The NYT reports, embedding this presidential tweet:
Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that - and everybody’s talking! Remember, we are the “piggy bank” that’s being robbed. All will be Great!
— Donald J. Trump (@realDonaldTrump) July 24, 2018
Here's another tweet he came up with today (I don't know how he thinks of all this stuff):
MAKE AMERICA GREAT AGAIN!
— Donald J. Trump (@realDonaldTrump) July 24, 2018
Posts
104 comments:
I voted for the man. I'll vote for him again. But he is an idiot.
So it looks like the Government is going to go back to buying food from farmers and give it to the poor. Nothing new here. It goes back to at least F.D.R.. When I was in college I qualified for government cheese, and from what I remember it was pretty good.
I realize this is very very very serious, but "Tariffs are the greatest!" made me laugh.
God this awfully bad policy. The next step after paying off farmers hurt by tariffs is government cheese.
Gahrie, you beat me to the cheese.
It's not the "President's trade war", it's America's trade war. I'm with DJT.
Make Ricardo's Theorem Great Again!
As Kevin Bacon's character Chip Diller implored in Animal House, Remain Calm! All Is Well!
I assume this is temporary while the tariffs are negotiated.
If you think government cheese is over, notice the date on this story,.
The alternative is to cling to the illusion of sustainable development through labor and environmental arbitrage, which is to deny both the explicit and implicit tariffs imposed by other nations, and immigration reform (e.g. refugee crises) in lieu of emigration reform.
It would be cool if the no tariffs crowd were hard on the Europeans and Chinese. Ben Sasse is aghast at tariffs. But he has no problem with the Chinese fucking the US. He’s a principled hypocrite. He’ll make a great lobbyist in a few years cashing in on selling out the country with his “policies.”
What he's doing makes sense, and the 12 billion to farmers is not for the purpose of perpetuating dependency, but to break China's back during a showdown. China needs to sell here more than we need to sell there.
The left says Donald Trump is a Russian stooge, I say he's Captain America.
Yes, government regulation is no different than a tariff. If the US banned the importation of any goods (and persons) from countries with labor and environmental laws that were less stringent than the US, then China would implode (along with US universities so dependent on full paying students from China).
The GOP wants cheap wet back labor and cheap Chinese goods. They are the party of principled douchebags.
It would be cool if the no tariffs crowd were hard on the Europeans and Chinese. Ben Sasse is aghast at tariffs. But he has no problem with the Chinese fucking the US. He’s a principled hypocrite. He’ll make a great lobbyist in a few years cashing in on selling out the country with his “policies.”
"Free trade" seems to actually mean "cheap Chinese imports" for a lot of people.
I’m with djt. I have yet to hear a republican ( Paul Ryan doesn’t count ) explain to me why we should have our goods hit with tariffs but we should not hit back. Or have I heard a single solitary republican give a crap about the folks whose jobs left. F’em.
If the US is to have a trade war, then the proper approach is to share the pain. Trump is doing the right thing by the farmers.
We allocate around a trillion dollars annually in redistributive change (e.g. welfare, social safety net) to compensate for environmental and labor arbitrage (i.e. implicit tariffs, outsourcing), explicit foreign tariffs, and immigration reform (e.g. insourcing).
If you think government cheese is over, notice the date on this story...
Government cheese is never over.
So it looks like the Government is going to go back to buying food from farmers and give it to the poor.
Good! Commodities instead of food stamps. Give real food and cease allowing tax payer money to be able to buy junk food or be fraudulently exchanged for money to buy booze, cigarettes and drugs. The food stamp program is riddled with fraud.
Actually, some short term subsidies for those agricultural products that will be most affected by tariffs is a good backstop until things even out or until the growers can rotate to other crops. Like throwing a bowling ball into a pond, there are bound to be ripples for a while. Things will smooth out.
(eaglebeak)
Trump not an idiot--just funny
Not a lot of comments on this one, not surprising, as perhaps some of Ann's readers don't see welfare for the farmers the same way she does: as the hilarious work of a consummate showman whose every move is a work of genius. Come on you guys, can't you see how funny it is, the way Trump acts? As she suggests, Ann has got to be laughing her head off.
I hate tariffs but I understand the need to force China into lowering theirs. We can handle temporary disruption or farm welfare (subsidies are tariff’s shady cousin) if that’s what it takes. By acting on taxes, immigration and border security Trump has more than earned from me the room to maneuver. If it works great! If not we can adjust tariffs as needed. Trump should explain it but those who need the explanation wont listen anyway. His tweets are funny. He’s a funny guy. I didn’t appreciate that in my Trump-despising days gone by. Humor goes a long way toward bringing people together.
