could be substantial. But the idea that the U.S. trade agreements of the past generation have caused impoverishment to any significant extent is absurd.

This week the "Trump Rally" continued as the Dow Jones Industrial Average crossed 20,000, and our president issued a celebratory. How much does this mean? To what extent is it a vindication of the economic policy approaches pursued by the new Administration? Will the post-election rally continue? 

Do the financial cheerleaders for a business-leader-dominated administration approve of the emerging combination of weak dollar rhetoric from both the president and Treasury secretary nominee along with strong dollar policy?

If, as secretary nominee Mnuchin has just written to Congress and the president has asserted, the administration believes the dollar is too strong, why are all its policies calculated to raise the dollar: (i) very expansionary fiscal policy (ii) complaints about easy money (iii) measures like the border tax adjustment that discourage imports and encourage exports and (iv) measures to reduce capital outflows as American companies outsource? This is the least coherent dollar policy since the Carter administration.

The new US president will be operating on a very weak political foundation, is very unlikely to be able to deliver the results he has promised to key constituencies, and seems likely to take dangerous gambles in the international arena. This makes it probable that a cycle of growing disillusion, disappointment and disapproval will set in within a year.

In statistical terms, 2016 was a year of continuity for the world economy, as performance was quite similar to that of recent years. The big changes were political, as a widespread anti-globalization movement signaled a breakdown in a consensus among most political leaders that had held since the end of the World War II. It used to be generally accepted that reducing trade barriers increases prosperity and promotes peace, benefiting investing and recipient countries and promoting international cooperation in solving problems around the world. Almost all of this was called into question in 2016.

Just as Ronald Reagan’s landmark 1986 bipartisan tax reform increased simplicity, fairness and economic efficiency by broadening the tax base and reducing rates, today reform of the system has the potential to help American families and the economy.

Following a brief market plunge, the President-elect’s speech on Tuesday night was more conciliatory than many expected and emphasised his commitment to infrastructure investment. Investors have, on balance, concluded that the combination of a shift to very expansionary fiscal policy and major reductions in regulation in sectors ranging from energy to finance to drug pricing will raise demand and reflate the American economy.