June 28, 2016

"Our politicians have aggressively pursued a policy of globalization - moving our jobs, our wealth and our factories to Mexico and overseas."

"Globalization has made the financial elite who donate to politicians very wealthy. But it has left millions of our workers with nothing but poverty and heartache. When subsidized foreign steel is dumped into our markets, threatening our factories, the politicians do nothing. For years, they watched on the sidelines as our jobs vanished and our communities were plunged into depression-level unemployment.... Many Pennsylvania towns once thriving and humming are now in a state despair. This wave of globalization has wiped out our middle class. It doesn't have to be this way. We can turn it all around - and we can turn it around fast. But if we're going to deliver real change, we're going to have to reject the campaign of fear and intimidation being pushed by powerful corporations, media elites, and political dynasties. The people who rigged the system for their benefit will do anything - and say anything - to keep things exactly as they are. The people who rigged the system are supporting Hillary Clinton because they know as long as she is in charge nothing will ever change...."

From Donald Trump's job's plan speech, delivered today, 30 miles from Pittsburgh.

141 comments:

rcocean said...

Wow. Pretty straight talk for a Billionaire.

Looks like trump is a traitor to his class.

Limited blogger said...

Trump is outflanking our gal Hill.

Jack Wayne said...

This message needs saying. Good for him. Cruz and the rest did not read the political tea leaves very well at all.

Mid-Life Lawyer said...

That's a home run and the establishment politicians on both sides have no argument against what he is saying. Not that anyone cares to listen to, at least.

wild chicken said...

To be fair, all the globalist maneuvering helped my retirement portfolio too. I am not rich.



coupe said...

He's saying the same thing I've been saying. I think he's hiring the right people to guide his speeches.

Trump knows he will be dead soon (of old age), and you can't take it with you. He never built any factories, but he knows their value. All he knows is the service industry, and that's a dead-end with no middle-class.

I think the Democrats think they can power through without a middle-class, if they can just raise taxes of the top 1%, and redirect the wealth, while skimming off the top.

bagoh20 said...

So Hillary is a globalist free trader and is also in the pocket of unions who hate imports? It's all very confusing. I think someone is messing with me.

Jack Wayne said...

Actually the union members won't vote for her. But the union leaders know where their bread is buttered, don't they?

Limited blogger said...

The end game of globalization never came; the commensurate rise of the standard of living in India, Asia, Africa. Without those regions demanding economic equality there would always be a drag on America. Maybe it would come some day, but we got tired of waiting.

rhhardin said...

Economists pretty much all say Trump's wrong that it's fixable. The protectionists are the cronies, in fact.

That said, it's possible to make good deals and bad deals.

I think in fact the US manufactures more goods than it ever has, but it takes lots less labor.

Trump may be mischaracterizing that.

Where economists are wrong is theirs is a good theory for steady-state allocations, but today we have dirt poor foreign labor pools who are not steady-state, and they unemploy US workers who are not steady-state either. Someday everybody will be equally rich as a whole and foreigners will work for the same wages as US workers, and things will be as the economists say.

I don't think there's any theory of transient states in economics.

So Trump may or may not do something sensible. You can't tell.

Michael K said...

Just remember that Japan created technology and invented a lot of quality methodology. China steals technology and insists US manufacturers build plants in China so they can steal it.

Japan built factories here to avoid Reagan's rules on local content.

Trump has a point.

chickelit said...

I don't think there's any theory of transient states in economics.

Do you mean like transition state theory in chemistry?

coupe said...

"I am going to instruct my Treasury Secretary to label China a currency manipulator."

OK, now I've got my popcorn ready!

rhhardin said...

The classical economics problem is the third world country asks itself, "How can we possibly compete with America? They have all the skills and capital and machines and technology, and all we have is dirt."

America asks itself, "How can we compete with dirt poor labor from poor countries? We have to pay enormous wages here."

The answer is called comparative advantage (not competitive advantage). Both sides are richer if they specialize a little and trade.

The math though finds work for displaced US workers, which doesn't seem to be happening.

One big blocker is US regulation and taxes, for example Obamacare, the biggest job killer ever invented.

dreams said...

Trump is a more natural politician than Hillary and I think he is going to win. We're going to find out just how much Hillary is despised. Plus, it will fun watching the liberal media have a humongous hissy fit.

Limited blogger said...

Yes we have made our manufacturing incredibly high tech. But we always then export that technology and allow another country to still do the manufacturing cheaper than us.

And the 'dumping' of cheaply made goods is so destructive, it must be reigned in, if not stopped.

AReasonableMan said...

It is interesting that the US and England are the two countries that seem to be struggling most emotionally with globalization. There are at least two important commonalities between the two countries that might explain this.

1. Both countries have been rulers of the universe, or at least much of the world, within living memory and are struggling to adjust to the rise of China, in particular, and multiple poles of influence more generally.

2. The economies in both countries have shifted from being manufacturing based towards a dominance of the financial industry. Britain more so than the US, but to a striking degree in both countries, much more than any other country. This has created much of the increase in income and wealth inequality within both countries.

I think reason two is the greater importance but a general feeling of decline for white protestant anglophones, as their place in the world becomes less unique must also be a factor.

chickelit said...

Jack Wayne said...Actually the union members won't vote for her. But the union leaders know where their bread is buttered, don't they?

That sounds unsustainable to me.

rhhardin said...

One way things level out is currency value changes, which has the effect of equalizing wages as the dirt poor Chinese find they can buy more US goods. China keeps that from happening by holding down their currency (in fact, using their surplus to buy US debt, as a way of keeping it from buying stuff). So Trump's on one right track a little.

The Chinese are exchanging Chinese goods for pictures of American presidents, in effect.

Limited blogger said...

Great location for this speech. Capitol of the 'Rust Belt'. Don't think Trump can win Pennsylvania?

rcocean said...

Economic theory makes so many assumptions, that its worthless in the real world.

Saying "Free Trade" is good, leaves the real question unanswered - Good for *who*?

Are running massive trade deficits a good thing? if so, why do some countries avoid having them? I guess they're just stupid.

Besides these trade deals are negotiated between governments. Which means Trump can negotiate better ones.

rhhardin said...

We've been dumping unwanted goods for years, with surplus food, bankrupting farmers in poor countries. This is called foreign aid. Agribusiness likes it. US buys surplus cheese and gives it to Africa, keeping the US price up.

TA said...

That's a crock of shit. Wrong factually, and in the argument. PJ Rourke said (in endorsing Hillary as the second worse thing that could happen to America), Hillary's wrong about everything, but within normal parameters. Right on both counts. This guy's a fool on a magnificent scale.

rhhardin said...

Trade deficits are not bad. They're matched by capital surpluses. The US ran a huge trade deficit in the 1800s as foreign capital flowed in for better opportunities.

Today the capital inflow goes mostly into Treasuries, meaning it's handed out to welfare recipients, which isn't quite so good at all. That's a policy error, not a trade error.

Curious George said...

"Jack Wayne said...
Actually the union members won't vote for her. But the union leaders know where their bread is buttered, don't they?"

Many will, for the same reason that my dad bought Chevies his whole life...he was a "Chevy" guy. A lot of these guys are "Democrat guys". Hopefully not enough.

rhhardin said...

There's no opportunity in America. Nobody can afford to deal with the regulations and taxes. Things are always better for business somewhere else, so somewhere else is where the business goes.

Curious George said...

The same wih blacks. Many will wake up and see that unfettered immigration is going to take food out of their mouths, and stagnate wages. Trumps message will resonate.

buwaya said...

"I think in fact the US manufactures more goods than it ever has,"

Comes down to definitions. Some goods are manufactured purely as a result of population growth, that are not usually traded internationally in large quantities - packaged food products for instance count as manufactured goods. Also there is a matter of values, where value of manufactures are rarely quoted per-capita.

US motor vehicle production for instance peaked in 1999 at @13m and by 2015 was still under 12M. Thats a solid problem right there.
Its even worse when you figure it per-capita, falling from one new vehicle per 21 people in 1999 to one per 27 people in 2015.

