My point is the UAW worker you are paying $100 per day, costs more than the Bengali who earns that same wage per month.
Don't worry it will NEVER happen, so no point debating.
Don't worry it will NEVER happen, so no point debating.
Why Free Trade Cannot Co-Exist With Currency Manipulators
Maybe you're not understanding how tariffs work.
If you impose heavy tariffs on goods from countries that peg their currencies and employ slaves, then people in the countries imposing tariffs will stop buying those items because they're too fucking expensive. If the $500 iphone sees an overnight price increase to $1000, iphone sales will dry up rapidly. The US is the world's 3rd largest country by population size. 50% of smart phones sold in the US are iphones. Despite many of our problems, the US still remains as the primary cultural trendsetter in the world. The US market is of critical importance to Apple. If the only way for Apple to remain viable in the US market is by selling iPhones for $500 they'll do what it takes, including building a factory and employing workers who are paid fair wages in the US. If they don't, fuck em. They can enjoy their decline.
If you impose heavy tariffs on goods from countries that peg their currencies and employ slaves, then people in the countries imposing tariffs will stop buying those items because they're too fucking expensive. If the $500 iphone sees an overnight price increase to $1000, iphone sales will dry up rapidly. The US is the world's 3rd largest country by population size. 50% of smart phones sold in the US are iphones. Despite many of our problems, the US still remains as the primary cultural trendsetter in the world. The US market is of critical importance to Apple. If the only way for Apple to remain viable in the US market is by selling iPhones for $500 they'll do what it takes, including building a factory and employing workers who are paid fair wages in the US. If they don't, fuck em. They can enjoy their decline.
As the United States passes trade tariffs against major world powers, it will lead to trade wars, then to proxy wars and finally to more direct national conflicts between multiple nations. This is because the United States uses an inherently dishonest means of settling trade negotiations; the U.S. Dollar in terms of U.S. Treasury Notes and U.S. Treasury Bills. The U.S. can create them freely, unlike other nations (who can create their own currency and treasury notes) and then attempt to coerce other nations to use them in trade being backed up by the might of the U.S. armed forces. The use of currency in this (dishonest) manner is an act of (economic) warfare.
The U.S. was in a unique position after WWII as most of the world´s capital (in terms of gold and production of goods) was held by and/or stored in the U.S. and most major nations were destroyed and/or in debt after WWII. The U.S. Dollar was convertible to gold and used to settle trade between nations as of 1944. This is no longer the case, but prices for commodities (oil, wheat, sugar, silver, etc., etc.) are settle in U.S. Dollars. When a nation (whether it be China, Panama, Saudi Arabia, Hong Kong or any other) pegs (with the intention to manipulate) its currency (not money) to the U.S. Dollar it is doing so in order to defend itself. To impose an import tariff on a country that is trading with the U.S. while the U.S. is operating the largest currency manipulation in the history of the world is an additional act of (economic) war. To expect a nation with a measure of common sense not to defend itself is foolish.
If a prudent man had business dealings with another man (trader) who was dishonest or who had cheated them or others, he would stop doing business with this trader, as the prudent man will lose more in the long run. If the prudent man thought that this trader was going to kill him because he would not trade with the trader; and the prudent man was unable to defend himself (currently), he would build himself up to a point and join forces with others (prudent men) to where they could defend themselves and break relations with the dishonest trader. Until the prudent man could do this, he would deal with the trader in a way to protect himself and minimize interactions with the trader until he could stand on his own. To expect any nation that desires to survive to do any less is unreasonable.
The U.S. was in a unique position after WWII as most of the world´s capital (in terms of gold and production of goods) was held by and/or stored in the U.S. and most major nations were destroyed and/or in debt after WWII. The U.S. Dollar was convertible to gold and used to settle trade between nations as of 1944. This is no longer the case, but prices for commodities (oil, wheat, sugar, silver, etc., etc.) are settle in U.S. Dollars. When a nation (whether it be China, Panama, Saudi Arabia, Hong Kong or any other) pegs (with the intention to manipulate) its currency (not money) to the U.S. Dollar it is doing so in order to defend itself. To impose an import tariff on a country that is trading with the U.S. while the U.S. is operating the largest currency manipulation in the history of the world is an additional act of (economic) war. To expect a nation with a measure of common sense not to defend itself is foolish.
If a prudent man had business dealings with another man (trader) who was dishonest or who had cheated them or others, he would stop doing business with this trader, as the prudent man will lose more in the long run. If the prudent man thought that this trader was going to kill him because he would not trade with the trader; and the prudent man was unable to defend himself (currently), he would build himself up to a point and join forces with others (prudent men) to where they could defend themselves and break relations with the dishonest trader. Until the prudent man could do this, he would deal with the trader in a way to protect himself and minimize interactions with the trader until he could stand on his own. To expect any nation that desires to survive to do any less is unreasonable.
Now that I sugar-coated that pill in my previous post, I want to return to some more detailed economics around these points, but if you want to read as to why I think that even with war, there will eventually be another outcome by these types of prudent men, you may read posts here
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A good definition from investopedia is that a tariff is tax imposed on imported goods and services. Tariffs are used to restrict trade, as they increase the price of imported goods and services, making them more expensive to consumers. An ad-valorem tariff is levied based on the item’s value (e.g., 10% of the cell phone value). I would add that there are also Compound tariffs which are a combination of specific tariffs and ad valorem tariffs. For example, a compound tariff might consist of a fixed $100 duty plus 10% of the value of the cell phone.
Tariffs provide additional revenue for governments and domestic producers at the expense of consumers and foreign producers. They are one of several tools available to shape trade policy.
Governments typically use one of the following justifications for implementing tariffs:
•To protect domestic jobs. If consumers buy less-expensive foreign goods, workers who produce that good domestically might lose their jobs.
•To protect infant industries. If a country wants to develop its own industry producing a particular good, it will use tariffs to make it more expensive for consumers to purchase the foreign version of that good. The hope is that they will buy the domestic version instead and help that industry grow.
•To retaliate against a trading partner. If one country doesn’t play by the trade rules both countries previously agreed on, the country that feels jilted might impose tariffs on its partner’s goods as a punishment. The higher price caused by the tariff should cause purchases to fall.
•To protect consumers. If a government thinks a foreign good might be harmful, it might implement a tariff to discourage consumers from buying it.
The trade deficit will decrease in the country imposing the tariff. Other countries will continue to consume the good(s) with the import tariff (as they most probably have not tariff imposed on them). The new producers (who face no competition) in the country with the import tariff may benefit, but the customers do not. The reduced competition causes the prices to rises. The sales of domestic producers should also rise as they have a surplus, all else being equal. The increased production and price causes domestic producers to hire more workers which causes consumer spending to rise. When the price of the good(s) with the tariff has increased, the consumer is forced to either buy less of this good or less of some other good. The price increase can be thought of as a reduction in consumer income. Since consumers are purchasing less, domestic producers in other industries are selling less, causing a decline in the economy.
Generally the benefit caused by the increased domestic production in the tariff protectedindustry and the increased government revenues does not offset the losses the increasedprices cause consumers and the costs of imposing and collecting the tariff. Then the possibility that other countries might put tariffs on our goods in retaliation must be considered, which is known to be costly to the consumer.
More importantly, in regard to the investment of economic capital, the new national producers of the good(s) with the import tariff may have chosen to do something else with their time and capital that was more needed in country before import tariff. But the import tariff acted as a subsidy and the new national producer can prosper more quickly and probably to a greater degree at the expense of the members of the nation (who eventually must pay for the subsidy through taxation, debt, and/or inefficient production). This is one path with down-stream effects that make the country with the import tariff less efficient on a macro scale. The country having the tariff imposed upon them can also shift to other products or other sources to sell their production. There may be capital costs associated with this as well. The cheaper labor can be employed doing other things (to including fighting in wars) than producing the product with the import tariff. In almost all instances the tariff causes a net loss to the economies of both the country imposing the tariff and the country the tariff is imposed on.
