Wonkbook: Commerce nominee Ross says top priority is renegotiating NAFTA

By Ylan Q. Mui Billionaire investor Wilbur Ross singled out changes to the nation's free trade agreement with Mexico and Canada on Wednesday as "the first thing" he would address if confirmed to lead the Commerce Department in President-elect Donald Trump's administration. Speaking before the Senate Commerce Committee, Ross argued that the United States should …   The latest economic and domestic policy from Wonkblog   Billionaire investor Wilbur Ross (Reuters/Lucas Jackson/File Photo) By Ylan Q. Mui Billionaire investor Wilbur Ross singled out changes to the nation's free trade agreement with Mexico and Canada on Wednesday as "the first thing" he would address if confirmed to lead the Commerce Department in President-elect Donald Trump's administration. Speaking before the Senate Commerce Committee, Ross argued that the United States should open its economic borders to countries that "play by the rules." But those that do not, he said, "should be punished — severely." "I am not anti-trade. I am pro-trade," Ross said. "But I am pro-sensible trade, not pro-trade that is to the disadvantage of the American worker and the American manufacturing community." Read the rest on Wonkblog. Americans have been lying to themselves about the economy for way too long Republican presidential candidate Donald Trump arrives on stage for a campaign event at Clinton Middle School in January 2016 in Clinton, Iowa. (Joe Raedle/Getty Images) By Jeff Guo Many of the world's most celebrated stories are tales of upward mobility. There's Arthur, the orphan who becomes king after yanking a sword from a rock; Aladdin, the street urchin who wins fabulous wealth from a magic lamp; and Cinderella, the bullied girl who marries a prince after a footwear-related meet-cute. In each of these stories, the characters succeed mostly by fate or luck. But in the late 1800s, during a time of rising inequality and hardening social hierarchies, an American named Horatio Alger became famous for telling a different kind of tale, one in which poor people ascended to the upper class by dint of their own hard work and sterling morals. By Alger's formula, crossing class lines didn't require a genie or a fairy godmother — only gumption. Although many scholars now say we've misunderstood Alger's message, he still is remembered for spreading a distinctly American fantasy of self-made success. A new study out of Harvard shows how Alger's legacy continues to steer our perceptions of the economy. Unlike Europeans, Americans vastly overestimate the likelihood of moving up the economic ladder, according to economists Alberto Alesina, Stefanie Stantcheva and Edoardo Teso. Read the rest on Wonkblog. Brexit is only the beginning Prime Minister Theresa May makes her keynote speech as she closes the 2016 Conservative Conference at the ICC Birmingham in October 2016 in Birmingham, England. (Matt Cardy/Getty Images) By Matt O'Brien Damn the torpedoes, full Brexit ahead. ADVERTISEMENT   That, more or less, was what British Prime Minister Theresa May had to say on Tuesday about her plan to take the country out of the European Union. There will be no compromises. Britain will not try to stay in Europe's Single Market, and only on a limited basis in its Customs Union. It will instead try to negotiate new free trade deals with Europe, and the rest of the world for that matter. In other words, Britain really is going to make itself poorer so that it can restrict immigration. Welcome to the new nationalism. Read the rest on Wonkblog. Congress is considering an extremely dangerous idea almost nobody has heard of (Matt McClain/The Washington Post) By Lawrence H. Summers Inevitably, Congress has more attractive uses for new funds than it has sources of new funds, so there is always is a desperate search for "pay-fors" — measures that are scored by the Congressional Budget Office as raising revenue or reducing outlays and so can be used to finance new initiatives. The pressure is particularly acute this year with the ambitious plans of the new administration. There is also the likelihood that the use of the budget reconciliation procedure will preclude careful deliberation of proposed pay-fors. I recently learned of a particularly dangerous pay-for that may have superficial appeal —the repeal of Orderly Liquidation Authority (OLA).  This repeal, if enacted, will exacerbate moral hazard, impair financial stability, increase economic vulnerability and in all likelihood increase the national debt. It would be a major unforced error. Read the rest on Wonkblog. The mistake most states made when legalizing marijuana Glass containers display varieties of marijuana for sale on shelves at a retail and medical cannabis dispensary, in Boulder, Colo. (AP Photo/Brennan Linsley) By Keith Humphreys The arrival of 2017 will bring many changes to the country, including falling marijuana prices in states that have legalized a recreational market. Cannabis users may cheer this news, but it heralds the start of an enduring budgetary headache for states that tax legal marijuana sales based solely on price. New data from one legalization state illustrate the point. Colorado's Department of Revenue assesses the going price for marijuana every six months and uses this information to calculate the value of the state's 15 percent tax on pot production. The progression of marijuana prices over time in Colorado perfectly parallels the pattern in Washington after that state legalized (reported in Wonkblog last year): Prices briefly spiked due to initial supply shortages, but then began dropping as the marijuana industry matured and expanded. Wholesale prices in Colorado tumbled 24.5 percent over the past year to $1,471 per pound. Read the rest on Wonkblog. Most Recent Posts from Wonkblog Whistleblower suit alleges widespread problems at bank run by Treasury nominee Mnuchin By Ylan Q. Mui  •  Read more »   Maker of $34,000-a-vial drug to pay $100 million for allegedly preventing competition A company allegedly bought a competitor to protect its monopoly on a rare-disease drug. By Carolyn Y. Johnson  •  Read more »   Inflation breaches 2-year high in signs of a strengthening economy The new reading shows the sustained growth of the past few years may have finally absorbed slack in the economy. By Ana Swanson  •  Read more »   Commerce nominee Ross says top priority is renegotiating NAFTA "I am not anti-trade. I am pro-trade," he said. By Ylan Q. Mui  •  Read more »   The serious contradiction in Trump’s views on the dollar Trump says he wants a weaker dollar. But most of his policy proposals say the opposite By Ana Swanson  •  Read more »   Why one of Obama’s favorite programs isn’t going away As Obama leaves the White House, more companies say they plan to invest in My Brother's Keeper and open doors for minority youths. By Tracy Jan  •  Read more »   Americans have been lying to themselves about the economy for way too long The problem with the biggest myth in American history By Jeff Guo  •  Read more »   Brexit is only the beginning The rest of the world is only finding out what Brexit truly means. By Matt O'Brien  •  Read more »   ADVERTISEMENT   The mistake most states made when legalizing marijuana Cannabis users may cheer this news, but it heralds the start of an enduring headache for states. By Keith Humphreys  •  Read more »   Congress is considering an extremely dangerous idea almost nobody has heard of By Lawrence H. Summers  •  Read more »   World leaders find hope for globalization in Davos amid populist revolt Xi Jinping's speech at the Davos World Economic Forum was a rebuke of the protectionist movement endorsed by President-elect Donald Trump. By Max Ehrenfreund  •  Read more »           Share Wonkbook:       Twitter      Facebook Trouble reading? Click here to view in your browser. You received this email because you signed up for a Wonkblog newsletter. For additional free newsletters or to manage your newsletters, click here. We respect your privacy. 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