Concerning the graph of How Couples Meet... I assume it's a joke. Without my bothering to give my half-axed attempt, well somebody just carefully explain it to me. Forget that jokes need no explaining! Sometimes SH's do!
I'm shaking my head as all my favorite economists throw up their hands at Trump's tariff moves. Tariffs themselves are simple transit/transaction taxes, no different than sales or value added tax. Protectionism is when tariffs are used to meddle in trade, either by nation or by industry. A tariff could be a better way to finance government than an income tax, if it was a flat rate levied equally. Using the word tariff as a shorthand for protection is confusing to all.
Smoot-Hawley raised fees above other nations, from 40% to 46% as noted, while Trump raised them from 2% to be half the level of most others. That's an odd way to start a "trade war." We've only seen the beginning of the negotiation; the end result may be lower tariffs overall. Nations are already responding by offering lower tariffs, such as Argentina and Vietnam. Recall that Adam Smith ended his illustrious career as head of Scottish Customs, collecting tariffs.
Peter Navarro has often talked about this and its a very important point. China is at war with us. The only way we can win it is if we crush their industrial economy while we build ours at home. These tariffs are being sold as benefitting the economy. Perhaps yes in some cases, and not in others. But the more important aspect is onshoring industry because its a YUGE national security issue. Longer term perspective is important here.
Is this worth a trade war? Numbers are estimates. We buy about $150B from Vietnam. Average USA tariff rate on Vietnamese goods (from AI) = 2.5% & some are much higher like 20% on steel. Let's use 2.5%. We make around $4B on Vietnamese goods (.025 X $150B) Vietnam imports about $10B from USA & hits us with 9.5% tariff. That's less than $1B for Vietnamese.
We make more in whole dollars than Vietnam. One reason they don’t buy more from us is b/c average Vietnamese citizen can’t afford made in America.
Just because you can make a historical analogy (like 1928/Smoot Hawley), doesn't validate the relevance of the analogy. US was in surplus in 1928 and shortly thereafter global trade was in disarray due to countries leaving the gold standard and competitive devaluations. Banking systems were collapsing and deflation was rampant for a whole host of reasons beyond global trade flows.
In contrast the US today has been in a perpetual and increasing trade deficit balance due to the policies of high surplus countries. And the trend is growing worse, as China pivots from a failed construction-based growth strategy to a manufacturing export strategy to meet government enforced GDP growth goals. T
here is no concept of a free market economy in China, which directly contradicts the assumptions used to prove Ricardian comparative advantage.
Which leaves us with two relevant historical analogies:
The first is the US was able to ensure Allied superiority during WWII due to our immense industrial capacity. Today China has shipbuilding capacity 230 TIMES greater than the US. US overall manufacturing capacity was 150% larger than China in 2004; by 2023 China possesses a greater share of global capacity than the US in 2004 and is TWICE America's current share.
Which country would you prefer to form an alliance with if you were facing a multi-year total war? Any conflict in Asia would require vast supply lines dependent on shipping capacity if US was to effectively counter Chinese aggression.
Then there are the numerous examples where societies incur great internal conflict due to rising income inequality. Over the past 4 decades, the top income quintile in the US grew 165%, where incomes in the middle and lowest quintiles grew about 40%. In 1981 the typical top quintile family was earning 2.5 times the average middle class income. By 2021, that was 5 times. Yes, globalization has created wealth in the US, but there is no data that can support this wealth has been shared across all income levels.
Reversing America's industrial decline that is a result of unequal trading relationships is about securing our strategic future and ensuring domestic tranquility.
Sorry if your 401K took a hit. US equities were grossly overvalued and a correction was only a matter of time. But what use is your retirement savings in 20 years if we lose our strategic dominance to China or our society is in a state of economic dystopian chaos?
I read an article by attorney Simon in reason. He is professor at Scalia law school. He gave a lot of good reasons explaining why president’s tariff authority is questionable. He said lawsuits are coming.
Btw- I hope they torpedo Trump’s tariffs before my 401k is depleted. Here are a couple excerpts from Trump’s book kick ass: (and many worship this man?)
“I love to make the big score and to make the big deal. I love to crush the other side and take the benefits. Why? Because there is nothing greater. For me it is even better than sex, and I love sex. But when you hit, when the deals are going your way, it is the greatest feeling! You hear lots of people say that a great deal is when both sides win. That is a bunch of crap. In a great deal you win – not the other side. You crush the opponent and come away with something better for yourself. (p. 48)
The world is a vicious, brutal place. It’s a place where people are looking to kill you, if not physically, then mentally. In the world that we live in every day it is usually the mental kill. People are looking to put you down, especially if you are on top… You have to know how to defend yourself. People will be nasty and try to kill you just for sport. Even your friends are out to get you! (p. 139)”
Concerning the graph of How Couples Meet... I assume it's a joke. Without my bothering to give my half-axed attempt, well somebody just carefully explain it to me. Forget that jokes need no explaining! Sometimes SH's do!
