Trump's Trade War

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Re: Trump's Trade War

Postby everything on Mon May 20, 2019 1:01 pm

The original research thing just isn't true.

But even if it were, it is a red herring that doesn't matter.

It doesn't matter who has first mover advantage in, say, EVs. It doesn't matter who invented cars or that Ford did the assembly line or GM slapped higher end logos on the same cars.

It's more important to understand these issues as an economist rather than as a political scientist.

The simple fact is we (the world) over manufacture everything.
That means everything is commoditized.
That means price falls to marginal cost.
It doesn't matter that Apple is the most valuable company in the world and basically pays no taxes.
Because that doesn't solve the economic issues of the USA. Designed in California and built elsewhere only helps some intellectual elites in Cupertino. It doesn't help us.

Yes, Trump is an idiot, but he's not the idiot who caused these issues. Those idiots were Wall St and the CEOs.
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Re: Trump's Trade War

Postby windwalker on Mon May 20, 2019 2:13 pm

.Yes, Trump is an idiot, but he's not the idiot who caused these issues. Those idiots were Wall St and the CEOs


Ya might want to look in a mirror.
This Administration is attempting to correct what was done in the past.

Many of the policies he put forth in the 70s in a briefing to Congress, favord by both parties.
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Re: Trump's Trade War

Postby gzregorz on Mon May 20, 2019 3:24 pm

Yet Trump still has everything made in China.

As far as China not having innovators it sounds like you guys are arguing idealogy to me.

Did you even see those electric cars?

We can also discuss how unlike the US China doesn't get involved in regime change.

China isn't as socialist as you think in fact I would say it is far more capitalist than you think, having lived there, money is everything. If you're unemployed, hungry and starving the state does nothing for you so you may want to do a bit of research before claiming China is just another socialist country therefore there is no point in success.

Worth mentioning since obviously few watched the actual video that China's middle class is the size of the US population. Not a small feat even with such an enormous populatin.
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Re: Trump's Trade War

Postby gzregorz on Mon May 20, 2019 3:26 pm

All Trump did was put in tariffs by executive order which means we pay more.

Americans will still pay either way at least those making a decent wage will.
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Re: Trump's Trade War

Postby everything on Mon May 20, 2019 3:49 pm

Plenty of stories of how the tariffs actually hurt American businesses Trump is supposed trying (in politics if not in reality) trying to protect because now those supplies are expensive. So then you can't afford as many workers. At the macro level, fewer workers = less consumer spending. A bad cycle. This is just econ 101, but when you mix in president-as-narcism-reality-show idiocracy, the shit show goes crazy.

One thing people don't seem to get is "one party" with "market economy". That isn't in the econ theory books, but that's what's happening. To some extent, you could argue "two parties" is just "one party" as well, but political "science" is one of those fuzzy non-scientific things.

Anyhoo, in the meantime, Vermont will pay you $10k over two years to move there.
https://www.cnbc.com/2019/01/10/vermont ... ly---.html
so there's that. Maybe start your import/export business there.
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Re: Trump's Trade War

Postby Steve James on Mon May 20, 2019 3:56 pm

The current kind of advanced technology that is being referred to as fifth generation, and above, requires large numbers of highly skilled people acting independently towards a unified goal to make it work. As we've talked about before, that is one of the reasons why the US is one of the few countries that can engage in fracking.


That's totally untrue. China produces more engineers and scientists per year than the US ever has. Afa technological advancement, it depends on whether one is talking about the military or the lives of everyday citizens. We're definitely behind the Japanese and Koreans as far as household devices. I mean, we have them, but we buy them from those countries.

Afa China, one has to remember what it was like 20 years ago. "Failure" of any sort would be a better situation than it was in the 80s or 90s. It doesn't need to be the number one global economy. But, the fact is that is a possibility. Next, take military intervention or prevention is almost impossible. That's why NK still exists, and there is no way to destroy or occupy China ever.

Afa the success of Trump economic policy, I have only heard people say that what he wants is better than what was. I.e., they're just repeating whatever he says. In fact, everyone in the states has been quite content to buy Chinese (and Mexican) goods --especially when they were cheaper. Of course, the reason they are cheaper is because of the wages paid to laborers, and because of the population size, there are always a need for them. What, for ex., is the unemployment rate in the PRC.

Afa socialism, China is communist. France is socialist. In communist countries, the state controls the industries. However, China has been offering economic incentives that allow people to become rich. That's not what people think of when it comes to communism, though. The problem is that the state retains the right to take control, and there's no mechanism to prevent it. So, as long as it's beneficial, it'll be permitted.