Looks like John and I approach this from different angles.
Welfare for rich farmers
I realize Trump is trying to play the long game on the trade deficit. But this is dumb.
If the US is to have a trade war, then the proper approach is to share the pain. Trump is doing the right thing by the farmers.
But that makes no sense. What about the next group being impacted by the tariffs? And then the next one? And the one after that?
Sharing the pain is where everybody shares it.
You never miss an opportunity to STFU, do you Pickering?
With good humor Mike advances the hopes of the Trump true believer, whereas I am simply imagining some of hilarious thoughts going through Ann's head, with her kind permission. As for me, I find myself in the position of the feminist who is asked, how many feminists does it take to change a lightbulb?
My answer: I don't think that's very funny.
Yep, this is one of those things I don't like about Trump.
we are the “piggy bank” that’s being robbed.
And Trump's spreading that pork to shore up Midwest votes.
DBQ,
Fair enough, although any system can be gamed -- the only difference between my exchanging a SNAP card for drugs or a big bag of cheese for drugs is that one transaction will be a lot more conspicuous than the other. But, then, we live in an era where Tide is a recognized commodity, and you just don't get more conspicuous than Day-Glo Orange.
I think it was Theodore Dalrymple (or at least someone who thinks very like him) who proposed making some commodities free to the whole populace. Bulk grains, flour, pasta, salt, yeast, canned tomatoes and other fruits/veggies, probably eggs and milk and cheese and ground beef and a few other perishables, maybe coffee. Sounds good to me.
A Trade War must be won by a commander-in-chief ordering assets into the fray. The Chinks targeted counter attack on our Midwestern States is being blocked. That strong move can re-start negotiations. They are playing Poker, and Trump raised the bet.
More Government Cheese!! Huzzah! Huzzah! Huzzah!
What about the next group being impacted by the tariffs? And then the next one? And the one after that?
Who are they ? What does China buy from us ?
Here is a proChina web site.
Does anybody see what those exports are ? I expect airliners from Boeing but China is requiring lots of intellectual property sharing, also know as theft.
The rest is soy beans and farm products.
I dpn't think Boeing needs subsidies more than they already get.
who proposed making some commodities free to the whole populace.
Then they would have to learn to cook instead of watching "The View." Never happen.
"speaking loudly and carry a big stick" God Emperor of The United States
I’m in the comparative advantage camp...but what if he wins concessions?
The coverage of this on TV and the NPR/CBS radio has been awful.
Good luck in getting ANY kind of sophisticated analysis or understanding of WHAT kind of farmer are getting the aid, and WHY specifically they need it, and HOW it ties into Trump's trade strategy.
Instead all you get is a lot of hysterical - its a TRADE WAR!!! and TRUMP IS CRAZY!! and FREED TRADE IS GOOD!!!
Plus, lots of quotes from morons like Sasse the Asse about "Farmers want free trade not handouts".
And I'll just say this:
We don't have "Free Trade" we have "Trade deals" with various countries. These "deals" include quotas and tariffs on some USA goods and not others. And we also have certain barriers to foreign imports.
These "deals" - have picked winners and losers. Which was their intent. Now Trump is re-negotiating "the deals". Which will cause certain industries/economic sectors to gain and others to lose.
Just shouting that the current deal is the best of all possible worlds is stupid.
To the power elite, our current unrestricted immigration, relations with NATO and Russia, and our current Trade deals CANNOT be changed.
They don't want to discuss it. They don't want to justify it. They just want to insult and attack anyone who wants to change it - like Trump.
See, here's where old Trump-is-a-clown me has to stop and think. Of course, I'm a Smithian-Ricardian. But -- China hasn't played fair. What are we gonna do? We tried the WTO. We tried talking. They keep stealing and subsidizing and setting conditions for companies. We need a better deal. We still have just enough leverage to have a chance. If Trump's team has a sense of what the deal is, and will push for it, cuz Tariffs are the greatest, as a tool only, then maybe, if not, it could work out badly. But a Smithian-Ricardian needs to remember that the old guys practiced political economy.
