Senate Everything you always wanted to know about economics*

Just for you

 

Well that’s a wildly unsubtle hit piece.

 

If this doesn't get Ender to return, he's probably gone for good

 

He's permbanned,

 

Landlords are dishonest parasites and Wall Street parasites prefer fascists to social democrats. This thread is teaching me a lot.

 

Of course, the article didn't mention who was one of the founders of RealPage.

Billionaire and 'good friend' of Clarence Thomas - Harlan Crow.

 

(Moving the tariffs discussion here)

I don't necessarily think that it should be wound back.
I think that, to some extent, there is and there will be a shift in the opposite direction, no matter whether I like it or not.
My main arguments are two:

1) that free trade naturally leads the US to progressively lose their dominance, and America is not going to just let it happen easily. Some people say "Americans don't care about dominance", and I have already made my case that most of them actually do care, even though they might not know it.

2) that redistribution remains local. The argument is rather straightforward: if production were also local, then those who produce would organize in such a way that they can have bargaining power to achieve a just redistributive system. Though production is not local anymore. Factories can be moved abroad. On the other hand, we have not reached yet a stage in which the redistributive system is global as well, so that it covers for the disruption that the global nature of the production implies.
The ideal scenario would be that the next stage of civilization will consist in moving toward a situation where redistribution is also globalized, but today we are fairly far from that.

 

What do you think the policy of the United States should have been regarding free trade? Both in the past and now?

I just really disagree that Americans care about trade deficits, or even offshoring to any great extent, let alone perceived fall in global dominance (or if they do, it’s being blamed for other issues). They care about inflation, the ability for themselves and their friends and family to be employed in good well paying jobs, and the price of the products they buy. All of these are basically improved by free trade. I think the failures of America to provide a social democracy whilst being the most wealthy country in the world is the actual underlying issue Americans have; this is then deflected to other perceived issues - immigration, DEI, free trade, relative global decline. This gets back to my point that someone like Trump was not inevitable because of the economic system. He’s a result of other failures, but the global system of free trade itself was not on an inextricable path to fascism, nor were people poised to react negatively to America not being the hegemon anymore.

Yes, it gives a company the option to offshore their production to undercut the bargaining position of workers. But this is also how free trade lowers prices for the community broadly and how other countries become wealthier (I think Western countries should have stricter standard for the worker protections countries they trade with are required to have, but that’s another issue). Now, yes, that means those workers could lose their jobs, but it also allows those workers to do less menial and more complex work, thereby expanding production capacity of the country, growing the economy and industry of the country in a new direction. In these new jobs, most of which cannot simply be offshored, workers retain full bargaining power. There are the same issues we face with emerging technologies; it’s terrible when someone’s life is disrupted and the economy adjusts, but it’s not something we can hold back forever.

Ultimately the lives of the workers in the first country and the second country are improved by this process; the issue is always how to manage the transition period.

 

1) If every JC Forums user gave me one dollar, how much would I get?

2) Can this be arranged?

 

Practically and short term, I would probably look for the best possible compromise between allowing free trade while defending jobs. Meaning that yes, I would probably impose some tariffs. Then, the devil is in the details for things like this.

Idealistically and long term, the ambitious goal should be toward building the foundation for a global redistributive system, but it would be an idea that is extremely hard to sell.

Then, they care, for example, about whether the dollar will remain the main currency on a global scale or not don't they?

They care whether they are the one who impose sanctions rather than having sanctions effectively imposed on them, don't they?
Etc etc.
I believe that you underestimate the significance of America's position in the world for the life of a random citizen.

 

With respect, I’m sure you can appreciate this feels a bit wishy washy. You want a goldilocks zone, when that balance has always been one governments have tried to strike, since governments very rarely forego all protectionist policies across their entire economy. Some ‘key industries’ are almost always protected (often seeing them as vital for national security, simply employing too many people that the economic jolt could be too significant, etc), whilst others are sacrificed. But ultimately, you agree, that broadly free trade is going to prevail over being protectionism, correct, and that some peoples jobs will be sacrificed to the greater economic benefit? In which case this liberal economic system is that which you say led almost inevitably to Trump.

It would likely remain the reserve currency for a good while longer if Trump and his supporters had not essentially scuttled that stability of it. Now it may be sunsetted way earlier than it needed to be.

In any case, this is all in the future. Trump has been elected now. The prospect of the moving off the USD as the reserve currency cannot have impacted peoples vote, because it hasn’t happened, and it hasn’t influenced them at all. How many of them even know what how the reserve currency works?

When have the Americans successfully been sanctioned? How could this have influenced the American electorate to vote for fascism? Have most people even considered the idea other countries would sanction them?