Although slavery was common during the time of Adam Smith (it is also common today…see below), does not negate his points from a purely economic stance with the exception of an Austrian point (which Smith was not) that a system of slavery will be economically less efficient in the long run as the slave will produce less over a longer course of time without incentive. If the incentive is the whip, eventually he may be maimed or killed where he can no longer produce (or produced at the previous level) and the system he is a part of will not reach its economic potential had he been producing (even at a minimal level). It is not a question of who gets to define who is a slave, I can define it (see below), but that means very little, rather it is the individual laborer who makes the ultimate decision (he may always choose to rebel and produce nothing for his master).
What is a slave or a serf economically? There is no common world-wide definition. The closest that I can see based on history is that a slave general was personally able to utilize 10% of his economic labor (in terms of food, shelter, clothing and basic necessities) whereas a serf kept utilized closer to 50% of his economic labor. Taxation can be considered a form of economic bondage. If you work for some other entity (company, nation, etc.) a case can be made that you chattel; although you can choose your master, you have more options in terms of expression of your labor.
When Adam Smith was discussing the notion that it is the maxim of a prudent head of a family (group), never to make an item at home when it will cost (assuming the quality is similar) him less to buy it from another, he was not talking about slavery. He was speaking generally in terms of utility of a man´s time. Utility is a measure of preferences over some set of goods and services. Until the mid-twentieth century, the standard term for the expected utility was the moral expectation, contrasted with "mathematical expectation" for the expected value. The phrase morally certain was introduced by Jacob Bernoulli in 1713 for a case in which the probability is .999. ¨That is morally certain whose probability nearly equals the whole certainty, so that a morally certain event cannot be perceived not to happen: on the other hand, that is morally impossible which has merely as much probability as renders the certainty of failure moral certainty. Thus, if one thing is considered morally certain which has 999/1000 certainty, another thing will be morally impossible which has only 1/1000 certainty.¨ Utility was introduced mathematically in1871by William Jevons. The expected utility hypothesis is a hypothesis concerning people's preferences with regard to choices that have uncertain outcomes (gambles). This hypothesis states that if specific axioms are satisfied, the subjective value associated with an individual's gamble is the statistical expectation of that individual's valuations of the outcomes of that gamble. This hypothesis has proved useful to explain some popular choices that seem to contradict the expected value criterion (which takes into account only the sizes of the payouts and the probabilities of occurrence), such as occur in the contexts of gambling and insurance. Daniel Bernoulli initiated this hypothesis in 1738.
In economics, the marginal utility of a good or service is the gain from an increase, or loss from a decrease, in the consumption of that good or service. Economists sometimes speak of a law of diminishing marginal utility, meaning that the first unit of consumption of a good or service yields more utility than the second and subsequent units, with a continuing reduction for greater amounts. The marginal decision rule states that a good or service should be consumed at a quantity at which the marginal utility is equal to the marginal cost.
There are also conceptions of utility that do not rely on quantification. The Austrian school of economics generally attributes value to the satisfaction of wants, and sometimes rejects even the possibility of quantification. It has been argued that the Austrian framework makes it possible to consider rational preferences that would otherwise be excluded.
But perhaps we want to discuss the moral value in terms of ethics or religion.
Aristotle thought that "the citizens must not live a mechanic or a mercantile life (for such a life is ignoble and inimical to virtue), nor yet must those who are to be citizens in the best state be tillers of the soil (for leisure is needed both for the development of virtue and for active participation in politics)", often paraphrased as "all paid jobs absorb and degrade the mind." Cicero wrote that "vulgar are the means of livelihood of all hired workmen whom we pay for mere manual labor, not for artistic skill; for in their case the very wage they receive is a pledge of their slavery." Adam Smith noted that employers often conspire together to keep wages low, and have the upper hand in conflicts between workers and employers. Utilitarianism is a theory in normative ethics holding that the best moral action is the one that maximizes utility. Utility is defined in various ways, but is usually related to the well-being of sentient entities.
Although I personally accept the moralistic argument, many will not so we must also be able to reason with it and without it economically.
If a moralistic argument based on religion is taken, one must decide with which religion and how does it interact with other belief systems. If you were to use Christianity as an example look at Leviticus 19:35-36, Deuteronomy 25:13-16, Ezekiel 45:9-10, Amos 8:4-6, Hosea 12:7-8, Micah 6:10-14, Proverbs 11:1, Proverbs 16:11, Proverbs 20:10, Proverbs 20:23, Proverbs 22:28. If these are not applied, and we bring up a moral argument for the wrongness of slavery and not bring one up for honest weights and measures is hypocritical. To further suggest a manner to defend a dishonest system from someone else who is fighting the dishonest system is flawed.
The issue with currency manipulation is that the initial trade is not fair for most countries because the currency manipulation is beginning with the (forced) use of U.S. dollars in the trade. When another country is pegging its currency it is a defensive measure (and a currency manipulation) in reaction to another manipulation. If sound money or a more commonly desired medium of exchange were used, the initial manipulation would be rendered less effective and (partially) nullify the advantage. This will decrease the moral hazard and without this, the moralistic argument that slavery is wrong or defending against a (currency) manipulation (via a tariff) will no longer be a non sequitur and will have a stronger base. The mercantilist of the 17th and 18th centuries did not generally need to employ currency manipulations as the goods and services were exchanged for something more universally desired. China´s neo-mercantilism is different.
Tariffs including export duties collected mainly for revenue, or import duties to keep alive industries needed for war were mentioned in a previous post, perhaps others will add to the list.
The following are some examples of practical studies with trade tariffs.
In 1984 Alan Blinder studied the textile industry and its import tariffs. He found that U.S. consumers paid $42,000 annually for each textile job that was preserved by import quotas, a sum that greatly exceeded the average earnings of a textile worker. That same study estimated that restricting foreign imports cost $105,000 annually for each automobile worker's job that was saved, $420,000 for each job in TV manufacturing, and $750,000 for every job saved in the steel industry.
In the year 2000 President Bush raised tariffs on imported steel goods between 8and 30 percent. The Mackinac Center for Public Policy cites a study which indicated that the tariff would reduce U.S. national income by between 0.5 to 1.4billion dollars. The study estimates that less than 10,000 jobs in the steel industrywould be saved by the measure at a cost of over $400,000 per job saved. For everyjob saved by this measure, 8 will be lost.
The cost of protecting these jobs is not unique to the steel industry or to theUnited States. The National Center For Policy Analysis estimates that in 1994tariffs cost the U.S. economy 32.3 billion dollars or $170,000 for every job saved. Tariffs in Europe cost European consumers $70,000 per job saved while Japanese consumers lost $600,000 per job saved through Japanese tariffs.
Recall that tariffs are not harmful for everyone, and they have a distributive effect. Some people and industries gain when the tariff is enacted and others lose. The way gains and losses are distributed is absolutely crucial in understanding why tariffs along with many other policies are enacted.
Mancur Olson in 1965 explains why economic policies are often to the benefit of smaller groups at the expense of larger ones. He looked at the Canadian lumber industry. I share the details here (to my already lengthy post) because he examines quintessential points that most would prefer to ignore because the amount of time and energy need to research and think through is significant.
He took the example of tariffs placed on imported Canadian softwood lumber. The measure was to save 5,000 jobs, at the cost of $20,000 per job, or a cost of 1 billion dollars to the economy. This cost is distributed through the economy and represents just a few dollars to every person living in America. It is obvious to see that it's not worth the time and effort for any American to educate himself about the issue, solicit donations for the cause and lobby congress to gain a few dollars. However, the benefit to the American softwood lumber industry is quite large. The ten thousand lumber workers will lobby congress to protect their jobs along with the lumber companies that will gain hundreds of thousands of dollars by having the measure enacted. Since the people who gain from the measure have an incentive to lobby for the measure, while the people who lose have no incentive to spend the time and money to lobby against the issue, the tariff will be passed although it may, in total, have negative consequences for the economy. The gains from tariff policies are a lot more visible than the losses. You can see the sawmills which would be closed down if the industry is not protected by tariffs. You can meet the workers whose jobs will be lost if tariffs are not enacted by the government. Since the costs of the policies are distributed far and wide, you cannot put a face on the cost of a poor economic policy. Although 8 workers might lose their job for every job saved by a softwood lumber tariff, you will never meet one of these workers, because it is impossible to pinpoint exactly which workers would have been able to keep their jobs if the tariff was not enacted. If a worker loses his job because the performance of the economy is poor, you cannot say if a reduction in lumber tariffs would have saved his job. The nightly news would never show a picture of a California farm worker and state that he lost his job because of tariffs designed to help the lumber industry in Maine. The link between the two is impossible to see. The link between lumber workers and lumber tariffs is much more visible and thus will garner much more attention. The gains from a tariff are clearly visible but the costs are hidden, it will often appear that tariffs do not have a cost. By understanding this we can understand why so many government policies are enacted which harm the economy.