Do the same exercise with this data series -
http://www.census.gov/library/visualizations/2016/comm/manufacturing-in-the-us.html
And you will see not just a failing recovery but a long term decline.

Bobby said...

"Our politicians have aggressively pursued a policy of globalization - moving our jobs, our wealth and our factories to Mexico and overseas."

Honest (but very academic) question: in the context in which he's using it, can any conservatives explain to me what Trump means by the phrase "our jobs, our wealth, our factories" (bold added for emphasis)?

Like, in the hypothetical case of, say, a corporation taking its capital to open a factory and move their production line overseas - philosophically (as a libertarian), I always thought that wealth (capital) belonged to the shareholders of that corporation to do with as they saw fit. Philosophically, why/how is that wealth not actually "theirs," but rather "ours"? Is it something like, you know, when you've got a business - you didn't build that, somebody else made it happen...? I seem to remember conservatives agreeing with us that the statement was absurd, so I'm truly trying to understand it here.

David Begley said...

A speech like this is how Trump wins. Blue or purple states he can win: IA, MN, WI, MI, OH, PA, VA, NC and FL.

rhhardin said...

Saying "Free Trade" is good, leaves the real question unanswered - Good for *who*?

The classical libertarian, and essentially the Constitutional, answer is it has to be no worse for anybody. If somebody comes off worse, you compensate him out of the surplus you generate. (Compare the takings clause and just compensation, since ruined by the courts).

The trouble is that compensation, say by unemployment insurance extensions, also deal a deadly moral hazard blow as the recipients go lazy and it turns out to be further harm instead.

Left Bank of the Charles said...

Here's the plan: Trump goes to China and says, "raise your prices or I'm going to tax you." So China raises its prices, because it would be stupid not too, China will make more money, and doesn't have to fear losing the jobs to another low wage country as they all will be getting the same threat. American companies will be told that they will be taxed if they move any jobs to China, which will protect the competitive position of their Chinese competitors.

coupe said...

TA said...P.J. Rourke said...

"When buying and selling are controlled by legislation, the first things to be bought and sold are legislators." - P.J. Rourke

rhhardin said...

A lot of US manufacturing uses foreign-built parts, which is then re-exported. Queering trade is going to have bad side effects right away.

Trump foregrounds what he wants to make visible but watch out for what is invisible.

buwaya said...

TA - "That's a crock of shit. Wrong factually,"

In what sense? You can point to several factors, but the end result is exactly what he's saying. And if you want to blame regulatory overreach for much of the current stagnation (and I do, and I bet PJ O'Rourke does too) then Clinton is the figurehead of the tribe that is committing this act of economic sabotage, and to vote for her is simply to ask for more.

O'Rourke is deluded by his lens of class I think. This is surprisingly powerful these days, it didn't use to be so, not so long ago. That may also be a symptom of reducing social mobility.

Can I stress enough that you are in a desperate state? Alan Greenspan is panicked over negligible productivity growth.

rhhardin said...

If you want the solution, besides dead repeal of Obamacare and insane regulation, overturn the labor laws. You can have unions but employers don't have to deal with them.

dreams said...

"Trade deficits are not bad. They're matched by capital surpluses. The US ran a huge trade deficit in the 1800s as foreign capital flowed in for better opportunities."

I remember trade deficits were constantly being criticized and also the stock market kept going higher despite high interest rates in the eighties under Reagan. When I bought my first stock in 1981 it was a utility stock that paid a dividend yielding 15% and at that time money market funds were paying 18 and 19% yields. I could have bought Exxon at that time and its dividend yield was 12%.

buwaya said...

"our jobs, our wealth, our factories"

"Our" as being present in this country, of the collective entity which he proposes to lead.
If these things are in a country and healthy the people are better off.
And there are things like collective entities.

This was the goal of, for instance, development economics, to increase all these things for the purpose of making the people and the state wealthier. If you run a country thats what you really want, not to have your best people run away elsewhere to get rich, leaving yours depopulated of its best and poor.

David Begley said...

All this classical economics stuff goes right over the head of the average voter. It is America first. We want fair trade. Wages have been stagnant. Blame the foreigners.

buwaya said...

"The trouble is that compensation, say by unemployment insurance extensions, also deal a deadly moral hazard blow as the recipients go lazy and it turns out to be further harm instead."

Precisely. The choice is to productively employ your people or keep them as pets. If you are in charge of the country it would seem to be an important goal to do what is prudent to make the first happen.

Unknown said...

https://www.washingtonpost.com/news/wonk/wp/2016/06/28/five-ways-donald-trump-benefits-from-the-globalization-he-says-he-hates/

Trump has built his campaign — and secured his spot as the presumptive Republican presidential nominee — largely by aligning himself with voter unrest over free trade. He has slammed American companies for moving manufacturing jobs to countries such as China and Mexico.

But in his decades as a dealmaker and businessman, Trump has routinely made money from outsourced labor, overseas manufacturing and other planks of the free-trade policy he has rallied against as a politician. Even today, Trump and his businesses are rewarded handsomely for several lucrative deals he has made in the global marketplace — including manufacturing deals in China and Mexico.

Here are a few examples. Trump's campaign did not respond to a request for comment......


Oops.

Limited blogger said...

David Begley, please put a big red bow on that last statement.

buwaya said...

"All this classical economics stuff goes right over the head of the average voter. "

Yes it does. It also isn't holy writ. Economics is, ideally, a pragmatic and empirical field. Many people don't like thinking of it that way, and assume laws that, variously, may not be applicable, may have complications that turn things topsy-turvy, may not apply to a given situation, and etc.

Its sort of like Global Warming. CO2 is a greenhouse gas, sort of. Get more of it you get more greenhouse effect. That is a "law". But it does not follow that all the complicated systems that may or may not be affected as a consequence will behave according to the simple "law", hence the failure of all the models.

The public may be more realistic.

eric said...

It was a really solid speech.

So what?

All Hillary will say is, "Racist!"

But actually, Hillary won't say anything. Because Hillary is old and boring and nasty and the less screen time she gets, the better.

However, her enablers, the MSM and those she pays directly, will say it for her.

Unknown said...

http://www.redstate.com/jaycaruso/2016/06/22/trump-flat-out-lie-about-why-his-clothes-are-made-in-china-and-mexico/

Watch Trump Flat Out Lie About Why His Clothes Are Made In China And Mexico (VIDEO)

Donald Trump must think people are really stupid. Plenty of people are but he thinks that about most people. Either that or he's just so comfortable with lying that he doesn't care. Or he subscribes to the George Costanza theory: "It's not a lie, if you believe it."

Trump has taken some heat as being a hypocrite for yelping about companies who have products made in China and Mexico, when he has products made in the same countries, such as his ties (China), 'Make America Great Again' hats (China) and suits (Mexico).

Ironically, he hasn't been confronted about it by the press until he sat down for an interview with ABC's David Muir who asked Trump about comments made Hillary Clinton regarding so many Trump products being made outside the United States. Watch his response.......


Ooops.



eric said...

Blogger Unknown said...
https://www.washingtonpost.com/new


Why are you quoting an arm of the Hillary for America campaign and expecting us to care?

If you've got an argument, make it.

Although I suspect copy and paste is easier and you probably don't get paid all that much per hour to actually make cogent arguments.

Guildofcannonballs said...

"You can't tell."

I can tell time will tell.

Damnit Susan, my reasons satisfy me, as Kane said (but using the rudimentary spelling of "damnit" I presume).

coupe said...

One of the things we have to be careful of, is a lot of manufacturing no longer requires humans.

Politicians can't get people hopes up about getting 20th Century jobs back.

eric said...

Blogger Unknown said...
http://www.redstate.com/jaycaruso/2016/06/22/trump-flat-out-lie-about-why-his-clothes-are-made-in-china-and-mexico/

Watch Trump Flat Out Lie About Why His Clothes Are Made In China And Mexico (VIDEO)


Sometimes I can't tell if people are dumb or dishonest. Which is it, are you dumb or dishonest?

