Republican aggresors grow skeptical of free trade

[Kidlicious]

Oh, you mean industrial capacity for war. Well you know more is always better for that.

[Blake]

It's amazing that something can be so fundamentally immoral that even Republicans can recognize what it is.

There's NO WAY that China should be allowed to get away with their industrial (mal)practices, they need incitement to put more emphasis on quality of every kind - quality of the products and quality of life.

You just can't morally trade freely with an entity like China because you're being complicit in their immorality.

And this is morality in a humanist/compassionate sense, not divine.

The correct thing to do, as abhorrent as the concept is, is to attach a monetary value to the moral-cost of the imported goods and tariff them appropriately. It would of course be nice to spend the proceeds morally rather than on bombs or whatever. I like the idea of spending the proceeds on green technology and stuff then sending it to China as a kind of big and less than subtle hint.

[Berzerker]

Poor Berzerker

I'm not a Republican

and if you look at our trade deals, we dont have free trade.

They can produce whatever they want to. That's the benefit of a command economy.

Two clerks standing on either side of the road shouting, "Getch yer grey socks here!'

[Victor Galis]

Originally posted by Kidicious


That's stupid. When is free trade going to make the US deficit go away, the dollar stronger etc... ? We can go through this all day if you want. Or you can just explain yourself.

If economists are to be believed, it will make the deficit go away and the dollar stronger when it is so weak that imports are too expensive for Americans and American exports are cheap to everyone else.

It's more like "You can have this job, and I'll owe you money"

Yeah... except those suckers accept weak American dollars whose fall in value doesn't even make up for the low interest rates paid on it.

China does not produce goods more efficiently than we do. They just produce goods more cheaply. There is no overall economic advantage to that.

Actually... they don't have to produce anything better than us. There just has to be a difference in the relative efficiency of producing goods. Like... if we can produce more high-tech goods per unit of unit of labour-intensive good than they can, there's gains to be had.

I would believe in free trade if corporations didn't use cheaper labor in other countries. I'm positive that that's not what classical economics were talking about when they argued for free trade. That, in fact, creates inefficiencies. Things are produced for the cheap labor not where they can be brought to market with the least amount of labor.

Except without free trade that labour wouldn't be employed at all, and we'd waste more labour on things we don't produce that well.

Um no it's not. We are using most of that capacity. Stopping trade with China would require increasing capacity quite a bit.

And that would come at the expense of higher tech industries. For all the whining about jobs going abroad, the US's unemployment rate is pretty low by historical standards.

[Dinner]

Originally posted by Barnabas
The USA gets goods, the rest of the world gets green paper

How is the USA suffering? I think they are doing great

Send enough green paper over seas and the value of that green paper goes down. This can be problematic to people who have most of their assets valued in green paper. Like say EVERYONE who owns something in the US.

Luckily the US economy and world demand for dollars is so high that any changes will be relatively slow and orderly instead of the big collapses we see in developing economies but a slow motion spiral downward leaves you in the same spot as the sudden spike downward even if it takes a bit longer.

[Victor Galis]

Originally posted by Oerdin


Send enough green paper over seas and the value of that green paper goes down. This can be problematic to people who have most of their assets valued in green paper. Like say EVERYONE who owns something in the US.

Luckily the US economy and world demand for dollars is so high that any changes will be relatively slow and orderly instead of the big collapses we see in developing economies but a slow motion spiral downward leaves you in the same spot as the sudden spike downward even if it takes a bit longer.

You know who also owns green paper? The people who lend the US money.

[Kidlicious]

Originally posted by Victor Galis
If economists are to be believed, it will make the deficit go away and the dollar stronger when it is so weak that imports are too expensive for Americans and American exports are cheap to everyone else.

I think you mean that the dollar will stop getting weaker and the deficit will close. I know of that theory. How much evidence is there for it. It seems to me that the cheaper our exports get the larger the deficit gets. We would have to radically alter our economy to export enough to close the deficit with such weak currency. The dollar has been falling quite a bit and the deficit keeps getting larger.

Yeah... except those suckers accept weak American dollars whose fall in value doesn't even make up for the low interest rates paid on it.

Yes, I know we get good prices, but it's still jobs for debt. I think people over value cheap stuff.

Actually... they don't have to produce anything better than us. There just has to be a difference in the relative efficiency of producing goods. Like... if we can produce more high-tech goods per unit of unit of labour-intensive good than they can, there's gains to be had.