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thread-53234...pid1239204
A good definition from investopedia is that a tariff is tax imposed on imported goods and services. Tariffs are used to restrict trade, as they increase the price of imported goods and services, making them more expensive to consumers. An ad-valorem tariff is levied based on the item’s value (e.g., 10% of the cell phone value). I would add that there are also Compound tariffs which are a combination of specific tariffs and ad valorem tariffs. For example, a compound tariff might consist of a fixed $100 duty plus 10% of the value of the cell phone.
Tariffs provide additional revenue for governments and domestic producers at the expense of consumers and foreign producers. They are one of several tools available to shape trade policy.
Governments typically use one of the following justifications for implementing tariffs:
•To protect domestic jobs. If consumers buy less-expensive foreign goods, workers who produce that good domestically might lose their jobs.
•To protect infant industries. If a country wants to develop its own industry producing a particular good, it will use tariffs to make it more expensive for consumers to purchase the foreign version of that good. The hope is that they will buy the domestic version instead and help that industry grow.
•To retaliate against a trading partner. If one country doesn’t play by the trade rules both countries previously agreed on, the country that feels jilted might impose tariffs on its partner’s goods as a punishment. The higher price caused by the tariff should cause purchases to fall.
•To protect consumers. If a government thinks a foreign good might be harmful, it might implement a tariff to discourage consumers from buying it.
The trade deficit will decrease in the country imposing the tariff. Other countries will continue to consume the good(s) with the import tariff (as they most probably have not tariff imposed on them). The new producers (who face no competition) in the country with the import tariff may benefit, but the customers do not. The reduced competition causes the prices to rises. The sales of domestic producers should also rise as they have a surplus, all else being equal. The increased production and price causes domestic producers to hire more workers which causes consumer spending to rise. When the price of the good(s) with the tariff has increased, the consumer is forced to either buy less of this good or less of some other good. The price increase can be thought of as a reduction in consumer income. Since consumers are purchasing less, domestic producers in other industries are selling less, causing a decline in the economy.
Generally the benefit caused by the increased domestic production in the tariff protectedindustry and the increased government revenues does not offset the losses the increasedprices cause consumers and the costs of imposing and collecting the tariff. Then the possibility that other countries might put tariffs on our goods in retaliation must be considered, which is known to be costly to the consumer.
More importantly, in regard to the investment of economic capital, the new national producers of the good(s) with the import tariff may have chosen to do something else with their time and capital that was more needed in country before import tariff. But the import tariff acted as a subsidy and the new national producer can prosper more quickly and probably to a greater degree at the expense of the members of the nation (who eventually must pay for the subsidy through taxation, debt, and/or inefficient production). This is one path with down-stream effects that make the country with the import tariff less efficient on a macro scale. The country having the tariff imposed upon them can also shift to other products or other sources to sell their production. There may be capital costs associated with this as well. The cheaper labor can be employed doing other things (to including fighting in wars) than producing the product with the import tariff. In almost all instances the tariff causes a net loss to the economies of both the country imposing the tariff and the country the tariff is imposed on.
Although slavery was common during the time of Adam Smith (it is also common today…see below), does not negate his points from a purely economic stance with the exception of an Austrian point (which Smith was not) that a system of slavery will be economically less efficient in the long run as the slave will produce less over a longer course of time without incentive. If the incentive is the whip, eventually he may be maimed or killed where he can no longer produce (or produced at the previous level) and the system he is a part of will not reach its economic potential had he been producing (even at a minimal level). It is not a question of who gets to define who is a slave, I can define it (see below), but that means very little, rather it is the individual laborer who makes the ultimate decision (he may always choose to rebel and produce nothing for his master).
What is a slave or a serf economically? There is no common world-wide definition. The closest that I can see based on history is that a slave general was personally able to utilize 10% of his economic labor (in terms of food, shelter, clothing and basic necessities) whereas a serf kept utilized closer to 50% of his economic labor. Taxation can be considered a form of economic bondage. If you work for some other entity (company, nation, etc.) a case can be made that you chattel; although you can choose your master, you have more options in terms of expression of your labor.
When Adam Smith was discussing the notion that it is the maxim of a prudent head of a family (group), never to make an item at home when it will cost (assuming the quality is similar) him less to buy it from another, he was not talking about slavery. He was speaking generally in terms of utility of a man´s time. Utility is a measure of preferences over some set of goods and services. Until the mid-twentieth century, the standard term for the expected utility was the moral expectation, contrasted with "mathematical expectation" for the expected value. The phrase morally certain was introduced by Jacob Bernoulli in 1713 for a case in which the probability is .999. ¨That is morally certain whose probability nearly equals the whole certainty, so that a morally certain event cannot be perceived not to happen: on the other hand, that is morally impossible which has merely as much probability as renders the certainty of failure moral certainty. Thus, if one thing is considered morally certain which has 999/1000 certainty, another thing will be morally impossible which has only 1/1000 certainty.¨ Utility was introduced mathematically in1871by William Jevons. The expected utility hypothesis is a hypothesis concerning people's preferences with regard to choices that have uncertain outcomes (gambles). This hypothesis states that if specific axioms are satisfied, the subjective value associated with an individual's gamble is the statistical expectation of that individual's valuations of the outcomes of that gamble. This hypothesis has proved useful to explain some popular choices that seem to contradict the expected value criterion (which takes into account only the sizes of the payouts and the probabilities of occurrence), such as occur in the contexts of gambling and insurance. Daniel Bernoulli initiated this hypothesis in 1738.
In economics, the marginal utility of a good or service is the gain from an increase, or loss from a decrease, in the consumption of that good or service. Economists sometimes speak of a law of diminishing marginal utility, meaning that the first unit of consumption of a good or service yields more utility than the second and subsequent units, with a continuing reduction for greater amounts. The marginal decision rule states that a good or service should be consumed at a quantity at which the marginal utility is equal to the marginal cost.
There are also conceptions of utility that do not rely on quantification. The Austrian school of economics generally attributes value to the satisfaction of wants, and sometimes rejects even the possibility of quantification. It has been argued that the Austrian framework makes it possible to consider rational preferences that would otherwise be excluded.
But perhaps we want to discuss the moral value in terms of ethics or religion.
Aristotle thought that "the citizens must not live a mechanic or a mercantile life (for such a life is ignoble and inimical to virtue), nor yet must those who are to be citizens in the best state be tillers of the soil (for leisure is needed both for the development of virtue and for active participation in politics)", often paraphrased as "all paid jobs absorb and degrade the mind." Cicero wrote that "vulgar are the means of livelihood of all hired workmen whom we pay for mere manual labor, not for artistic skill; for in their case the very wage they receive is a pledge of their slavery." Adam Smith noted that employers often conspire together to keep wages low, and have the upper hand in conflicts between workers and employers. Utilitarianism is a theory in normative ethics holding that the best moral action is the one that maximizes utility. Utility is defined in various ways, but is usually related to the well-being of sentient entities.
Although I personally accept the moralistic argument, many will not so we must also be able to reason with it and without it economically.
