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On September 03 2016 20:23 RvB wrote:Show nested quote +On September 03 2016 14:32 FiWiFaKi wrote:On September 03 2016 13:11 LegalLord wrote:On September 03 2016 12:32 Toadesstern wrote:On September 03 2016 12:06 FiWiFaKi wrote:On September 03 2016 11:35 Toadesstern wrote:Am I late on this? Mexican senator to propose anti-Trump expropriation law
A Mexican senator is proposing legislation to empower the government to retaliate if a U.S. administration led by Donald Trump inflicts expropriations or economic losses on his country to make it pay for a border wall.
Republican presidential nominee Trump has vowed to have Mexico fund the planned wall to keep out illegal immigrants if he is elected, and threatened to fund it by blocking remittances sent home by Mexicans living in the United States.
Armando Rios Piter, an opposition senator for the center-left Party of the Democratic Revolution (PRD), will next week present the initiative he hopes will protect Mexicans, and highlight the risks of targeting them economically.
The plan offers a taste of the kind of tit-for-tat measures that could gain traction between the two heavily-integrated economies if Trump wins the presidency at the Nov. 8 election.
In a preliminary summary of the proposal, which also foresees giving the Senate the power to disavow international treaties when the interests of Mexico or its companies are threatened by other signatories, it states:
"In cases where the property/assets of (our) fellow citizens or companies are affected by a foreign government, as Donald Trump has threatened, the Mexican government should proportionally expropriate assets and properties of foreigners from that country on our territory."
Total remittances to Mexico from abroad - most of which come from the United States - were worth nearly $25 billion last year, according to the central bank. Bilateral trade between the two nations is worth about half a trillion dollars a year.
Trump has also threatened to tear up a trade deal with Mexico if it is not recast in the United States' favor. He met President Enrique Pena Nieto in Mexico City this week, sparking fierce criticism in Mexico of the government for hosting him.
Afterwards, Trump repeated his pledge to make Mexico foot the bill for the wall. Mexico says it will not pay.
It is yet to be established how such expropriations could work, nor is it clear what chance the bill could have of passing. The PRD and other leftist parties hold less than a quarter of the 128 seats in Mexico's Senate.
Rios Piter said his aim was to counter threats by Trump to target Mexicans in the United States and to stress that the economic welfare of both nations is at stake.
"At a time like this, it's vital for us to understand why this relationship benefits both. We're neighbors, we're friends, we're partners," he said. "He's putting (that) at risk."
The initiative also seeks to protect Mexico against unilateral changes to the 1994 North American Free Trade Agreement (NAFTA), which Trump has threatened to ditch. http://www.reuters.com/article/us-usa-election-mexico-idUSKCN1182PLwho would have thought It's okay, it would hurt Mexico 10x as badly as the US. The bargaining chip is on the US, and Mexico can try their silly antics, but its just a bluff or an extremely stupid economic decision for them. I really can't think of any other recent scenarios in which a country decided to do something that was considered to be economically stupid but did it anyways for emotional reasons.... oh wait Brexit "Foreign nations are fucking with your economy to influence you politically" is a damn good reason to take an economic hit on principle to prove a point. And often the plebs understand that better than those in power. It's a quote I very much I agree with. It's actually a big reason of why I support Trump - the people who claim oh look Brexit was such a failure, look how the the pound dropped, etc... And only looking after the short term effects. I think everyone, Trump supporters included should understand that there will be short term costs to such hostile policy, particularly on immigration, it's long term where these benefits can be realized. So from my viewpoint, the US can wave its power and say how it's going to get Mexico to build a wall, because the benefit of having Mexico as a trading ally is a lot smaller to the US and to Mexico. Understand that around 25% of the GDP of mexico comes from US trade, and around 1-2% of GDP of the US comes from Mexico. Not only that, but the US has other markets that could easily replace Mexico in sight, not to mention bring jobs back to US from that lost 1-2% to supply them to the economy instead. Meanwhile, Mexico has absolute no wealthy market to drop its goods off to, and are completely fucked if the US stops trading with them. US trade is the main driving factor in the recent prosperity in Mexico. When Trump mentions this bargaining power difference, it's a serious thing, the US doesn't have good deals. This is exactly what the US needs to do, it's like playing poker, either you're playing with a stupid opponent who's going to play emotionally and lose everything, or they'll cut their losses and run - i.e. renegotiate a new contract with the US, which includes paying tariffs, and other things that will make it more favorable to do business from within the US. Mexico will gladly pay these tariffs (or help pay for building a wall), because trade with the US makes sense for them. Trump doesn't have to say it in such a harsh way, because it will alienate Mexico a bit, and they might vote emotionally, which will be good for neither party. At the same time, he's telling the US citizens that we are the shit, so maybe that makes up for it, as it's a thing of national pride and strength. The anti Brexit case has always rested on the negative long term impact of potential economic growth of leaving the single market. The pound falling as far as it did is partly a consequence of worse long term expectations. Your argument is fundamentally wrong because the point of free trade is that both benefit and that with tariffs in the long term both lose out. Trade does not just make sense for Mexico it makes sense for the US as well. You're asking Mexico and the US to both make sacrifices for a symbolic wall. en.m.wikipedia.orgIf you want I can post studies on comparative advantage and thst it does indeed exist.