Afa birthrates, there's a problem in Europe, and it's not from a lack of bonking. I remember when people had families of five or six; now, many stick at two. And then, the problem is that most young people like to live in the city. So, that's one reason France has to subsidize its farmers, and why they go on strike. Japan has started to accept more visas for foreign workers --because its population is ageing faster than babies are being born.

Afa immigration, btw, the new Trump/Kushner plan aims to encourage applicants with skills. It sounds great, except that the question is "where are the Americans with those skills?" When I was in Switzerland, it was simple. You couldn't take a job that a Swiss citizen "could" fill. I'm totally down with that. If there was a need, there was a training program for it. The jobs that non-Swiss got were those that Swiss didn't want to do. Hence, there were jokes about the Italians and Turks who fixed the roads. Meh, Swiss also get a guaranteed minimum wage for anything they do. I don't know if it should be considered socialist --being the home of banking-- but the state takes care of its citizens.
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Re: Trump's Trade War

Postby everything on Mon May 20, 2019 4:11 pm

This is in sharp contrast to the pattern in the perestroika undertaken by Mikhail Gorbachev in which most of the major reforms were originated by Gorbachev himself. The bottom-up approach of the Deng reforms, in contrast to the top-down approach of perestroika, was likely a key factor in the success of the former.[47]

Deng's reforms actually included the introduction of planned, centralized management of the macro-economy by technically proficient bureaucrats, abandoning Mao's mass campaign style of economic construction. However, unlike the Soviet model, management was indirect through market mechanisms. Deng sustained Mao's legacy to the extent that he stressed the primacy of agricultural output and encouraged a significant decentralization of decision making in the rural economy teams and individual peasant households. At the local level, material incentives, rather than political appeals, were to be used to motivate the labor force, including allowing peasants to earn extra income by selling the produce of their private plots at free market value.


https://en.wikipedia.org/wiki/Deng_Xiaoping

this is one explanation of how "socialist market economy" works. notice the contrast with Russia's approach.

as far as cheap goods, people are realizing they love/hate amazon and walmart, but then others are buying directly via alibaba, etc.. still others set up super high end us manufacturing at super high prices. what bothers me about that is 1. do people have good jobs 2. massive gap in wealth grows (because money makes money way faster than labor makes money, especially if you can't get a good job). I mean this doesn't bother me personally as much as it does as a policy matter.
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Re: Trump's Trade War

Postby windwalker on Mon May 20, 2019 4:35 pm

As a policy matter it does seem to be being corrected.

Wages are grinding higher as the labor market continues to tighten,” said Justin Weidner, an economist at Deutsche Bank. “Wage growth is likely to be over 3 percent again soon.”



what bothers me about that is 1. do people have good jobs 2. massive gap in wealth grows (because money makes money way faster than labor makes money, especially if you can't get a good job). I mean this doesn't bother me personally as much as it does as a policy matter.


Does it bother you, or doesn't it.

It will take time to correct the imbalances in the labor market and manufacturing.
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Re: Trump's Trade War

Postby edededed on Mon May 20, 2019 5:06 pm

Thanks Peacedog.

Fracking - I think another reason that only the US can do this is due to the infrastructure (for transport) that is there already. (Other countries would have to create these.)

Top-down - that makes sense. A lot of it is forced onto the citizens though - working with people from Japan and China, I find that the Chinese tend to be more independent and active compared to the Japanese nevertheless. Japan and Korea in a way have stronger Confucian hierarchy than China, but China has the Communist government.

New technologies - it is true that for the most part, China and Japan spend their time just translating the newest papers from the US and then applying it (thus translation is a key required skill). As they are for the most part always trying to catch up, there seems little original creation on the other hand.
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Re: Trump's Trade War

Postby gzregorz on Mon May 20, 2019 6:12 pm

windwalker wrote:As a policy matter it does seem to be being corrected.

Wages are grinding higher as the labor market continues to tighten,” said Justin Weidner, an economist at Deutsche Bank. “Wage growth is likely to be over 3 percent again soon.”



what bothers me about that is 1. do people have good jobs 2. massive gap in wealth grows (because money makes money way faster than labor makes money, especially if you can't get a good job). I mean this doesn't bother me personally as much as it does as a policy matter.


Does it bother you, or doesn't it.

It will take time to correct the imbalances in the labor market and manufacturing.


3% is nothing.

3% for someone making $10 an hour is 30 cents and 60 if you make $20.