If a moralistic argument based on religion is taken, one must decide with which religion and how does it interact with other belief systems. If you were to use Christianity as an example look at Leviticus 19:35-36, Deuteronomy 25:13-16, Ezekiel 45:9-10, Amos 8:4-6, Hosea 12:7-8, Micah 6:10-14, Proverbs 11:1, Proverbs 16:11, Proverbs 20:10, Proverbs 20:23, Proverbs 22:28. If these are not applied, and we bring up a moral argument for the wrongness of slavery and not bring one up for honest weights and measures is hypocritical. To further suggest a manner to defend a dishonest system from someone else who is fighting the dishonest system is flawed.
The issue with currency manipulation is that the initial trade is not fair for most countries because the currency manipulation is beginning with the (forced) use of U.S. dollars in the trade. When another country is pegging its currency it is a defensive measure (and a currency manipulation) in reaction to another manipulation. If sound money or a more commonly desired medium of exchange were used, the initial manipulation would be rendered less effective and (partially) nullify the advantage. This will decrease the moral hazard and without this, the moralistic argument that slavery is wrong or defending against a (currency) manipulation (via a tariff) will no longer be a non sequitur and will have a stronger base. The mercantilist of the 17th and 18th centuries did not generally need to employ currency manipulations as the goods and services were exchanged for something more universally desired. China´s neo-mercantilism is different.
Tariffs including export duties collected mainly for revenue, or import duties to keep alive industries needed for war were mentioned in a previous post, perhaps others will add to the list.
The following are some examples of practical studies with trade tariffs.
In 1984 Alan Blinder studied the textile industry and its import tariffs. He found that U.S. consumers paid $42,000 annually for each textile job that was preserved by import quotas, a sum that greatly exceeded the average earnings of a textile worker. That same study estimated that restricting foreign imports cost $105,000 annually for each automobile worker's job that was saved, $420,000 for each job in TV manufacturing, and $750,000 for every job saved in the steel industry.
In the year 2000 President Bush raised tariffs on imported steel goods between 8and 30 percent. The Mackinac Center for Public Policy cites a study which indicated that the tariff would reduce U.S. national income by between 0.5 to 1.4billion dollars. The study estimates that less than 10,000 jobs in the steel industrywould be saved by the measure at a cost of over $400,000 per job saved. For everyjob saved by this measure, 8 will be lost.
The cost of protecting these jobs is not unique to the steel industry or to theUnited States. The National Center For Policy Analysis estimates that in 1994tariffs cost the U.S. economy 32.3 billion dollars or $170,000 for every job saved. Tariffs in Europe cost European consumers $70,000 per job saved while Japanese consumers lost $600,000 per job saved through Japanese tariffs.
Recall that tariffs are not harmful for everyone, and they have a distributive effect. Some people and industries gain when the tariff is enacted and others lose. The way gains and losses are distributed is absolutely crucial in understanding why tariffs along with many other policies are enacted.
Mancur Olson in 1965 explains why economic policies are often to the benefit of smaller groups at the expense of larger ones. He looked at the Canadian lumber industry. I share the details here (to my already lengthy post) because he examines quintessential points that most would prefer to ignore because the amount of time and energy need to research and think through is significant.
He took the example of tariffs placed on imported Canadian softwood lumber. The measure was to save 5,000 jobs, at the cost of $20,000 per job, or a cost of 1 billion dollars to the economy. This cost is distributed through the economy and represents just a few dollars to every person living in America. It is obvious to see that it's not worth the time and effort for any American to educate himself about the issue, solicit donations for the cause and lobby congress to gain a few dollars. However, the benefit to the American softwood lumber industry is quite large. The ten thousand lumber workers will lobby congress to protect their jobs along with the lumber companies that will gain hundreds of thousands of dollars by having the measure enacted. Since the people who gain from the measure have an incentive to lobby for the measure, while the people who lose have no incentive to spend the time and money to lobby against the issue, the tariff will be passed although it may, in total, have negative consequences for the economy. The gains from tariff policies are a lot more visible than the losses. You can see the sawmills which would be closed down if the industry is not protected by tariffs. You can meet the workers whose jobs will be lost if tariffs are not enacted by the government. Since the costs of the policies are distributed far and wide, you cannot put a face on the cost of a poor economic policy. Although 8 workers might lose their job for every job saved by a softwood lumber tariff, you will never meet one of these workers, because it is impossible to pinpoint exactly which workers would have been able to keep their jobs if the tariff was not enacted. If a worker loses his job because the performance of the economy is poor, you cannot say if a reduction in lumber tariffs would have saved his job. The nightly news would never show a picture of a California farm worker and state that he lost his job because of tariffs designed to help the lumber industry in Maine. The link between the two is impossible to see. The link between lumber workers and lumber tariffs is much more visible and thus will garner much more attention. The gains from a tariff are clearly visible but the costs are hidden, it will often appear that tariffs do not have a cost. By understanding this we can understand why so many government policies are enacted which harm the economy.
The entire idea of needing to work for money was uncommon for most native peoples around the world throughout history. Although they needed to work to survive, there were not dependent on an external intermediary called money (or currency) nor did they the state to survive (although the tribe did increase the probability of survival in more harsh environments). Why work 40 hours? They began calling for 40 hour work weeks in the U.S. in 1836 as workers in Britain were putting in 10-16 hours per day during the development of their industrial revolution. At what point is the current level of consumerism necessary, or is it just a nice to have because you want it (which is reasonable if you want to put forth the effort to obtain it)? What is a frivolous purchase? This over-indulgence has been nurtured and fed by the corporations using commercialism.
Cheaper labor is a relative advantage that will normally exist somewhere in a world-wide market. There are many other types of competitive advantages as well whether they are mineral resources, climate, geographic location and so on.
The minimum wage, as well as the median wage of a country; are important indicators of its health when it is based on natural market forces, not forced by an external agency. Minimum wage does not work when it is based on some arbitrary group looking at a section of goods and services and one point (an then again at another, and another) in a controlled fashion to attempt to outsmart the market. It can never be as efficient as market and can be raised to a price that the market will not bear and the products and services will no longer be desired. Watch what happens with places (cities or countries) with minimum wages, poverty increase and shortages become more frequent. If you give everyone a hypothetical one million dollar a year salary based on fiat currency, the market will price (over a relatively moderate time frame) the increased wages into the system and prices of goods and services will rise. This is based on a simplistic quantitative value of currency (perhaps money as well) and it is much more detailed. Those using the fiat currency first do gain a competitive (and dishonest) advantage until the market adjusts.
Cheaper labor is a relative advantage that will normally exist somewhere in a world-wide market. There are many other types of competitive advantages as well whether they are mineral resources, climate, geographic location and so on.
The minimum wage, as well as the median wage of a country; are important indicators of its health when it is based on natural market forces, not forced by an external agency. Minimum wage does not work when it is based on some arbitrary group looking at a section of goods and services and one point (an then again at another, and another) in a controlled fashion to attempt to outsmart the market. It can never be as efficient as market and can be raised to a price that the market will not bear and the products and services will no longer be desired. Watch what happens with places (cities or countries) with minimum wages, poverty increase and shortages become more frequent. If you give everyone a hypothetical one million dollar a year salary based on fiat currency, the market will price (over a relatively moderate time frame) the increased wages into the system and prices of goods and services will rise. This is based on a simplistic quantitative value of currency (perhaps money as well) and it is much more detailed. Those using the fiat currency first do gain a competitive (and dishonest) advantage until the market adjusts.
Excellent write-up. I agree with pretty much everything you have written. But I think morality and ethics are less important than raw social consequences. Even purely economic analyses tend to neglect the role of trade in shaping the social fabric of a nation.
In an efficient economic system, jobs will always go to where the labor is most profitable. As the cost of moving labor from one place to another decreases, communities suffer from the disruptions caused by layoffs, business closures, and abandoned buildings. Although those jobs and businesses may be replaced and buildings re-purposed, I've seen no analysis that answers the questions: (1) is there any limit to the rate communities can adapt to changing employment markets (2) what social or cultural sacrifices must be made to achieve that adaptability? Can the social cost of unemployment in Detroit be measured in strictly economic terms?
