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Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

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Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#81

Post by [deleted] »

tim333 wrote: post #79
rib3ye wrote: post #66

I see many comments here saying “but stock market went up” while ignoring the bare bone problem Buffett is presenting: Disproportionate foreign ownership of US assets harms American sovereignty. The issue may be that sovereignty is hard to measure, but I think we have been complaining about the long-tail effects for a while: - wealth inequality (as businesses become optimized on foreign labor, execs are paid more and…

In theory but compared with 2003 when that was written I'd say American sovereignty has increased. In Europe and most places we buy from Amazon, search with Google, the computers run Windows or MacOS, the phones run US software etc. It's more the US owning abroad than abroad owning the US.

[deleted]

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#82

Post by margalabargala »

tim333 wrote: post #78

While I'm a fan of Buffett, as he himself says macroeconomics isn't his speciality. One issue with the story is he suggests the people selling America stuff, say China end up accumulating American land and owning the country but it's not what generally happens in practice. In practice foreigners tend to end up either with US dollar debt, which tends to inflate away, or equity in US companies, of which YCombinator and…

Depends what region of the country you are in.

In much of the western US, especially Arizona, there are enormous farms growing water-intensive crops, in particular alfalfa. These farms are owned by assorted entities in the Middle East, and the crops are shipped overseas.

This is an enormous problem. The Colorado River basin is already over-allocated and there is not enough water to go around. But due to how water rights work, any entity can purchase an open-ended amount of our already endangered water supply and do as they please with it.

At this moment it isn't a critical problem, because we do have enough other agriculture and water to support ourselves. But with the direction the climate is heading, eventually we will have a drought of such severity that the water used by those farms makes or breaks us.

During the Great Famine in Ireland, the island consistently produced more than enough food to feed its citizens; it was all simply sent overseas.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#83

Post by lr1970 »

In this 2003 article Warren Buffett proposed a clever mechanism of ICs (Import Certificates) instead of blunt tariffs to deal with trade imbalance. IC is a "soft" control variable that effectively transfers money from importers to exporters and helps to balance the trade. I wish POTUS implemented such a mechanism instead of blanket tariffs that have huge blast radius.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#84

Post by rib3ye »

paxys wrote: post #20

Buffett has been aggressive selling stock in the last year ($134 billion total in 2024) and Berkshire is right now sitting on $334 billion cash vs $272 billion in equities. Kinda funny because he's the first one who will tell you "don't time the market", but he definitely timed it to perfection. "Be fearful when others are greedy and greedy when others are fearful".

It's not timing.

His principal is simple: Buy priced fairly or underpriced businesses. Sell overpriced businesses.

The not simple part: Using 80 years of business experience to assess strengths and risks to an enterprise, and not FOMOing into something. He would say, he doesn't buy stocks, he buys businesses. How many people buying stocks have even opened a 10K?

One of the few shining examples of investor vs trader mindset.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#85

Post by ein0p »

margalabargala wrote: post #13
ein0p wrote: post #5

Earlier quoted context omitted.

Buffett's suggestion, while elegant, would require that Congress passes legislation on this, which there's zero percent chance that it would, in its present state.

The current state of the government is that Congress has tacitly ceded their power to the President. They are allowing him to do things that generally would not be permitted with out Congressional approval, because the majority is aligned with him anyway. An intelligent or competent leader who had the power currently enjoyed by the President would be able to implement the system suggested by Buffet, and it would like…

Actually, no. They haven't "ceded" a damn thing. If they did, the GOP would be working on Trump's legislative agenda, which is something it's been sabotaging again and again in spite of having a slim majority in both the House and the Senate. The plan seems to be: sabotage until midterms, then lose one or both majorities to dems, and raise money off "gracefully losing" for the remaining 2 years of Trump's term. That was the plan 8 years ago, too. It worked.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#86

Post by cherry_tree »

rayiner wrote: post #47
twoodfin wrote: post #26

Earlier quoted context omitted.

