Trade Offs

[snarlcakes]

Sargon actually gives an old school liberal answer on why tariffs are beneficial. Putting aside whether she is correct or not, she is addressing the underlining problem that has plagued America the past 30 years and why there is so much division, in my opinion. Globalization and immigration has been great for cheaper goods, cheaper labor, and capital inflows into the U.S., but has been a terrible deal for the middle class in the U.S.

I personally don’t think tariffs will do much about it because the issue is structural, but I do applaud Trump for trying (assuming that is part his reason IU g for them). The U.S. benefitted greatly from Bretton Woods agreement and so did the world, but it’s no longer in the U.S. best interests. We need a a monetary reset and a neutral reserve asset like gold or Bitcoin (my choice obviously). If we don’t these issues that plague the U.S. are only going to get worse and we’re going to end up with more and division.

 

[JamieDimonsBalls]

This ignores value. The only reason people argue about car manufacturing (which China is not a Top 2 importer now) is nostalgia.

PPE products are very low value (low complexity, high volume, low margin). Same with most pharma products.

We don’t want to manufacture everything. Why does nobody understand comparative advantage any longer?

 

[twenty02]

Tax our way to prosperity. Definitely no more old school liberal than that line of thinking.

 

[snarlcakes]

This ignores value. The only reason people argue about car manufacturing (which China is not a Top 2 importer now) is nostalgia.

PPE products are very low value (low complexity, high volume, low margin). Same with most pharma products.

We don’t want to manufacture everything. Why does nobody understand comparative advantage any longer?

How much of the comparative advantage comes from not being the world reserve currency?

 

[snarlcakes]

Tax our way to prosperity. Definitely no more old school liberal than that line of thinking.

True, but they’re also doing tax cuts, cutting regulations, and government cuts.

 

[twenty02]

True, but they’re also doing tax cuts, cutting regulations, and government cuts.

The tax 'cuts' are just an extension of current tax policy.

 

[crazed_hoosier2]

This ignores value. The only reason people argue about car manufacturing (which China is not a Top 2 importer now) is nostalgia.

PPE products are very low value (low complexity, high volume, low margin). Same with most pharma products.

We don’t want to manufacture everything. Why does nobody understand comparative advantage any longer?

CA is literally like the first week or two in macroeconomics.

And it’s frustrating that more people don’t understand why that is a net positive.

They don’t understand balance of payments, either. They hear “trade deficit” and it just turns into “China is stealing from us.”

 

[crazed_hoosier2]

The tax 'cuts' are just an extension of current tax policy.

Mostly.

But there are several key changes being sought - none of which are wise.

- Elimination of taxes on tips, overtime, and SS benefits (which is sheer brainless Trumpian populism)

- Some kind of hike in the SALT deduction cap (which is a sop to donors…and would almost exclusively benefit high earners).

 

[TyWebbIU]

This ignores value. The only reason people argue about car manufacturing (which China is not a Top 2 importer now) is nostalgia.

PPE products are very low value (low complexity, high volume, low margin). Same with most pharma products.

We don’t want to manufacture everything. Why does nobody understand comparative advantage any longer?

We don’t want to have to rely on other countries for things we need. Especially China.

This would include…

-rare earth elements

-pharmaceutical elements

And so on.

 

[IUCrazy2]

CA is literally like the first week or two in macroeconomics.

And it’s frustrating that more people don’t understand why that is a net positive.

They don’t understand balance of payments, either. They hear “trade deficit” and it just turns into “China is stealing from us.”

The problem is that the benefits haven't really "trickled down" to that mid to lower middle class worker. "You can buy a cheaper shirt" isn't a substitute for "you can more comfortably pay your bills."

Losing manufacturing like described above because of CA isn't so much the issue as there was no comparable replacement for those jobs.

 

[snarlcakes]

CA is literally like the first week or two in macroeconomics.

And it’s frustrating that more people don’t understand why that is a net positive.

They don’t understand balance of payments, either. They hear “trade deficit” and it just turns into “China is stealing from us.”

We have a centralized monetary system. There are trade offs for being the world reserve currency. A lot of those trade offs benefit the top at the expense of the middle class. Claiming we have a free market and saying something about comparative advantage doesn’t address the issues.

 

[crazed_hoosier2]

The problem is that the benefits haven't really "trickled down" to that mid to lower middle class worker. "You can buy a cheaper shirt" isn't a substitute for "you can more comfortably pay your bills."

Losing manufacturing like described above because of CA isn't so much the issue as there was no comparable replacement for those jobs.

It may not feel like it, and I understand that. But this chart would argue otherwise.

You can’t examine all how well somebody is doing without including prices of the things they buy.

 

[snarlcakes]

The problem is that the benefits haven't really "trickled down" to that mid to lower middle class worker. "You can buy a cheaper shirt" isn't a substitute for "you can more comfortably pay your bills."

Losing manufacturing like described above because of CA isn't so much the issue as there was no comparable replacement for those jobs.