In an efficient economic system, jobs will always go to where the labor is most profitable. As the cost of moving labor from one place to another decreases, communities suffer from the disruptions caused by layoffs, business closures, and abandoned buildings. Although those jobs and businesses may be replaced and buildings re-purposed, I've seen no analysis that answers the questions: (1) is there any limit to the rate communities can adapt to changing employment markets (2) what social or cultural sacrifices must be made to achieve that adaptability? Can the social cost of unemployment in Detroit be measured in strictly economic terms?
NASA Test Pilot, I spotted the flaw in your analysis.
False. No one is forcing the use of U.S. Dollars. The pegging to the US Dollar is unnecessary and harmful to the citizens of any country that does it, but great for that country's elites who get to enslave their citizens to a constantly devaluing currency.
Before 2008 and the US started printing, the Dollar was a floating value that no one had any reason to peg their currency to. But elites within various third-world tyrannies wanted to abuse the Brenton Woods system to their own advantage and created the peg. This eventually resulted in the bankruptcy of the USA, and the USA responded by printing currency. This creates a perverse situation where third-world workers are working non-stop for constantly devalued wages.
We are seeing the results of this system 8 years later as third-world countries are collapsing into depression or even hyperinflation, and American workers go without meaningful good paying jobs. The depression will continue to get worse until the pegs are lifted or tariffs are imposed against the countries with pegs.
You state that slavery is not an efficient system because slaves do not have incentives to work, and I agree. We already see this reality reflected with cheap third-world goods that fall apart within months after purchase, buildings in China that fall apart after construction, ghost cities no one can afford to live in, etc. etc. And yet despite how shitty these third-world goods are, because there is such an abundance of third-world slaves it does not matter how shitty the goods are, there are yet more slaves who can be forced to produce even more cheap shit. So really, I can't see how by any definition of slavery the conditions of slavery are not being met here. With either a loose or strict definition of slavery, we can see these third-worlders working under a peg cannot accumulate savings and are slaves.
Quote:Quote:
The issue with currency manipulation is that the initial trade is not fair for most countries because the currency manipulation is beginning with the (forced) use of U.S. dollars in the trade. When another country is pegging its currency it is a defensive measure (and a currency manipulation) in reaction to another manipulation.
False. No one is forcing the use of U.S. Dollars. The pegging to the US Dollar is unnecessary and harmful to the citizens of any country that does it, but great for that country's elites who get to enslave their citizens to a constantly devaluing currency.
Before 2008 and the US started printing, the Dollar was a floating value that no one had any reason to peg their currency to. But elites within various third-world tyrannies wanted to abuse the Brenton Woods system to their own advantage and created the peg. This eventually resulted in the bankruptcy of the USA, and the USA responded by printing currency. This creates a perverse situation where third-world workers are working non-stop for constantly devalued wages.
We are seeing the results of this system 8 years later as third-world countries are collapsing into depression or even hyperinflation, and American workers go without meaningful good paying jobs. The depression will continue to get worse until the pegs are lifted or tariffs are imposed against the countries with pegs.
You state that slavery is not an efficient system because slaves do not have incentives to work, and I agree. We already see this reality reflected with cheap third-world goods that fall apart within months after purchase, buildings in China that fall apart after construction, ghost cities no one can afford to live in, etc. etc. And yet despite how shitty these third-world goods are, because there is such an abundance of third-world slaves it does not matter how shitty the goods are, there are yet more slaves who can be forced to produce even more cheap shit. So really, I can't see how by any definition of slavery the conditions of slavery are not being met here. With either a loose or strict definition of slavery, we can see these third-worlders working under a peg cannot accumulate savings and are slaves.
Contributor at Return of Kings. I got banned from twatter, which is run by little bitches and weaklings. You can follow me on Gab.
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Quote: (03-17-2016 11:46 AM)Samseau Wrote:
The pegging to the US Dollar is unnecessary and harmful to the citizens of any country that does it, but great for that country's elites who get to enslave their citizens to a constantly devaluing currency.
False. An economy whose capital flows are highly sensitive to exogenous shocks may have an advantage in pegging its currency. A good example is Denmark with a small, open economy pegged to the Euro. The peg creates credibility and reduces volalitily. This can be good for long-term trade relations. It is almost certainly true Danes are poorer than they would otherwise be, but in the long-run, the economy will either make internal adjustments through wage increases, or the currency will be allowed to appreciate. The real determinant of prosperity is productivity. There is no "magic" formula.
Quote: (03-17-2016 11:46 AM)Samseau Wrote:
And yet despite how shitty these third-world goods are, because there is such an abundance of third-world slaves it does not matter how shitty the goods are, there are yet more slaves who can be forced to produce even more cheap shit. So really, I can't see how by any definition of slavery the conditions of slavery are not being met here. With either a loose or strict definition of slavery, we can see these third-worlders working under a peg cannot accumulate savings and are slaves.
You're contradicting yourself (as you have multiply times in this thread). You say on the one hand Chinese goods are crap. If it really was crap, no one would buy them. Then you say their abundant labor supply means they can increase the supply of a crappy good that no one wants to buy?
If China's goods really were crap value for money, you could make a fortune right now producing a similar product at better value for money.
There is no force or fraud - at least in the US or European end of this trading relationship, so people are buying this stuff because they want to. I doubt there is much force or fraud in the Chinese end. Real wages rose an average of 8% a year after China joined the WTO, and were rising briskly before that. The poverty rate has plummented. A huge amount of the global decline in poverty can be ascribed to the Chinese government's decision to liberalize. Yes, there is almost certainly overinvestment in China, but seriously... the idea the Chinese are somehow slaves is just bogus. Perhaps you are talking about non-Chinese third worlders, but given the absolutely stunning strides China has made as a result of opening itself up to foreign investment and trade, there is no reason to suspect other countries cannot emulate this. Yes, the value of Chinese people's savings are artifically low because of capital controls, but this probably harms the "elites" more than others, because they are the ones who save the most!
When people buy Chinese goods, they do so because they are, given the price, often a better deal.
The fact that there is a huge deficit between the US and China is simply due the fact Americans just don't save very much. Right up until the crisis hit, the savings quotient in the US was negative! So the US was in the middle of a major credit boom, which disguised the lack of broad-based economic growth. This boom was facilitated by a housing bubble brought about from financial regulatory regimes that subsidized housing at the expense of commercial lending. For intelligent reading on this, check out the blog, spontaneousfinance.com.
The problems of the US economy are real, manifold and multi-dimensional, but the diagnosis in this thread is really confusing and nonsensical.
A year from now you'll wish you started today
^^ Wasn't the petro dollar created to force all countries to buy oil in US dollars?
Every nation was forced to carry the US currency, if they dis-obeyed then they ended up being attacked like Iraq and Libya.
The big news development that no one is talking about, is that China has unpegged itself from the US dollar. Iran has done the same and so has Russia.
^ I would argue the chinese model would be hard to emulate in the west. We have never experienced Communism, we live in a culture that wants it all.
Every nation was forced to carry the US currency, if they dis-obeyed then they ended up being attacked like Iraq and Libya.
The big news development that no one is talking about, is that China has unpegged itself from the US dollar. Iran has done the same and so has Russia.
^ I would argue the chinese model would be hard to emulate in the west. We have never experienced Communism, we live in a culture that wants it all.
Quote: (03-17-2016 06:07 PM)rudebwoy Wrote:
^^ Wasn't the petro dollar created to force all countries to buy oil in US dollars?
???
Do the Saudis drive Chevrolets? Or do they drive mostly German cars? Tell me, what currency do you need to buy a German car with?
Oil is probably one of the more perfectly traded goods out there. It is totally unimportant what currency oil is traded in, because what matters is what you can buy with. Oil in and of itself is worthless.
A year from now you'll wish you started today
^ We are on the verge of a major war, being fought over oil and oil pipelines.
I would say China, Russia and Iran would disagree with your statement about "it doesn't matter what oil is being traded in".
I would say China, Russia and Iran would disagree with your statement about "it doesn't matter what oil is being traded in".
