The Economics Thread

[sglowrider]

No argument from me about the Healthcare. I think the only solution is Medicare for All but we will never get that (given that one sixth of the US economy is healthcare). So, I would start by getting rid of Medicaid and putting the people eligible for it into Medicare. But that's another discussion.

Regarding manufacturing jobs and protectionism, I think you are just wrong. I don't think the tariffs will be enough, for sure, to change things dramatically, but they are a good start.
And no, we wouldn't be North Korea if we shut up shop. North Korea is an extreme communist dictatorship with no capitalism so you aren't even comparing like with like. A more valid comparison would be China, except without all the BS their govt inflicts on the people. If we told companies that they had a choice - you can sell to the American market and locate your plants here or you can sell to the rest of the world and locate your plants elsewhere, I can almost guarantee you that most of them would chose America. We are the majority of their customers.

Would the CEOS of these companies make as much money? No. Would they have to employee more expensive workers. Yes, they would. Would the American worker become more valuable because of this and much better off - yes, of course they would. It might be a difficult short term transition but if the political will was there, we could role back the years and reboom our manufacturing sector. It's not like its impossible and you need a wizard to pull it off. All we need to do is exactly what China have done - they have taken advantage of our open markets while at the same time, closing their own markets to our companies. That's not fair and its really stupid by us to continue on this path when we get nothing but slightly cheaper goods because they were made in a country that bends over for business and has no labor or environmental laws comparable us or most other European countries.

I am not for closing our doors completely. We would of course, continue to trade with Europe and anywhere else where our companies are allowed to compete on an equal basis with the home nation. It's time that China got a bloody nose though!

Are you aware that Chinese companies wanted to buy up various US entities but were vetoed? That doesn't sound like an open market to me. The US is always the angel and the victim in the scheme of things.

You are just buying into a particular narrative that have been barked at you. Facts matter. Google is your friend.

 

[oneniltothearsenal]

No argument from me about the Healthcare. I think the only solution is Medicare for All but we will never get that (given that one sixth of the US economy is healthcare). So, I would start by getting rid of Medicaid and putting the people eligible for it into Medicare. But that's another discussion.

You only say this because you already believe in your rather massive assumption that things like income inequality, finding a good job with a livable wage, all reduce to manufacturing. I am saying its a lot more complicated than that.

Regarding manufacturing jobs and protectionism, I think you are just wrong. I don't think the tariffs will be enough, for sure, to change things dramatically, but they are a good start.
And no, we wouldn't be North Korea if we shut up shop. North Korea is an extreme communist dictatorship with no capitalism so you aren't even comparing like with like. A more valid comparison would be China, except without all the BS their govt inflicts on the people. If we told companies that they had a choice - you can sell to the American market and locate your plants here or you can sell to the rest of the world and locate your plants elsewhere, I can almost guarantee you that most of them would chose America. We are the majority of their customers.

Would the CEOS of these companies make as much money? No. Would they have to employee more expensive workers. Yes, they would. Would the American worker become more valuable because of this and much better off - yes, of course they would. It might be a difficult short term transition but if the political will was there, we could role back the years and reboom our manufacturing sector. It's not like its impossible and you need a wizard to pull it off. All we need to do is exactly what China have done - they have taken advantage of our open markets while at the same time, closing their own markets to our companies. That's not fair and its really stupid by us to continue on this path when we get nothing but slightly cheaper goods because they were made in a country that bends over for business and has no labor or environmental laws comparable us or most other European countries.

I am not for closing our doors completely. We would of course, continue to trade with Europe and anywhere else where our companies are allowed to compete on an equal basis with the home nation. It's time that China got a bloody nose though!

Well, I'd agree you seem to want to return to the 80s. The 1880s. I mean these are suggestions straight out of 19th century US protectionism. Before the US economy was thriving. This just ignores decades of research from pretty much every economic school. I am trying to even think of a single prominent economist that thinks this type of protectionism is a good idea. Getting rid of the protectionist Smoot-Hawley Tariff Act and developing the framework of Bretton Woods, GATT and other deals were a integral factor in the US economies massive growth and success after WWII. Going back to pre-WWI is just a wild idea that you won't find supported among any economists. There is just no evidence from history or economics supporting the idea that these strict protectionist ideas you champion would work.

More than 1,100 economists sign open letter to Trump, Congress voicing opposition to tariffs and protectionism
"In 1930, 1,028 economists urged Congress to reject the protectionist Smoot-Hawley Tariff Act "

The letter (see full text below) was released today at 10 a.m. at a press conference at the National Press Club and featured comments from signers including:

• Susan A. Aaronson, Research Professor of International Affairs and Cross-Disciplinary Fellow at the George Washington University’s Elliott School of International Affairs and Senior Fellow at the think tank Center for International Governance Innovation.
• Sherman Robinson, nonresident senior fellow at the Peterson Institute for International Economics.
• Robert Dietz, Chief Economist and Senior Vice President for Economics and Housing Policy for the National Association of Home Builders.
• Mary Lovely, Professor of Economics and Melvin A. Eggers Faculty Scholar at Syracuse University’s Maxwell School of Citizenship and Public Affairs.
• Douglas Holtz-Eakin, president of the American Action Forum.