I have an Econ degree, I'm very familiar with comparative advantage, not to mention these little graphs that show the cost of tariffs in classical economics:
http://thismatter.com/economics/images/economic-effects-of-tariffs.gif
So yes, clearly you are making the economic pie smaller, as shown by the deadweight loss in that diagram.
My whole argument is that classical economics doesn't work here. My argument is that by engaging in trade (which classical economics says always benefits a party, due to comparative not absolute advantage)... You tend to remove all industries in your country that you don't have a comparative advantage in.
This results in Mexico and China having all the production facilities, and in general a technological inflow, that stimulates the society in positive ways, encourages education, so forth.
Meanwhile, the US becomes a service based economy, that experiences capital outflow. Its viable industries sink to natural resource, healthcare, high-tech like transportation (air,water, ground), and so forth. However with other countries having higher standards to work, it gets more beneficial to move companies elsewhere, or at least outsource work to them, because the English in their workforce is improving, education standards are improving, so on.
So what will happen soon imo, is that the US will lose more and more high-tech markets to emerging economies (electronics is a big one that Japan and US have been losing recently), and then actually be at a bargaining disadvantage simply due to lacking infrastructure. When you're a leader in a field, it gives you implicit benefits on the market, and in the 1970s and 1980s, at least from what I've read, it looked like the US was a leader in almost everything. This kind of technological hub has massive economic benefits, power benefits, educated people in the field, etc. By letting go of these industries, simply because other places are able to produce them cheaper means that you give up a lot of these advantages, and more and more things around you become black boxes - all in the name of a short term economic benefit.
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On September 04 2016 02:24 FiWiFaKi wrote:
This results in Mexico and China having all the production facilities, and in general a technological inflow, that stimulates the society in positive ways, encourages education, so forth.
Meanwhile, the US becomes a service based economy, that experiences capital outflow. Its viable industries sink to natural resource, healthcare, high-tech like transportation (air,water, ground), and so forth. However with other countries having higher standards to work, it gets more beneficial to move companies elsewhere, or at least outsource work to them, because the English in their workforce is improving, education standards are improving, so on.
Is this trend somehow avoidable through economic policy though? How is the trend of globalization/outsourcing something that the government can actively stop, as opposed to simply delaying indefinitely? And if the government *can't* actively stop it, wouldn't it be better to take the hit now, rather than 20-30 years in the future when we have even more to lose?
This is the part of isolationist trade policy that I don't really understand, because it feels like shutting down trade from other parts of the world doesn't really solve any problems. The things that gave those places the advantage that makes trade unfavorable for you don't go away, and you can't just bury your head in the sand forever. So I don't see how that's supposed to be a viable solution in the long term.
(Genuinely asking, as economics isn't my area of expertise.)
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On September 04 2016 02:29 TheYango wrote:Show nested quote +On September 04 2016 02:24 FiWiFaKi wrote:
This results in Mexico and China having all the production facilities, and in general a technological inflow, that stimulates the society in positive ways, encourages education, so forth.
Meanwhile, the US becomes a service based economy, that experiences capital outflow. Its viable industries sink to natural resource, healthcare, high-tech like transportation (air,water, ground), and so forth. However with other countries having higher standards to work, it gets more beneficial to move companies elsewhere, or at least outsource work to them, because the English in their workforce is improving, education standards are improving, so on.
Is this trend somehow avoidable through economic policy though? How is the trend of globalization/outsourcing something that the government can actively stop, as opposed to simply delaying indefinitely? And if the government *can't* actively stop it, wouldn't it be better to take the hit now, rather than 20-30 years in the future when we have even more to lose? (Genuinely asking, as economics isn't my area of expertise.)
In theory delay is all you need because the "third world" catches up enough to make outsourcing the critical industries unproductive. I am skeptical of that.
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HILLARY CLINTON’S CAMPAIGN has been seeking the endorsement of former Secretary of State Henry Kissinger, and their efforts may pay off, as there are reports that he is expected soon, alongside former Secretary of State George Schultz, to issue a joint endorsement of Clinton.
While those inside the national security community in Washington, D.C., may applaud the endorsement, Kissinger’s legacy of war crimes — from complicity in the 1973 coup in Chile to spearheading the saturation bombing of Indochina — has made him far less popular among human rights observers.
Clinton is well aware of that legacy. As secretary of state, she traveled to areas of the world that were devastated by policies Kissinger crafted and implemented.
The most relevant example is in 2012, when she visited Laos’s Cooperative Orthotic & Prosthetic Enterprise, a joint project between NGOs and the government of Laos dedicated to helping people with physical disabilities get prosthetic limbs and be rehabilitated. The project’s creation was prompted by the millions of submunitions littered across Laos, left over from the U.S. air war on the country during the conflict in Indochina.
A 2009 government report estimated that there are still 300 casualties annually from leftover ordinance.