By forcing of the U.S. dollars I mean what Rudebwoy alludes to as well as the initial system after Bretton Woods. World-wide commodities (of which oil is only one) are priced in U.S. dollars. This was fine, as a country running a trade surplus before 1971 could trade their surplus for gold held in U.S. storage, but Nixon closed the gold window in August 1971 stopping the reality that the U.S. Dollar was as good as gold because the U.S. Treasury gold was being depleted as many nations wanted gold for their dollars. President De Gaulle of France was pissed in 1968 (partly because of interference in former French Indo-China) and wanted exchange his surplus trade dollars for gold to be stored in France´s treasury. This run on the bank (U.S. gold) escalated until 1971. In 1973 Kissinger and friends finalized the Petro-dollar system where oil (especially Saudi Arabia) was to be exchanged for U.S. Dollars and more importantly these excess dollars would be re-cycled back into the U.S. Treasury and the Treasury would issue U.S. Treasury Bonds (interest bearing IOU´s) for the Saudi and other oil producers to have held form them at the U.S. Treasury.
As a side note this is a huge issue now as there are somewhere from 3-5 trillion dollars in U.S Treasury Bonds off balance sheet with the Exchange Stabilization Fund (ESF) held in trust for the Saudi Monarchy. If the monarchy were to fall, that off book balance could disappear. This would be a huge boon for the U.S.
After the 1973 agreement the Saudi´s were to have U.S. military protection and a special relationship was forged. When countries did not want to do this, the force of the U.S. military was unleashed and the leadership was changed. Iraq, Iran, Libya and Venezuela are not on the (overt and covert) list by accident (look at their oil, lack of central banking, and desire to trade their oil for something other than dollars to include Euros or creating things like an Arab gold-back Dinar as Libya was doing in North Africa with plans to connect to an Arab gold-backed Gulf Dinar).
By slavery not being efficient, I am talking generally in an economic system that will not reach its economic potential as the laborers (or slaves) will not fulfill their capabilities (reach their potential) as they are under duress or not incentivized.
Keep me on my toes guys, I appreciate it!
Part of my solution was listed in the post I liked above:
thread-53234...pid1239204
Specifically where I propose a macro solution:
1) Promote trade among nations, cultures.
2) Create machines/engines that are more efficient that reduce the (input) energy needed to increase (relative) energy output (moving towards a Carnot engine). These machines/engines include various forms of robotics, nano-machines, better carburetors, etc.
3) The advancement of Zero-point and Fusion types of energy devices (Carnot Engines that do not exist publically).
4) The movement of humans off world.
I have not proposed micro solutions other than my first posts on this thread
(#4) where I said: ¨Free trade and capitalism are built on sound money and mutually enforced contract laws. Trade is enhanced when the parties trust one another and there are standard weights and measures of value and equitable means of resolving disputes.¨
(#16) where I said: ¨To have trade without a commonly desired medium of exchange (honest money as an example) will in the long run be neither free nor fair. If one country says it wants to trade its oil (goods/services) and it wants XXX (not U.S. Dollars), but another country attempts to prevent (through various means) this yet another type of manipulation. The exchange in a manipulated system that does not have a commonly desired medium of exchange has an element of fraud built. Tariffs are a way to protect when one party (country) does not believe the trade (or trading) is equitable.¨
As a side note this is a huge issue now as there are somewhere from 3-5 trillion dollars in U.S Treasury Bonds off balance sheet with the Exchange Stabilization Fund (ESF) held in trust for the Saudi Monarchy. If the monarchy were to fall, that off book balance could disappear. This would be a huge boon for the U.S.
After the 1973 agreement the Saudi´s were to have U.S. military protection and a special relationship was forged. When countries did not want to do this, the force of the U.S. military was unleashed and the leadership was changed. Iraq, Iran, Libya and Venezuela are not on the (overt and covert) list by accident (look at their oil, lack of central banking, and desire to trade their oil for something other than dollars to include Euros or creating things like an Arab gold-back Dinar as Libya was doing in North Africa with plans to connect to an Arab gold-backed Gulf Dinar).
By slavery not being efficient, I am talking generally in an economic system that will not reach its economic potential as the laborers (or slaves) will not fulfill their capabilities (reach their potential) as they are under duress or not incentivized.
Keep me on my toes guys, I appreciate it!
Part of my solution was listed in the post I liked above:
thread-53234...pid1239204
Specifically where I propose a macro solution:
1) Promote trade among nations, cultures.
2) Create machines/engines that are more efficient that reduce the (input) energy needed to increase (relative) energy output (moving towards a Carnot engine). These machines/engines include various forms of robotics, nano-machines, better carburetors, etc.
3) The advancement of Zero-point and Fusion types of energy devices (Carnot Engines that do not exist publically).
4) The movement of humans off world.
I have not proposed micro solutions other than my first posts on this thread
(#4) where I said: ¨Free trade and capitalism are built on sound money and mutually enforced contract laws. Trade is enhanced when the parties trust one another and there are standard weights and measures of value and equitable means of resolving disputes.¨
(#16) where I said: ¨To have trade without a commonly desired medium of exchange (honest money as an example) will in the long run be neither free nor fair. If one country says it wants to trade its oil (goods/services) and it wants XXX (not U.S. Dollars), but another country attempts to prevent (through various means) this yet another type of manipulation. The exchange in a manipulated system that does not have a commonly desired medium of exchange has an element of fraud built. Tariffs are a way to protect when one party (country) does not believe the trade (or trading) is equitable.¨
Quote: (03-17-2016 06:53 PM)rudebwoy Wrote:
^ We are on the verge of a major war, being fought over oil and oil pipelines.
I would say China, Russia and Iran would disagree with your statement about "it doesn't matter what oil is being traded in".
It is axiomatic that the medium of exchange is unimportant, as long as it is sufficiently liquid. What matters is where they decide to place their savings and/or what goods they decide to purchase from the sale of their oil.
If their portfolio is controlled by a single investor - a sovereign wealth fund - and that sovereign wealth fund exclusively buys US assets (treasuries), even when risk-adjusted returns would be higher with a different portfolio make-up, then they are essentially subsidizing US taxpayers.
But that decision has to do with WHERE the savings go. Not the currency they are traded in.
A year from now you'll wish you started today
Quote: (03-17-2016 05:45 PM)ElJefe Wrote:
Quote: (03-17-2016 11:46 AM)Samseau Wrote:
The pegging to the US Dollar is unnecessary and harmful to the citizens of any country that does it, but great for that country's elites who get to enslave their citizens to a constantly devaluing currency.
False. An economy whose capital flows are highly sensitive to exogenous shocks may have an advantage in pegging its currency. A good example is Denmark with a small, open economy pegged to the Euro. The peg creates credibility and reduces volalitily. This can be good for long-term trade relations. It is almost certainly true Danes are poorer than they would otherwise be, but in the long-run, the economy will either make internal adjustments through wage increases, or the currency will be allowed to appreciate. The real determinant of prosperity is productivity. There is no "magic" formula.
False. All that the currency peg does to the Danes is hide the true value of their mark relative to the Euro which means they will either pay too much or too little relative to other goods in the market.
Simply amazing at how badly you've contradicted yourself in this thread. First you claim to be for free trade and anti-tariff, then you defend currency manipulation. The contradiction is so bad it borders on insanity.
Quote:Quote:
Quote: (03-17-2016 11:46 AM)Samseau Wrote:
And yet despite how shitty these third-world goods are, because there is such an abundance of third-world slaves it does not matter how shitty the goods are, there are yet more slaves who can be forced to produce even more cheap shit. So really, I can't see how by any definition of slavery the conditions of slavery are not being met here. With either a loose or strict definition of slavery, we can see these third-worlders working under a peg cannot accumulate savings and are slaves.
You're contradicting yourself (as you have multiply times in this thread). You say on the one hand Chinese goods are crap. If it really was crap, no one would buy them. Then you say their abundant labor supply means they can increase the supply of a crappy good that no one wants to buy?
No contradiction here. It's easier to buy crap goods if there is a huge oversupply of crap. Even if the product breaks in 3 months, if it's still cheaper than a product that would take 3 years to break people are still drawn to the crap because of the lower price tag.
Consumers may eventually catch on, but not before incredible damage is done to the domestic economy and many places go out of business.