The GOP foolishly chose to pretend we have free markets and there are no negative outcomes for, being the world reserve currency, globalization, immigration (prior to Trump), and endless wars. It’s why their party got hijacked by Trump. They were all getting extremely wealthy off of it. Fun fact: since 1971 the average price for a share of the S&P 500 is up 8x. If the averaged wage would have kept up it would be over 200 dollars (I couldn’t locate the exact numbers, but they’re close).

 

[hookyIU1990]

The problem is that the benefits haven't really "trickled down" to that mid to lower middle class worker. "You can buy a cheaper shirt" isn't a substitute for "you can more comfortably pay your bills."

Losing manufacturing like described above because of CA isn't so much the issue as there was no comparable replacement for those jobs.

Why should we be OK with such a massive misallocation of capital in an effort to keep low value manufacturing jobs?

That's not any different than the argument that energy policies should be used to shutter coal plants and mining or mandates for EV adoption. It's a distortion of the market and effective/efficient flow of capital in markets.

 

[IUCrazy2]

It may not feel like it, and I understand that. But this chart would argue otherwise.

You can’t examine all how well somebody is doing without including prices of the things they buy.

That chart is great and all but the median family income in 1971 was $10,290 which is roughly $81,000 in today's dollars. The median now is around $78,000. And that was with women participating less than they do now.

 

[twenty02]

We have a centralized monetary system. There are trade offs for being the world reserve currency. A lot of those trade offs benefit the top at the expense of the middle class. Claiming we have a free market and saying something about comparative advantage doesn’t address the issues.

The USD is not the end all, be all. It's about 58% of foreign exchange reserves.

 

[GooglyMooglyWooglyBoogly]

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Sargon actually gives an old school liberal answer on why tariffs are beneficial. Putting aside whether she is correct or not, she is addressing the underlining problem that has plagued America the past 30 years and why there is so much division, in my opinion. Globalization and immigration has been great for cheaper goods, cheaper labor, and capital inflows into the U.S., but has been a terrible deal for the middle class in the U.S.

I personally don’t think tariffs will do much about it because the issue is structural, but I do applaud Trump for trying (assuming that is part his reason IU g for them). The U.S. benefitted greatly from Bretton Woods agreement and so did the world, but it’s no longer in the U.S. best interests. We need a a monetary reset and a neutral reserve asset like gold or Bitcoin (my choice obviously). If we don’t these issues that plague the U.S. are only going to get worse and we’re going to end up with more and division.

This is an incomplete analysis. The U.S. doesn’t manufacture anymore but we are by leaps and bounds the leader of the world in software.

That includes much of the middle class who work in jobs either directly or tangentially related to software services.

The idea that you can’t have a healthy middle class without manufacturing is a fallacy imo.

 

[IUCrazy2]

Why should we be OK with such a massive misallocation of capital in an effort to keep low value manufacturing jobs?

Don't do it, but you have to replace them with something.

That's not any different than the argument that energy policies should be used to shutter coal plants and mining or mandates for EV adoption. It's a distortion of the market and effective/efficient flow of capital in markets.

Shipping in slave labor from the third world was a distortion of market rates too. You have to balance the markets with the well being of your populace.

 

[twenty02]

This is an incomplete analysis. The U.S. doesn’t manufacture anymore but we are by leaps and bounds the leader of the world in software.

That includes much of the middle class who work in jobs either directly or tangentially related to software services.

The idea that you can’t have a healthy middle class without manufacturing is a fallacy imo.

LMAO. The US is the 2nd largest manufacturer in the world. Nearly $3T a year in manufacturing output.

 

[GooglyMooglyWooglyBoogly]

LMAO. The US is the 2nd largest manufacturer in the world. Nearly $3T a year in manufacturing output.

Context of the conversation dummy. No one is saying we don’t manufacture at all.

 

[twenty02]

Context of the conversation dummy. No one is saying we don’t manufacture at all.

That's what you just said. People are confusing/conflating manufacturing output with manufacturing employment. Including the OP and the dumb woman linked

 

[hookyIU1990]

Shipping in slave labor from the third world was a distortion of market rates too. You have to balance the markets with the well being of your populace.

What slave labor are we shipping in?

 

[snarlcakes]

That chart is great and all but the median family income in 1971 was $10,290 which is roughly $81,000 in today's dollars. The median now is around $78,000. And that was with women participating less than they do now.

The charts aren’t great and don’t correctly measure inflation. It’s shitty data. Go check out what CPI has been the last 4 years and compare it to what you pay now for the same goods and serves. They’re not close.

 

[crazed_hoosier2]

That chart is great and all but the median family income in 1971 was $10,290 which is roughly $81,000 in today's dollars. The median now is around $78,000. And that was with women participating less than they do now.

Not according to the data I’m finding here.

Median HH income has gone from $68k to $80k, in 2024 dollars.

 

[mcmurtry66]

That chart is great and all but the median family income in 1971 was $10,290 which is roughly $81,000 in today's dollars. The median now is around $78,000. And that was with women participating less than they do now.

Parents bought their house in 71 for $17,500. Not even twice the med income. House today is worth about five times the median income now