During Clinton’s visit she met with Peter Kim, a young man who at age 16 happened upon an unexploded American bomb and lost both of his hands and his eyesight. “For everyone who works to help prevent injury and then to help survivors, and to the people of Laos, and I wish everything good for you,” Clinton told Kim as reporters watched on.
Source
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On September 04 2016 02:29 TheYango wrote:Show nested quote +On September 04 2016 02:24 FiWiFaKi wrote:
This results in Mexico and China having all the production facilities, and in general a technological inflow, that stimulates the society in positive ways, encourages education, so forth.
Meanwhile, the US becomes a service based economy, that experiences capital outflow. Its viable industries sink to natural resource, healthcare, high-tech like transportation (air,water, ground), and so forth. However with other countries having higher standards to work, it gets more beneficial to move companies elsewhere, or at least outsource work to them, because the English in their workforce is improving, education standards are improving, so on.
Is this trend somehow avoidable through economic policy though? How is the trend of globalization/outsourcing something that the government can actively stop, as opposed to simply delaying indefinitely? And if the government *can't* actively stop it, wouldn't it be better to take the hit now, rather than 20-30 years in the future when we have even more to lose?
Of course it can be stopped. The tool is mercantilist/protectionist policy.
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On September 04 2016 02:21 PassiveAce wrote:
TIL when you take all the vowels out of Reince Priebus' name your left with RNC PR BS
That is AMAZING.
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On September 04 2016 02:29 TheYango wrote:Show nested quote +On September 04 2016 02:24 FiWiFaKi wrote:
This results in Mexico and China having all the production facilities, and in general a technological inflow, that stimulates the society in positive ways, encourages education, so forth.
Meanwhile, the US becomes a service based economy, that experiences capital outflow. Its viable industries sink to natural resource, healthcare, high-tech like transportation (air,water, ground), and so forth. However with other countries having higher standards to work, it gets more beneficial to move companies elsewhere, or at least outsource work to them, because the English in their workforce is improving, education standards are improving, so on.
Is this trend somehow avoidable through economic policy though? How is the trend of globalization/outsourcing something that the government can actively stop, as opposed to simply delaying indefinitely? And if the government *can't* actively stop it, wouldn't it be better to take the hit now, rather than 20-30 years in the future when we have even more to lose? This is the part of isolationist trade policy that I don't really understand, because it feels like shutting down trade from other parts of the world doesn't really solve any problems. The things that gave those places the advantage that makes trade unfavorable for you don't go away, and you can't just bury your head in the sand forever. So I don't see how that's supposed to be a viable solution in the long term. (Genuinely asking, as economics isn't my area of expertise.)
Well the larger your country, the lower less benefit trade has for you (I'd look at it as a price vs quantity graph in the shape of price = e^-quantity, so the benefit of economies of scale reduces the more you produce). For example, if there's an industry in the US that does pretty well, but a little little bit worse than elsewhere in the world, say 10-20% more expensive... It might be worth protecting that industry, simply by raises tariffs on wheat by 20% if that's the industry we're talking about. And then its worth for your national wheat farmers to do their thing. This is very common in Canada, particularly with agriculture.
Not to mention, while your industry is still in the country, you can attempt to get it to become more competitive, versus it being game over if it leaves. But again, depends on the industry and depends if it's economically worthwhile to keep it there.
I do think like the poster below you said, a big goal is to keep many of your industries healthy while the rest of the world is developing. Germany did a very good with the cars to keep their industry, even though everywhere else in the world was doing it for cheaper. Unfortunately, you can't do that with a lot of industries, as people will care about the cost much more than quality of brand of most things not cars, particularly commercial suppliers, and with most goods, the quality difference between great and good isn't as pronounced, and harder to notice for the customer.
Either way, the goal is isn't to not trade. The goal is to protect your industries as much as reasonably possible, and time is of the essence, while the US has more bargaining power than it will have in the future, and it has more diverse industries than it will have in the future.
Yes, globalization is more and more inevitable, but that doesn't mean you embrace it with open arms, same way as how most of us don't embrace strict copyright laws with open arms, even though they'll eventually happen. Approach it in a way that will yield maximum benefit to you in the transition. I think the current system with Europe isn't too bad, and hence why I didn't bring up trade between these two bodies, but I think particularly with Mexico and China, it's not great.
As for TPP that I brought up a page or two back, I think TPP is fairly good for the US short term, long term it'll do even more of what I've been complaining about. On the other hand, as a Canadian, it's the worst thing for Canada, because Canada doesn't have big high tech industries and copyrights that will be protected which US has, and it'll open trade with even more nations. This will send Canada down a path of a pure natural resource economy, as we wont be able to protect our industries, which are far more expensive than in other places in the world, due to union presence, pollution standards, so forth.
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On September 04 2016 02:24 FiWiFaKi wrote:Show nested quote +On September 03 2016 20:23 RvB wrote:On September 03 2016 14:32 FiWiFaKi wrote:On September 03 2016 13:11 LegalLord wrote:On September 03 2016 12:32 Toadesstern wrote:On September 03 2016 12:06 FiWiFaKi wrote:On September 03 2016 11:35 Toadesstern wrote:Am I late on this? Mexican senator to propose anti-Trump expropriation law
A Mexican senator is proposing legislation to empower the government to retaliate if a U.S. administration led by Donald Trump inflicts expropriations or economic losses on his country to make it pay for a border wall.
