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Do you believe that we should have free trade with China? Why not?
My opinion: YES!
Why don't people rebut them from their own parties? Especially the Republicans since they claim to know more about economics.
So we often hear from the Trump/Sanders crowd that China is beating us on trade. They are winning and we are losing. They are winning because they are manipulating their currency, they don't have the same environmental and labor protections that we do. These trade deals are bad for America.
These comments prove that both the Republicans & Democrats don't get trade.
If they are truly being used as "slave labor" then that is great for Americans! Last time I checked slavery wasn't bad for white people. No one complained that they can't pick cotton in the hot sun because of all of the cheap slave labor in the south.
For rich Americans who make up senior executives at corporations trade deal is good. For your average middle class American the trade deal was bad. It not a coincidence proverty across the world has decrease at the expense of Americas middle class. China now has the largest middle class in the world. Whether this was inevitable is up for debate as the world would catch up to America after WW2 (where many countries had to rebuild while the US was untouched).
It not a coincidence proverty across the world has decrease at the expense of Americas middle class.
To quibble a bit, poverty across the world is increasing, not decreasing. The big population growth parts of the world are Africa and India.
But yeah, "East Asian" poverty is decreasing at the expense of the unskilled parts of the middle class. That includes South Korea and Taiwan. The high school C student can't get a factory job paying middle class wages like 30 years ago. Those jobs all face global competition now or are automated into oblivion in the endless march to slash unit labor cost. I think you'll find that the more skilled in the middle class are still doing fine.
We exchange paper (fiat currency) for physical goods. Fiat currency can become worthless, but goods serve a purpose. They can also be recycled. Physical goods are another form of wealth. Yes, we are getting a good deal in that regard.
One of China's early goals was to provide an abundance of jobs for it's people. To that end, they have accomplished what they set out to do. They now control the second largest economy in the world, and have a skilled, capable workforce. In that regard, they have benefited enormously. Now we get to see how well they hold things together.
For both countries, there are some downsides to the trade deals laid out. For example, China's environment is messed up, and it's easy to blame the growth of industry. Of course, in America, many people blame China for taking jobs and eliminating opportunities for the average citizen.
Quote:
Originally Posted by GeoffD
To quibble a bit, poverty across the world is increasing, not decreasing. The big population growth parts of the world are Africa and India.
But yeah, "East Asian" poverty is decreasing at the expense of the unskilled parts of the middle class. That includes South Korea and Taiwan. The high school C student can't get a factory job paying middle class wages like 30 years ago. Those jobs all face global competition now or are automated into oblivion in the endless march to slash unit labor cost. I think you'll find that the more skilled in the middle class are still doing fine.
Since we sent away all the jobs, most of the C students in America just go to business school. That way, they can make big salaries while they export even more jobs, and run our companies into the ground.
But yeah, "East Asian" poverty is decreasing at the expense of the unskilled parts of the middle class.
At the expense of the bottom 99.9% actually. That's pretty much everyone.
I didn't pull that number out of my butt either. Only the top .1% has experienced gains exceeding the increase in the per capita GDP in the last 40 years.
For rich Americans who make up senior executives at corporations trade deal is good. For your average middle class American the trade deal was bad. It not a coincidence proverty across the world has decrease at the expense of Americas middle class. China now has the largest middle class in the world. Whether this was inevitable is up for debate as the world would catch up to America after WW2 (where many countries had to rebuild while the US was untouched).
I don't think we would consider that a great middle class. The average person would qualify for poverty assistance. And this is found by simple division, no deduction from the inequality that they have there.
All of this pessimism is a recent development. No one was complaining during the 80s and 90s about them. It wasn't until post 2008 that all of the sudden China became the boogeyman. And the financial crisis of 2008 was our fault as well.
America simply has made bad decisions on what to do with its money, can't use China as an excuse because we never fixed our healthcare system or our tax system or the massive money that we spend overseas in conflicts. China didn't cause our mess we did.
All of this pessimism is a recent development. No one was complaining during the 80s and 90s about them.
I was.
Wages have been stagnant since the late 70s. The US middle class (the bottom 99.9%) has paid for globalization ever since. The primary beneficiaries have been oligarchs running the show.
At first glance it would appear that the global lower classes benefited at the expensive of global mid-upper class (US middle), but the chart below only goes up to the 99%ile. It would need to show the 99.9% and 99.99% to see what really happened.
Real world GDP rose from $30T to $50T from '88 to '08, 67%:
How many on the first chart did better than the 67% average? The people in developing countries are certainly better off than they were, but the US middle class didn't "donate" wealth to them. Rather we gave it to the 99.99+%ile. In the US this group experienced ~700% increase.
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