China has been in a trade war with the US for awhile. The lobbyists in Congress try to hide that fact as do douchebags like Ryan and Sasse. Flake will soon be a lobbyist. He’ll push for more wetbacks and cheap shit from China. The bullshit these guys call “free trade.” When these guys are out of jobs, we’ll know free trade and a free market have arrived. Until then, spare us the bullshit. Our trade policies are meant to make their benefactors wealthy so they can get a taste.
It is marvelous to see how the left is discovering that Putin and the Russians are evil, that free trade is good, and that we should be proud of the CIA and the FBI.
Somebody has to explain to me why we can't come up with money for health care but, when Pumpkin Spice is sinking in the polls, he can pull $12B out of his ass. Under Obama the deficit was crippling but now it's all good.
So far, I would say that Trump with this is telling China and the EU that he is willing to stick with this "trade war" as long as they are, so why not get serious and make him an offer for a deal?
"Here's another tweet he came up with today (I don't know how he thinks of all this stuff):
MAKE AMERICA GREAT AGAIN!— Donald J. Trump (@realDonaldTrump) July 24, 2018"
Well, I think we all would agree that a liberal Dem would never think to tweet something like that however unoriginal it is.
Beacause halthcare costs trillions and aTrump economy makes $12B in its sleep.
Welcome to caring about deficits though. Glad you’re here. Don’t leave again when it’s convenient.
Donald J. Trump
Verified account @realDonaldTrump
The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready - but they won’t!
5:08 PM - 24 Jul 2018
Via Insty:
Mexico’s chief negotiator, Jesus Seade, says a new deal is “inevitable.”
“What I see … to be a very feasible expectation is that we’ll be concluding the negotiation in the next two months if possible, or in the next few months a bit further down the road,” Seade told Mexican radio.
More from Mr. Seade:
“President Trump has a very personal style. He likes to appear chaotic. But the last thing he is is chaotic,” he said. “I think he’s a very intelligent man.”
Seade once served as deputy director-general of the World Trade Organization.
China is requiring lots of intellectual property sharing, also know as theft.
BINGO!!!
Somebody has to explain to me why we can't come up with money for health care
What are you talking about? We spend oodles on health care.
Michael K asks what the Chinese buy from us?
Let me ask you, Michael, what do you think the Chinese do with all the dollars they get in exchange for I-Phones, microwaves and all the other stuff they sell us?
Do they just stuff it into the mattress? If they do, doesn't that mean that we are getting free stuff?
The ONLY use for dollars anywhere in the universe is to buy American goods and services. Yes, they could buy oil from the Saudis but that only transfers the problem, it doesn't change it.
One of the things that the Chinese do buy is US government debt in the form of bonds and such. So for govt, at least pre-Trump, it was a pretty sweet deal. More money for them to give to their friends and constituents.
So there is a second order effect here. If we sell less to China, it starves the swamp. Perhaps President Trump feels he can't cut govt spending directly and cutting off the Chinese loans accomplishes the same goal
I've mentioned this before here. Last month I was talking about it with my cousin's anti-trump husband. retired from a life in the financial business. First he had to rant and rave about President Trump being to stupid to even know what a second order effect was and that there is no way he is thinking of this.
I disagree, Citizen Trump has a career of being pretty sharp. But I pointed out that even if DJT were boneheaded, even if he were not doing it on purpose, the second order effect and benefit still exists.
I don't like tariffs. I may even be more extreme on free trade than Rand Paul. But I can see some benefit here.
The end goal, as President Trump has said to the G8, Angela Merkel, Xi and others is no trade barriers at all. Germany doesn't tax American cars at all, we don't tax German cars at all. Or, as he said to the G8, we don't tax anything coming into the US, you don't tax anything coming into your country.
I doubt anyone can win a trade war with us. If BMW's become more expensive, we have a lot of options. It hurts Germany a Hell of a lot more than it hurts us.
John Henry
So any bets on when some of these deals are signed? That Man gets stuff done huge grin!
The very concept of any kind of trade deficit is bullshit. Trade always balances. It just doesn't always balance the way we want it to. We want to buy Toyotas from Japan, the Japanese don't want to buy Chevys from the US. They might buy US real estate or golf vacations instead. (Or combine the two and buy Pebble Beach! Yeah. How'd that work out for them?)
The problem is the way the trade deficit is defined.
Say China ships us $1mm in microwaves, then uses that $1mm to buy steel to build a new warehouse.
If they ship the steel to China and build the warehouse there, Voila! Trade balances, there is no deficit and all is unicorns and rainbows.
