241–250 of 274 posts
that's not what comparative advantage means except in a degenerate sense.
if country A is worse than country B in both making clothes and making paper, their comparative advantage is in the product which they are less worse at; they can maximize their GDP making that product.
Earlier quoted context omitted.
It’s reasonable to want to bring back american manufacturing. But the random, temper-tantrum, market-manipulation tariffs are not going to do that. America isn’t going to all of a sudden produce tonnes and tonnes of xmas decorations every year just because of a 50% tariff on all chinese goods that may or may not be around in 6 months. All that’s going to happen is xmas decorations are going to be more expensive. An a…
It isn't just about that. You need industrial policy. And not just stuff like the CHIPS act. In China a small outfit can get financing and open a factory anywhere. You can't do that in the USA. You are too small for the lenders or investors who do such things to care yet too risky for traditional financial institutions to risk anything on you. If I want to buy a couple of CNC machines and start making a product in my…
This is a pretty reductive take. If a nation works 6 days a week, 12 hours a shift then obviously they will outcompete any nation where people work 5 days a week for 8 hours. Protecting workers from that kind of competition seems fair. Tariffs aren't bad in itself. They are just a tool. Unfortunately fools wielding a tool like this can cause a lot of damage, but that's true for any tool.
If a nation has a decades-long technological lead over another nation, then obviously it will outcompete it in many industries and enjoy major advantages in trade. But somehow that advantage doesn't seem to count in your argument. Cherry-picking one side's advantages is not an analysis of international trade; it's just bias.
The context here is that president Trump has an interesting view of trade deficits / surpluses. Specifically, he frequently cites cases where the US has a trade deficit with another country -- where the US is spending more in that country than that country is in the US -- as if that country is "taking money" from the US. This is a bit peculiar, because it ignores the whole "the money we are spending is being exchange…
We do a disservice when we act like he has a strategy or view about these things. He doesn't. He is ignorant of how they work, and to prove it you only have to listen to his own words.
Earlier quoted context omitted.
It’s reasonable to want to bring back american manufacturing. But the random, temper-tantrum, market-manipulation tariffs are not going to do that. America isn’t going to all of a sudden produce tonnes and tonnes of xmas decorations every year just because of a 50% tariff on all chinese goods that may or may not be around in 6 months. All that’s going to happen is xmas decorations are going to be more expensive. An a…
An actual plan would look like the IIJA, IRA, CHIPS Act -- what Biden was doing, but act larger scale. The problem with globalization is not that free trade failed to create a surplus, it's that 150% of the surplus went to capital and -50% went to labor, which can and should be fixed with tax and spend. Instead, of course, we didn't tax capital and we spent the money on stupid wars. That said, good industrial policy…
I agree with everything you're saying except this bit. I don't think democrats were working to fix it in any fundamental way. They're too beholden to corporate interests to do anything that overturns that apple cart. They were trying to tweak the program slightly to make it less bad, sure. But that's not a real fix for such a broken capital/labor split.
A current account deficit is a capital account surplus. Persistent deficits shift the balance between Asset vs Export sectors, dumping the export sector and pumping the asset sector. Put differently, we can pay for imports with shit that we make or shit that we own -- and this has implications for people in our country who make shit vs own shit. A better analogy for the trade deficit would be sitting on the couch sla…
Another analogy that's in my mind is cancer. You certainly don't want to provide more nutrition for those literally parasitic cells.
Earlier quoted context omitted.
It’s reasonable to want to bring back american manufacturing. But the random, temper-tantrum, market-manipulation tariffs are not going to do that. America isn’t going to all of a sudden produce tonnes and tonnes of xmas decorations every year just because of a 50% tariff on all chinese goods that may or may not be around in 6 months. All that’s going to happen is xmas decorations are going to be more expensive. An a…
> It’s reasonable to want to bring back american manufacturing. Capitalism produces where it is convenient to do so. And no politician can change it. You can try to protect very few critical sectors, but not whole "manufacturing" which by the way keeps rising in US since ever. What politicians want to sell is the "good old times of well paying manufacturing jobs". Robots have long come for those.
Laughably untrue.
Is it most convenient to produce semiconductors in taiwan? No. Decades of taiwanese industrial policy produced that outcome.
Capitalism takes advantage of current conditions, but those conditions aren't inherent or natural, they're the result of history and specific choices by specific people.
A current account deficit is a capital account surplus. Persistent deficits shift the balance between Asset vs Export sectors, dumping the export sector and pumping the asset sector. Put differently, we can pay for imports with shit that we make or shit that we own -- and this has implications for people in our country who make shit vs own shit. A better analogy for the trade deficit would be sitting on the couch sla…
Earlier quoted context omitted.
It doesn’t really matter what Ricardo said in 1817: every US academic economist surveyed in 2018 by the Kent Clark Center disagreed that US aluminum and steel tariffs would increase the welfare of the American people ([0]), and this is with the benefit of >200 years in advances in economic scholarship and analysis since Ricardo. [0] https://kentclarkcenter.org/surveys/steel-and-aluminum-tarif...
If only all those academic economists were as loud about how to keep tech and industrial capacity from withering and moving to China, as they are with their criticism of attempts to prevent that. They don't even complain when China engages in protectionism, dumping, and general "market distorting" subsidies. Listening to them, you'd never learn that none of the advanced economies got that way by following their laiss…
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Maybe even use the tariff proceeds to provide incentives to those very same domestic industries? (I am not an economist.)
If that were seriously on the table, we could have just used the proceeds from having the world reserve currency to do that. Instead, their open plan for that national asset is to squander it. In general, stop trying to steelman the looters. Sometimes a con artist is really just a con artist.
Re-read my comment in the context of the message to which it replied.