Republican presidential nominee Trump has vowed to have Mexico fund the planned wall to keep out illegal immigrants if he is elected, and threatened to fund it by blocking remittances sent home by Mexicans living in the United States.
Armando Rios Piter, an opposition senator for the center-left Party of the Democratic Revolution (PRD), will next week present the initiative he hopes will protect Mexicans, and highlight the risks of targeting them economically.
The plan offers a taste of the kind of tit-for-tat measures that could gain traction between the two heavily-integrated economies if Trump wins the presidency at the Nov. 8 election.
In a preliminary summary of the proposal, which also foresees giving the Senate the power to disavow international treaties when the interests of Mexico or its companies are threatened by other signatories, it states:
"In cases where the property/assets of (our) fellow citizens or companies are affected by a foreign government, as Donald Trump has threatened, the Mexican government should proportionally expropriate assets and properties of foreigners from that country on our territory."
Total remittances to Mexico from abroad - most of which come from the United States - were worth nearly $25 billion last year, according to the central bank. Bilateral trade between the two nations is worth about half a trillion dollars a year.
Trump has also threatened to tear up a trade deal with Mexico if it is not recast in the United States' favor. He met President Enrique Pena Nieto in Mexico City this week, sparking fierce criticism in Mexico of the government for hosting him.
Afterwards, Trump repeated his pledge to make Mexico foot the bill for the wall. Mexico says it will not pay.
It is yet to be established how such expropriations could work, nor is it clear what chance the bill could have of passing. The PRD and other leftist parties hold less than a quarter of the 128 seats in Mexico's Senate.
Rios Piter said his aim was to counter threats by Trump to target Mexicans in the United States and to stress that the economic welfare of both nations is at stake.
"At a time like this, it's vital for us to understand why this relationship benefits both. We're neighbors, we're friends, we're partners," he said. "He's putting (that) at risk."
The initiative also seeks to protect Mexico against unilateral changes to the 1994 North American Free Trade Agreement (NAFTA), which Trump has threatened to ditch. http://www.reuters.com/article/us-usa-election-mexico-idUSKCN1182PLwho would have thought It's okay, it would hurt Mexico 10x as badly as the US. The bargaining chip is on the US, and Mexico can try their silly antics, but its just a bluff or an extremely stupid economic decision for them. I really can't think of any other recent scenarios in which a country decided to do something that was considered to be economically stupid but did it anyways for emotional reasons.... oh wait Brexit "Foreign nations are fucking with your economy to influence you politically" is a damn good reason to take an economic hit on principle to prove a point. And often the plebs understand that better than those in power. It's a quote I very much I agree with. It's actually a big reason of why I support Trump - the people who claim oh look Brexit was such a failure, look how the the pound dropped, etc... And only looking after the short term effects. I think everyone, Trump supporters included should understand that there will be short term costs to such hostile policy, particularly on immigration, it's long term where these benefits can be realized. So from my viewpoint, the US can wave its power and say how it's going to get Mexico to build a wall, because the benefit of having Mexico as a trading ally is a lot smaller to the US and to Mexico. Understand that around 25% of the GDP of mexico comes from US trade, and around 1-2% of GDP of the US comes from Mexico. Not only that, but the US has other markets that could easily replace Mexico in sight, not to mention bring jobs back to US from that lost 1-2% to supply them to the economy instead. Meanwhile, Mexico has absolute no wealthy market to drop its goods off to, and are completely fucked if the US stops trading with them. US trade is the main driving factor in the recent prosperity in Mexico. When Trump mentions this bargaining power difference, it's a serious thing, the US doesn't have good deals. This is exactly what the US needs to do, it's like playing poker, either you're playing with a stupid opponent who's going to play emotionally and lose everything, or they'll cut their losses and run - i.e. renegotiate a new contract with the US, which includes paying tariffs, and other things that will make it more favorable to do business from within the US. Mexico will gladly pay these tariffs (or help pay for building a wall), because trade with the US makes sense for them. Trump doesn't have to say it in such a harsh way, because it will alienate Mexico a bit, and they might vote emotionally, which will be good for neither party. At the same time, he's telling the US citizens that we are the shit, so maybe that makes up for it, as it's a thing of national pride and strength. The anti Brexit case has always rested on the negative long term impact of potential economic growth of leaving the single market. The pound falling as far as it did is partly a consequence of worse long term expectations. Your argument is fundamentally wrong because the point of free trade is that both benefit and that with tariffs in the long term both lose out. Trade does not just make sense for Mexico it makes sense for the US as well. You're asking Mexico and the US to both make sacrifices for a symbolic wall. en.m.wikipedia.orgIf you want I can post studies on comparative advantage and thst it does indeed exist. I have an Econ degree, I'm very familiar with comparative advantage, not to mention these little graphs that show the cost of tariffs in classical economics: http://thismatter.com/economics/images/economic-effects-of-tariffs.gifSo yes, clearly you are making the economic pie smaller, as shown by the deadweight loss in that diagram. My whole argument is that classical economics doesn't work here. My argument is that by engaging in trade (which classical economics says always benefits a party, due to comparative not absolute advantage)... You tend to remove all industries in your country that you don't have a comparative advantage in. This results in Mexico and China having all the production facilities, and in general a technological inflow, that stimulates the society in positive ways, encourages education, so forth. Meanwhile, the US becomes a service based economy, that experiences capital outflow. Its viable industries sink to natural resource, healthcare, high-tech like transportation (air,water, ground), and so forth. However with other countries having higher standards to work, it gets more beneficial to move companies elsewhere, or at least outsource work to them, because the English in their workforce is improving, education standards are improving, so on.