Quote:Quote:
If China's goods really were crap value for money, you could make a fortune right now producing a similar product at better value for money.
Not at all, because the Chinese are operating at such lower production (from lack of regulations and slave labor) costs they can keep up their crap production long enough to fool consumers which results in closures of American businesses that were operating on thin margins.
You cannot even make a startup against such a scheme because in the time it takes for consumers to realize they would save money by spending a bit more, you've eaten so many losses that it makes competition almost impossible.
Quote:Quote:
There is no force or fraud - at least in the US or European end of this trading relationship, so people are buying this stuff because they want to. I doubt there is much force or fraud in the Chinese end.
This is a joke. Chinese citizens cannot accumulate savings because of Communist force and this is reflected in their recent market crash. Despite working like dogs for 30 years under their peg, now that American consumption has plummeted (because Americans have no good paying jobs to buy shit anymore and they're maxed on debt) the Chinese cannot sustain their own levels of production since their peg means they can only extract value from international consumption but not domestic consumption.
This is blatant force - without the Communist gov FORCING the Chinese to accept this peg, most Chinese would never voluntarily take a currency peg. You're absolutely in denial and out of touch with reality if you believe otherwise. What man voluntarily works for a currency that is constantly valued less than 6x vs. a competing currency?
Quote:Quote:
Real wages rose an average of 8% a year after China joined the WTO, and were rising briskly before that. The poverty rate has plummented.
Wages raising mean nothing within an extreme inflationary environment such as China's. Wages rise but so does the cost of everything else.
Define poverty. Chinese birthrates have crashed and even if they lifted the 1 child rule they won't be coming back up anytime soon. Chinese cannot afford to live their "middle class" lifestyles (i.e some little apartment in a city of creature comforts) and raise children on their meager incomes.
Quote:Quote:
A huge amount of the global decline in poverty can be ascribed to the Chinese government's decision to liberalize. Yes, there is almost certainly overinvestment in China, but seriously... the idea the Chinese are somehow slaves is just bogus.
They aren't liberalized, they're more mercantilist. Also you've done nothing to disprove the notion that a class of people who cannot accumulate savings aren't slaves.
Quote:Quote:
Perhaps you are talking about non-Chinese third worlders, but given the absolutely stunning strides China has made as a result of opening itself up to foreign investment and trade, there is no reason to suspect other countries cannot emulate this. Yes, the value of Chinese people's savings are artifically low because of capital controls, but this probably harms the "elites" more than others, because they are the ones who save the most!
No their savings are low relative to the elites because the elites are able to escape the capital controls and convert their renminbi into other currencies or buy real estate in non-pegged environments like Canada, Europe, or the USA. Meanwhile the serfs stuck in China watch their years of work go down the drain every time the USA prints more money.
Quote:Quote:
When people buy Chinese goods, they do so because they are, given the price, often a better deal.
False. People are deceived by cheap prices and do not discover that the product is trash until later. When they finally decide to buy American, many American places have gone out of business in the meanwhile.
Quote:Quote:
The fact that there is a huge deficit between the US and China is simply due the fact Americans just don't save very much.
No, it's because there are no good paying American jobs and American elites profit immensely from exploiting Communist slaves.
Quote:Quote:
Right up until the crisis hit, the savings quotient in the US was negative!
Because people took on debt expecting more jobs to materialize, which never did due to shit trade deals.
Quote:Quote:
So the US was in the middle of a major credit boom, which disguised the lack of broad-based economic growth.
No growth because of shit trade deals.
Quote:Quote:
The problems of the US economy are real, manifold and multi-dimensional, but the diagnosis in this thread is really confusing and nonsensical.
Most people are confused because of financial jargon. However, the worst confused are guys like yourself and other economists who have trouble escaping their economic dogmas, but once you understand how slavery works it's not very complicated.
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Quote:Quote:
After the 1973 agreement the Saudi´s were to have U.S. military protection and a special relationship was forged. When countries did not want to do this, the force of the U.S. military was unleashed and the leadership was changed. Iraq, Iran, Libya and Venezuela are not on the (overt and covert) list by accident (look at their oil, lack of central banking, and desire to trade their oil for something other than dollars to include Euros or creating things like an Arab gold-back Dinar as Libya was doing in North Africa with plans to connect to an Arab gold-backed Gulf Dinar).
I've heard this argument many times but it's not believable.
If China decided to stop trading in US dollars, the US would not invade or give a shit. China would suffer and that would be that.
The reasons for the destabilization of these countries is not because their currency choice, they are for other political reasons. For example, Iran, because it was flirting with communism. Also every President that goes in office has a different foreign policy plan, and over the decades Presidents contradict each other and it creates a very schizophrenic policy. There is no single cause that unites American policy, so don't bother looking for it.
Contributor at Return of Kings. I got banned from twatter, which is run by little bitches and weaklings. You can follow me on Gab.
Be sure to check out the easiest mining program around, FreedomXMR.
^ They are after Iran because it doesn't have a central bank. Which means the Zionists don't have a hold on the country, it has nothing to do with communism.
China has stopped trading in US dollars and it is already affecting America, the Chinese will not suffer as they are making stronger alliances with Russia.
The 1973 arrangement is very much true, Kissinger forced that deal with the Saudi's.
https://hendersonlefthook.wordpress.com/...-hegemony/
China has stopped trading in US dollars and it is already affecting America, the Chinese will not suffer as they are making stronger alliances with Russia.
The 1973 arrangement is very much true, Kissinger forced that deal with the Saudi's.
https://hendersonlefthook.wordpress.com/...-hegemony/
Quote: (03-20-2016 11:33 AM)rudebwoy Wrote:
^ They are after Iran because it doesn't have a central bank. Which means the Zionists don't have a hold on the country, it has nothing to do with communism.
China has stopped trading in US dollars and it is already affecting America, the Chinese will not suffer as they are making stronger alliances with Russia.
The 1973 arrangement is very much true, Kissinger forced that deal with the Saudi's.
https://hendersonlefthook.wordpress.com/...-hegemony/
Er, from what I know Iran does have a central bank: https://en.wikipedia.org/wiki/Central_Ba...ic_of_Iran
What makes it different (and so irksome to elites who have a firm grip on our countries) is the fact that Iran doesn't use fractional reserve banking, not the presence of a central bank.
"Imagine" by HCE | Hitler reacts to Battle of Montreal | An alternative use for squid that has never crossed your mind before
Quote: (03-20-2016 02:50 PM)Handsome Creepy Eel Wrote:Actually what the elites find so irksome about it, is that it is government owned and run. In the US, the claim is that the federal reserve bank doesn't have any owners, although they have shareholders (which sounds like some word salad BS if you ask me.) The shareholders to name a few are Bank of America, Citicorp, Chase, etc.
Er, from what I know Iran does have a central bank: https://en.wikipedia.org/wiki/Central_Ba...ic_of_Iran
What makes it different (and so irksome to elites who have a firm grip on our countries) is the fact that Iran doesn't use fractional reserve banking, not the presence of a central bank.
Quote: (03-17-2016 07:12 PM)NASA Test Pilot Wrote:
3) The advancement of Zero-point and Fusion types of energy devices (Carnot Engines that do not exist publically).
4) The movement of humans off world.
This is a great thread about economics and your analysis is well-informed and convincing, but don't make things weird.
@BortimusPrime
Thanks for the kind words. The following was my train of thought regardless if one agrees or disagrees with any of the content. In this case, it is important to read a larger portion of the thread and its links. The response to which you reference (#87) was an addition to a previous posts #47 (which was a statement and query into post #46) and posts #78 & #79 (which were partial responses to post #46, #49 & #77). Post #87 was also in response to post #82 & #84 & #83 (talking about the diagnosis being confusing and nonsensical in reference to what I took to be multiple posters of which I may have been one).
Post #87 references a link to a post that discusses solutions in the context of energy which directly relates to trade and the expansion of economies for it is the limiting factor and I believe will also influence tariffs. Without excess net energy an economy cannot grow. My train of thought is not only with this century, but across centuries and well beyond. I briefly outlined the macro solutions (per the linked post) and made reference to micro solutions that were mentioned in my earlier posts on this thread. Therefore, numbers 3 and 4 to which you refer may seem out of context without going through the history. My intent was not to ´make things weird,´ but rather to tie up loose ends and be responsive.