Trump is a man driving 65 MPH on the highway that has a 65MPH speed limit. But he's telling everyone that he wants to raise it to 80 MPH. And you're the idiot mocking him for obeying current law.

Oooops

Big Mike said...

"Globalization has made the financial elite who donate to politicians very wealthy."

Does a nice job of hanging Hillary's $675,000 speaking fees from Goldman Sachs around her neck. Coupling "powerful corporations" with "political dynasties" is a very nice touch. Cuts the knees out from under Jeb, who went back on his pledge to support the eventual nominee, as much as it cuts the ankles out from under Hillary Clinton.

rcocean said...

"The US ran a huge trade deficit in the 1800s as foreign capital flowed in for better opportunities."

The USA had an enormous tariff wall from 1820 to 1939. Sheltering under it enabled the US iron/steel industry, along with other industries, to grow and make us the greatest industrial nation in the world.

Had we listened to "free traders" we'd still be sending cotton and wheat to England in return for steel and iron.

Unknown said...

Hahahahaha!

Seriously Eric, you get the blue ribbon for Trump apologia.

rcocean said...

Funny how the whole "free trade" thing works. For example, the japanese auto industry grew up under a tariff barrier that protected it from US exports in the 50s and early 60s.

Now, Japan exports cars to us.

Dumb Japanese. Don't they know tariffs are bad?

cubanbob said...

dreams said...
"Trade deficits are not bad. They're matched by capital surpluses. The US ran a huge trade deficit in the 1800s as foreign capital flowed in for better opportunities."

I remember trade deficits were constantly being criticized and also the stock market kept going higher despite high interest rates in the eighties under Reagan. When I bought my first stock in 1981 it was a utility stock that paid a dividend yielding 15% and at that time money market funds were paying 18 and 19% yields. I could have bought Exxon at that time and its dividend yield was 12%.

6/28/16, 7:47 PM"

I remember buying in 1980 Eurodollar certificate of deposits paying 15%. Of course inflation was 21%.

AprilApple said...

The media only talk about Hillary and play Hillary clips. The corruption IS the media.

AprilApple said...

we're going to have to reject the campaign of fear and intimidation being pushed by powerful corporations, media elites, and political dynasties.




cubanbob said...

Unknown said...
Hahahahaha!

Seriously Eric, you get the blue ribbon for Trump apologia.

6/28/16, 8:10 PM"

True but not as good a job as yours in shilling for Hillary.

buwaya said...

I am looking for a dataset of:

For the US 1999-2015 or so

Manufacturing value added - note: this removes value of imported materials and components.
very important.
In constant dollars Per capita.

That would tell the whole story.

What I have tells me, so far, that manufacturing is definitely in a long term decline. Doing the value added thing probably would show an even steeper decline.
From personal experience, a lot of US final product is completed in the US, but as Trump puts it, re steel, much more these days is made from imported materials and components, so less value added and less actual manufacturing activity.

As for Unknown, you seem to be good at finding things, I suggest you contribute and get on what I suggested. Are you up to it?

Bobby said...

buwaya @ 7:49p,

On an ideological level, I think I'm still confused. (Politically, I understand and even agree with you and David Begley, as I've long found "liberals" and "conservatives" to be frequently inconsistent and routinely hypocritical). But I appreciate the response- thanks!

dreams said...

"we're going to have to reject the campaign of fear and intimidation being pushed by powerful corporations, media elites, and political dynasties."

We need to do that while we still have a chance.

"This is why Democrats are so anxious to “fundamentally transform” the United States through mass immigration from Third World countries. Only by building up the minority population do they have a chance to stay competitive. But that still wouldn’t be enough, even if the Democrats got most of the votes cast by minorities, if minorities voted in anything like a normal pattern. In order to win, the Democrats need to roll up ridiculous margins, like the 90%-8% lead that Clinton holds with blacks in the ABC/WaPo poll.

This is why the Democrats seek every opportunity to stir up racial conflict. They need to keep minority voters constantly riled up and fearful of a phantom “racism.” The Democrats’ strategy, founded on a cynical exploitation of identity politics, explains the sharp decline in race relations now taking place in the U.S. Racial conflict suits the Democrats. In fact, they need it to have a chance of remaining competitive. This is the sad truth that, more than anything else, has brought our contemporary politics to such a low level."

http://www.powerlineblog.com/archives/2016/06/trump-holds-big-lead-among-white-voters.php

madAsHell said...

That magnificent bastard should be arrested for pandering.

jr565 said...

bagoh20 wrote:
So Hillary is a globalist free trader and is also in the pocket of unions who hate imports? It's all very confusing.

are you expecting leftists to be consistent? In her case she's trying to thread the needle and being all things for everyone in her party. If those inconsisties cause dissonance, she simply hopes no one notices.

khesanh0802 said...

Holman Jenkins wrote a column about NAFTA and slipped up by saying that Ford had to go to Mexico to build a plant that could compete with the foreign car makers now making their cars in the American south (BMW, Toyota, Honda, Subaru). I commented then that the simple answer for Ford, that would support American workers, would be to build a plant in the American south. If they can't do that then there must be an imbalance somewhere in NAFTA or problems with the unions that are harmful to American workers and Trump is correct.

buwaya said...

OK, heres what I got, from the BEA, the Census, Manufacturing value added as a GDP component per capita in 2009 chained dollars (more or less constant dollars) per capita.
http://www.bea.gov/industry/gdpbyind_data.htm
data table GDPbyInd_VA_1947-2015
Manufacturing Value Added per person.
1999 5434
2000 5706
2001 5419
2002 5418
2003 5637
2004 5947
2005 6024
2006 6266
2007 6404
2008 6158
2009 5639
2010 5887
2011 5862
2012 5836
2013 5880
2014 5930
2015 5962

Phil 3:14 said...

Another war....

a trade war.

Bobby said...

coupe,

"One of the things we have to be careful of, is a lot of manufacturing no longer requires humans.

Politicians can't get people hopes up about getting 20th Century jobs back.
"

Yes, and this is where I get confused. If it's the proper role of government to tell businesses: "yes, it's your business and you can do with it what you want, but you have a responsibility to your fellow Americans to keep them employed, so you cannot move jobs overseas even if it costs you more to keep your jobs here," then why couldn't/wouldn't government also tell businesses: "yes, it's your business, but you have a responsibility to your fellow Americans to keep them employed, so you cannot use technological innovation if it will lead to cutting jobs." Pass that law and now manufacturing once again requires humans (albeit at greater cost and less quality products).

Long-term, I assume those inefficient, labor-intensive, non-innovative businesses would eventually be surpassed by other companies (in other countries that could use cheaper labor and technological innovation). But apparently that's not our concern since we apparently think business has social responsibilities that take precedence over making money.

khesanh0802 said...

@rcocean The Japanese build cars here for financial and content reasons. Worked out well for everybody.

khesanh0802 said...

Bobby What you say is true up to a point. One real problem with business in this country is the high tax rate - highest in the developed world. It helps lead to high costs - taxes are part of your cost structure -, offshoring and an unwillingness to repatriate off-shore profits to be invested here.

Drago said...

From Unknown's snip: "But in his decades as a dealmaker and businessman, Trump has routinely made money from outsourced labor, overseas manufacturing and other planks of the free-trade policy he has rallied against as a politician."

Potential Headline: US Businessman abides by laws/rules passed by politicians in conducting his business.

From Unknown's snip: "Even today, Trump and his businesses are rewarded handsomely for several lucrative deals he has made in the global marketplace — including manufacturing deals in China and Mexico."

Potential Headline: US businessman derided by leftists as being a complete fraud and moron somehow makes lucrative international deals.

Hagar said...

Being Norwegian born and raised I am naturally strongly in favor of free trade; it is what we do for a living, or at least we carry the goods for those who do the actual trading. At least that is the way it was before they found oil in the North Sea.
But if "free trade" is dependent on big deals negotiated between landlubber governments, or blocs of governments, rather than just buyers and sellers getting together wherever there is a profit to be made, I wonder how "free" it is. Certainly it is not Adam Smith's idea of "free trade."
And, of course, if the "free trade" is dependent on big comprehensive deals made by government officials (not their own money) rather than countless little deals between individuals or companies, the chances for making disastrously bad deals increase exponentially.