If they ship the steel to Texas and build the warehouse there, O Woe is us!!! We have a trade deficit.
Or, if they take the $1mm and buy US T-Bills, there is a deficit and again O Woes is us!
the concept of trade deficits is bullshit.
Two caveats:
If a trade deficit did exist, if we were getting Chinese microwaves in exchange for electrons in a bank account, they would be pretty stupid and it would mean free microwaves for us.
There may be small imbalances due to timing of payments. These are minimal and since they will exist in both directions will cancel out.
Interesting pair of developments. NYTimes reports POTUS threw tantrum on AF1 because a TV was tuned to CNN. Turns out it was FLOTUS's doing. Meanwhile, Cohen's new lawyer-flack is on CNN playing the Cohen-Trump tape and trashing Trump and Giuliani about the subject of paying off the playboy playmate. Fun times.
"I voted for the man. I'll vote for him again. But he is an idiot."
Hmmm. What does that make you? (At the very least, an...enabler.)
readering believes everything it reads in the NY Times.
The election is coming.
Blogger Sebastian said...
What are we gonna do? We tried the WTO. We tried talking. They keep stealing and subsidizing and setting conditions for companies.
One of the things we are going to do is encourage US capital to come back to the US. Some huge amount ($250bn?) has already come back since the tax law encouraging this went into effect.
That means more capital for investment in the US AND less capital for investment elsewhere.
On similar lines, we encourage companies to manufacture here. FoxConn, bring 13m (13,000 for you, Inga) jobs to Wisconsin from China. That means tens of billions will go to products made in WI instead of in China. FoxConn is the most visible example but there are plenty of others.
John Henry
We need a better deal. We still have just enough leverage to have a chance. If Trump's team has a sense of what the deal is, and will push for it, cuz Tariffs are the greatest, as a tool only, then maybe, if not, it could work out badly. But a Smithian-Ricardian needs to remember that the old guys practiced political economy.
"Here's another tweet he came up with today (I don't know how he thinks of all this stuff):
MAKE AMERICA GREAT AGAIN!— Donald J. Trump (@realDonaldTrump) July 24, 2018"
------------
What?? You don't know how he thinks of a two-year old slogan and thumbs it onto a small screen today?
"The ONLY use for dollars anywhere in the universe is to buy American goods and services."
See you be stupid you buy oil with dollars. So dollars are fungible.
Michael K asks what the Chinese buy from us?
Let me ask you, Michael, what do you think the Chinese do with all the dollars they get in exchange for I-Phones, microwaves and all the other stuff they sell us?
They were buying US debt but that seems to have stopped. They are building empty cities and malls.
The Japanese were not as smart but nobody is as smart as the Chinese for the past 500 years. Go to Monterey Park in LA. It is all Chinese. That suggests they may not have as much confidence in China as we think.
The Japanese were buying buildings they could not take home to Japan.
The Chinese seem to be much more interested in intellectual property, so they can build the airliners and cars.
Chuck, I prefer the LLR shtick over The Inner Asshole sockpuppet.
Blogger D. said...
Donald J. Trump
Verified account @realDonaldTrump
The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready - but they won’t!
5:08 PM - 24 Jul 2018
I had not seen this Tweet but he has said this often enough over the past few years as I said at 8:25. He seems to think tariffs are stupid and counterproductive but if other countries want to fuck with us via tariffs, he is not afraid to fuck right back.
And since our economy is the big dog in the world, who do you think is going to win this pissing contest?
John Henry
"NYTimes reports POTUS threw tantrum on AF1 because a TV was tuned to CNN. Turns out it was FLOTUS's doing"
Fake News
Blogger D. said...
"The ONLY use for dollars anywhere in the universe is to buy American goods and services."
See you be stupid you buy oil with dollars. So dollars are fungible.
As I noted at 8:25 "Yes, they could buy oil from the Saudis but that only transfers the problem, it doesn't change it."
Now the Saudis have the problem of what to do with the dollars. Ahhh.. you might say. But suppose they use it to buy Italian Ferraris? Sure, then the Italians have the problem of the dollars. And they might buy oil from Russia and so on. In the 60's Eurodollars were a big thing. Dollars that floated all over Europe and never came back to the US. Russians were big players in this market.
The only reason that this string of trades can go on is because people know that they can, at any time, use the dollars to buy US goods and services.
And until they do, it is the equivalent, from our standpoint, of the Chinese stuffing the dollars in the mattress.