So what will happen soon imo, is that the US will lose more and more high-tech markets to emerging economies (electronics is a big one that Japan and US have been losing recently), and then actually be at a bargaining disadvantage simply due to lacking infrastructure. When you're a leader in a field, it gives you implicit benefits on the market, and in the 1970s and 1980s, at least from what I've read, it looked like the US was a leader in almost everything. This kind of technological hub has massive economic benefits, power benefits, educated people in the field, etc. By letting go of these industries, simply because other places are able to produce them cheaper means that you give up a lot of these advantages, and more and more things around you become black boxes - all in the name of a short term economic benefit.
The manner in which the US maintained its leadership in "everything" was never going to last. It was a WW2/Cold War bump. while everybody else except the major allies was rebuilding and the US was selling them everything they needed to do it. If you think the US is going to go back to being a major manufacturing hub based economy or even go close to being as competitive as India or China or whoever, based on protectionism then I suggest you burn your econ degree.
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On September 04 2016 02:51 Rebs wrote:Show nested quote +On September 04 2016 02:24 FiWiFaKi wrote:On September 03 2016 20:23 RvB wrote:On September 03 2016 14:32 FiWiFaKi wrote:On September 03 2016 13:11 LegalLord wrote:On September 03 2016 12:32 Toadesstern wrote:On September 03 2016 12:06 FiWiFaKi wrote:On September 03 2016 11:35 Toadesstern wrote:Am I late on this? Mexican senator to propose anti-Trump expropriation law
A Mexican senator is proposing legislation to empower the government to retaliate if a U.S. administration led by Donald Trump inflicts expropriations or economic losses on his country to make it pay for a border wall.
Republican presidential nominee Trump has vowed to have Mexico fund the planned wall to keep out illegal immigrants if he is elected, and threatened to fund it by blocking remittances sent home by Mexicans living in the United States.
Armando Rios Piter, an opposition senator for the center-left Party of the Democratic Revolution (PRD), will next week present the initiative he hopes will protect Mexicans, and highlight the risks of targeting them economically.
The plan offers a taste of the kind of tit-for-tat measures that could gain traction between the two heavily-integrated economies if Trump wins the presidency at the Nov. 8 election.
In a preliminary summary of the proposal, which also foresees giving the Senate the power to disavow international treaties when the interests of Mexico or its companies are threatened by other signatories, it states:
"In cases where the property/assets of (our) fellow citizens or companies are affected by a foreign government, as Donald Trump has threatened, the Mexican government should proportionally expropriate assets and properties of foreigners from that country on our territory."
Total remittances to Mexico from abroad - most of which come from the United States - were worth nearly $25 billion last year, according to the central bank. Bilateral trade between the two nations is worth about half a trillion dollars a year.
Trump has also threatened to tear up a trade deal with Mexico if it is not recast in the United States' favor. He met President Enrique Pena Nieto in Mexico City this week, sparking fierce criticism in Mexico of the government for hosting him.
Afterwards, Trump repeated his pledge to make Mexico foot the bill for the wall. Mexico says it will not pay.
It is yet to be established how such expropriations could work, nor is it clear what chance the bill could have of passing. The PRD and other leftist parties hold less than a quarter of the 128 seats in Mexico's Senate.
Rios Piter said his aim was to counter threats by Trump to target Mexicans in the United States and to stress that the economic welfare of both nations is at stake.
"At a time like this, it's vital for us to understand why this relationship benefits both. We're neighbors, we're friends, we're partners," he said. "He's putting (that) at risk."