John said...

Here is a chart showing manufacturing's total share of employment since 1940. The peak year was 1946.

The trend line ever since has been a fairly straight downward line. We've been losing manufacturing jobs at a constant rate for 70 years now.

The other thing that drives me nuts about Trump, and most other pols, journalists, and many economists is the bullshit about the trade deficit.

To take one Trump example, he talks about how he buys thousands of TV sets for his properties "And they don't buy anything from us!!!"

5 minutes later, he talks about how he loves the Chinese because they buy condos from him, stay in his hotels and rent his buildings.

The problem is the bullshit that is the way the trade deficit is defined. The TVs count as imports and against the deficit because they come from outside. The condos etc don't because they don't leave the country. This gets called a trade imbalance. Seems to me that the trade balances.

It always will.

Whatever you call it, it seems like a good thing to me. We have the TVs that we imported AND we still have the condos etc. What's the problem, Donald Dipshit?

I do generally like trump and am looking forward to his presidency. But he and all other pols have no idea what they are talking about. Hilary says much the same things but has the excuse of ignorance.

Trump buys and sells for a living. If he stopped to think about it he would realize what he is saying and shut up about it.

Problem is not the "trade deficit". The problem is how it is defined and calculated. Trade ALWAYS balances. In the event it did not, China sends us TVs and takes nothing in return, seems like a good thing for us.

John Henry

John said...

Sorry, forgot the link to the chart on manufacturing jobs 1946-present


http://mungowitzend.blogspot.com/2016/04/hey-trump-and-sanders-manufacturings.html

Jack Wayne said...

Chicklit - Exactly! Notice how many States have become right-to-work states in the last few years? The union members get tired of paying dues so the union leaders can be part of the elite.

rcocean said...

"The Japanese build cars here for financial and content reasons. Worked out well for everybody."

Missing the point completely. But thanks for the response.

John said...

Blogger rcocean said...

Funny how the whole "free trade" thing works. For example, the japanese auto industry grew up
under a tariff barrier that protected it from US exports in the 50s and early 60s.


It was not so much that as that the American companies didn't make cars that even Americans wanted and the Japanese did.

And that the huge American cars of the time were completely unusable in Japan, even had they been affordable without the tarriff.

And that the American car manufacturers refused to build cars with the steering wheel on the right. Lee Iacocca went so far as to say, in all seriousness, that the Japanese needed to learn to drive on the right hand side of the road.

A great book comparing and contrasting Nissan's and Fords histories from founding to 1986 is David Halberstam's "The reckoning"

Now defunct Motorola also had problems selling cell phones in Japan. The Japanese used a different frequency/protocol than the US or most of the rest of the world. Galvin, head of Motorola and son of the founder refused to make phones that could be used in Japan. He thought it was a crappy technology and insisted that they change. It may or may not have been a crappy technology but who the Hell is Galvin to insist that they change to use what he wants to make?

The key to success in any business is selling what the customer wants to buy.

John Henry

rcocean said...

Its obvious from reading the comments, with a few exceptions, that most people don't know what the hell they're talking about when it comes to Trade policy.

The only thing worse then a ignorant person is a misinformed one.

It makes me wonder if Trump is going to gain anything from his economic nationalism.

Jack Wayne said...

Bobby, here's a true story that shows the drag the government puts on American businesses. Let's say you're an oil company that does business in a foreign country. In the past you would bribe the local boss and he would spread the bribes around and everybody would be somewhat happy. But then the USA decided that "we are better than that". In short, we are attempting to be the superhumans that the Germans only dreamed about. So what happens today? A company goes in and instead of cash, they have to build a road, a school, something. That makes the price go up to do business. Because the local boss still wants his cash! And the local company doing the work is filled with his family members. In the meantime, the corporate tax on American companies has gotten so high, that the companies can't bring the money back home, so they offshore it. And eventually, that money gets used in that local economy, building THEM up. And the jobs that used to go to Americans now go to locals, partly because the IRS rules are so onerous that no company really wants to send Americans overseas. The list of interference is endless! And this is how an Empire declines and fades away. By suicide.

traditionalguy said...

That was perfect communication by Trump. But it is being ignored intentionally for any other coverage that can fill the Media airtime.

Trump will need to repeat that speech 10 times. He may need to buy his own airtime if the EnemyMedia refuses coverage, as they are all suddenly all doing in unison.

John said...

Blogger buwaya said...

Its sort of like Global Warming. CO2 is a greenhouse gas, sort of. Get more of it you get more greenhouse effect.

There is quite a bit of debate, and has been for years, about whether CO2 leads or follows warming.

In other words, does warming cause increased CO2 or does increased CO2 cause warming?

That assumes that there is any warming at all. The temperature data on which the science is based is so inaccurate, even before "adjustments" that I would not trust it to be +/- 5 degrees. Certainly not good enough to measure 0.8 degrees rise over more than a century.

But that is a topic for another comment thread.

John Henry

gadfly said...

Trump:When subsidized foreign steel is dumped into our markets, threatening our factories, the politicians do nothing. For years, they watched on the sidelines as our jobs vanished and our communities were plunged into depression-level unemployment.... Many Pennsylvania towns once thriving and humming are now in a state despair. This wave of globalization has wiped out our middle class. It doesn't have to be this way. We can turn it all around - and we can turn it around fast. But if we're going to deliver real change, we're going to have to reject the campaign of fear and intimidation being pushed by powerful corporations, media elites, and political dynasties.

Did nothing? You can go back as far as 1974 and find where our government has subsidized U.S. Steel to the tune of billions! The Steelworkers Union is making the complaint that Donald is spouting, despite the fact that we are putting a 266% duty on inbound Chinese steel. Guess who pays for that.

Then there is the rosy report entitled "2016 looks strong and steady for Pennsylvania's economy" which indicates that the Keystone State weathered the economic downturn well from 2008 - its the natural gas fracking from the Marcellus shale, folks.

And people are going to vote for this idiot?

Sebastian said...

"The end game of globalization never came; the commensurate rise of the standard of living in India, Asia, Africa." Huh, what? The past generation has seen one of the greatest advances in human wellbeing. See Radelet, The Great Surge.

"in the context in which he's using it, can any conservatives explain to me what Trump means by the phrase "our jobs, our wealth, our factories"" No conservative can. But then, Trump is no conservative.

Of course, the problem for Trump, and everybody else, is massive technical change, which outweighs the effects of globalization. See other post about world without work -- not here yet, just first rumblings. Trump ain't gonna stop it. The questions are how to divvy up the spoils and how to give meaning to the lives of the dispensable.

ELC said...

I live a few miles up river from where Trump gave his speech today, and I work in a town just across the river from there. The local Dairy Queen advertised "Free Cone for Trump" on their electronic sign board. I haven't heard that he took them up on it. :)

David said...

"Now, Japan exports cars to us."

They manufacture most of the Japanese cars we buy here in the USA and some in Mexico. BMW makes all of the 5 Series cars worldwide in the USA. China produces nearly 8x as much steel as the USA does. They are the world's leading exporter but their net exports are only a little more than 10% of production. China must import 80% of the iron ore it uses in its steel production and a large percentage (I do not have the number) of its coal. We export a lot of coal to China and would export more if it were not for "activists" who have been doing everything possible to shut down west coast coal exports and prevent new export facilities.

It's a complex system and irrational in significant ways. Right now there is a worldwide oversupply in steelmaking capacity. And a strong dollar. So US steel companies are at a huge disadvantage. Not sure how we legislate out of that. It's not simple. We had better hope that the Chinese economy improves because if they tank there will really be a glut as they try to dump more product. The irony is that we have to protect ourselves, but if we damage China badly it will hurt is too.

It's complicated and the answers are not easy.

TCom said...

Take note: When Trump goes out to raucous rallies and speaks off the cuff, he got coverage, because the media wants to nitpick any slip up, and say he's 'not Presidential'.

When he gives more careful remarks, they ignore it. Can't show him being Presidential.