Think of it like a check. I buy a doghouse from you at a yard sale. I give you a check for $100. You take the check to the gas station and sign it over to them. They sign it over to someone else and so on.
Until someone deposits it and the money is debited from my bank account, I have a free doghouse. If I know that the check is going to float around until November, I don't even need to have the money in the bank, do I?
Until someone (Chinese, Suadi, Italian, Russian etc) takes the $100 that I spent on the Chinese microwave and spends it in the US, we, the US, are 1 microwave richer.
John Henry
Trump is right. Free Trade for all or Tariffs for all.
This is totally up to Europe and China. If they want to drop their tariffs and barriers Trump has already offered to completely drop ours.
What we have now is crony trade. It is fucking stupid to let countries sell their shit here for free while we tax the shit out of our citizens and corporations.
Saudi women want muscle cars.
Imports should be taxed at least as much as products produced here in our own country.
You have to tax something.
Letting people build things in other countries and ship it here free while we tax and regulate the crap out of the people here is stupid.
Go to Monterey Park in LA. It is all Chinese. That suggests they may not have as much confidence in China as we think.
The Japanese were buying buildings they could not take home to Japan.
Well there's the answer to your question about what they are buying from us: Buildings, real estate. I doubt they can take the Monterey Park stuff home to China either.
So to modify my analogy of the steel: We buy Chinese microwaves and they buy buildings. Trade balances. But, since the buildings don't leave the country, we call it a trade deficit.
I call it bullshit. The idea of a trade imbalance.
John Henry
The Chinese don't buy buildings in Monterey Park. Chinese immigrants do. But the Chinese spend tourist and education dollars here, which count as exports. Of course, the Trump administration making it harder to do both things does not help with the balance of payments.
Free trade with nations that exploit labor and the environment (i.e. arbitrage) is good for corporate profits, environmental delusions, immigration reform, and social progress.
tariffs can cause other dislocations.
Back in the 90's or so, pickup trucks coming into the US from Japan were taxed (tariff)
So Toyota negotiated a deal for bring in truck parts and assembly trucks in a factory in the US. Great! said the US.
So Toyota built a big warehouse in the Seattle area.
The pickup trucks consisted of the truck without the bed and the bed plus lights and so on.
Toyota being efficient and all (using Henry Fords methods) minimized shipping cube by shipping the bed on the truck.
So efficiently that the bed rested on on the truck frame held in place by some strapping.
"Assembly" consisted of cutting the strapping, running in 4 bolts to fix the bed and plugging in a jack for the prewired tail and brake lights.
We had something similar here. Back in 84 I bought a new Mitsubishi without air conditioning. Well, with airconditioning but it was in a box in the trunk. The AC was, technically, sold separately after I had bought the car and taken title. Then the dealer installed it before I drove the car away. It took an hour or so.
But, local sales taxes taxed air conditioned cars at a significantly higher rate than one without AC.
I apparently saved a couple hundred dollars doing this boneheadely stupid transaction.
John Henry
"I call it bullshit. The idea of a trade imbalance. "
We build real cities. China builds imaginary ones. Where's that money coming from?
Blogger readering said...
The Chinese don't buy buildings in Monterey Park. Chinese immigrants do.
Perhaps Monterrey Park is different but in general, the Chinese buying buildings here in the US, including Trump condos, are for the most part not immigrants. There is an enormous amount of empty commercial and residential real estate in the US owned by Chinese nationals living in China. They buy it because they need to buy something with the dollars they got from the microwave oven (etc) sales.
They buy it also because they might decide to become immigrants all of a sudden if things go south in China. Things go seriously south in China a couple times a century for the past 5,000 years so it is not an unreasonable expectation.
This gives them capital in the US where it is safe from the Chinese govt. Safer than anywhere else in the world. It also, because they have capital here, greases the skids if and when they do decide to become immigrants.
John Henry
Blogger D. said...
We build real cities. China builds imaginary ones. Where's that money coming from?
I've heard several theories but none of them completely convincing. Unless they are using dollar bills instead of straw in making bricks I don't see what it has to do with the so-called trade deficit. If that's what they are doing, I whole heartedly encourage it. I doubt they are that stupid.
They are buying building materials (wood, Tyvek, plumbing etc) from the US with some of the dollars.
John Henry
The Chinese are spending tons of money developing infrastructure in Africa such as Ethiopia.
Now the Africans have the dollars and need to spend it.