The initiative also seeks to protect Mexico against unilateral changes to the 1994 North American Free Trade Agreement (NAFTA), which Trump has threatened to ditch. http://www.reuters.com/article/us-usa-election-mexico-idUSKCN1182PLwho would have thought It's okay, it would hurt Mexico 10x as badly as the US. The bargaining chip is on the US, and Mexico can try their silly antics, but its just a bluff or an extremely stupid economic decision for them. I really can't think of any other recent scenarios in which a country decided to do something that was considered to be economically stupid but did it anyways for emotional reasons.... oh wait Brexit "Foreign nations are fucking with your economy to influence you politically" is a damn good reason to take an economic hit on principle to prove a point. And often the plebs understand that better than those in power. It's a quote I very much I agree with. It's actually a big reason of why I support Trump - the people who claim oh look Brexit was such a failure, look how the the pound dropped, etc... And only looking after the short term effects. I think everyone, Trump supporters included should understand that there will be short term costs to such hostile policy, particularly on immigration, it's long term where these benefits can be realized. So from my viewpoint, the US can wave its power and say how it's going to get Mexico to build a wall, because the benefit of having Mexico as a trading ally is a lot smaller to the US and to Mexico. Understand that around 25% of the GDP of mexico comes from US trade, and around 1-2% of GDP of the US comes from Mexico. Not only that, but the US has other markets that could easily replace Mexico in sight, not to mention bring jobs back to US from that lost 1-2% to supply them to the economy instead. Meanwhile, Mexico has absolute no wealthy market to drop its goods off to, and are completely fucked if the US stops trading with them. US trade is the main driving factor in the recent prosperity in Mexico. When Trump mentions this bargaining power difference, it's a serious thing, the US doesn't have good deals. This is exactly what the US needs to do, it's like playing poker, either you're playing with a stupid opponent who's going to play emotionally and lose everything, or they'll cut their losses and run - i.e. renegotiate a new contract with the US, which includes paying tariffs, and other things that will make it more favorable to do business from within the US. Mexico will gladly pay these tariffs (or help pay for building a wall), because trade with the US makes sense for them. Trump doesn't have to say it in such a harsh way, because it will alienate Mexico a bit, and they might vote emotionally, which will be good for neither party. At the same time, he's telling the US citizens that we are the shit, so maybe that makes up for it, as it's a thing of national pride and strength. The anti Brexit case has always rested on the negative long term impact of potential economic growth of leaving the single market. The pound falling as far as it did is partly a consequence of worse long term expectations. Your argument is fundamentally wrong because the point of free trade is that both benefit and that with tariffs in the long term both lose out. Trade does not just make sense for Mexico it makes sense for the US as well. You're asking Mexico and the US to both make sacrifices for a symbolic wall. en.m.wikipedia.orgIf you want I can post studies on comparative advantage and thst it does indeed exist. I have an Econ degree, I'm very familiar with comparative advantage, not to mention these little graphs that show the cost of tariffs in classical economics: http://thismatter.com/economics/images/economic-effects-of-tariffs.gifSo yes, clearly you are making the economic pie smaller, as shown by the deadweight loss in that diagram. My whole argument is that classical economics doesn't work here. My argument is that by engaging in trade (which classical economics says always benefits a party, due to comparative not absolute advantage)... You tend to remove all industries in your country that you don't have a comparative advantage in. This results in Mexico and China having all the production facilities, and in general a technological inflow, that stimulates the society in positive ways, encourages education, so forth. Meanwhile, the US becomes a service based economy, that experiences capital outflow. Its viable industries sink to natural resource, healthcare, high-tech like transportation (air,water, ground), and so forth. However with other countries having higher standards to work, it gets more beneficial to move companies elsewhere, or at least outsource work to them, because the English in their workforce is improving, education standards are improving, so on.
So what will happen soon imo, is that the US will lose more and more high-tech markets to emerging economies (electronics is a big one that Japan and US have been losing recently), and then actually be at a bargaining disadvantage simply due to lacking infrastructure. When you're a leader in a field, it gives you implicit benefits on the market, and in the 1970s and 1980s, at least from what I've read, it looked like the US was a leader in almost everything. This kind of technological hub has massive economic benefits, power benefits, educated people in the field, etc. By letting go of these industries, simply because other places are able to produce them cheaper means that you give up a lot of these advantages, and more and more things around you become black boxes - all in the name of a short term economic benefit. The manner in which the US maintained its leadership in "everything" was never going to last. It was a WW2/Cold War bump. while everybody else except the major allies was rebuilding and the US was selling them everything they needed to do it. If you think the US is going to go back to being a major manufacturing hub based economy or even go close to being as competitive as India or China or whoever, based on protectionism then I suggest you burn your econ degree.
Hang on to what you can as much as possible. Yes, it's not going to be a China in manufacturing, but you'd be shocked just how much Engineering work gets outsourced to China. It's not just factory workers on an assembly line. It's things like drafting and design on the "easier stuff". Engineering is the field I'm familiar with, hence that example, but I imagine there's a lot more.
Furthermore, a lot of manufacturing these days is very automated, and requires only a few skilled workers. It'd be beneficial for the US for that kind of manufacturing to stay there for example. The low skill labor sweatshop esque things, yes, keep those elsewhere.
You're right that what created the US dominance was WW2 (cold war, not so much, that's just a product of WW2)... But once you're the leader in something, it's much easier to stay there than for someone new to come along.
Same way how Facebook controls most Social Media, and how most email belongs to Google. It's about that technological momentum, and the difficulty switching its path due to the big hub and infrastructure already developed in the US. If it was a 100% free international market with low barriers to entry, no asymmetrical information, among the other points, then yes, I'd agree with you, but it's not.
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On September 04 2016 02:43 xDaunt wrote:
Of course it can be stopped. The tool is mercantilist/protectionist policy.