One wonders how much it takes for some people to wake the Hell up. How much more obvious does it have to get?

David Begley said...

John

The global warming scam is a huge drag on the economy with federal tax credits and forced subsidies. But the Greens fully support Hillary because she wants solar panels on every house. I heard her promise in person in Iowa. Elon Musk loves Hillary..

John said...

Blogger rcocean said...

Its obvious from reading the comments, with a few exceptions, that most people don't know what the hell they're talking about when it comes to Trade policy.

I confess that I don't. Perhaps my confusion begins with why there should be any trade policy at all? Can you explain that to me?

All countries are welcome to sell anything they want into the US provided that it complies with our laws (Pharmaceuticals meet FDA standards, food complies with USDA, no machine guns and so forth)

I would be OK with a tariff provided that it applied uniformly to everything coming in. Like a 10% sales tax, sort of. No different rates for different countries or products.

If they do not want to buy from us, I have no problem with that. We are going to pay for their products with dollars. (Or we will use dollars to buy yen but the same thing) We wind up with goods, they wind up with dollars that are spendable nowhere else in the world than the US.

If they do not spend them, we have esentially gotten the goods for free. Much as if I bought a car from you, gave you a check and you never cashed it. Now I have the car and the money.

Eventually you will cash the check and I will have to cough up the money. Eventually the other country will spend the money and we will have to cough up some goods.

John Henry

David said...

Gadfly, have you spent much time in Western Pa?

No? I thought so. If you had you would not base your argument on some self congratulatory report. These towns have been getting killed (literally) for decades.

Bobby said...

khesanh0802, Jack Wayne,

I agree with what you guys are saying, but then why isn't the solution to reduce the tax and regulatory burden on companies operating in the US in order to make investments in America more attractive than investments in Mexico or China? I mean, I get that we are where we are with the government interfering with the market because the government believes it makes better decisions than does the market on everything from how much to pay workers, how many hours they can work and everything in between... But why is the solution to chase it with more government interference in the economy? Because this time government really does know better than do market forces?

That doesn't sound right to me, and I honestly can't see how that differs from what Democrats and Socialists (but I repeat myself) have been saying for years.

John said...

Should have read "My trade policy would be all countries can sell anything into the US..."

John Henry

David said...

e. Seems to me that the trade balances.

It always will.


"Payments" will always balance. There can be no deficit in balance of payments. But trade does not have to balance. The imbalance must be accounted for by borrowing, investment, etc but trade is by its nature imbalanced in a world with international capital flows.

Jack Wayne said...

Bobby, Trump is not my guy but he has repeatedly called for a reduction in regulation. As he is not an ideologue, it's hard to say what his eventual program will be. If he's serious about bringing jobs back to America, then he will look first at small businesses before he worries about the large conglomerates. Time will tell but that alone would be a huge change.

dreams said...

"I agree with what you guys are saying, but then why isn't the solution to reduce the tax and regulatory burden on companies operating in the US in order to make investments in America more attractive than investments in Mexico or China? I mean, I get that we are where we are with the government interfering with the market because the government believes it makes better decisions than does the market on everything from how much to pay workers, how many hours they can work and everything in between... But why is the solution to chase it with more government interference in the economy? Because this time government really does know better than do market forces?

That doesn't sound right to me, and I honestly can't see how that differs from what Democrats and Socialists (but I repeat myself) have been saying for years."


I think Bobby is teaching while pretending to be the student.

Jack Wayne said...

He's also said he wants to fix corporate taxes to bring the offshore money back. As that's over a Trillion, that could be a big boost.

Jack Wayne said...

Also, fwiw, most global corporations are playing the Enron game with the blessing of Congress. It's easy, using SAP, to set up multiple companies all around the world. Then, depending on the tax laws of the country, once those entities are established in it, you can lower your taxes by saying that company is actually owned or subordinate to a company in another country. All it takes is a spreadsheet to determine what mix of subordination results in the best tax reduction.

gadfly said...

@David said...
Gadfly, have you spent much time in Western Pa?

No? I thought so. If you had you would not base your argument on some self congratulatory report. These towns have been getting killed (literally) for decades.


I grew up less than an hour away from Pittsburgh in WV's northern panhandle, so don't talk to me about hard times. Trump indicates that PA had particularly hard times but that was back in the last century. Nobody in the world makes steel like we did last century, so the ugly remains of those plants keep reminding people of what used to be.

The article I cited covers recovery since 2008. Here is the flavor if you didn't read it.

Pennsylvania was insulated from the worst excesses of the housing bubble, and, as a result, its economy had fewer losses to recover from in the past few years. For example, in 2008, the U.S. economy contracted 2.8 percent, but Pennsylvania’s gross domestic product (GDP) only fell 0.5 percent. This explains why the state’s growth has lagged behind national averages throughout the recovery — compared to other regions Pennsylvania had significantly less economic slack to take up.

Pittsburgh has been at the forefront of the state’s recovery. The city regained the GDP lost during the recession by early 2011 — a full two years earlier than the state as a whole. And since 2008, Pittsburgh’s growth trajectory has been significantly steeper than the rest of the nation’s. While the city’s economy is unlikely to return to the extraordinary rate of growth seen during the height of the gas boom, Pittsburgh should continue to surpass the national average GDP per capita.

n.n said...

Offshoring to avoid environmental, etc. regulations and to exploit cheap foreign labor.

Inshoring to compensate for the elective abortion and clinical cannibalism of over one millions Americans annually and to discriminate and disenfranchise Americans through [class] diversity schemes (e.g. racism) for democratic and economic leverage.

Importing to compensate for trillion dollar deficits (i.e. devaluation of capital and labor, forwarded demand), redistributive change schemes (e.g. political bribes), and to smooth resulting environmental, labor, and social instabilities.

Classical economics does not tolerate authoritarian intervention in the form of monopolies and monopolistic practices that create progressive misalignments. Neither does classical liberalism tolerate [class] diversity schemes, anti-native policies (e.g. excessive, illegal immigration), and Planned Parenthood (i.e. human component markets).

AGW (Anthropogenic Government Whoring) destabilizes classical societies and creates catastrophic misalignments in social and economic domains. The female chauvinist revolution that normalized elective abortion (i.e. debasement of human life for wealth, pleasure, leisure, and narcissistic fulfillment) in order to gain a short-term gain in government and corporate revenues has run its course, and now they have turned to inshoring to address the consequences of violating classical norms in order to compensate for lost future demand and suppress social unrest.

So, this is the overlapping and convergent interests between liberals and libertarians, where the latter is the former (i.e. social libertines) without the former's promise of redistributive change benefits.

gadfly said...

@Jack Wayne said...
Also, fwiw, most global corporations are playing the Enron game with the blessing of Congress. It's easy, using SAP, to set up multiple companies all around the world.

So all that needs to be done is to buy SAP Accounting Software, supplemented by our trusty Excel spreadsheet, in order to overcome every foreign tax law in the world and when Trump says bring back all those Dollars residing in foreign banks - poof! Done!

Donald Trump is a miracle worker indeed and SAP will raise prices tomorrow!

mockturtle said...

Perot was spot-on about that 'giant sucking sound' of jobs leaving the US after NAFTA was approved. But, then, Perot was right about everything.

Guildofcannonballs said...

As did the father Chip in Talledaga Nights, I've held my tongue for too damn long about the thin-skinned Trump trolling fate's Karma by being roasted on Comedy Central. What a jerk. He should have told everyone he will destroy them and sic hundreds of lawyers on 'em, the dope.

These evil other do things like sacrifice their life or dignity because of the stupidity of the people. The madness of voters.

G. Washington really screwed America by not Kinging it up, just look at the Maoists-in-other-than-name-only Obama puts in charge and you'll not fail to notice.

And after years of consideration, I've decided to raise $30,000 via Althouse for betamax3000 to create a roast of Hillary, based on the Situation "roasts" of Trump. All the money goes from you the reader to Althouse to Beta; and that's the way it is.