Signers of the letter include economists from each of the 50 states, 15 Nobel laureates (Alvin Roth, Richard Thaler, Oliver Hart, Roger Myerson, Robert Merton, James Heckman, George Akerlof, Robert Lucas, Robert Shiller, Vernon Smith, Robert Engle, Eric Maskin, Eugene Fama, Robert Solow, Edmund Phelps), and advisors to presidents Reagan, Bush, Clinton, Bush II, and Obama. NTU will keep the option to sign the letter open so that additional economists can have their names added to the list. Current list of signatories available here.

 

[Santi_Mesut_Alexis_87]

Hate to break it to you but the US is now a service economy and the manufacturing jobs aren't coming back. Labor is cheap in other areas of the world and many manufacturing jobs have been replaced by services ones and others are simply going away because of technology.

Below is a timeline of how we have gradually transitioned away from being a manufacturing economy.

It has happened a bit everywhere, tbh. The finance has literally destroyed the economy.

 

[Adisa]

No argument from me about the Healthcare. I think the only solution is Medicare for All but we will never get that (given that one sixth of the US economy is healthcare). So, I would start by getting rid of Medicaid and putting the people eligible for it into Medicare. But that's another discussion.

Regarding manufacturing jobs and protectionism, I think you are just wrong. I don't think the tariffs will be enough, for sure, to change things dramatically, but they are a good start.
And no, we wouldn't be North Korea if we shut up shop. North Korea is an extreme communist dictatorship with no capitalism so you aren't even comparing like with like. A more valid comparison would be China, except without all the BS their govt inflicts on the people. If we told companies that they had a choice - you can sell to the American market and locate your plants here or you can sell to the rest of the world and locate your plants elsewhere, I can almost guarantee you that most of them would chose America. We are the majority of their customers.

Would the CEOS of these companies make as much money? No. Would they have to employee more expensive workers. Yes, they would. Would the American worker become more valuable because of this and much better off - yes, of course they would. It might be a difficult short term transition but if the political will was there, we could role back the years and reboom our manufacturing sector. It's not like its impossible and you need a wizard to pull it off. All we need to do is exactly what China have done - they have taken advantage of our open markets while at the same time, closing their own markets to our companies. That's not fair and its really stupid by us to continue on this path when we get nothing but slightly cheaper goods because they were made in a country that bends over for business and has no labor or environmental laws comparable us or most other European countries.

I am not for closing our doors completely. We would of course, continue to trade with Europe and anywhere else where our companies are allowed to compete on an equal basis with the home nation. It's time that China got a bloody nose though!

You need to brush up on your history.
There's a good reason why tariffs are a taboo word in America.

 

[Carolina Red]

I don't know...history.

That’s a true statement.

 

[Danny_]

America depends on those imports just as much as the exporting countries do. What smartphones are Uber etc. going to run on? America doesn't have a Foxconn/Samsung with 10s of thousands well trained staff willing to do hard labor for 12h shifts. Most of the high value manufacturing done in the US is done within a global supply chain selling to a global customer base. There's parts from every major economy in every Boeing, and there's Boeing's in every major economy (Boeing being an example, it might as well be GE, IBM, HP, Caterpillar etc.) Could Boeing build a plane from parts only manufactured in the US? Probably, but you'd be looking at F35 prices (and all the knock on effects that would have on the aviation industry). The US wouldn't be "just fine" if they put up a few walls and solely depended on their domestic market, the now remaining parts of the manufacturing sector would be noncompetitive within less than a decade.

Yes, we don't currently have those manufacturing jobs. Are you seriously saying that we couldn't build smartphones here ourselves and planes? Uber is an app so I don't know what you are talking about - it would be just fine running on the phones we already have. There would be a transition period where we experienced massive growth in the manufacturing sector but most people think of that as a good thing. The middle class would get wealthy once again as there would be a high demand for their skills. The only thing I can think of that we would have a shortage of is rare earth materials which are necessary for making smart phones and other stuff like that. But guess what - we do actually have a mine that we could exploit - it's just cheaper to import them from China as that is who provides most of the supply at the moment. But, just because that is the way it is RIGHT NOW doesn't mean that is the way it always has to be.

 

[JPRouve]

That’s a true statement.

The lack of comma is a problem isn't it?

 

[afrocentricity]

Yes, we don't currently have those manufacturing jobs. Are you seriously saying that we couldn't build smartphones here ourselves and planes? Uber is an app so I don't know what you are talking about - it would be just fine running on the phones we already have. There would be a transition period where we experienced massive growth in the manufacturing sector but most people think of that as a good thing. The middle class would get wealthy once again as there would be a high demand for their skills. The only thing I can think of that we would have a shortage of is rare earth materials which are necessary for making smart phones and other stuff like that. But guess what - we do actually have a mine that we could exploit - it's just cheaper to import them from China as that is who provides most of the supply at the moment. But, just because that is the way it is RIGHT NOW doesn't mean that is the way it always has to be.

All sounds a bit Brexit mate...

 

[Danny_]

Are you aware that Chinese companies wanted to buy up various US entities but were vetoed? That doesn't sound like an open market to me. The US is always the angel and the victim in the scheme of things.

You are just buying into a particular narrative that have been barked at you. Facts matter. Google is your friend.