Strengthened. In the US this has happened: https://fred.stlouisfed.org/series/MEPAINUSA646N https://fred.stlouisfed.org/series/DSPIC96 Meanwhile across the entire world this has happened: https://ourworldindata.org/history-of-poverty-data-appendix You can argue the growth of globalization & lowering of trade barriers were unrelated to this up-and-to-the-right, but it’s hard to argue they’re making things worse unless…

But the political climate during that time period—starting on the left and now going to the right—has been that the middle class is being hollowed out. Is your argument that the Bush/Obama regime (recall that the Bush administration developed the bank bailout plan that Obama implemented) was basically correct? All the economy required was a little more regulation via Dodd Frank and the CFPB?

George W Bush first term is “the left” now?

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#87

Post by graemep »

jfengel wrote: post #51
graemep wrote: post #36

Earlier quoted context omitted.

Yes, that is stupid. Why not apply that to the big economies that the GP comment said was 90% of the deficit. Exempt small low income countries - save a lot of people a lot of paid at little cost. On the other hand this is a bargaining tactic. I do not think these tariffs will last. > Instead, recall that President Trump views tariffs as generating negotiating leverage for making deals. It is easier to imagine that a…

He seems quite confident that we "hold all of the cards", to quote another set of international trade negotiators. I am less confident. The domestic consequences are immediate. Many of these negotiations are with experienced and patient experts. China, in particular, is under no obligation to its people or stock market to resolve this quickly. The tariffs may not last, but I think they will end more unilaterally than…

I think the longer the US waits the relatively weaker it becomes, so the sooner the better from that point of view.

I think many people in the US, and almost everyone in Europe, has not really woken up to the extent to which their economic clout has diminished over the last few years.

People go into denial about this, as it undermines their worldview, but if you look at west vs rest GDP the change over the last few decades is huge.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#88

Post by graemep »

mitthrowaway2 wrote: post #80
andsoitis wrote: post #61

Earlier quoted context omitted.

More than half of factories in Cambodia are Chinese owned. The idea is to put pressure on China.

Pressure to move back to China where their tariff drops from 49% to 34%? Over the past few years a lot of companies have moved production out of China and into friendlier countries like Vietnam, anticipating US pressure on China. Vietnam's tariff rate is 42%. Now they wish they'd left their production lines in China.

> Pressure to move back to China where their tariff drops from 49% to 34%?

That assumes the tariffs will be imposed long term.

They are intended as a bargaining measure so some compromise will be reached. it is very likely that in the long run Vietnam will pay lower tariffs.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#89

Post by nabla9 »

hayst4ck wrote: post #64
nabla9 wrote: post #50

Earlier quoted context omitted.

No amount of tariff turns into de facto blockade. blockade, embargo, sanction, tariff. Each are different and have different meaning.

While you are lecturing me on words meanings, I would advise you to look up the meaning of "de facto." If you were America's founding fathers and King George 3, the leader of their government, decided to put a 10000% tariff on goods meant for the colonies, do you think they would have felt blockaded?

No amount of tariffs makes a blockade. De facto blockade would mean that you can't trade with anyone.

But I give you something. US can de facto blockade itself by raising tariffs for everyone.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#90

Post by andsoitis »

mitthrowaway2 wrote: post #80
andsoitis wrote: post #61

Earlier quoted context omitted.

More than half of factories in Cambodia are Chinese owned. The idea is to put pressure on China.

Pressure to move back to China where their tariff drops from 49% to 34%? Over the past few years a lot of companies have moved production out of China and into friendlier countries like Vietnam, anticipating US pressure on China. Vietnam's tariff rate is 42%. Now they wish they'd left their production lines in China.

> Pressure to move back to China where their tariff drops from 49% to 34%?

... and one day later, where are we? Trump is threatening China with an additional 50% unless they back down. China's response is that they will fight to the bitter end. https://www.theguardian.com/business/live/2025/apr/08/stock-...

Who will win this battle? Or will it be a war? Which philosophical worldview do you prefer?

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