【By Guan察者网, Liu Bai】"A great country cannot be built on lies," said Leo Melamed, an American economist and former chairman of the Chicago Mercantile Exchange (CME).

In an interview report published by Nikkei News on August 13, Melamed criticized President Trump's protectionist policies as wrong and potentially disastrous, stating that his policies not only divided the country but also undermined the truth, making lies acceptable. Melamed also mentioned China, saying that the Chinese people are well-educated, smart, and hardworking. The United States will still maintain its leadership for now due to the status of the dollar as a reserve currency, but China may become the next world leader in the future.

Melamed is widely recognized as the founder of financial futures and is known as the "father of the modern futures market." He is a major advocate of neoliberalism opposing government intervention and is the honorary chairman for life of the CME.

When asked about "how to evaluate the protectionist policies of the Trump administration," Melamed said: "I completely oppose protectionism. The concept of globalization was born after World War II in 1945. At the Bretton Woods Conference in 1944, John Maynard Keynes played a central role and said that the world must find a way to prevent another world war. There had already been two, and he wanted to prevent a third."

Melamed interviewed by Nikkei News

He said that at the time, there was no word called "globalization," but the system they established was exactly globalization. They created a system where ideas and goods could circulate freely. If war occurred, the losses would exceed the benefits. Technology thus advanced globally, and there has been no world war in the past 80 years.

Melamed admitted that globalization certainly has its pros and cons. But if we look back at the progress of civilization over the past half-century, it is undeniable that people around the world live better lives. For example, the problem of hunger in Africa has decreased by more than 50%.

He mentioned that in a market economy, the decision-making power lies with yourself. People have to bear the cost of their own decisions, but it is wrong to blame the entire system for that.

"The Chinese people are well-educated, smart, and hardworking. It is undeniable that globalization has benefited China," Melamed said. However, as long as the dollar remains the world's reserve currency, the U.S. leadership position will be difficult to shake, and this situation will not change overnight. This is not because the dollar is good, but because there is no better alternative.

"However, I do believe that the next leader will be China," he said. "But this will not happen through hot wars or tomorrow. The decline of hegemony has a process. Looking back at history, the dominance shifted from Spain to Britain, then to the United States. The world changes like this."

Regarding why U.S. Treasury Secretary Bessen and Commerce Secretary Lutnick, who once worked in the financial markets, became the vanguard of the protectionist tariff policy, Melamed said: "I know Lutnick very well. He is a very smart person. If you ask him to swear to tell the truth, I think he would say, 'Well, tariffs might not be good,' but if you want this job, you have to follow your boss's instructions."

"They are just following the president's established strategy, but I think these policies will not work and will be very bad. Eventually, many things will return to the original state. They know this."

He further pointed out that one of the most dangerous things the Trump administration did was to create an atmosphere where if you dare to defy, you will have trouble, which is not the correct way to govern a country.

When talking about Trump's use of "anti-Semitism" to suppress universities such as Harvard, Melamed said, although he supports the fight against "anti-Semitism," Trump's approach also divided the country. He attacked the administrative system, made lies acceptable, and undermined the truth, which is dangerous.

"A great country cannot be built on lies. You cannot lead a country by dividing its people. This is not leadership, but destruction," he said.

From steel and aluminum tariffs to car tariffs and then to "reciprocal tariffs," the Trump administration continuously escalated trade protectionist measures, triggering global opposition and multiple countermeasures.

The Chinese side has repeatedly emphasized that a tariff war and trade war have no winners, and protectionism harms the common interests of all countries.

Earlier, the Financial Times cited a report from the Kiel Institute for the World Economy, which stated that since protectionism is usually a self-harming act, the biggest negative impact of the U.S. tariff policy is likely to hit the U.S. itself. Decision-makers who participated in building the global trade system have experienced the disasters brought by protectionism that puts others at risk. However, the U.S. has returned to the protectionist state nearly a century ago and destroyed the achievements it previously worked hard to establish. These tariffs, combined with new policy environments that are uncontrolled and full of uncertainty, will cause harm to the global and U.S. economies in the present and in the future.

"There is only one winner - China," said Larry Summers, former U.S. Treasury Secretary, in a recent conversation program on Bloomberg Television, giving a similar judgment on the current economic and trade policies of the Trump administration.

Summers pointed out that protectionist and nationalist policies are making the U.S. "alienate from other countries around the world." Raising raw material prices, bringing more uncertainties to investors, and alienating customers are not the right strategies. He emphasized that in this situation, only one winner will emerge, and that is China.

He warned that Trump's policies might lead the U.S. down a path similar to post-war Argentina.

This article is an exclusive piece by Observer, and without permission, it cannot be reprinted.

Original: https://www.toutiao.com/article/7538282254057914915/

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