Draghi and Trump, the different twins

…while organizing my thoughts for a lecture I have to give tomorrow at a master's degree program, I reflected on the fact that, ultimately, Draghi and Trump are more similar than one might think.

Draghi, in fact, wants a more competitive economy, but ignores that CAB = FAB, and therefore that if increased competitiveness increases the Eurozone's net exports of goods, savings will necessarily flow (or, as he would say, flow) from the Eurozone to the rest of the world. It's also unclear why what was positive for Germany (lending money to the PIIGS) should be negative for the Eurozone, especially considering that in this case the borrowers have a rosier credit rating and survival prospects than the PIIGS (as long as they aren't members of the Titanic Europe…).

Trump, on the other hand, wants to preserve the exorbitant privilege of "America's financial sector dominance" ( here on page 14), but ignores that since FAB = CAB, those who issue financial assets particularly sought after by the rest of the world and are therefore net importers of capital (everyone crazy about Treasuries !) are necessarily also net importers of goods. It's not clear why they would preserve this exorbitant privilege without exercising it: and the privilege is precisely that of being able to borrow in the short term by lending in the long term (that is, to issue pieces of paper and buy companies: there's no shortage of examples here).

In short: they are two Don Quixotes at odds with the world and with themselves, and battling the windmill of accounting identities, which will pulverize them as it is pulverizing the flat-earther economists who are so popular on social media.

It is hard to believe, and I don't know how to prove it, that they belong to the same species (one cannot say race, and species is more appropriate) as Keynes…

This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2026/05/draghi-e-trump-i-gemelli-diversi.html on Thu, 28 May 2026 19:42:24 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.