Thanks for the kind words. The following was my train of thought regardless if one agrees or disagrees with any of the content. In this case, it is important to read a larger portion of the thread and its links. The response to which you reference (#87) was an addition to a previous posts #47 (which was a statement and query into post #46) and posts #78 & #79 (which were partial responses to post #46, #49 & #77). Post #87 was also in response to post #82 & #84 & #83 (talking about the diagnosis being confusing and nonsensical in reference to what I took to be multiple posters of which I may have been one).
Post #87 references a link to a post that discusses solutions in the context of energy which directly relates to trade and the expansion of economies for it is the limiting factor and I believe will also influence tariffs. Without excess net energy an economy cannot grow. My train of thought is not only with this century, but across centuries and well beyond. I briefly outlined the macro solutions (per the linked post) and made reference to micro solutions that were mentioned in my earlier posts on this thread. Therefore, numbers 3 and 4 to which you refer may seem out of context without going through the history. My intent was not to ´make things weird,´ but rather to tie up loose ends and be responsive.
Assuming that free trade is the most efficient system of international commerce, the impact of an absurd overabundance of compliance and regulation on cost of living is staggering.
In the Philippines, depending on where you live, you can walk to the street and get a trike to drive you 10 minutes at a cost of less than $0.50. In the US, the minimum you'd pay for the same level of mobility would be at least $10.
A trike wouldn't be legally allowed on the road for passenger purposes, perhaps due to thousands of pages of legislation on road safety, insurance regulations, business permits, and so on. Cost of a sedan (taxi) compared to a motorcycle with a welded carriage: additional ~500-1,000%.
In many localities the taxi would need to purchase a medallion, perhaps costing in the hundreds of thousands of dollars in order to operate legally. This would have to be averaged over the lifetime of the taxi and included in the fare price.
Perhaps a better example is the cost of running a storefront. In the Philippines, many people sell random goods out of the side window of their home. The cost of having the business is only the cost of replenishing their stock.
In the US, most likely you'd be looking at a standalone store front building that would have to be built to fire, electrical, plumbing, and other myriad building standards. The building would have to exist in a specifically zoned area, and would likely be built to a relatively large minimum size. You would need to pay the lease (cost of land) which is inflated due to all the costs of building and preparing the unit. You would need the proper permits, accounting compliance, legal compliance, labor compliance, and so on. The minimum amount of revenue that would need to be generated just to stay solvent would be considerable, rendering a myriad of potential entrepreneurial activities moot from the get go.
Many of those same considerations (cost of land, cost of rent, etc) of a rent seeking based economy that's been forcibly created through government regulation will force everyone to spend considerably more in order to afford the basic necessities of life. This drives up the cost of labor, (not to mention the unseen costs of labor, such as social security, medicare, health insurance, etc), rendering an even greater number of potential businesses financially unfeasible.
For the common man, they suffer by having their labor eroded on a grossly elevated cost of living. They must work unnecessarily long work weeks, and retire much later than necessary just to survive. Governments benefit by having a highly productive captive labor force (whose productivity they can steal in the form of elevated taxation) that would otherwise be satisfied to reach a minimum level of subsistence. Schemes like property taxes and forced consumer activity (healthcare) make it impossible for people to reach independence and fully remove themselves from the treadmill.
In my amateur opinion, it seems to me that aside from gross imbalances in the supply of labor and jobs, regulations (environmental, safety, labor, legal, financial, etc) are responsible for the vast majority of price differential in large countries.
__________
As far as I know, fusion is a theoretically feasible energy source. The Sun is undergoing fusion within it's core, producing an incredible source of energy by converting hydrogen into helium. It does not violate the 1st law of thermodynamics.
Zero point energy seems to violate the 1st law of thermodynamics. How would that be possible? Is our current understanding of physics incorrect?
In the Philippines, depending on where you live, you can walk to the street and get a trike to drive you 10 minutes at a cost of less than $0.50. In the US, the minimum you'd pay for the same level of mobility would be at least $10.
A trike wouldn't be legally allowed on the road for passenger purposes, perhaps due to thousands of pages of legislation on road safety, insurance regulations, business permits, and so on. Cost of a sedan (taxi) compared to a motorcycle with a welded carriage: additional ~500-1,000%.
In many localities the taxi would need to purchase a medallion, perhaps costing in the hundreds of thousands of dollars in order to operate legally. This would have to be averaged over the lifetime of the taxi and included in the fare price.
Perhaps a better example is the cost of running a storefront. In the Philippines, many people sell random goods out of the side window of their home. The cost of having the business is only the cost of replenishing their stock.
In the US, most likely you'd be looking at a standalone store front building that would have to be built to fire, electrical, plumbing, and other myriad building standards. The building would have to exist in a specifically zoned area, and would likely be built to a relatively large minimum size. You would need to pay the lease (cost of land) which is inflated due to all the costs of building and preparing the unit. You would need the proper permits, accounting compliance, legal compliance, labor compliance, and so on. The minimum amount of revenue that would need to be generated just to stay solvent would be considerable, rendering a myriad of potential entrepreneurial activities moot from the get go.
Many of those same considerations (cost of land, cost of rent, etc) of a rent seeking based economy that's been forcibly created through government regulation will force everyone to spend considerably more in order to afford the basic necessities of life. This drives up the cost of labor, (not to mention the unseen costs of labor, such as social security, medicare, health insurance, etc), rendering an even greater number of potential businesses financially unfeasible.
For the common man, they suffer by having their labor eroded on a grossly elevated cost of living. They must work unnecessarily long work weeks, and retire much later than necessary just to survive. Governments benefit by having a highly productive captive labor force (whose productivity they can steal in the form of elevated taxation) that would otherwise be satisfied to reach a minimum level of subsistence. Schemes like property taxes and forced consumer activity (healthcare) make it impossible for people to reach independence and fully remove themselves from the treadmill.
In my amateur opinion, it seems to me that aside from gross imbalances in the supply of labor and jobs, regulations (environmental, safety, labor, legal, financial, etc) are responsible for the vast majority of price differential in large countries.
__________
As far as I know, fusion is a theoretically feasible energy source. The Sun is undergoing fusion within it's core, producing an incredible source of energy by converting hydrogen into helium. It does not violate the 1st law of thermodynamics.
Zero point energy seems to violate the 1st law of thermodynamics. How would that be possible? Is our current understanding of physics incorrect?
Regulation happens when unregulated economy leads to rampant fraud, exploitation, and general deterioration of living standards as the economy comes to infect every aspect of daily life.
Quote: (03-18-2016 11:18 AM)Samseau Wrote:
False. All that the currency peg does to the Danes is hide the true value of their mark relative to the Euro which means they will either pay too much or too little relative to other goods in the market.
Simply amazing at how badly you've contradicted yourself in this thread. First you claim to be for free trade and anti-tariff, then you defend currency manipulation. The contradiction is so bad it borders on insanity.
Lol. Samseau, you're keyboard jockeying. You don't even understand what I'm writing because you're just too eager to disagree for the sake of disagreeing.
If you think the topic is interesting, I strongly suggest some basic trade courses on economics. Whether you agree or not, it will under any circumstance strengthen your arguments, even if you're against free trade.
Unfortunately, I don't have time to go into depth on this. You're an intelligent guy, so I'm sure you understand developing one's ideas about how the world works in an intellectual vacuum is a bad idea.
A year from now you'll wish you started today
This video offers useful commentary on most of Trump's positions.
To be clear: I'm in favor in tariffs because it reduces the progressivity of the US tax code, and ONLY if those tariffs are used to reduce the corporate tax rate (not personal income tax rates).
A year from now you'll wish you started today
You know, all this bullshit would magically disappear if we went back on the gold standard.
Many people talk about getting the money out of politics. What we really need is getting the politics out of money.
Many people talk about getting the money out of politics. What we really need is getting the politics out of money.
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