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Not true. The US has terrible savings rates. Our main trading partner, China, has very good savings rate. Hence there is a net flow of money to China. That has nothing to do with jobs. Unemployment is at a low. The US spends a higher percentage of its GDP on consuming crap than other countries do.
I encourage you to think about this for a moment.
If companies are encouraged and allowed by policy to seek the lowest cost location for labor and production, with no risk of restriction, then a large percentage of them will leave. It's a no brainer. It has nothing to do with savings.
The US is most certainly not suffering from a lack of savings or capital for investment. The problem is that a large percentage of that investment has left the country (wealth drain). Rather since 2008 we have been suffering from low demand (consumer buying power). Why? Because private debt had been escalating for decades, to keep consumption boosted while our wages were flat. It is no accident that easy credit was invented along with globalization and our constant trade deficits.
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If we impose tariffs we hurt ourselves in the long run.
I agree that tariffs are a poor solution. It would be much more efficient to have free trade and let the US$ exchange value fall until equilibrium is achieved. We will still import labor intensive products though a bit less, and we will make up the difference with high value added production like every developed country.
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Take Apple. If they are forced to manufacture the iPhone in the US with our high labor cost, the price of an iPhone goes way up.
A lot less than you think. This was computed in detail and the figure was somewhere in the teens, <$20 per phone. But this is the same story for many products. It doesn't have to be a big $ difference, any at all is enough. The share holders pocket the higher profit, and the people in the US who work for a living wonder why wages have been depressed for 40 years.
Certainly not me. But most democratic countries will do what is best for their citizens. Do you think it should be otherwise?
Like the founders of this country, I certainly do not believe that nations should be guided by the scattershot notions of a badly under-educated populace.
It is equally clear that if some countries must run trade deficits in order for others to run the surpluses they need to launch and support growth, it is indeed the already large, prosperous and wealthy economies who should be running those deficits.
Nonsense. Countries like Germany, the Netherlands or Denmark have huge export surplusses, yes they have more jobs, but not because they export so much, but because everyone works much fewer hours per year compared to U.S. Americans. The work is just distributed on more people. Overall these countries have to work much less but are still able to achieve export surplusses. If those countries would consume their export surplusses they would create more jobs within in their countries.
The export surplus means that they produce more than they consume. This obviously leads to a better job, savings, investment, and net worth situation. If they consumed that surplus instead, they could only pay for it by reducing savings or acquiring debt. Oh, just like we've been doing in the US.
It's pretty nice that their median living standard is very comparable to the US, and they are able to acheive this with much lower hours of work, yes? Most of that difference isn't due to higher productivity, but rather much lower income and wealth disparity.
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How do you define education level and how is that measured?
College degreed. Do you have a better measure? Isn't that supposed to the minimum requirement to make it in our new economy?
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The U.S. has a relatively high percentage of unskilled workers. That's one reason why manufacturing in the U.S. is not very competitive.
Actually we don't. Rather lower skilled workers have been squeezed by policies that encourage companies to move to China and Mexico, and additionally by illegal immigration.
If you have a perpetual trade deficit, then there is a net loss of jobs.
Jobs have been lost everywhere in manufacturing as an example. Not everywhere has been running trade deficits. Markets have been telling the US for quite some time that we should get out of the labor-intensive jobs that developing nations can now perform just as well as we can and more cheaply to boot. We should be using our advanced technologies and high quality labor force for bigger and better things.
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Originally Posted by rruff
The US's position in globalization has always been to absorb the excess production of other countries.
In other words, we are so successful as an economy that even after consuming all of our own residual domestic production, we can easily afford to consume substantial amounts of items produced abroad. What a cushy and comfy position to be in.
Like the founders of this country, I certainly do not believe that nations should be guided by the scattershot notions of a badly under-educated populace.
I'm not talking about the scattershot notions of the populace, I'm talking about what is actually *best* for the citizens of the country.
Instead we've had policies for 40 years that have clearly been guided by what is best for the .01% at the expense of everyone else.
I'm not saying that the .01% has ever failed to get their way. But before globalization and creative finance, they couldn't get rich without taking the rest of us along. That is no longer the case. And if it wasn't so ****ing obfuscated by propaganda and diversionary lies, the public would have done something about it a long time ago.
The US spends a higher percentage of its GDP on consuming crap than other countries do.
That is a good thing. In China by contrast, Personal Consumption Expenditures are below 50% of GDP. That is a measure of what a crappy deal Chinese consumers actually get out of their economy, and don't think that they don't know it.
Location: Born in L.A. - NYC is Second Home - Rustbelt is Home Base
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OP, prob not. It will come back to bite unless there are some laws for the good of society. But society wont go for it, they say they don't want laws that crimp their style, so have to let it take its natural course. Ants and bees work together for the best of the colony. Humans pull in all directions to bring it down.
Jobs have been lost everywhere in manufacturing as an example. Not everywhere has been running trade deficits.
You should know full well that production and manufacturing are not synonymous. Production and trade involve both goods and services. And "manufacturing jobs" is joke. Jobs in that sector have been declining worldwide for decades.
Production is what matters, and productivity... doing the most with the least labor.
When a country runs a perpetual trade deficit, the imbalance results in a depression of wages, a reduction in savings, and an escalation of debt.
I'm not talking about the scattershot notions of the populace, I'm talking about what is actually *best* for the citizens of the country.
As determined by whom? It has been plain for centuries that a ragamuffin populace will fall for the well-tailored slop of demagogues and silver-tongued charlatans all the livelong day and through most of the night as well. Are these the geniuses whose intellect you want to invoke?
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Originally Posted by rruff
Instead we've had policies for 40 years that have clearly been guided by what is best for the .01% at the expense of everyone else.
Bolded items are not made any more impressive in the process. They suggest only that you lack faith in the simple words themselves. Meanwhile, people have voted for people who plainly stated that they would do these very things. Impeach Trump?
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Originally Posted by rruff
I'm not saying that the .01% has ever failed to get their way. But before globalization and creative finance...
As those who have studied economic history will know well, globalization has existed for centuries. And creative finance is an evil on its face chiefly to those who do not understand finance well enough to keep a simple checkbook in proper order.
The far larger problems we face result from the fact that hard-right corporatists have taken over the media, and these incessantly pump absolute rot and garbage into what used to be the marketplace of ideas. Those unable to swim upstream against the tides of cascading horse manure are simply engulfed by it and end up voting accordingly. Thus Reagan, Bush-43, and the current nightmare. None knows at this pointy where or when the crisis will end.
You should know full well that production and manufacturing are not synonymous.
Among the rather many things that I know full well is that you are weakly trying to trade on the fact that net imports are a mathematical deduction in the calculation of GDP by disposition. Suffice it to say that the theories you have tried to pile up on that simple additive premise are -- from my point of view -- nothing but misguided misinformation.
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