Facts do matter and you are not providing any. Go ahead and provide your facts instead of making snide remarks with no basis to them. There is a massive trade deficit for many years now between China and the US so obviously, one country is opening its markets to the other. And the US doesn't need to 'play the victim'. All you have to do to see the impact of this on the middle class is look at the data on wage stagnation since the 70s to see the impact of this.

.

 

[Danny_]

You need to brush up on your history.
There's a good reason why tariffs are a taboo word in America.

Yes, it's called propaganda.

 

[Danny_]

It has happened a bit everywhere, tbh. The finance has literally destroyed the economy.

Agreed but it has happened in the US way more than anywhere else. And the sad thing is that people feel like we are powerless to do anything about it. That's the lie propagated by the benefactors (the 1 percent) of it who have gotten massively richer because no sensible laws were put in place (at least in the US) to protect workers from it.

 

[Carolina Red]

There is a massive trade deficit for many years now between China and the US so obviously, one country is opening its markets to the other.

100,000 Walmart shelf throwaway items vs. 1,000 passenger jet engines. What would you rather be paid to make?

Yes, it's called propaganda.

No. It’s called history. The era of protection tariffs died before World War II. The economy has become infinitely more globalized since then. It’s applying a 19th century idea to a 21st century issue.

 

[Billy Blaggs]

That’s a true statement.

 

[Santi_Mesut_Alexis_87]

Agreed but it has happened in the US way more than anywhere else. And the sad thing is that people feel like we are powerless to do anything about it. That's the lie propagated by the benefactors (the 1 percent) of it who have gotten massively richer because no sensible laws were put in place (at least in the US) to protect workers from it.

Because you had Reagan, the godfather of neoliberalism along with Thatcher. The problem is that the left has done nothing about it, but has totally embraced it. Then you wonder why Trump won.

 

[Cal?]

Yes, we don't currently have those manufacturing jobs. Are you seriously saying that we couldn't build smartphones here ourselves and planes? Uber is an app so I don't know what you are talking about - it would be just fine running on the phones we already have. There would be a transition period where we experienced massive growth in the manufacturing sector but most people think of that as a good thing. The middle class would get wealthy once again as there would be a high demand for their skills. The only thing I can think of that we would have a shortage of is rare earth materials which are necessary for making smart phones and other stuff like that. But guess what - we do actually have a mine that we could exploit - it's just cheaper to import them from China as that is who provides most of the supply at the moment. But, just because that is the way it is RIGHT NOW doesn't mean that is the way it always has to be.

Robotics industry will experience massive growth. Guess what, most of the jobs lost by the US manufacturing sector has gone to machines and not China.

 

[Dr. Dwayne]

Hate to break it to you but the US is now a service economy and the manufacturing jobs aren't coming back. Labor is cheap in other areas of the world and many manufacturing jobs have been replaced by services ones and others are simply going away because of technology.

Below is a timeline of how we have gradually transitioned away from being a manufacturing economy.

Indeed, thirty years on from the beginning of that transition and some people haven't acquired marketable skills. Who's fault is that?

 

[Red Dreams]

And back in the real world... Seriously! The retirement age needs to be reduced??? We have more people retiring than we can afford to pay for currently and are funding this program by borrowing from China and other countries.

You will never get it will you?

All your posts have no basis in economics.

Clue. Trickle down economics is not a macro economics theory.

Its propaganda.

 

[Abizzz]

Yes, we don't currently have those manufacturing jobs. Are you seriously saying that we couldn't build smartphones here ourselves and planes? Uber is an app so I don't know what you are talking about - it would be just fine running on the phones we already have. There would be a transition period where we experienced massive growth in the manufacturing sector but most people think of that as a good thing. The middle class would get wealthy once again as there would be a high demand for their skills. The only thing I can think of that we would have a shortage of is rare earth materials which are necessary for making smart phones and other stuff like that. But guess what - we do actually have a mine that we could exploit - it's just cheaper to import them from China as that is who provides most of the supply at the moment. But, just because that is the way it is RIGHT NOW doesn't mean that is the way it always has to be.

Yes, I'm seriously saying you can't build smartphones in the US (or Europe for that matter) that are competitive in the market place (even with a 25% tariff). Why? Because Foxconn and Samsung have developed huge economies of scale in manufacturing the components in their mega factories, together with a huge workforce who are rather good at what they're doing, and do so for a wage that make American fast food workers look fortunate. I have no doubt at all that America has the brains and know how to manufacture them in the US, but they would not be competitive for a very long time.

I seriously doubt the US consumer is going to accept an inferior product at a vastly more expensive price anytime soon.

 

[Danny_]

You only say this because you already believe in your rather massive assumption that things like income inequality, finding a good job with a livable wage, all reduce to manufacturing. I am saying its a lot more complicated than that.



Well, I'd agree you seem to want to return to the 80s. The 1880s. I mean these are suggestions straight out of 19th century US protectionism. Before the US economy was thriving. This just ignores decades of research from pretty much every economic school. I am trying to even think of a single prominent economist that thinks this type of protectionism is a good idea. Getting rid of the protectionist Smoot-Hawley Tariff Act and developing the framework of Bretton Woods, GATT and other deals were a integral factor in the US economies massive growth and success after WWII. Going back to pre-WWI is just a wild idea that you won't find supported among any economists. There is just no evidence from history or economics supporting the idea that these strict protectionist ideas you champion would work.