We run a trade surplus with some African countries. For example, in 2017, we sold almost $600mm more to Ethiopia than we bought.
https://www.census.gov/foreign-trade/balance/c7749.html
I suspect that you will find something similar with other African countries where China is active.
Question: Is this a good thing for the US? Why or why not?
John Henry
"They are buying building materials (wood, Tyvek, plumbing etc) from the US with some of the dollars.
John Henry"
Maybe. But I would suggest that "make work" projects are commie endeavors. ymmv.
Via Insty yesterday:
SILK ROAD BLUES: China’s Global Building Spree Runs Into Trouble in Pakistan. “To fund a 70-nation infrastructure initiative, Beijing has been extending loans in opaque deals often contingent on using Chinese contractors.”
Financed and built by Chinese state-run companies, the soon-to-be-finished overhead railway through Lahore is among the first projects in China’s $62 billion plan for Pakistan. Beijing hoped the $2 billion air-conditioned metro, sweeping past crumbling relics of Mughal and British imperial rule, would help make Pakistan a showcase for its global infrastructure-building spree.
Instead, it has become emblematic of the troubles that are throwing China’s modern-day Silk Road initiative off course.
China’s global plan, called the “Belt and Road Initiative,” involves some 70 countries and has been likened to the U.S. Marshall Plan that helped rebuild Europe after World War II. By building a network of ports, railways, roads and pipelines, China aims to open new East-West trade routes, generate business for Chinese companies and expand its strategic influence.
While the Americans mainly used grants in Postwar Europe, China has mostly extended loans in opaque deals often contingent on using Chinese contractors. Pakistan is now one of several countries grappling with the financial and political fallout of taking on so much Chinese debt.
With a general election in Pakistan scheduled for July 25, an ascendant opposition is pledging to publish secret details about the financing of Chinese projects, including the Orange Line, and Pakistani industry is agitating for less-generous perks for Chinese companies.
Massive graft and bribes....
"
Question: Is this a good thing for the US? Why or why not?"
Question: Should the USA dollar be the currency of the world?
Blogger D. said...
Maybe. But I would suggest that "make work" projects are commie endeavors. ymmv.
I agree but what does this have to do with trade deficits and whether or not they can exist?
John Henry
"Question: Is this a good thing for the US? Why or why not?"
"Question: Is a $22 trillion USA debt a good thing for the US? Why or why not?"
"I agree but what does this have to do with trade deficits and whether or not they can exist?
John Henry"
How money does the USA gov't send to Chicagoland? How much does USA gov't get back?
Blogger johnhenry100 said...
Blogger D. said...
Question: Should the USA dollar be the currency of the world?
Other than national pride/bragging rights/branding, what difference does it make whether it is or not?
We don't trade for dollars, we trade goods and services. 100 microwave ovens for 2 tons of steel. We do it personally and we do it internationally.
It makes little difference whether the deal is denominated in rubles, rupees, dollars or Euros.
Money has no intrinsic value except as a medium of exchange. An accounting tool to reduce everything to a single common denominator.
That function has value by making transactions easier but the money in and of itself has no value. You can't eat it, you can't write on it, you can't even, comfortably, wipe your ass with it.
john Henry
John Henry
"Money has no intrinsic value except as a medium of exchange. "
So you have "full faith and credit" Venezuela's currency?
"Money has no intrinsic value except as a medium of exchange. An accounting tool to reduce everything to a single common denominator."
Soros laughs
They buy it also because they might decide to become immigrants all of a sudden if things go south in China.
I think this is why I see so many Chinese nationals joining the US Army.
They have patents in China. They want citizenship and, unlike the left's favorite illegals, they are doing it legally.
I don't think they are interested in espionage since they are privates.
I think parents are encouraging them for doubts about China long term.
I am not fond of this move. I hope it is a temporary stopgap that allows Trump to fix our trading imbalances.
He does things in a different way. It takes some getting used to and a leap of faith for this classically liberal/conservative libertarian.
The proof will be in the results.
Fiat money has no intrinsic value other the full faith and credit of the suckers who bail out the banks.