Yes, it's good news for struggling Americans but considering that rents, mortgages, educatuon, gasoline, and healthcare costs are shooting up I fail to see how 3% is going to make up that difference for the Average Joe or forgotten man.
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Re: Trump's Trade War

Postby Steve James on Mon May 20, 2019 6:26 pm

It seems odd to say that whatever (positive) economic changes can be attributed to a "trade war." First of all, the wars not over, so the changes may not reflect the result. If the 3% increase is real because of the war, when the war's over, who's to say whether it will go up or down. Besides, if gas prices continue to rise, the overall increase in pay will not cover it.

The question to ask is whether the cost of items manufactured here are rising or lowering. Rising is good for the worker. Profits are not pulled from thin air; they come from sales. Imposing tariffs simply raises costs that must be passed along to the consumers. I'm no economist, but that's the way it usually works.

Btw, the news that tariffs on Canadian steel and aluminum have been lifted seems to go unnoticed. What exactly was the resolution? Is it better now, and how? Why were they lifted, if they were good? What's the new agreement, or is it the same? The point is whether tariffs and trade wars work or are necessary.

Hey, if the point is that all countries look after their interests, then China does the same thing with its business that Trump does with his taxes and real estate deals: i.e, everything permitted by law --and everything else they can get away with.
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Re: Trump's Trade War

Postby everything on Mon May 20, 2019 6:40 pm

windwalker wrote:
what bothers me about that is 1. do people have good jobs 2. massive gap in wealth grows (because money makes money way faster than labor makes money, especially if you can't get a good job). I mean this doesn't bother me personally as much as it does as a policy matter.


Does it bother you, or doesn't it.

It will take time to correct the imbalances in the labor market and manufacturing.


Lol, it doesn't bother me too much for my own personal situation. It bothers me as a policy matter because I want everyone to have a better life ... without the earth getting irreversibly damaged. Even if we were 1%ers with self-interest, what good is that wealth if everyone else can't be consumers and producers, creating more wealth (which will be disproportionate)?
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Re: Trump's Trade War

Postby everything on Mon May 20, 2019 6:54 pm

Steve James wrote:It seems odd to say that whatever (positive) economic changes can be attributed to a "trade war." First of all, the wars not over, so the changes may not reflect the result. If the 3% increase is real because of the war, when the war's over, who's to say whether it will go up or down. Besides, if gas prices continue to rise, the overall increase in pay will not cover it.

The question to ask is whether the cost of items manufactured here are rising or lowering. Rising is good for the worker. Profits are not pulled from thin air; they come from sales. Imposing tariffs simply raises costs that must be passed along to the consumers. I'm no economist, but that's the way it usually works.

Btw, the news that tariffs on Canadian steel and aluminum have been lifted seems to go unnoticed. What exactly was the resolution? Is it better now, and how? Why were they lifted, if they were good? What's the new agreement, or is it the same? The point is whether tariffs and trade wars work or are necessary.

Hey, if the point is that all countries look after their interests, then China does the same thing with its business that Trump does with his taxes and real estate deals: i.e, everything permitted by law --and everything else they can get away with.


Well the point is that tariffs are seen as NOT being in one's long term interest. Free trade is seen as helping countries' long term interests. It's not really clear to me if there is a theory that says how/why you should have tariffs to help you that doesn't hurt your long term interests. Those interests being wealth creation. If you add "friction" to business, less shit gets sold all around. I guess more money goes to the government, but it's already empirically proven that market economies (including the "socialist market economy" of China) do better at wealth creation vs. state-run capital allocation.
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Re: Trump's Trade War

Postby everything on Mon May 20, 2019 6:55 pm

I dunno, though, because the bottom line is that none of the economists, political scientists, journalists, and others writing about this seem to understand what "game" Trump is playing. Maybe the psychologists understand.
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Re: Trump's Trade War

Postby Steve James on Mon May 20, 2019 7:13 pm

Tariffs are costs added to imported goods. They're a penalty. So, Trump says that they are to punish China for unfair practices, like dumping (selling things below the cost it takes to produce them). Are the Chinese doing anything illegal? Well, the problem is that it's said that the US economy suffers because of Chinese practices --that are permitted by agreement. That's why there are supposedly new talks in hopes of a new agreement that will be "better" for the US. Of course, the only reason there isn't one is because China has its own ideas of what's fair business.

If you recall, everything was supposed to be easy. In reality, it takes smarts and a recognition that fairness and being "number 1" are not compatible bargaining positions.
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