I want to go back to the 70s and 80s when we made our own stuff. I am not against free trade, but free trade is not what we have with China. They have free trade with us. We don't have free trade with them. And yes, every economist will cite the benefits of free trade. It's not hard to understand - if I specialize in making one good and you specialize in making another good, the overall output will be greater than if we both try to make the goods ourselves. So the increased efficiency has to be a good thing, right?
But why is the middle class shrinking then? Why aren' t we all sharing in this eutopia? . Economists don't worry about the distribution of these new gains. They just look at numbers and quite frankly, most of them are not that intelligent - you don't have to be in order to be an economist. The economist answer will be - well that's the govt's job to ensure that the wealth gets distributed equally. Really, so we are talking about the govt where in order to win a governer's race in illinois, you need over $100m. What could possibly be wrong here???

So, don't make snide remarks about me wanting to go back to the 1880s when your whole argument just demonstrates that you are one of the many parrots of the party line. And don't quote a letter sent to our bought and paid for govt by 1100 economists and suggest that these people are some kind of authority on what's good for the middle class. We've tried their version of 'free trade' and the end result has been wage stagnation for over 40 years and the decimation of the middle class. It is time people woke up and stopped listening to this bs lie. I will be quite happy to take protectionism and a more expensive TV over what we have right now.

 

[Zarlak]

I want to go back to the 70s and 80s when we made our own stuff. I am not against free trade, but free trade is not what we have with China. They have free trade with us. We don't have free trade with them. And yes, every economist will cite the benefits of free trade. It's not hard to understand - if I specialize in making one good and you specialize in making another good, the overall output will be greater than if we both try to make the goods ourselves. So the increased efficiency has to be a good thing, right?
But why is the middle class shrinking then? Why aren' t we all sharing in this eutopia? . Economists don't worry about the distribution of these new gains. They just look at numbers and quite frankly, most of them are not that intelligent - you don't have to be in order to be an economist. The economist answer will be - well that's the govt's job to ensure that the wealth gets distributed equally. Really, so we are talking about the govt where in order to win a governer's race in illinois, you need over $100m. What could possibly be wrong here???

So, don't make snide remarks about me wanting to go back to the 1880s when your whole argument just demonstrates that you are one of the many parrots of the party line. And don't quote a letter sent to our bought and paid for govt by 1100 economists and suggest that these people are some kind of authority on what's good for the middle class. We've tried their version of 'free trade' and the end result has been wage stagnation for over 40 years and the decimation of the middle class. It is time people woke up and stopped listening to this bs lie. I will be quite happy to take protectionism and a more expensive TV over what we have right now.

Did you seriously just say that somebody shouldn't quote a letter by 1100 experts and infer that they know what they're talking about in the field they've specialised in and are in mass agreement over? When your kid needs surgery do you take them to a surgeon or to a basket weaver?

 

[langster]

Did you seriously just say that somebody shouldn't quote a letter by 1100 experts and infer that they know what they're talking about in the field they've specialised in and are in mass agreement over? When your kid needs surgery do you take them to a surgeon or to a basket weaver?

 

[Danny_]

Yes, I'm seriously saying you can't build smartphones in the US (or Europe for that matter) that are competitive in the market place (even with a 25% tariff). Why? Because Foxconn and Samsung have developed huge economies of scale in manufacturing the components in their mega factories, together with a huge workforce who are rather good at what they're doing, and do so for a wage that make American fast food workers look fortunate. I have no doubt at all that America has the brains and know how to manufacture them in the US, but they would not be competitive for a very long time.

I seriously doubt the US consumer is going to accept an inferior product at a vastly more expensive price anytime soon.

I think you underestimate US companies. If the tariffs are done right, of course they could compete. Lets say apple decides to give the US govt the finger and continues to make its i-phones in China. What we should do is take a look at their annual profits from sales of I-phones and set the tarriff at 50 percent of these. Then, we should subsidize American companies trying to make i-phones at home with this money to try to level the playing field. The transition might be rocky but you underestimate the sentiment of public opinion over here. One of the reasons why Trump got in is because he was voicing people's anger about outsourcing and the devastation it has caused to the middle class. Why do you think he won the blue collar states of Michigan and Ohio that were vital for him.

 

[Danny_]

Did you seriously just say that somebody shouldn't quote a letter by 1100 experts and infer that they know what they're talking about in the field they've specialised in and are in mass agreement over? When your kid needs surgery do you take them to a surgeon or to a basket weaver?

They aren't experts on what's good for the middle class so you are not comparing like with like

 

[Zarlak]

They aren't experts on what's good for the middle class so you are not comparing like with like

They are experts on everything relating to economics. I really have no idea what you think you're talking about.

 

[Raoul]

They aren't experts on what's good for the middle class so you are not comparing like with like

As mentioned yesterday, the manufacturing jobs aren't coming back. We are not going to magically start building TVs when we can get them cheaper from elsewhere.

 

[langster]

The funny thing is that the US was going to start manufacturing solar panels on a massive scale but Trump fecked that with his insane tarrifs and disastrous energy policy reversals.