Right, I get that, I just wasn't clear on whether this is a viable long-term solution or simply putting off the problem for a couple decades until said protectionist trade policy is no longer sustainable.
On September 04 2016 02:50 FiWiFaKi wrote:
Approach it in a way that will yield maximum benefit to you in the transition.
This reasoning makes sense to me, I'm just not too clear on what constitutes "yielding maximum benefit". Intuitively, it seemed like isolationist trade policy in the short term would just delay the adjustment of domestic industries to the global market, and exacerbate the problems in the long-term, but I'm clearly not in a position to make a judgment, given my lack of formal education on the subject.
Thanks for your informative post.
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On September 04 2016 03:01 FiWiFaKi wrote:Show nested quote +On September 04 2016 02:51 Rebs wrote:On September 04 2016 02:24 FiWiFaKi wrote:On September 03 2016 20:23 RvB wrote:On September 03 2016 14:32 FiWiFaKi wrote:On September 03 2016 13:11 LegalLord wrote:On September 03 2016 12:32 Toadesstern wrote:On September 03 2016 12:06 FiWiFaKi wrote:On September 03 2016 11:35 Toadesstern wrote:Am I late on this? Mexican senator to propose anti-Trump expropriation law
A Mexican senator is proposing legislation to empower the government to retaliate if a U.S. administration led by Donald Trump inflicts expropriations or economic losses on his country to make it pay for a border wall.
Republican presidential nominee Trump has vowed to have Mexico fund the planned wall to keep out illegal immigrants if he is elected, and threatened to fund it by blocking remittances sent home by Mexicans living in the United States.
Armando Rios Piter, an opposition senator for the center-left Party of the Democratic Revolution (PRD), will next week present the initiative he hopes will protect Mexicans, and highlight the risks of targeting them economically.
The plan offers a taste of the kind of tit-for-tat measures that could gain traction between the two heavily-integrated economies if Trump wins the presidency at the Nov. 8 election.
In a preliminary summary of the proposal, which also foresees giving the Senate the power to disavow international treaties when the interests of Mexico or its companies are threatened by other signatories, it states:
"In cases where the property/assets of (our) fellow citizens or companies are affected by a foreign government, as Donald Trump has threatened, the Mexican government should proportionally expropriate assets and properties of foreigners from that country on our territory."
Total remittances to Mexico from abroad - most of which come from the United States - were worth nearly $25 billion last year, according to the central bank. Bilateral trade between the two nations is worth about half a trillion dollars a year.
Trump has also threatened to tear up a trade deal with Mexico if it is not recast in the United States' favor. He met President Enrique Pena Nieto in Mexico City this week, sparking fierce criticism in Mexico of the government for hosting him.
Afterwards, Trump repeated his pledge to make Mexico foot the bill for the wall. Mexico says it will not pay.
It is yet to be established how such expropriations could work, nor is it clear what chance the bill could have of passing. The PRD and other leftist parties hold less than a quarter of the 128 seats in Mexico's Senate.
Rios Piter said his aim was to counter threats by Trump to target Mexicans in the United States and to stress that the economic welfare of both nations is at stake.
"At a time like this, it's vital for us to understand why this relationship benefits both. We're neighbors, we're friends, we're partners," he said. "He's putting (that) at risk."
The initiative also seeks to protect Mexico against unilateral changes to the 1994 North American Free Trade Agreement (NAFTA), which Trump has threatened to ditch. http://www.reuters.com/article/us-usa-election-mexico-idUSKCN1182PLwho would have thought It's okay, it would hurt Mexico 10x as badly as the US. The bargaining chip is on the US, and Mexico can try their silly antics, but its just a bluff or an extremely stupid economic decision for them. I really can't think of any other recent scenarios in which a country decided to do something that was considered to be economically stupid but did it anyways for emotional reasons.... oh wait Brexit "Foreign nations are fucking with your economy to influence you politically" is a damn good reason to take an economic hit on principle to prove a point. And often the plebs understand that better than those in power. It's a quote I very much I agree with. It's actually a big reason of why I support Trump - the people who claim oh look Brexit was such a failure, look how the the pound dropped, etc... And only looking after the short term effects. I think everyone, Trump supporters included should understand that there will be short term costs to such hostile policy, particularly on immigration, it's long term where these benefits can be realized. So from my viewpoint, the US can wave its power and say how it's going to get Mexico to build a wall, because the benefit of having Mexico as a trading ally is a lot smaller to the US and to Mexico. Understand that around 25% of the GDP of mexico comes from US trade, and around 1-2% of GDP of the US comes from Mexico. Not only that, but the US has other markets that could easily replace Mexico in sight, not to mention bring jobs back to US from that lost 1-2% to supply them to the economy instead. Meanwhile, Mexico has absolute no wealthy market to drop its goods off to, and are completely fucked if the US stops trading with them. US trade is the main driving factor in the recent prosperity in Mexico. When Trump mentions this bargaining power difference, it's a serious thing, the US doesn't have good deals. This is exactly what the US needs to do, it's like playing poker, either you're playing with a stupid opponent who's going to play emotionally and lose everything, or they'll cut their losses and run - i.e. renegotiate a new contract with the US, which includes paying tariffs, and other things that will make it more favorable to do business from