New Books In Economics

Denial is a classic symptom of codependency ... Lacking a sense of self, codependent partners tend to be hypersensitive to criticism or negative feedback, preferring instead to deflect it onto others. The resulting denial fuels an escalating cycle of blame and conflict that drives codependent partners apart. Unfortunately, this progressively dysfunctional pathology applies all too well to the conflict between the United States and China. The United States sees its trade deficit as China’s fault, as if its own lack of saving had nothing to do with it. China sees its surplus saving and its related current account and trade surpluses as benevolent support for deficit-prone America, as if its own underfunded social safety net and the resulting suppression of personal consumption were not its own doing. Both economies are steeped in denial over the effects of their self-inflicted saving imbalances. Each then turns that denial into blame directed at the other. – Stephen Roach, Accidental Conflict: America, China, a