 

[oneniltothearsenal]

I want to go back to the 70s and 80s when we made our own stuff. I am not against free trade, but free trade is not what we have with China. They have free trade with us. We don't have free trade with them. And yes, every economist will cite the benefits of free trade. It's not hard to understand - if I specialize in making one good and you specialize in making another good, the overall output will be greater than if we both try to make the goods ourselves. So the increased efficiency has to be a good thing, right?
But why is the middle class shrinking then? Why aren' t we all sharing in this eutopia? . Economists don't worry about the distribution of these new gains. They just look at numbers and quite frankly, most of them are not that intelligent - you don't have to be in order to be an economist. The economist answer will be - well that's the govt's job to ensure that the wealth gets distributed equally. Really, so we are talking about the govt where in order to win a governer's race in illinois, you need over $100m. What could possibly be wrong here???

So, don't make snide remarks about me wanting to go back to the 1880s when your whole argument just demonstrates that you are one of the many parrots of the party line. And don't quote a letter sent to our bought and paid for govt by 1100 economists and suggest that these people are some kind of authority on what's good for the middle class. We've tried their version of 'free trade' and the end result has been wage stagnation for over 40 years and the decimation of the middle class. It is time people woke up and stopped listening to this bs lie. I will be quite happy to take protectionism and a more expensive TV over what we have right now.

It's not a snide remark. You are literally advocating policies that haven't been advocated for since the 19th century. And there is no "party line" here. Its 100 years worth of the entire field of economics. Isolationism vs. trade is probably one of the very few issues that every school, branch and sub-division in economics agrees on. Because the historical and statistical evidence is simply overwhelming in favor of trade.

I linked that letter because it sources thousands of the most prominent economists in both 1930 and today. Included in that letter are 15 Nobel Prize winners from all economic schools - neo-classical, neo-Keynesian, behavioral economists, labor economists, Chicago school. You have advisors form every modern President before 45,. academic economists from conservative to liberal and industry economists from the trade associations like National Association of Builders Very few things that collection of vastly different economists agree on but every school of economics strongly disagrees with all your assumptions.

In 1930 all the top economists also wrote a letter saying the Smoot-Harley Tariff Act was too protectionist and an economic disaster. They didn't listen to the economists then and part of the result was the long Great Depression. Only until after WWII did they finally get rid of the protectionist Harley-Smoot Act and that was a huge factor in the massive growth of the US economy from the 1950s to the 1970s. This is historical evidence in favor of trade that you cannot find in favor of protectionism.

Its called isolationism because any protectionist policies incur a reciprocal response. If you tried to erect all the tariffs, laws forcing companies to manufacture in the US, they would be met by trade barriers in Europe and Asia essentially isolating the American market.

California is the world's 5th largest economy. California's most important industries are all heavily dependent on international trade and export. Silicon Valley exported 30bn USD to foreign markets in 2016. California agriculture exported 20bn USD to foreign countries. Hollywood greatly depends on the international market:

Spoiler: international market share of Hollywood profits

Depending on how you calculate the stats California total exports are 100-175 billion USD. Strong protectionist policies would ruin these export industries. And this 100+ billion loss in value is supposed to made up by manufacturing jobs? Even if the economics were even remotely feasible (which they aren't) you want thousands of actors, film crews, computer nerds and generational cowboys and farmers to be happy losing their current jobs to go work in the factory? Nah, that'd never work - they'd just move to Canada, Europe or Asia. Or most likely, California would just secede if the US Fed ever tried to force these types of policies. Would probably be joined by Texas, New York and the Great Lakes region as well. For instance why would a global company like 3M stay in Minnesota if all those policies were implemented? They would just move to Canada.

Anyway, this type of isolation is just an artifact of the 19th century for a reason. Moving towards the future, if the goal is really to improve the lot of the working and middle class then that lies in logical policies like universal healthcare, livable wage, etc. Manufacturing is moving smaller anyway. The maker revolution is a much better solution than trying to re-imagine 1950s manufacturing that completely ignores modern global logistics and supply chains. Isolationist policies would not save the US middle class they would slowly drag the US into a third world isolated economy.

 

[sglowrider]

I think you underestimate US companies. If the tariffs are done right, of course they could compete. Lets say apple decides to give the US govt the finger and continues to make its i-phones in China. What we should do is take a look at their annual profits from sales of I-phones and set the tarriff at 50 percent of these. Then, we should subsidize American companies trying to make i-phones at home with this money to try to level the playing field. The transition might be rocky but you underestimate the sentiment of public opinion over here. One of the reasons why Trump got in is because he was voicing people's anger about outsourcing and the devastation it has caused to the middle class. Why do you think he won the blue collar states of Michigan and Ohio that were vital for him.

Danny boy -- what you are doing is an emotional argument versus a logical one (aka economic/history) ie not being experts of the middle-class.

Sure we would all like to be 17 with all the things that we know now. But that's not even possible and also even if we could go back to the future using a flux-capacitor, there will be consequences to changes. If you want the US government to be active intervening in trade, a new responsibility of the US government, then there will be consequences.

 

[Danny_]

It's not a snide remark. You are literally advocating policies that haven't been advocated for since the 19th century. And there is no "party line" here. Its 100 years worth of the entire field of economics. Isolationism vs. trade is probably one of the very few issues that every school, branch and sub-division in economics agrees on. Because the historical and statistical evidence is simply overwhelming in favor of trade.

