the Chronycle

Capitalists who don't understand competition

On July 4th, 2018, Holly Ellyatt interviews Eric Lonergan on CNBC’s "Squawk Box Europe."
The video and transcript of the interview can be consulted at

Eric Lonergan is a macro fund manager at M&G Investments, based in London, United Kingdom. He makes the following, outrageous claim:
"We're only able to run those surpluses thanks to the generosity and kindness of strangers who are willing to take in all of those goods.
It’s a lie to say this is an amazing German export achievement — no, it isn’t, it’s because there is a consumer at the other end who’s willing to generate the demand."

Mr. Lonergan, what in tarnation's name are you trying to say?? That somehow as American consumers we do you A FAVOR when we buy your better-made chocolate and sports cars?

Do you believe in capitalism, or do you not? If you do, then surely you take it for granted that consumers buy what they prefer, which is German and Japanese cars over American cars, because American cars are mostly crap. It's very simple.

And just like Trump, you completely skew the conversation by never mentioning that ALL large foreign car makers have enormous operations on the ground in the US. Of course they do! You think Mercedes would rather take the risk of shipping a few hundred thousand cars across the ocean, or would they rather simply drive them out of the factory in Alabama?

If you want to talk about the macro view, the problem in the US for the past 40 years hasn't been policy as much as culture.

The main reason we run a trade deficit in the US is that we measure economic success based on consumption (which is stupid), and as a result we educate our children to love buying cheap useless stuff that we toss in landfills after 18 months. Since this cultural bias simultaneously eventually makes our offspring as dumb as a bag of rocks, we're also increasingly incapable of manufacturing anything valuable.

I think your argumentation is very dangerous; you present yourself as a highly rational person but you ignore the most basic logical contradictions and omit glaring facts, and then you exploit the fact that you confused your audience to come off as authoritative even though the conclusion you arrive at is illogical and ultimately, dangerously false.

philip m. shearer


bronx, ny, usa