201–210 of 814 posts
Earlier quoted context omitted.
Dollar bills under the circa pre-Nixon gold standard were IOU for gold, there was no need to have enough gold to cover them as it was a fractional reserve.
So why gold? Why not buildings or factories or railroads or ports?
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Unemployment is low in the US though? what type of jobs do high school grads do? and would working in a (let say) doll factory be a better job for them?
They move to where the jobs are. And the small town where they got their schooling hollows out.
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yes indeed - it has been conflated with the decline of US manufacturing. Reality is the most significant export of the US is the USD itself - that is the trade good which everyone must have (at US insistence)
Out of all the many industries out there, I don't understand why we keep glorifying and romanticizing manufacturing and trying to "bring it back." Depending on what you are manufacturing, it can be a very boring, stressful, stinky, physically taxing, or dangerous job. And it really doesn't pay well. It may have paid well 70 years ago, but it doesn't today, and you can't turn time back. A lot of customer service and t…
Manufacturing capital is primarily the value of onshoring manufacturing, the labor itself may not be particularly valuable at present, but the ability to repurpose it quickly is valuable. It would take the US much longer to build up the kind of manufacturing infrastructure and capital required to be self-sufficient than it will take China to build up the talent infrastructure and intellectual capital required to replace the US. China has no shortage of intelligent and driven people.
Advanced manufacturing (mainly thinking of semiconductors but there are other areas) is increasing in value with AI development, and has been increasingly valuable with prior digitization. It was a mistake for prior (pre-CHIPS) US administrations to not subsidize it.
There are other good reasons: not everyone in society can be upskilled. You need jobs for the lower and middle class that afford them decent lives. Only having high skill high education jobs and low skill low education jobs leaves people in the middle with limited opportunities for economic mobility.
Why would you not if you don't incur in external debt doing so? The real wealth is not dollars or pounds or whatever, the real wealth is goods and services. Having access to goods and service is what gives you a better living standard, the money is just a way to exchange them and to store value. The US has the privilege of having high international demand for its currency, as it is the default global reserve currency…
you described economic Neoliberalism since 1968, in a nutshell. However, its most important consequence - impoverishment of the low-income and very low-income native population and its inevitable supplementation by emigrants, is destabilizing the very nations who championed it.
Secondarily, militarism (NATO, Israel, Taiwan, Korea, etc.) needed to maintain the pecking order is under great strain and requires considerable counterproductive expenditures (Palestine, Iraq, Libya, Lebanon, Ukraine, Afghanistan, Serbia, etc.) just as the native populations age rapidly.
Thirdly, de-dollarization has its own dynamics and is driven by politically motivated economic sanctions enforced by high seas naval interdictions, Russian asset seizures, Chinese exclusionary trade rules, & global criminal gangs like the Kushner's crime family extortion of Qatar in 2017. Rise of BRICs+(25 countries waitlisted), Alt-SWIFT payment systems (BRICS Pay, CIPS) are supplementing USD, the very foundation of the Neoliberal economics.
Using a national currency as the de facto global reserve guarantees a trade deficit for that country. No one else can manufacture USD's, so other countries have to acquire them by shaping their economies to supply goods and services demanded by the US. They can then use these earned dollars to transact with other countries, as the US itself insists they do. For the US, this is a simple trade off - gain massive politi…
The US isn’t forcing anyone else to use USD. People around the world use USD because they are confident it will help them buy products and services they want in the future.
I disagree. The petrodollar is a thing.
The author seems to gloss over the economy not being a zero sum game. As an example, since this is HN: the US creates a ton of startups. Any country that creates new businesses is going to see foreign investment, which on paper leads to a trade deficit. Essentially, the US exports businesses to the rest of the world, but that is not tallied in a 19th century model for the trade balance of goods. However, it's arguabl…
Using a national currency as the de facto global reserve guarantees a trade deficit for that country. No one else can manufacture USD's, so other countries have to acquire them by shaping their economies to supply goods and services demanded by the US. They can then use these earned dollars to transact with other countries, as the US itself insists they do. For the US, this is a simple trade off - gain massive politi…
Adam Smith already pointed out that a trade deficit is not really interesting, so I do not understand the American obsession about it ;) Also, the often-mentioned US-EU trade deficit is not that big if you count in services. Which I think should be done in the 21st century. Large parts of the US economy are focused on digital high-value services, and they are "exported" worldwide.
The author seems to gloss over the economy not being a zero sum game. As an example, since this is HN: the US creates a ton of startups. Any country that creates new businesses is going to see foreign investment, which on paper leads to a trade deficit. Essentially, the US exports businesses to the rest of the world, but that is not tallied in a 19th century model for the trade balance of goods. However, it's arguabl…
> However, it's arguably a better export that commoditized goods, from a margin standpoint. Importantly, this is the same dynamic that causes economies to move away from manufacturing towards service-oriented economies. Capitalism is going to chase higher margins, but there should be guardrails that mitigate the negative externalities of such behavior. Else we are left with an eroded middle class, lack of supply chai…
Earlier quoted context omitted.
> China for example, sends huge number of electronics and all kind of other consumer goods that Chinese produce by sweating in 12 hours shifts in 6 day work weeks in exchange for imaginary numbers That's more a function of subsidizes instead of foreign preference for USD. Chinese median household incomes (Yuan 34,000 or around $4,700) are much too low to spend on most goods at scale [0], and most of the money that co…
China definitely has industrial policy supporting its manufacturing, but the wages argument is begging the question. The USD, as the global reserve currency, is over-valued; if an alternative system were used (eg. the Bancor) and the Yuan allowed to float, then those 34,000 Yuan would buy a lot more and the median US wage would buy less.
China has a medical debt problem [0], education pricing problem [1], and private sector capital crunch [2] similar to that of the US. This makes it much more difficult for the median household to spend in China because there is an incentive to keep saving.
In isolation an $8,000 EV looks cheap to us earning a salary in the West, but that is still 1.7x the median household income (so half of all Chinese households have even less money to spend). For half of Chinese households, that's the equivalent of your median American household purchasing a Maserati. And healthcare costs can reach the $8k-15k price point in China for critical operations.
The reality is, the median Chinese household is significantly underpaid compared to their peers in Thailand [3] or Malaysia [4] - either incomes have to rise to allow Chinese consumers to consume as well as cover health+education spending, or the central and provincial governments will have to dramatically expand social services in order to cover rising costs.
The Chinese consumer cannot replace the American consumer without an expanded social safety net giving some breathing room to spend instead of saving.
[0] - https://www.ft.com/content/4d892cd4-e7ef-446d-85c4-93262a7a3...
[1] - https://sccei.fsi.stanford.edu/china-briefs/high-cost-educat...
[2] - https://www.bloomberg.com/news/articles/2025-03-18/china-pri...
[3] - https://www.nso.go.th/nsoweb/storage/survey_detail/2023/2023...
[4] - https://open.dosm.gov.my/dashboard/household-income-expendit...
Because there are 1) willing exporters of US dollars USD (the US federal government USG ultimately, and US citizens in the final analysis); and 2) willing users of USD - us non-US-ian people around the world. When I sell stuff to someone in the UK, then pounds are fine as means of exchange. When I sell the same someone around the world, then the transaction not being domestic, the cash part that is 1/2 of it (or 1/4…
FYI better not to use silly terms like 'US-ian' as they are confusing and cause problems while solving none. Just stick to the standard 'American', context makes it clear what you mean :)