I linked that letter because it sources thousands of the most prominent economists in both 1930 and today. Included in that letter are 15 Nobel Prize winners from all economic schools - neo-classical, neo-Keynesian, behavioral economists, labor economists, Chicago school. You have advisors form every modern President before 45,. academic economists from conservative to liberal and industry economists from the trade associations like National Association of Builders Very few things that collection of vastly different economists agree on but every school of economics strongly disagrees with all your assumptions.

In 1930 all the top economists also wrote a letter saying the Smoot-Harley Tariff Act was too protectionist and an economic disaster. They didn't listen to the economists then and part of the result was the long Great Depression. Only until after WWII did they finally get rid of the protectionist Harley-Smoot Act and that was a huge factor in the massive growth of the US economy from the 1950s to the 1970s. This is historical evidence in favor of trade that you cannot find in favor of protectionism.

Its called isolationism because any protectionist policies incur a reciprocal response. If you tried to erect all the tariffs, laws forcing companies to manufacture in the US, they would be met by trade barriers in Europe and Asia essentially isolating the American market.

California is the world's 5th largest economy. California's most important industries are all heavily dependent on international trade and export. Silicon Valley exported 30bn USD to foreign markets in 2016. California agriculture exported 20bn USD to foreign countries. Hollywood greatly depends on the international market:

Spoiler: international market share of Hollywood profits

Depending on how you calculate the stats California total exports are 100-175 billion USD. Strong protectionist policies would ruin these export industries. And this 100+ billion loss in value is supposed to made up by manufacturing jobs? Even if the economics were even remotely feasible (which they aren't) you want thousands of actors, film crews, computer nerds and generational cowboys and farmers to be happy losing their current jobs to go work in the factory? Nah, that'd never work - they'd just move to Canada, Europe or Asia. Or most likely, California would just secede if the US Fed ever tried to force these types of policies. Would probably be joined by Texas, New York and the Great Lakes region as well. For instance why would a global company like 3M stay in Minnesota if all those policies were implemented? They would just move to Canada.

Anyway, this type of isolation is just an artifact of the 19th century for a reason. Moving towards the future, if the goal is really to improve the lot of the working and middle class then that lies in logical policies like universal healthcare, livable wage, etc. Manufacturing is moving smaller anyway. The maker revolution is a much better solution than trying to re-imagine 1950s manufacturing that completely ignores modern global logistics and supply chains. Isolationist policies would not save the US middle class they would slowly drag the US into a third world isolated economy.

You have zero economic data to support the position that free trade and globalism has been good for the middle class. The middle class has been decimated by it. You keep saying that all economists agree that free trade is a good thing. I have conceded that point and said that it has benefits. But the benefits are not shared benefits. And if all the actors and people in Hollywood leave, I actually see that as a plus. I am sure they will survive fine though with the domestic market if it comes to it (which it wouldn't since your objection about Hollywood being dependent on exports is just pure fantasy). Even if it was true, they would earn 50 percent less (the one percent that is) which is actually a good thing. It doesn't hurt the middle class one bit since the 6 major Hollywood studios are not the middle class.

Silicon valley is successful because it produces cutting edge technology that the rest of the world wants. That isn't going to stop if we put a few sensible protections in place. What might stop it though is China stealing research secrets (believe it or not, the Chinese state govt (not Chinese corporations) has a division dedicated to this that hacks into American companies systems to try to steal their secrets and help its own companies get a competitive advantage.

Finally, the great depression was not caused by protectionism (OMG, you really need to read your history). It was caused mainly by a stock market crash and bank failures. The tariff only came after this and wasn't able to stop the economy going over a cliff - and at the time, we didn't need the tariff as there was no outsourcing. It wasn't solving the problem it would help solve today. And to add to that perfect storm, there was a terrible drought in the 30s. The great depression was the first example and maybe the worst one of what a bubble can do.

Finally, universal healthcare would be great but it is not going to happen and 'liveable wage' is not a policy. 'Liveable wage' is what we haven't had due to the stagnation of the last 40 years. It's not that there aren't jobs, it's that there aren't enough good jobs any more for the middle class.

 

[Danny_]

Danny boy -- what you are doing is an emotional argument versus a logical one (aka economic/history) ie not being experts of the middle-class.

Sure we would all like to be 17 with all the things that we know now. But that's not even possible and also even if we could go back to the future using a flux-capacitor, there will be consequences to changes. If you want the US government to be active intervening in trade, a new responsibility of the US government, then there will be consequences.

Yes, good consequences and some bad as the status quo will fight like crazy to keep things the way they are since the 1 percent are benefiting massively from it. But the moment they see we are serious about trying to do something, they will mobilize. This is already happening as we speak as they are grouping together to oppose Trumps tariffs. But, if we make it painful enough for companies like Apple to build their factories abroad, eventually, they will come round. We keep getting told we are powerless to change the situation, that it will be a disaster etc. The real disaster is to do nothing though (what we have done for the last 40 years). We need to get people into positions of power that are willing to champion this cause, not just pay lip service to it. Say what you want about Trump. At least he is fighting for us. That's more than what Obama or Bush did in the last 16 years.

