Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why does the U.S. always run a trade deficit?

libertystreeteconomics.newyorkfed.org

Post reply on HN
Print view View original

701–710 of 814 posts

Re: Why does the U.S. always run a trade deficit?

#701

Post by bumby »

sorcerer-mar wrote: post #699
bumby wrote: post #698

Earlier quoted context omitted.

Sure, if you want to stop making cars to make weapons instead for a long period of time. Have you ever retooled a highly automated assembly plant? I have, and I can tell you it’s not something that can be changed on a whim.

Is your contention that we should be churning out wartime levels of war materiel when we're not at war? Like specifically what do you think we should be doing?

My perspective is that we shouldn’t be trivializing the problem and recognize the tradeoffs and externalities. Pretending we have lots of manufacturing capacity for weapons systems because we know how to make cars misses the point of how difficult a transition from one to the other would be.

Re: Why does the U.S. always run a trade deficit?

#702

Post by StackRanker3000 »

AnIrishDuck wrote: post #563
biorach wrote: post #555

Earlier quoted context omitted.

(Not the person you were replying to) You asked a question, they answered in good faith, and now you've dismissed their answer. I would also point out that you're dismissal is actually about a related, but separate issue - you've suddenly started talking about preferred store of value, when your original question was about how to value production. I don't think you're arguing in good faith.

I pointed out they were providing ridiculous answers to the question of "how do you measure value" and they doubled down on the ridiculous. You are correct, there are many ways to measure value. However, I don't think picking various commodities as the "true" measure of what is "valuable" is a useful exercise. You may disagree. That's fine! I suggest you put your wisdom to use on the various markets that are set up f…

I feel like it’s pretty clear that chabska was saying that China does more manufacturing per capita, creates more stuff, whereas the US captures more value.

If a paralegal at a fancy law firm works 9 billable hours at $200/h, and a senior partner then spends one hour adding some finishing touches for which he bills $2000, the paralegal has likely produced more work, but the partner’s output is more valuable (and sometimes it might not even be that useful, maybe the paralegal could’ve done the whole thing himself, but the oversight is part of the package and that’s what a senior partner costs).

Which metric is more useful probably depends on what you’re trying to find out.

Re: Why does the U.S. always run a trade deficit?

#703

Post by IG_Semmelweiss »

mrtksn wrote: post #643
IG_Semmelweiss wrote: post #634

Earlier quoted context omitted.

Your statement would be true without nuance. Yes. The mass of US consumers do benefit from penny subsidies of certain foreign product. However, for every penny of foreign subsidy benefitting US consumers buying finished iron or steel goods, a US metallurgist is losing a job somewhere. On strictly numbers, we are better off with foreing-paid subsidies yes, but there are losers, and they take the brunt of the downside.…

Good point but I think these are about the choices you make. You can choose to look after your metallurgist who become obsolete as a laborers but I'm sure they are amazing people. You might be worried for becoming communist or welfare state though. You can choose to limit trade and other freedoms so you can artificially keep metallurgists at work so you don't have to share what you have with them without exchanging s…

I will make you a deal.

I will accept this premise of "choice" with 1 condition.

I will personally advocate for tariffs at 0% worldwide in 2030, if in the interim, ALL permits required to have or work as :

- an accredited university

- work in national security,

- or in university professors (economists!),

- accountant

- lawyer

- pharmacist

- insurance brokers

- any other white-collar profession, etc

Are rescinded. All of them.

So, anyone from abroad can open a university tomorrow, and get student loans, grants etc money. Or, anyone from china can come and become an accountant, if E&Y wants to hire them , either remotely, or in person. Up to E&Y.

Yes, those in person workers would use temporary (seasonal visas) for those jobs. So someone from China can come and teach econometrics at Stanford if Stanford wishes to hire them for 8 months (the undergrad season). Or someone can start a new Stanford in Bangalore, or whatever.

In other words. You don't need a license or some kind of permit to practice as a professor, or at a desk job at Raytheon.

Do you accept ?

My point. White collars are are protected by the state.

In the real world, i've come to learn that "free trade" doesnt actually mean "unrestricted free trade" .

Its just an excellent sleight of hand to say "free trade" when in the real world, the position you actually advocate is to sacrifice the have nots, while leaving the elites untouched

Re: Why does the U.S. always run a trade deficit?

#704

Post by bumby »

sorcerer-mar wrote: post #139
phkahler wrote: post #130

Earlier quoted context omitted.

Automation was reducing the number of manufacturing jobs. But "free trade" has taken away a lot of the manufacturing itself. The US as a whole can no longer make the TVs and iPhones that it consumes so many of.

There's more manufacturing than there ever has been in the United States. It doesn't make low value-added goods like TVs, it doesn't employ a lot of people, and it's not growing as fast as other sectors, but we still manufacture more than ever before. The “crumbling” sensation is because fewer people are employed by it and more people are employed (and earning more) in other sectors.

I was with you until the assumption that more people are earning more in other sectors. 1) they are often not the same populations of people and 2) many people are also making much less in the low-wage service economy when they would have had middle class wages in manufacturing in previous generations.