Trump is an arrogant ignoramus on par with Benito Mussolini. His theme was to restore the grandeur of the Roman Empire, i.e., Make Italy Great Again. Instead, his country was wrecked in WWII. Mussolini and his mistress were strung up in the streets by partisans. Let's hope that Trump and the GOP suffer the same ignominious fate. Trump's 18 golf courses can be made with little effort into public courses, or converted into wildlife sanctuaries. Trump's tax breaks for the rich, and his fiddling with the economy while "Rome burns," may plunge the world into a Second Great Depression. A Third World War that will wipe life off the planet for 10,000 years could easily be the end result of Trump's tiny hands and big mouth. The deplorable Trumptards must share the blame for Trumpism, and his lack of principle, and his acts of folly. When the GOP is eliminated, and a sane administration takes the reigns of power, the Supreme Court should be increased to 18 justices to dilute the impact of Trumps stacking of the Supreme Court with right-wing hacks.
I think the Republican Congress should pass Glenn Reynolds' proposal that the Supreme Court be increased to 59 Justices: the present 9 nominated by the President, and an additional 50 proposed by each of the 50 state governors. (All would be confirmed by the Senate.)
Is this $12 billion of “new money” or the repurposing of money that was already earmarked to be pissed away on some less worthy risk-shifting scheme intended to benefit farmers?
What do Yahoo, Amazon, Uber, Google, and Facebook all have in common? They are titans of American industry. And none has a presence in China.
On the other hand, the EU thinks it has rights to a percentage of World Wide revenues from Google, using anti-trust as the excuse.
https://www.cnbc.com/2018/07/10/eu-hits-alphabet-google-with-android-antitrust-fine.html
You might enjoy reading this thread by @themarketswork
Every trade restriction of every sort, be it a tariff, quota, or some other barrier, is an infringement on the liberty of the consenting adults whose freely chosen trades are being interfered with. Trade restrictions are just another way the power of the government is used to benefit some people at the expense of others. And like every other exercise of power by a government, it is often abused.
Conservatives and libertarians are rightly suspicious of many exercises of government power. But it seems if the claimed motive is to damage foreigners or immigrants, abuses suddenly are A-OK.
As a retired professional economist, I know that while there are a lot of economic policies that economists disagree on, free trade is not one of them. Except for a handful who work for the UAW or some other organization that directly benefits from trade restrictions, economists universally oppose trade restrictions of every sort.
I don't mean to pick on Michael K., a regular here whose comments are often both informative and entertaining. But I wouldn't dream of telling him that I know more about any area of medicine than he does. He studied long and hard to get his MD, and I'm certain that he learned a lot of stuff that I don't know. Then he spent most of his life expanding and applying that knowledge. But like most of the commenters here, he evidently doesn't think economists like me learn much of anything during our years of study and work.
Many of us have PhD's and have worked professionally in the field for decades. Almost certainly, we are at least as smart as the commenters on this blog, and almost certainly we have thought longer and harder about these issues than you have. Do you really think we haven't considered the arguments you are making? Do you really think we're all that stupid?
"Conservatives and libertarians are rightly suspicious of many exercises of government power. But it seems if the claimed motive is to damage foreigners or immigrants, abuses suddenly are A-OK. "
I think in this case people are willing to give Trump the benefit of the doubt. I think , as an economist, free trade isn't free trade if all the 'free' is only on one side. Trump is a good negotiator and I think this is one of his tactics.
We'll see.
" Do you really think we're all that stupid?"
Posting tip. Don't be the straight man. Here goes.
Not all of you. Just you.
Do you really think we're all that stupid?
Krugman certainly is, and he has a Nobel prize.
Jeff,
> Trade restrictions are just another way the power of the government is used to benefit some people at the expense of others.
One thing that bothers me about the "free trade" arguments is the following, and since you seem to be an expert, perhaps you can give me an answer.
Let us take a country, call it the "US", which has taxation and redistribution. I've heard the redistribution can be quite high.
Let us also say that a single job by worker "A" in the US is exported where it can be done more cheaply to some other country, but the job is not replaced with an equivalent paying job, such that the person who had the job now goes on welfare. Let's also assume the cost to the consumer is lesser.
The free trade argument goes that the export of the job from the US is a good thing for consumers, provided it drops the cost of the good/service. But, let us see what happens in reality.
Worker "A" no longer pays taxes.
Worker "A" now draws welfare, possibly SSDI (which draws on regressive social security taxes, and opens up a class based advantage).
Ultimately, it is the taxpayers of the US who must make up the difference.
It seems the simple equation of "free trade" is not so straight-forward in a system in which governments tax and redistribute.
I have never seen these variables addressed by free traders.