 

[sglowrider]

Yes, good consequences and some bad as the status quo will fight like crazy to keep things the way they are since the 1 percent are benefiting massively from it. But the moment they see we are serious about trying to do something, they will mobilize. This is already happening as we speak as they are grouping together to oppose Trumps tariffs. But, if we make it painful enough for companies like Apple to build their factories abroad, eventually, they will come round. We keep getting told we are powerless to change the situation, that it will be a disaster etc. The real disaster is to do nothing though (what we have done for the last 40 years). We need to get people into positions of power that are willing to champion this cause, not just pay lip service to it. Say what you want about Trump. At least he is fighting for us. That's more than what Obama or Bush did in the last 16 years.

I understand your plight. But you are cherry picking. You want to enjoy the benefits of an economic system without wanting the collateral damages.

The US is undergoing an economic restructuring and unfortunately, there are collateral damages including the dissemination of the manufacturing industries. The country has to move up the value chain and not compete against lower wage countries. Its comparative advantage. The fault lies in the Government is not re-training and providing 'landing strips' for those newly retained workers like the Coal miners.

Personally, I think the Internet has accelerated the changes. It enabled many companies to outsource, manage their supply chains remotely or on the Cloud. As like in your example, Apple with its ecosystem partners in China.
But hey-ho, without the Internet, we wouldn't be having an almost live dialogue on this topic.

All solutions from laws to technologies are double-edged swords. What they give, it will also take. But that's the reality of life.

As for what Trump is saying -- you need to realise that they are only words. They have yet to come to fruition. Yes, the economy is doing well with raising wages but that has to be matched against inflation to get an actual real terms wage growth, over a period of time.
His trade wars will also cause prices of imports to increase which will that erode any of the wage gains.
It also sounds good but the reality of life is that there are always negative consequences which he never highlights. A POTUS almost always has to make decisions based on that balance.
Not Trump.

 

[sglowrider]

That's a good post. Both Trump and Bernie do not understand that the manufacturing jobs aren't coming back. There is no way to "make America (American manufacturing and middle class wages) great again" as it was in the past by applying tariffs and forcing companies to bring the factories back. Producing goods in America will mean increasing inflation, which will in turn lead to the central bank increasing interest rates, which will lead to an economic slowdown.

I like Lizzy Warren's idea to bring about some parity much better, but unfortunately the chances of it passing are next to none.

https://www.vox.com/2018/8/15/17683022/elizabeth-warren-accountable-capitalism-corporations

This is why I don't understand that the big hate on Warren by the populist is all about. It must be confusing as feck for her.


Ironically, I think the solution is to be found in the government -- fixing the situation for the disenfranchised or the collateral damaged folks of the re-structuring. But unfortunately, the bureaucrats at the state and federal levels aren't working together in trying to building 'landing strips' for those folks. Like the coal mining folks who take that job as some cultural identity. So you need to bring the mountain to Mohammed ie new industries. But that requires a whole set of infrastructure from education to power to roads to tax incentives.

In my opinion, governments need to be restructured is the problem has to be fixed. They have simplistic Chinese walls that address symptoms in its isolation but not the causality and the impacts. No over the horizon perspective of anticipating problems before it hit the fan.

Like in health care both literally and metaphorically. They do not practise preventative medicine which is a quantum leap in cost savings if practised and you nip patients before they become patients. Either social or psychological issues pop up first before physiological problems show up. But both the various departments/ministries will only tend to problems after they happen.

Thus the need for a holistic patient/citizen approach -- reverse the pyramid in their view of the world.

In its current trajectory, most developed nations are on a course of financial unsustainability with little accountability to the bureaucrats and the government. They are essentially running a Ponzi scheme to keep afloat -- certainly in the case of the US. And if Trump was more polished, who better to run a federal Ponzi scheme than that modern day PT Barnum.

 

[Danny_]

This is why I don't understand that the big hate on Warren by the populist is all about. It must be confusing as feck for her.


Ironically, I think the solution is to be found in the government -- fixing the situation for the disenfranchised or the collateral damaged folks of the re-structuring. But unfortunately, the bureaucrats at the state and federal levels aren't working together in trying to building 'landing strips' for those folks. Like the coal mining folks who take that job as some cultural identity. So you need to bring the mountain to Mohammed ie new industries. But that requires a whole set of infrastructure from education to power to roads to tax incentives.

In my opinion, governments need to be restructured is the problem has to be fixed. They have simplistic Chinese walls that address symptoms in its isolation but not the causality and the impacts. No over the horizon perspective of anticipating problems before it hit the fan.

Like in health care both literally and metaphorically. They do not practise preventative medicine which is a quantum leap in cost savings if practised and you nip patients before they become patients. Either social or psychological issues pop up first before physiological problems show up. But both the various departments/ministries will only tend to problems after they happen.

Thus the need for a holistic patient/citizen approach -- reverse the pyramid in their view of the world.

In its current trajectory, most developed nations are on a course of financial unsustainability with little accountability to the bureaucrats and the government. They are essentially running a Ponzi scheme to keep afloat -- certainly in the case of the US. And if Trump was more polished, who better to run a federal Ponzi scheme than that modern day PT Barnum.