I take comfort in knowing I am not Ted Kennedy.


http://latimesblogs.latimes.com/showtracker/2011/03/jersey-shores-situation-nearly-booed-off-stage-at-comedy-central-donald-trump-roast.html

http://www.ew.com/article/2011/03/16/donald-trump-roast-situation-snoop-dogg

Chuck said...

So tonight Trump (in St. Clairsville, OH) goes back to the "we need to waterboard... or worse" pronouncement.

Remember the last time Trump blundered into that? It was back in February. Trump popped off about waterboarding "and worse, much worse" at a New Hampshire debate. The CIA, through its director and numerous agents, all promptly said they'd not obey such an order from Trump. John Yoo, one of the authors of the so-called "torture memos" in the Bush Administration's Department of Justice Office of Legal Counsel, denounced Trump in detail.

http://lawnewz.com/video/bush-doj-lawyer-who-actually-approved-waterboarding-says-trumps-policy-violates-federal-law/

This is not a political question; I like John Yoo. I support John Yoo's OLC work. I have no problem with "the torture memos." I have no problem with the narrowly-tailored use of waterboarding in the Bush era.

But Trump is an idiot. An idiot-outlier. An outlier, even among idiots. Anyone who agrees with Trump on this crackpot idea has no business serving in any high-level U.S. governmental office.

Trump can't even muster the support of the people in his own party who ought to be his base. A bad, ugly, joke.

Guildofcannonballs said...

"But is The Donald serious about being our next Commander-in-Chief? He certainly seemed to be when we spoke to him backstage after the show. “I feel that the country is being terribly run right now,” Trump said. “It’s very sad what’s happening to our country. We’re being taken advantage of by many other countries in the world, whether it’s China, South Korea, the OPEC countries. Everybody is looking at us as a whipping post. What this country needs is a person who’s already very successful in charge.”

Despite his in-no-way-self-aggrandizing desire to enhance America’s standing in the global community, Trump was careful to leave himself a face-saving out: “I’ve always heard that it’s very, very hard for a very successful person to run for public office. Especially because I’ve won a lot of battles, and I’ve beaten a lot of people, and those people don’t like me. That’s true of other very, very successful people. But what this country needs is a very successful person.” So when if Trump’s presidential prospects decline faster than ratings for a non-Gary-Busey-fronted season of The Apprentice, he has his excuse. He’s too successful."

http://www.ew.com/article/2011/03/15/donald-trump-comedy-central-roast-presidential-campaign


Michael K said...

I think reason two is the greater importance but a general feeling of decline for white protestant anglophones, as their place in the world becomes less unique must also be a factor.

I am about to make a racist comment so anyone who can't handle it, had better go into the puppies and playdough room.

There is a myth on the left that everyone is exactly equal and only racism or "white privilege" explains differences in outcome.

That's bullshit.

There are two racial groups that have higher mean IQ, whites and Asians.

Joel Mokyr, in his great book, The Lever of Riches," pointed out that Rome had the potential to start the Industrial Revolution 1,000 years before it began. There were a couple of reasons why it didn't happen. Rome had a working steam engine, The aeolipile, which could be used to open temple doors.

What they didn't have was a legal system that could reward inventors and secure the benefits of their invention. The inventor of the horse collar and the mould board plow are unknown. Those were huge technological steps toward modern life.

The English legal system established the rights of inventors.

The English legal system was also aided by the flight of the Huguenots from French intolerance.

Free trade and patent law made the "Enlightenment" happen. Free trade and patent law would not have made a difference in a society with a mean IQ of 85. At least if it was in competition with a society with a mean IQ of 100.

Ashkenazi Jews have a mean IQ of about 115. Does does anyone wonder why Israel is thriving once they threw off Socialism ?

China does not have a legal system that will allow its people to thrive in competition with the west, at least the US, Canada and the UK.

All the efforts of the left with "Diversity" is trying to push water uphill.

IQ does not respond to early education of the "Head Start" variety. They are fooling themselves.

Genetics is destiny. Get used to it.

Guildofcannonballs said...

Chuck the writer of the linked 2011 column above was mocking you personally, of course, when adding "certainly" to the article. You and I both know that author could have attempted a failed satire, in the best possible of lights, without actually turning dark and fooling folks with the c word.

Are you just gonna sit there and accept this what-will-come-to-be scene?

Paul said...

I pray Trump is a second Reagan. Maybe he is, maybe he isn't.

If he keeps talking strait AND more "presidential" in debates and formal speeches he will, as Scott Adams said, win by a landslide.

And then comes the hard part.... working with Congress.

I hope and pray he really is as he seems.

bagoh20 said...

I only read about 20% of this thread, but wow! So many great points and perspectives. Just awesome discussion. Even the stuff I disagree with is still very thoughtful and informed. Thanks, all.

David Begley said...

Chuck

I used to feel the same about Trump as you do. I saw him in person four times and three of the reports are at Power Line.

Here's my take now. I never thought waterboarding was torture but the Libs were wildly against it. I support John Yoo's legal work on the topic. There is a legal definition of torture and waterboarding ain't it. But Libs love their virtue signaling and waterboarding was in their wheelhouse. We are better than the terrorists because we don't torture. ISIS, on the other hand, drowns people in cages.

So with Trump saying "waterboarding or worse" it sends a message to Joe Six Pack that we are going to be tough on those terrorists. Fight fire with fire. You can also always create the ticking bomb scenario to justify it.

It is all about the emotion of completely crushing and defeating the terrorists after 15 long years of war.

jr565 said...

Trump,is actually hitting points that a lot of republicans should. Republicans are known as the party of big business. And part of that comes with siding with business as they push for cheap labor. At the expense of working people. Not just white working people but all working people. These free trade agreements might in fact be beneficial overall, but if you are out of a job it doesn't really register as a positive.
Republicans are actually largely poor or working class. They are not rich fat cats.so, you'd think republicans wouldn't shit all over their base they way KevIn Williamson did in National Review when he said they are heroin addicts who brought all the problems on themselves and the only recourse for them is to get a U-Haul.
trump speaks to those people because God Knows, Kevin Williamson doesn't.
Maybe Trump is inarticulate, but he seems to be grasping that a huge swath of republicans or those that would vote for the Repubalicqn over the democrat are not being served.

Chuck said...

So David who exactly is going to carry out any orders from Trump, for "waterboarding or worse"?

Under Trump's own description(s), and by the accounts of every legal expert from every corner of the political spectrum, it would be a crime. Any CIA operative, any independent contractor, any military officer would be risking their entire career and a prison term.

So who will do it? Because the fat-assed 70 year-old Donald Trump is not going to get his tiny little fingers dirty, doing his own waterboarding.

Michael K said...

"It is all about the emotion of completely crushing and defeating the terrorists after 15 long years of war."

Dave, we have encouraged this with our weak policies. I have no idea what Trump will do but anything is better than the hag

It's amusing that "The Hag" was the term in James Clavell's novel "Nobel House" for the woman who saved the company. "Struans" which was his history of Jardine Matheson and Company. I don't see Hillary as playing that role.

We are ending, I hope, an era in which weakness was a temptation for dictators much as Stanley Baldwin's England was in the 1930s.

If we don't turn this around, it will make me even happier that I am old and won't have to deal with it.

Michael K said...

Chuck, this was a pretty good thread.

Sorry to see you appear with your usual bluster.

eric said...

Oh geez Chuck, you've gone so far into Trump Derangement Syndrome that you now think waterboarding is torture?

Ugh!

Chuck said...

What I think about waterboarding is what John Yoo did; it was not "torture" in the three cases where the Bush Administration approved it. To extract irreplaceable intelligence from high-level terrorist leaders.

And it surely would be torture, in Donald Trump's world, wherein Trump said that whether the technique works or not in extracting critical intelligence from hardened terrorists, he would employ waterboarding because "they deserve it anyway," and because Trump thinks that wide-scale "waterboarding or much worse" would be a deterrent to people in terrorist nations, "sitting around their dinner tables" wondering if American was really a soft enemy.

Yes, eric; I think that Trump's notion is a criminal notion. And I say that as someone who was comfortable with, and supportive of, the work of John Yoo.