Will you now address these variables, in a way that proves, once and for all, that free trade in the practical world is always to the advantage of the consumer of a government? No using abstract utopias that don't exist.
becauseIdbefired,
You're making some assumptions that aren't warranted. First off, why do you assume that worker A will remain unemployed? The very fact that he was employed and not fired for cause tells us that he is eminently employable, although he may find that he has to take a pay cut.
Second, you're saying that "his" job was exported, as if he had a right to it. But that's not how a market economy works. You have the right to offer your services to potential employers, but they are under no obligation to accept your offer. If you and an employer can come to some mutual agreement on wages and duties, you will be employed. If not, you won't. What the trade restrictionists are saying is that somehow the government knows better than you and your employer what you should be paid.
Think of this another way. Many fewer people are employed as secretaries these days than before personal computers became widespread. The reason is obvious: executives equipped with PCs and office software have much less need for secretaries than they used to. Did those secretaries all have rights to their jobs? Should executives be forbidden by law from using PCs and office software because such use diminishes the demand for secretaries? If not, why is the worker whose job can be done more cheaply overseas entitled to his job when the secretaries are not?
In truth, many former secretaries are now employed in other pursuits. Some are making more money than they used to, some less. Most of us applaud the flexibility of market economies in adapting to changing circumstances. But for some reason, we take at face value the self-interested arguments of those who want trade restrictions, ethanol mandates, bank bailouts, agricultural prices supports, unnecessary professional licensing, etc.
Jeff, I gave you a scenario. Jobs go away and do not come back with similar paying jobs. You decided not to address the problem I posed, but decided instead to change the given.
But, there is evidence the given is a real. Look at what is happening with SSDI, and get back to me.
becauseIdbefired,
SSDI and trade have nothing to do with each other. People who get laid off for any reason other than an actual disability don't get SSDI. If they do, it's fraud.
You seem to be arguing that people laid off due to trade are somehow less honest than the rest of us and uniquely likely to fraudulently claim disability benefits. That's just bizarre.
It's true that some people who lose jobs to trade end up taking jobs that pay less. Others end up getting paid more, sometimes after additional training. But I'm willing to concede that most of them get jobs that pay less than their previous job. In fact, I'd bet that's true of people who involuntarily lose their jobs for any reason. But taking a pay cut does not increase the taxes of your fellow citizens, nor does it usually qualify you for government benefits. You evidently think that happens very often, often enough to be a serious problem that warrants trade restrictions. I am not aware of any credible studies that show that.
I do know that there have been huge numbers of jobs lost in manufacturing over the past several decades. But those jobs were mostly lost to automation, not trade. Manufacturing output is higher than ever. That's pretty much the definition of rising productivity: producing more with less labor. And it's a good thing, as ultimately rising productivity is what drives real wages up.
Jeff,
I asked you a hypothetical, and you chose not to answer the question, instead choosing to attack the given.
I suggested you look up what's happening with SSDI as a way to see that the given isn't out of the ballpark. I find it hard to believe you did that, either.
As a result, I find your opinion essentially worthless.
Jeff @ 11:45
The fallacy is that you're assuming that the exported job is the only job that a worker can get. That the job market is zero sum. "Ultimately it's the taxpayers that pay for free trade."
Only if the government subsidizes jobs and commodities.
becauseIdbefired,
I suggested you look up what's happening with SSDI as a way to see that the given isn't out of the ballpark. I find it hard to believe you did that, either.
And I explained why SSDI and trade have nothing to do with each other. I really don't care if they appear to be correlated to you, because I know that you have to be disabled to get SSDI. Whatever you think of trade, nobody but you believes that increased trade somehow causes worker disabilities. The only plausible way that could happen is if the laid-off workers were mostly dishonest grifters who decided to rip off the system after they lost their jobs. I don't think that merits serious consideration.
Your argument makes no sense, and you continue to repeat it even after it's been refuted. Either you're too dumb to understand the refutation, which I doubt, or you're a troll. In your original post you claimed that you had never seen a free trader address your argument, something I find hard to believe. Nothing I've said in my comments has been particularly deep or novel. Anyone who has been thinking about the issue even casually has almost certainly come across the arguments I am using, as some of them date back to Adam Smith in 1776. In truth, the trade issue in economics was mostly settled over 200 years ago by David Ricardo exposition of the theory of comparative advantage in 1817. The developments in trade theory since then are mostly extensions and elaborations of Ricardo's theory, which no one has been able to refute. Your apparent ignorance of this history while claiming to be very interested in trade indicates that you are, in fact, a troll.
This will be my last comment in this thread.
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