Nu, Steve? So where is the explanation?
Yes, it's a total joke.
I'm shaking my head as all my favorite economists throw up their hands at Trump's tariff moves. Tariffs themselves are simple transit/transaction taxes, no different than sales or value added tax. Protectionism is when tariffs are used to meddle in trade, either by nation or by industry. A tariff could be a better way to finance government than an income tax, if it was a flat rate levied equally. Using the word tariff as a shorthand for protection is confusing to all.
Smoot-Hawley raised fees above other nations, from 40% to 46% as noted, while Trump raised them from 2% to be half the level of most others. That's an odd way to start a "trade war." We've only seen the beginning of the negotiation; the end result may be lower tariffs overall. Nations are already responding by offering lower tariffs, such as Argentina and Vietnam. Recall that Adam Smith ended his illustrious career as head of Scottish Customs, collecting tariffs.
Peter Navarro has often talked about this and its a very important point. China is at war with us. The only way we can win it is if we crush their industrial economy while we build ours at home. These tariffs are being sold as benefitting the economy. Perhaps yes in some cases, and not in others. But the more important aspect is onshoring industry because its a YUGE national security issue. Longer term perspective is important here.
Is this worth a trade war? Numbers are estimates. We buy about $150B from Vietnam. Average USA tariff rate on Vietnamese goods (from AI) = 2.5% & some are much higher like 20% on steel. Let's use 2.5%. We make around $4B on Vietnamese goods (.025 X $150B) Vietnam imports about $10B from USA & hits us with 9.5% tariff. That's less than $1B for Vietnamese.
We make more in whole dollars than Vietnam. One reason they don’t buy more from us is b/c average Vietnamese citizen can’t afford made in America.
Trump is economic illiterate.
Just because you can make a historical analogy (like 1928/Smoot Hawley), doesn't validate the relevance of the analogy. US was in surplus in 1928 and shortly thereafter global trade was in disarray due to countries leaving the gold standard and competitive devaluations. Banking systems were collapsing and deflation was rampant for a whole host of reasons beyond global trade flows.
In contrast the US today has been in a perpetual and increasing trade deficit balance due to the policies of high surplus countries. And the trend is growing worse, as China pivots from a failed construction-based growth strategy to a manufacturing export strategy to meet government enforced GDP growth goals. T
here is no concept of a free market economy in China, which directly contradicts the assumptions used to prove Ricardian comparative advantage.
Which leaves us with two relevant historical analogies:
The first is the US was able to ensure Allied superiority during WWII due to our immense industrial capacity. Today China has shipbuilding capacity 230 TIMES greater than the US. US overall manufacturing capacity was 150% larger than China in 2004; by 2023 China possesses a greater share of global capacity than the US in 2004 and is TWICE America's current share.
Which country would you prefer to form an alliance with if you were facing a multi-year total war? Any conflict in Asia would require vast supply lines dependent on shipping capacity if US was to effectively counter Chinese aggression.
Then there are the numerous examples where societies incur great internal conflict due to rising income inequality. Over the past 4 decades, the top income quintile in the US grew 165%, where incomes in the middle and lowest quintiles grew about 40%. In 1981 the typical top quintile family was earning 2.5 times the average middle class income. By 2021, that was 5 times. Yes, globalization has created wealth in the US, but there is no data that can support this wealth has been shared across all income levels.
Reversing America's industrial decline that is a result of unequal trading relationships is about securing our strategic future and ensuring domestic tranquility.
Sorry if your 401K took a hit. US equities were grossly overvalued and a correction was only a matter of time. But what use is your retirement savings in 20 years if we lose our strategic dominance to China or our society is in a state of economic dystopian chaos?
I read an article by attorney Simon in reason. He is professor at Scalia law school. He gave a lot of good reasons explaining why president’s tariff authority is questionable. He said lawsuits are coming.
Btw- I hope they torpedo Trump’s tariffs before my 401k is depleted. Here are a couple excerpts from Trump’s book kick ass: (and many worship this man?)
“I love to make the big score and to make the big deal. I love to crush the other side and take the benefits. Why? Because there is nothing greater. For me it is even better than sex, and I love sex. But when you hit, when the deals are going your way, it is the greatest feeling! You hear lots of people say that a great deal is when both sides win. That is a bunch of crap. In a great deal you win – not the other side. You crush the opponent and come away with something better for yourself. (p. 48)
The world is a vicious, brutal place. It’s a place where people are looking to kill you, if not physically, then mentally. In the world that we live in every day it is usually the mental kill. People are looking to put you down, especially if you are on top… You have to know how to defend yourself. People will be nasty and try to kill you just for sport. Even your friends are out to get you! (p. 139)”
Another point of view:
https://www.youtube.com/watch?v=JrTBU7Nsdus&t=194s
People including experts are too habituated to modern economic thought and arrangements.They often have a personal stake in the status quo.