Guildofcannonballs said...

Why is everyone picking on Chuck in 2011?

That ain't no Grismond I ever heard of.

chickelit said...

@Chuck: The simple fact that you cannot distinguish what Bush did from what Trump would do is on you and you alone. To my mind, it shows that you cannot distinguish fact from hypothetical. Even worse, as an alleged attorney, it shows that you cannot deploy the indicative and subjunctive moods in the English language. Thus, you are a piss-poor writer and probably an even pissier, poorer lawyer. My God have mercy on your clients in Michigan.

machine said...

"Globalization has made the financial elite who donate to politicians very wealthy. "

he is playing you...and you lap it up.

chickelit said...

But it has left millions of our workers with nothing but poverty and heartache. When subsidized foreign steel is dumped into our markets, threatening our factories, the politicians do nothing. For years, they watched on the sidelines as our jobs vanished and our communities were plunged into depression-level unemployment

Isn't that the Pennsylvania that Kevin D. Williamson described and went to say deserved what they got? "Republications" like NRO are as big a problem as the DNC. That is also why this election is so unique.

chickelit said...

machine said...he is playing you...and you lap it up.

They are lapping at you and you're playing with yourself. Nice until the fantasy ends.

EDH said...

Chuck said...
So who will do it? Because the fat-assed 70 year-old Donald Trump is not going to get his tiny little fingers dirty, doing his own waterboarding.

Assuming that anyone who would be the plausible subject of waterboarding would not see the light of day again -- nobody, maybe?

Isn't half the benefit of the "WB or worse" policy the uncertainty it creates for the enemy combatants entering interrogation, as compared to a stated policy of absolutely no enhanced interrogation?

Jon Ericson said...

Chuckie, Chuckie, Chuckie.
Please lie down, take a handful of Lorazepam , and chill.

Brando said...

Oh good, the GOP is going back to its 19th century protectionist roots. Maybe next we can bring up the gold standard again.

It's easy for bloviating populists like Trump and Sanders to rage on about free trade "destroying jobs" because on a very basic level it makes sense--companies will have the work done cheaper by foreign labor overseas, so you lose your job here! But it ignores the fact that trade is so intertwined that those "cheaper" (or in many cases, better) products are integrated into what we produce here as well, and on the whole improve everyone's living standards, job opportunities and wages far more than they hurt. Free trade creates more and better jobs than protectionism ever could, for the same reason it does not benefit New Jersey to slap a tariff on goods produced in Pennsylvania (even if that were legal) or Newark to slap a tariff on goods from Trenton.

There are of course bad acts (e.g. currency manipulation) that we need to counteract, and even with the positive effects of free trade there will be victims, just as improved technology and efficiency will make a lot of jobs redundant (and the latter have much more of this effect than free trade does). It's worth discussing what can be done for such people, but trying to close off our economy (or turn back the clock on technology) is not the answer.

I've long wanted to see a Republican nominee who could convincingly make this case to the general public, but it seems now they've decided to give up and embrace outdated garbage.

tim in vermont said...

machine said...he is playing you...and you lap it up.

LOL. Hillary, whose legitimacy comes from winning the "invisible primary" AKA the "money primary" isn't playing progressives? Did Warren really mean anything she said if she's out there whoring her support for Wall Street darling Hillary?

This election can be boiled down to two choices.

"Hope and change"

And

"More and harder."

tim in vermont said...

and on the whole improve everyone's living standards, job opportunities and wages far more than they hurt. Free trade creates more and better jobs than protectionism ever could,

Right. So all of those people who used to go to work after getting a high school education and make a good life for themselves and their children? Well sorry, but those kinds of jobs are done at extremely low wages overseas. If everybody was cut out for college and the only reason people didn't go to college was laziness, or lack of affordability, I would say "fuck the lazy bastards and find a way to send the poor." For these people to remember what life was like for grandpa before people decided to "improve their lives" by flooding them with cheap Chinese shit, is a self defeating waste of time. Maybe we should round them up and put them on reservations! Isn't that what we do with people whose way of life and livelihood we have destroyed?

Rusty said...

"Yes, eric; I think that Trump's notion is a criminal notion. And I say that as someone who was comfortable with, and supportive of, the work of John Yoo."

Yes Chuck. War is shit. Counter insurgency even more so. And it's shit, Chuck, because there are no rules. There is only survival. You use any means at your disposal to survive. And if survival means you have to torture somebody to insure your people are safe, OK I'm good with that. Your mistake is that somewhere in that shit there's morality. There isn't. Your morality will get people killed.

tim in vermont said...

- its the natural gas fracking from the Marcellus shale, folks. - gadfly

Which Hillary and the rest of the Democrats would dearly love to kill as dead as Keystone XL.

Paco Wové said...

Behold The Elephant of Globalization.

damikesc said...

But it ignores the fact that trade is so intertwined that those "cheaper" (or in many cases, better) products are integrated into what we produce here as well, and on the whole improve everyone's living standards, job opportunities and wages far more than they hurt. Free trade creates more and better jobs than protectionism ever could, for the same reason it does not benefit New Jersey to slap a tariff on goods produced in Pennsylvania (even if that were legal) or Newark to slap a tariff on goods from Trenton.

...except it is not.

It would do so if the standard of living in poor countries improved. It is not in most cases. So marginal employees in the US are totally frozen out of the potential to get a job...while we import more cheap, marginal talent to do those jobs instead.

A lot of people have been utterly fucked over by free trade and nobody has wanted to even mention it for years.

Trump has done so.

Again, when the "respectable" groups decline to even entertain your concerns, you will seek out less "respectable" groups who will.

There are of course bad acts (e.g. currency manipulation) that we need to counteract, and even with the positive effects of free trade there will be victims

That's the problem --- the elites don't give a rat's ass about the victims since THEY are not the victims. Why SHOULDN'T a victim of this rebel against the elites who are getting richer while their standard of living is wasting away? The elites do not pretend to care and there are WAY more victims than elites.

A thorough blood-letting is not out of the question at this point, since our "elite" class is, arguably, the worst "elite" class in human history. Rome at its end had better leaders than we have now.

I've long wanted to see a Republican nominee who could convincingly make this case to the general public, but it seems now they've decided to give up and embrace outdated garbage.

No. The leadership has said "fuck the victims. Should've done what we did (which is have influential parents getting them into the right schools so they can succeed in spite of an amazing lack of actual talent or intellect)" They're lucky the victims have decided to still handle things politically and not violently...though that might end up happening.

If everybody was cut out for college and the only reason people didn't go to college was laziness, or lack of affordability, I would say "fuck the lazy bastards and find a way to send the poor." For these people to remember what life was like for grandpa before people decided to "improve their lives" by flooding them with cheap Chinese shit, is a self defeating waste of time. Maybe we should round them up and put them on reservations! Isn't that what we do with people whose way of life and livelihood we have destroyed?

Even worse --- it's not all colleges. It's only SOME colleges that are beneficial (shall we go into how much of our leadership goes to the same small circle of schools?). So, it is miles from a meritocracy. And the poor are expected to just accept this?

I don't love Trump --- but fuck I hate the Republicans and Democrats. As I said, if an explosion hit during the State of the Union and killed every politician in attendance, I'd not weep a single tear.

We are stuck with a leadership class that is out of touch with reality and gives zero shits about the people they govern. In fact, they think we're utter fools, given the reaction to the Brexit (how DARE the proles not side with what we want!). We owe them no loyalty. I renounced my Republican party affiliation a few years ago.

John said...

Wow. This is a great thread of comments that - with the exception of Chuck going off on waterboarding - have great insight and debate on trade. A few commentators have alluded to/ raised my concern over how trade is intertwined with with other market and political forces so deeply that to 'fix' trade only, misses the point. It seems that world population changes (with everything that brings [education, culture, health, exploitation, religion, easier migration, etc]) and technology (efficiency) have outpaced bloated political entities too quickly for them to adapt.