I don't think we would push out any production of high-tech goods at all if we imported less low-tech goods. It would take some time to adjust, but we could easily produce both and our productivity would get a boost.

Except without free trade that labour wouldn't be employed at all, and we'd waste more labour on things we don't produce that well.

I'll tell you the same thing I told Imran about importing Japanese cars. Managed trade doesn't mean that you don't import anything at all. That labor could be used, but at a more efficient level.

And that would come at the expense of higher tech industries. For all the whining about jobs going abroad, the US's unemployment rate is pretty low by historical standards.

Unemployment rates are decieving and never tell the story of how a labor force is being used. People have a lot of very low productivity jobs (like low skill service), jobs that can be replaced by higher paying manufacturing jobs.

[Imran Siddiqui]

We all do realize how well managed trade worked for the former Soviet Union. Efficiency .

Oh, and you seem to think for some inexplicable reason there is no other factor than weak dollar, exports, and deficits. There may be... well, other reasons why deficits are occuring. I'd imagine that selling more stuff overseas (and selling less foriegn goods "at home" as a result of relatively more expensive prices for imports) would tend to help lower trade deficits. But that just seems like common sense to me .

[Kidlicious]

Originally posted by Imran Siddiqui
We all do realize how well managed trade worked for the former Soviet Union. Efficiency .

Imran, every country in the world manages world trade, and always has. We just do a crappy job at it. It's better than it would be if we didn't manage it at all though.

Oh, and you seem to think for some inexplicable reason there is no other factor than weak dollar, exports, and deficits. There may be... well, other reasons why deficits are occuring. I'd imagine that selling more stuff overseas (and selling less foriegn goods "at home" as a result of relatively more expensive prices for imports) would tend to help lower trade deficits. But that just seems like common sense to me .

Selling more stuff overseas isn't going to happen. You can blame corporations for that, and there's nothing much we can do. We aren't Japan, we can't organize our society to do that. Plus our economy is just to big for that kind of strategy.

And I don't think that the currency has that much to do with the deficit either. In the eighties it looked like the J-curve worked. Notice the shorter lag period. But since then it looks like changes in currency value don't change the deficit.

[Kidlicious]

Here's a graph that I think explains why the deficit isn't shrinking.

1) The price of oil keeps going up

2) China has their currency pegged to ours

[Imran Siddiqui]

You do realize there may be more, greater, policies in effect (like... a massive war in the Middle East) that affect the deficit than more exports because of weak dollar... hmmm?

And selling more stuff overseas isn't going to happen because of our corporations?! So are you saying that cheaper goods don't sell more in other countries?

[Kidlicious]

Originally posted by Imran Siddiqui
You do realize there may be more, greater, policies in effect (like... a massive war in the Middle East) that affect the deficit than more exports because of weak dollar... hmmm?

I don't think that has a significant effect, especially at this point.

I don't think the deficit is caused by weak currency. I just think that weaker currency won't close the deficit. I think the deficit is caused by labor being used in other countries to supply the US market.

And selling more stuff overseas isn't going to happen because of our corporations?! So are you saying that cheaper goods don't sell more in other countries?

I'm saying that the goods get cheaper faster than they sell more.

[Dauphin]

This thread is hilarious.

[Whoha]

Originally posted by Imran Siddiqui
We all do realize how well managed trade worked for the former Soviet Union. Efficiency .

Oh, and you seem to think for some inexplicable reason there is no other factor than weak dollar, exports, and deficits. There may be... well, other reasons why deficits are occuring. I'd imagine that selling more stuff overseas (and selling less foriegn goods "at home" as a result of relatively more expensive prices for imports) would tend to help lower trade deficits. But that just seems like common sense to me .

alright the j curve makes its appearance!

[Vanguard]

Originally posted by Kataphraktoi


It is gaining us competitive advantage. People need to stop thinking in terms of the industrial age and measuring by factories and workers. It is true there is a worker class here with declining wages\future. They have to be eliminated as a class sometime, just like they eliminated classes before them.

Well, what is the advantage then? It certainly isn't more efficient to make goods in China and ship them 8000 miles rather than making them here and shipping them 500 miles.

Nor do Chinese factories make good more efficiently than we do. On the contrary, they require far more man-hours to make each unit of production than we do. Their productivity is vastly lower than ours.

The reason production has moved to China is that labor is twenty times cheaper there than here. But this just means that workers are earning less, which means that they can't afford to buy as much stuff. There is no net economic gain to switching to cheaper labor with the same or lower productivity.