This is the kind of BS that gets propagated constantly by the parrots. We do practice preventative medicine so you aren't offering any new magical solution. I truly wish that the solution to healthcare in the US (clearly something you know feck all about) was that simple. There is no substance in any of the rest of what you said.

 

[sglowrider]

This is the kind of BS that gets propagated constantly by the parrots. We do practice preventative medicine so you aren't offering any new magical solution. I truly wish that the solution to healthcare in the US (clearly something you know feck all about) was that simple. There is no substance in any of the rest of what you said.

I'm the parrot?

fyi I work in the healthcare sector. You have no idea what I am talking about.

 

[Nucks]

I think you underestimate US companies. If the tariffs are done right, of course they could compete. Lets say apple decides to give the US govt the finger and continues to make its i-phones in China. What we should do is take a look at their annual profits from sales of I-phones and set the tarriff at 50 percent of these. Then, we should subsidize American companies trying to make i-phones at home with this money to try to level the playing field. The transition might be rocky but you underestimate the sentiment of public opinion over here. One of the reasons why Trump got in is because he was voicing people's anger about outsourcing and the devastation it has caused to the middle class. Why do you think he won the blue collar states of Michigan and Ohio that were vital for him.

What you're suggesting is the anti-thesis of a free market economy. One of the ironies of Trump, and all the patriotic pro-America #freedomgunsandfreemarket types, is that Trumps protectionist economic concepts, are just one step away from a centrally planned economy, which is how commies ran their economies.

 

[Danny_]

That's a good post. Both Trump and Bernie do not understand that the manufacturing jobs aren't coming back. There is no way to "make America (American manufacturing and middle class wages) great again" as it was in the past by applying tariffs and forcing companies to bring the factories back. Producing goods in America will mean increasing inflation, which will in turn lead to the central bank increasing interest rates, which will lead to an economic slowdown.

I like Lizzy Warren's idea to bring about some parity much better, but unfortunately the chances of it passing are next to none.

https://www.vox.com/2018/8/15/17683022/elizabeth-warren-accountable-capitalism-corporations

It's a very interesting idea and has worked in Germany apparently. But, I am not sure the article is correct when it says it will only hurt the one percent. Most people over here have a retirement fund that their employer contributes a percentage of their salary to. These funds are invested in stocks and bonds. So, if this article is correct and Warren's plan was actually implemented resulting in a 25 percent reduction in the value of stocks, that's going to hurt a lot of people's retirement. Don't get me wrong - I would be all for this plan if it actually does work as I would prefer to have better and more secure working conditions. But I have trouble believing that 'shareholder supremacy' is the root cause of the middle class shrinking. Lets say that Warren's plan does get implemented and now, the workers get to elect 40 percent of the board of directors. Imagine, for example, this discussion betewen the new directors:

We want to build a new factory. We can build our factory in Mexico to make cars at 1/3 of the cost of making them here due to the cheap labor or we can make them in Detroit. What should we do?
3/5 directors immediately advocate for Mexico but the other two are worried and say that they have to go back to their base before they give the green light for the idea. The 3 directors have a solution though - they will give the current workers a small incentive to try to sway them their way.

That's a better situation than what we have but it isn't good. But I have to admit that this idea is new to me so I don't know all the details yet of what she is proposing. It does seem like if it is done right, it could definitely improve the corporate culture over here. But that depends upon whether she gets the details right or not (i.e how much power will the 40percetn have to stop a decision to outsource people's jobs etc.).

Thank you for the interesting article.

 

[Danny_]

What you're suggesting is the anti-thesis of a free market economy. One of the ironies of Trump, and all the patriotic pro-America #freedomgunsandfreemarket types, is that Trumps protectionist economic concepts, are just one step away from a centrally planned economy, which is how commies ran their economies.

I don't give a shit. Free market hasn't been a good thing for the middle class. Maybe, you haven't grasped that point yet. I don't care if it makes more money for the top one percent

 

[Danny_]

I'm the parrot?

fyi I work in the healthcare sector. You have no idea what I am talking about.

Then you should know that we do practice preventative medicine. It was part of Obamacare. And insurance plans (for example Aetna) offers incentives for people to be proactive about their health.

 

[Raoul]

I don't give a shit. Free market hasn't been a good thing for the middle class. Maybe, you haven't grasped that point yet. I don't care if it makes more money for the top one percent

It isn't the free market v protectionism that has caused the disparities between the middle class and top 1 percent - its the wage to inflation ratio that has soared in favor of inflation over the past few decades, as well as the fact that most of the wealth has coagulated at the very top - who then buy politicians who are willing to do their bidding to the exclusion of the interests of the middle and lower classes.

 

[sglowrider]

Then you should know that we do practice preventative medicine. It was part of Obamacare. And insurance plans (for example Aetna) offers incentives for people to be proactive about their health.

Its a long discussion 2 hours of which I have no patience to discuss with you.

It's about the restructuring of health care away from an acute disease-based care to what is reflective of reality, chronic disease care with the various stakeholders involved including the pay-masters, the gov't and the insurance companies, allied health, social workers etc.
What you think you this is 'preventative medicine' isnt sufficient otherwise why are the folks over 50 obese, or inflicted with diabetes or are hypertensive and the elk? Its band aid solutions.