Re: Why does the U.S. always run a trade deficit?

#705

Post by sorcerer-mar »

bumby wrote: post #701
sorcerer-mar wrote: post #699

Earlier quoted context omitted.

Is your contention that we should be churning out wartime levels of war materiel when we're not at war? Like specifically what do you think we should be doing?

My perspective is that we shouldn’t be trivializing the problem and recognize the tradeoffs and externalities. Pretending we have lots of manufacturing capacity for weapons systems because we know how to make cars misses the point of how difficult a transition from one to the other would be.

We agree then! I was confused how GP expected anyone to infer meaning from statements about shell consumption.

Re: Why does the U.S. always run a trade deficit?

#706

Post by sorcerer-mar »

bumby wrote: post #704
sorcerer-mar wrote: post #139

Earlier quoted context omitted.

There's more manufacturing than there ever has been in the United States. It doesn't make low value-added goods like TVs, it doesn't employ a lot of people, and it's not growing as fast as other sectors, but we still manufacture more than ever before. The “crumbling” sensation is because fewer people are employed by it and more people are employed (and earning more) in other sectors.

I was with you until the assumption that more people are earning more in other sectors. 1) they are often not the same populations of people and 2) many people are also making much less in the low-wage service economy when they would have had middle class wages in manufacturing in previous generations.

The answer to this is unions and social reforms, not more manufacturing. Manufacturing sans social reforms produce absolutely horrific conditions. Good conditions can be created by any highly productive industry (of which manufacturing isn't on a relative basis anymore) paired with social reforms.

Re: Why does the U.S. always run a trade deficit?

#707

Post by IG_Semmelweiss »

MaxPock wrote: post #660
IG_Semmelweiss wrote: post #634

Earlier quoted context omitted.

Your statement would be true without nuance. Yes. The mass of US consumers do benefit from penny subsidies of certain foreign product. However, for every penny of foreign subsidy benefitting US consumers buying finished iron or steel goods, a US metallurgist is losing a job somewhere. On strictly numbers, we are better off with foreing-paid subsidies yes, but there are losers, and they take the brunt of the downside.…

You might be losing as an individual but the country gains.

>>>> You might be losing as an individual but the country gains.

The country is not an individual.

A country can't be happy, or sad or unemployed. People are.

So who in the country gain ?

Re: Why does the U.S. always run a trade deficit?

#708

Post by api »

Buttons840 wrote: post #653
IG_Semmelweiss wrote: post #634

Earlier quoted context omitted.

Your statement would be true without nuance. Yes. The mass of US consumers do benefit from penny subsidies of certain foreign product. However, for every penny of foreign subsidy benefitting US consumers buying finished iron or steel goods, a US metallurgist is losing a job somewhere. On strictly numbers, we are better off with foreing-paid subsidies yes, but there are losers, and they take the brunt of the downside.…

How does the life of a US metallurgist who works part time at a grocery store compare to a Chinese metallurgist who is working 70 hours a week doing metallurgy?

The latter is getting skills in real-world productive work?

One problem with our information-and-services economy is that it enables a giant proportion of the population to live without any understanding of how anything in the physical world operates. You inhabit a universe of magic, using magic made by other people to provide services.

Eventually the entire country loses the ability to make anything in the real world.

Re: Why does the U.S. always run a trade deficit?

#709

Post by alabastervlog »

MaxPock wrote: post #660
IG_Semmelweiss wrote: post #634

Earlier quoted context omitted.

Your statement would be true without nuance. Yes. The mass of US consumers do benefit from penny subsidies of certain foreign product. However, for every penny of foreign subsidy benefitting US consumers buying finished iron or steel goods, a US metallurgist is losing a job somewhere. On strictly numbers, we are better off with foreing-paid subsidies yes, but there are losers, and they take the brunt of the downside.…

You might be losing as an individual but the country gains.

GDP (or equivalent) gains.

Ricardo only says big aggregate number go up (with a bunch of caveats). Not for whom within that aggregate. It can (hypothetically) be one person seeing huge gains while every single other person loses a little bit. Or, pick any more-plausible scenario that sees a very-few benefitting greatly while the net for the rest of the population is somewhat negative.

Re: Why does the U.S. always run a trade deficit?

#710

Post by bumby »

sorcerer-mar wrote: post #706
bumby wrote: post #704

Earlier quoted context omitted.

I was with you until the assumption that more people are earning more in other sectors. 1) they are often not the same populations of people and 2) many people are also making much less in the low-wage service economy when they would have had middle class wages in manufacturing in previous generations.

The answer to this is unions and social reforms, not more manufacturing. Manufacturing sans social reforms produce absolutely horrific conditions. Good conditions can be created by any highly productive industry (of which manufacturing isn't on a relative basis anymore) paired with social reforms.

Agree. Unfortunately, there seems to be a change in the social norms of business. Eg, pay structures that would be laughed out of the board room in previous generations are considered just the way we do business now. Same with the erosion of unions, etc.
Post reply on HN