Even if such a thing were to occur it couldn’t even practically happen for at least a century, I suspect, in the same way America probably can’t sanction China without causing massive pain onto itself. Why? Because the United States not declining like the United Kingdom did. It will remain extremely powerful for a very long time (unless Trump decides to send it all to the bottom of the ocean), perhaps remaining as one to three of the top players indefinitely.

The question is to what extend free trade is actually eroding that in practical terms, in ways which affects Americans beyond what they’ve been told to feel about things?

I’d argue any concern about how the United States stands against China (which, btw, is still very strong, all things considered) is a deflection used most often by the right wing media to point away from domestic policy failures. Concerned with your economic life? It’s because of free trade, or immigrants, or the rise of China. None of these things actually are eroding Americans economic position - government failure to give them any modern social democratic system is.

I again question whether this was an inextricable path to fascism, or were there domestic policy failures and propaganda which led to the electorate lashing out at the wrong things, leading to fascism?

 

I am explaining why the political dominance is important for the everyday life of a random citizen, which is the point you were arguing against.

Yet fascism is on the rise in social democracies as well.

It's pretty clear at this point that we are in an endless loop, repeating the same arguments over and over. I don't think I can make my position any more clear than I already have.

 

Three post rule ezzy

 

I agree we are in an endless loop, with neither getting through to the other. I’ll just respond to the below, since it’s the crux of it.

The argument you’re making is that America’s economic dominance eroding in relative terms has caused America to vote for Trump.

I asked for examples of how the decline in economic dominance has impacted citizens in a way which has caused them to vote like this, because you said they care about decline, whether they know it or not. The examples you gave are things which have not yet happened. That’s why I’m saying it cannot have caused them to vote for Trump. Your argument is at best a theoretical argument of what may happen in 50+ years but isn’t explanatory of what’s happening right now.

This will no doubt bring up back to the argument that offshoring is the thing which caused fascism in America, to which I’d again say you’re overstating how much that caused this.

 

But I've never wanted to know any of these things about economics.

 

Actually the problem of free trade is mostly routed in the US dollar, which has been weaponized as a world currency and then became to strong. Basically the US outsourced manufacturing (so did the EU) to countries with weaker currencies. Which was a conscious policy for thirty years.

 

Here's a question for the economics people: if tariffs are bad for our economy when we do it, why do other countries retaliate with tariffs against us? Wouldn't that be bad for their economy?

 

I thought the answer is yes, but less bad if it leads to the bad tariffs eventually being lessened.

 

It's seems like the economics version of "I stab myself" being responded with "oh yeah I'm stabbing myself"

 

I think it's more of a "I'll cut both of us" with "fine, then I'll drive at the cliff until you stop"

 

Tit-for-tat, I think.

But also, protectionism is somewhat good for nascent industries and developing countries, to get them off the ground, and not fully taken advantage of by multinational businesses. Or for countries/industries that have become too exploited and abused by globalization forces. There should be some kind of government check against the global megacorporations. It shouldn't need to be said, but to be clear, everything Trump has been doing is very short-sighted and incompetent and unwise.

 

Tariffs are neither universally bad nor universally good. They are a tool like many others. Like a knife in the kitchen, if you are using it properly there's nothing intrinsically wrong with it.

Though, the obvious question is why did they magically become so popular recently, and the answer is that, sadly, the celebration of free trade back then was hypocrytical, and free trade was only going to be considered great as long as it did not challenge the geopolitical status quo, as it is doing now.

 

Tariffs are only more ‘popular’ now because people do not understand what they do, and what the effects of broad tariffs will be on their lives. People don’t even understand that prices, in a best case scenario, won’t be coming back down: they’ll, at best, stabilise.

People in the United States security establishment - the people most hawkish on China - are only really arguing for a decoupling from China, because China is more adversarial than they imagined. The broad sweeping tariffs Trump is proposing is actually considered highly dangerous and destabilising to American strength.

The arguments for tariffs are both inconsistent and self defeating. No one who was actually interested in the security, stability and standard of living in the West would be advocating for the sweeping tariffs we have seen.

There’s argument before and against reciprocal tariffs. People will often argue that tariffs shouldn’t be put on in response, for the reasons you say. But the other argument is that free trade is a mutual agreement - if you’re going to try and hurt my exports by propping up your domestic industry, then I have no choice but to try and protect my industries. It will hurt both, but I have no choice but to prevent a worst impacts. That’s why tariffs take so long to take off again.

 

Yes, many people, indeed, fail to understand and I have pointed it out myself. That said, it's just insane to me that in your opinion factories shutting down played no role whatsoever in the current shift of the public opinion against free trade.
And it's even more insane that in your mind it is possible to imagine a context in which China outgrows the US to the point of becoming the first economic superpower and they would just let it do it, in case they did it "not adversarialy" whatever that even means.