531–540 of 1001 posts
Americans need to get over their view of “Asia” as being about making shoes. When I was working in engineering in the early aughts, we mocked the Chinese as being able only to copy American technology. Today, China is competitive with or ahead of America in key technology areas, including nuclear power, AI, EVs, and batteries. We need to anticipate a future where China is equal to America on a per capita basis, but f…
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Brexit is mad, driven by nostalgia etc. However, if we got a free trade agreement with the US would the inverse be true, EU companies are better off moving to the UK due to brexit? What about just a FTA with all commonwealth countries (why haven't we done this??)?
No. Because there wasn't any significant trade barriers to the EU from the US up till last week. And then today all the tarrifs are suspended (down to 10%) so it's hardly like there's a reliable advantage there.
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When in the supply-chain you are creating the "taxation" matters to the final cost, assuming 1) the gross margins remain the same and 2) the costs scale linearly. Consider a fictional supply-chain with three players A, B, C. Assume that B and C have 50% gross margins. In a no-tax world, if A sells the product to B for 10$, then B to C for 20$, C will sell it retail for 40$. (A:10$ -> B:20$ -> C:40$) Now imagine a 100…
I think in your scenario that B and C would drop their margin percentage because the tax does not represent anything that will increase their costs in handling the product. E.g. B would sell to C for $30 and C would sell retail for $50, making the same profit in dollar terms. If they don't, a competitor will, because a consumer will prefer the $50 price to the $80 price.
For financial costs, higher inventory value due to tariffs increases the cost of capital (interest on loans/tied-up funds), insurance premiums, and potentially transaction fees.
For operations costs (handling and labor), increases due to indirect effects: As the price of the average consumer basket increases due to tariffs, the average citizen either demands and receives higher wages or has to reduce spending; this means that the per-item variable cost of processing goes up, either because the wages of those employees increased (higher wages) or because the sales volume decreases (reduced spending).
Of course this does not mean that every business will have exactly this outcome. And absolute size of these effects is also dependent on the actual demand elasticity.
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> […] are "state capacity" issues. Things where the state is unavoidably involved and having better, more decisive leadership and not getting bogged down in consultations, would make a big difference. See "America needs a bigger, better bureaucracy": > I believe that the U.S. suffers from a distinct lack of state capacity. We’ve outsourced many of our core government functions to nonprofits and consultants, resulting…
That article seems confused, e.g.: > If government spending isn’t going to pay government workers, it must be going to pay people who work in the private sector — nonprofits, for-profit contractors, consultants, and so on. In other words, state capacity is being outsourced. The money is going to social security payments . Social security went from Meanwhile there is another reason why the number of government workers…
Uh...excluding the very recent cuts this year under Trump; the number of civilians in the US Federal work force has gone up fairly steadily. [0]
We had 23.592 million civilian employees in Jan 2025. 21.779M in Jan 2021, after being largely stagnant overall the previous 10 years. That's a net change in excess of 1.8M employees under Biden.
I do find it interesting that it appears that employee count was flat, or even down under Obama, but until COVID, there was a steady increase under Trump v1.
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China hasn't changed, as their new "partners" will be reminded of soon enough. I suspect they will squander the opportunity the US unforced error has provided, but we'll see.
The partners didn’t want to establish strong trade ties because of national animus between their peoples stemming from WW2 and regional security concerns, not because China is an unreliable trading partner. From what I’ve read, China is actually a very reliable trading partner and generally asks a lot less of countries than the US does. Obviously that’s how they attempt to gain influence and leverage in US spheres of…
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Back to coal mines.
it really seems like there's a push to de-skill Americans. like Bessent's remark that the laid-off civil servants could become factory workers as we bring back domestic manufacturing, and the recent corporate push towards vibe coding and integrating AI everywhere, and the purge of seasonal and unskilled migrant workers while keeping the H1B program. it almost seems like we're trying to clear immigrants out of the chi…
Yeah, Americans are going to go back to working in factories. But not for low wages, because errr ummm actually it’ll be robots doing the work! So where will Americans be working? Errr ummm well… in the factories! (??)
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While not disagreeing with you, I don't think we've done a great job of maintaining fisheries.
Also, continuing overfishing is a terrible long-term strategy. Sure, we will have the boats, fishermen and infrastructure around fishing, but that's of no help if the fish are gone.
This decade: "We're not the ones trying to steal your fishing jobs!"
Next decade: "It's not our fault there aren't fish!"
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> US will find itself in the same position the UK is in now The thing is .. there's a point here, but it's not at all tied in with physical products. People are obsessed with one side of the ledger while refusing to see the other. Most of the stuff the UK is struggling with (transport, healthcare, energy) are "state capacity" issues. Things where the state is unavoidably involved and having better, more decisive lead…
The free traders also need to accept the reality that the UK’s decline started long before Brexit and disputes about fishing. In terms of per capita GDP, the UK lost its edge over the rest of Europe in the 1970s, and then simply never recovered from the 2008 global financial collapse. Without the empire, the UK’s “competitive advantage” in financial and legal services wasn’t worth shit. I strongly suspect the US cann…
There does seem to be some sort of cycle in play: first a slave-driver-type economy creates a whole lot of wealth, then people get human rights, then they stop being driven like slaves and coast off the accumulated power, but forget the basic principles of wealth creation in the process (see also "good times create weak men" etc) and just spend all their resources arguing about who gets the wealth that is there instead of creating more. And I'm not saying that in an individualist framework - the reason individuals can't do it is a problem with the whole society, not with those individuals.
Americans need to get over their view of “Asia” as being about making shoes. When I was working in engineering in the early aughts, we mocked the Chinese as being able only to copy American technology. Today, China is competitive with or ahead of America in key technology areas, including nuclear power, AI, EVs, and batteries. We need to anticipate a future where China is equal to America on a per capita basis, but f…
As you state they haven't been "only" copying for a while and my problem with people keep repeating this "logic" (mea culpa) is precisely what's at stake right now: designing and "creating" is critical, but I'd argue that civilization is not made my design or one-off (or limited) editions. Civilization is the ability to innovate in mass production, in doing so, consistently in lower and lower costs. China excels (and will continue to excel) while they continue to appreciate this. The "service sector" world stopped caring about this.