Outcomes can include:
1) efficient factories operated with fewer humans by robotics and software - neither of which pay taxes or consume goods
2) more products in the market than needed (glut)
3) market prices artificially adjusted through tariffs & taxes (long response time) rather than supply & demand (short response time)
4) artificial protections and penalties for goods that are deemed positive or negative by political theory (eg: carbon fuels vs 'green' energy)

To discuss trade as mutually exclusive from political and geo-political or even market forces seems problematic. I personally believe there are few natural laws, one being the Law of Unintended Consequences.

Anglelyne said...

Brando: There are of course bad acts (e.g. currency manipulation) that we need to counteract, and even with the positive effects of free trade there will be victims, just as improved technology and efficiency will make a lot of jobs redundant (and the latter have much more of this effect than free trade does). It's worth discussing what can be done for such people, but trying to close off our economy (or turn back the clock on technology) is not the answer.

I've long wanted to see a Republican nominee who could convincingly make this case to the general public, but it seems now they've decided to give up and embrace outdated garbage.


That might be a good idea, if the problem were fundamentally a matter of voters not understanding Econ 101, and the solution available from people who understood the economic models from Econ 101, but not anything else. (BTW, ending currency manipulation probably won't have much effect on the problem.)

Speaking of outdated, everything you're saying would have been pretty stale stuff in any "free trade" discusssion c.1990. Including, "[i]t's worth discussing what can be done for such people", lol. Economist blogs used to be awash with apologists for trade-policy conventional wisdom blithering about "redistributing the gains of trade", as if redundancy and the withering of the middle class were minor problems just needing a little policy tweak. Guess this still passes for a novel recommendation for solving a new problem, a quarter century later.

Anglelyne said...

damikesc: It would do so if the standard of living in poor countries improved. It is not in most cases.

Not true. Over the last half-century a lot of poor people have gotten richer off of "free" (or "freer", at any rate) trade *into* wealthy countries. But they themselves were and are often highly protectionist. But, yes, these policies are not delivering for hoi polloi in wealthy countries, quite the contrary.

Michael K said...

"Maybe next we can bring up the gold standard again."

That will come after the present fiat currency collapses.

Chuck said...

So look at that last line from "damikesc." He renounced the Republican Party, wants nothing to do with it and displays general ill will toward Republicans as well as Democrats. That's okay; it's a free country. Just please stay out of Republican primaries, and go form your own party to field your own candidates.

And don't expect loyal Republicans, who I expect you loathe, to work for you or your candidates, while you attack them and denounce their policies.

Chuck said...

John I "went off on waterboarding" because Donald Trump "went off on waterboarding." After the passage of four months, and after having been rhetorically beaten into submission the first time he blundered into the issue, Trump went and did it again! I don't think any interesting discussion of merit absolves Trump of any of his daly stupidities.

Robert Cook said...

Trump's quoted passage is spot on. One will never hear a Washington politician speak the truth so plainly.

tim in vermont said...

Hillary's response? I hear you Trump voters, and I promise you more the same and harder.

William Chadwick said...

So if I am an American who owns a company, and there are people in Slobbovia who will work for me and produce my product at a labor cost lower than what US workers would charge me, so I decide to move my operations to Slobbovia, what gives Donald Trump--or Hillary, or anyone else--the right to stop me?

Bobby said...

William Chadwick,

I don't know, I was wondering the same thing. Apparently, many commenters here at least partially agree that "if you own that company, you didn't build it - somebody else made that happen," and therefore government is authorized to prohibit you from doing so and can indirectly redistribute your wealth by forcing you to operate under the higher costs of not relocating to Slobbovia. I don't personally agree with that, but then perhaps that's why I'm neither "liberal" nor "conservative."

And, by the way, everyone knows Slobbovia can't produce anything worth a damn, so they're actually doing you a favor.

Michael K said...

"I decide to move my operations to Slobbovia, what gives Donald Trump--or Hillary, or anyone else--the right to stop me?"

Nobody is going to "stop" you.

What I understand about Trump is that he wants to level the playing field.

China is signing big contracts with Boeing and other big manufacturers on condition they build the p,ants in China and hire Chinese workers and allow theft of intellectual property.

How about somebody figure out what that means in relative cost and add a tariff to those products imported here?

Reagan did this with Japanese cars. They built plants here and and US workers got jobs. If the Boeing products are all for Chinese consumption, the tariff is meaningless.

Sell your products in Slobbovia and you are home free.

Bobby said...

Michael K,

Assuming this is the case, wouldn't the William Chadwick Corporation simply build all their "export" products (for the purposes of this discussion, all products to be sold outside the US) in their Slobbovia factory, where labor costs are lower than the US and where the international trade regime has ensured products can be bought and sold sans tariffs? It seems to me the only factories the William Chadwick Corporation would have in high-cost USA would be those selling their products only in the USA.

Meanwhile, the international trade regime would likely reciprocate on the Trump tariff by putting up their own tariffs on US-made products, thereby making the William Chadwick Corporation's Slobbovian factory that much more competitive than its American one, and ensuring Americans are paying ever-higher costs for their goods and services than does the rest of the world for the very same William Chadwick Corporation products manufactured in his Slobbovian plant (with the aggregate effect inevitably making the American economy less competitive over time). I really don't see how we win in this scenario. But maybe foreign countries would enjoy the privilege of paying the US tariff so much that they wouldn't want to put their tariff on American products- heck, I bet they'd enjoy it so much that we can get them to subsidize our products! This stuff is easy when you don't actually have to do economics!

Also, could you please provide me to your source for the Reagan tariff on Japanese cars (I'm assuming you didn't type "cars" when you really meant "electronics")? I'd like to read more about it. Thanks in advance!

chickelit said...

Booby inquired: Assuming this is the case, wouldn't the William Chadwick Corporation simply build all their "export" products (for the purposes of this discussion, all products to be sold outside the US) in their Slobbovia factory, where labor costs are lower than the US and where the international trade regime has ensured products can be bought and sold sans tariffs?

I don't buy your first assumption. Why wouldn't the Chadwick corporation be like Apple and build all their widgets outside the US using dirt cheap labor and then re-import the finished products back into American markets? That is in fact what people are upset about, not something tied to your assumed business practice.

Bobby said...

Chickelit,

"I don't buy your first assumption. Why wouldn't the Chadwick corporation be like Apple and build all their widgets outside the US using dirt cheap labor and then re-import the finished products back into American markets? That is in fact what people are upset about, not something tied to your assumed business practice."

Well, they really want to, but they can't: in Michael K's scenario, the Trump Administration figured out the "relative cost and add[ed] [the] tariff to those products imported here." As we all know, government is omniscient, so this means (a) the Slobbovian produced goods are now being taxed at such a rate that their cost in the US is no longer competitive with the American produced goods, and (b) as the government is also infallible, there's no way the Chadwick Corporation can get around it and sell their goods in the US without paying that tariff.

American businesses win!

Well, except for those American companies who are already exporting their goods because they have a comparative advantage and are competitive on their own- their business would likely suffer as foreign countries imposed retaliatory tariffs of their own, and the businesses found their products were priced out of competitiveness with foreign products. But that's not really anything to worry about it. We all know that government chooses winners and losers far more efficiently than does the market economy, so we should empower the government to make those decisions.

John Henry said...

One of the reasons companies relocate overseas is the way US taxes are charged.

remember a year or two back, all the hoorah about the "American" company Burger King moving to Canada?

Burger King is owned by Argentines (Or Brazilian?) US companies have to pay taxes on their earning wherever they are earned. Thus you had Argentines paying US tax on burgers that their company sold in Japan.

Moving to Canada meant that they had to pay Canadian taxes only on their earnings in Canada. In what parallel universe does that make any sense at all?

They still pay the same US taxes in the US for earnings in the US as always.

Allergan recently moved to Ireland for the same reason. They are still mostly owned by US stockholders. They will still pay US taxes on US earnings. They will even pay US taxes on earnings for goods made in the US and exported.

What they will not do is pay US taxes on earnings for drugs made in France and sold in Germany.

Seems like it makes sense to me.

Want to fix this? Change the tax code. Do like most civilized countries do. Charge taxes on business in the US but not business outside of the US.

John Henry