within the US. Mexico will gladly pay these tariffs (or help pay for building a wall), because trade with the US makes sense for them. Trump doesn't have to say it in such a harsh way, because it will alienate Mexico a bit, and they might vote emotionally, which will be good for neither party. At the same time, he's telling the US citizens that we are the shit, so maybe that makes up for it, as it's a thing of national pride and strength. The anti Brexit case has always rested on the negative long term impact of potential economic growth of leaving the single market. The pound falling as far as it did is partly a consequence of worse long term expectations. Your argument is fundamentally wrong because the point of free trade is that both benefit and that with tariffs in the long term both lose out. Trade does not just make sense for Mexico it makes sense for the US as well. You're asking Mexico and the US to both make sacrifices for a symbolic wall. en.m.wikipedia.orgIf you want I can post studies on comparative advantage and thst it does indeed exist. I have an Econ degree, I'm very familiar with comparative advantage, not to mention these little graphs that show the cost of tariffs in classical economics: http://thismatter.com/economics/images/economic-effects-of-tariffs.gifSo yes, clearly you are making the economic pie smaller, as shown by the deadweight loss in that diagram. My whole argument is that classical economics doesn't work here. My argument is that by engaging in trade (which classical economics says always benefits a party, due to comparative not absolute advantage)... You tend to remove all industries in your country that you don't have a comparative advantage in. This results in Mexico and China having all the production facilities, and in general a technological inflow, that stimulates the society in positive ways, encourages education, so forth. Meanwhile, the US becomes a service based economy, that experiences capital outflow. Its viable industries sink to natural resource, healthcare, high-tech like transportation (air,water, ground), and so forth. However with other countries having higher standards to work, it gets more beneficial to move companies elsewhere, or at least outsource work to them, because the English in their workforce is improving, education standards are improving, so on.
So what will happen soon imo, is that the US will lose more and more high-tech markets to emerging economies (electronics is a big one that Japan and US have been losing recently), and then actually be at a bargaining disadvantage simply due to lacking infrastructure. When you're a leader in a field, it gives you implicit benefits on the market, and in the 1970s and 1980s, at least from what I've read, it looked like the US was a leader in almost everything. This kind of technological hub has massive economic benefits, power benefits, educated people in the field, etc. By letting go of these industries, simply because other places are able to produce them cheaper means that you give up a lot of these advantages, and more and more things around you become black boxes - all in the name of a short term economic benefit. The manner in which the US maintained its leadership in "everything" was never going to last. It was a WW2/Cold War bump. while everybody else except the major allies was rebuilding and the US was selling them everything they needed to do it. If you think the US is going to go back to being a major manufacturing hub based economy or even go close to being as competitive as India or China or whoever, based on protectionism then I suggest you burn your econ degree. Hang on to what you can as much as possible. Yes, it's not going to be a China in manufacturing, but you'd be shocked just how much Engineering work gets outsourced to China. It's not just factory workers on an assembly line. It's things like drafting and design on the "easier stuff". Engineering is the field I'm familiar with, hence that example, but I imagine there's a lot more. Furthermore, a lot of manufacturing these days is very automated, and requires only a few skilled workers. It'd be beneficial for the US for that kind of manufacturing to stay there for example. The low skill labor sweatshop esque things, yes, keep those elsewhere. You're right that what created the US dominance was WW2 (cold war, not so much, that's just a product of WW2)... But once you're the leader in something, it's much easier to stay there than for someone new to come along. Same way how Facebook controls most Social Media, and how most email belongs to Google. It's about that technological momentum, and the difficulty switching its path due to the big hub and infrastructure already developed in the US. If it was a 100% free international market with low barriers to entry, no asymmetrical information, among the other points, then yes, I'd agree with you, but it's not.
Im well aware of how much nuts and bolts work even that isnt unskilled labour gets outsourced. Ive been heavily involved in the process. But thats the same for every industry that the US is a leader in aswell, including tech. Google does it, Facebook does it, Microsoft does it. Heck even Apple started doing it,
My room mate in Seattle worked at Amazon and most of his time as a PM was spent working at home at night with a team in Guangzhou. But they arent losing there to anyone so
Bottom line is that the value of certain forms of employment just becomes less worthwhile and the expectation that the renumeration that a certain level of work should bring should be higher than it is, elsewhere because "globalization took our jobs" is a raw barefaced entitlement complex.
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On September 04 2016 03:17 Rebs wrote:Show nested quote +On September 04 2016 03:01 FiWiFaKi wrote:On September 04 2016 02:51 Rebs wrote:On September 04 2016 02:24 FiWiFaKi wrote:On September 03 2016 20:23 RvB wrote:On September 03 2016 14:32 FiWiFaKi wrote:On September 03 2016 13:11 LegalLord wrote:On September 03 2016 12:32 Toadesstern wrote:On September 03 2016 12:06 FiWiFaKi wrote:It's okay, it would hurt Mexico 10x as badly as the US. The bargaining chip is on the US, and Mexico can try their silly antics, but its just a bluff or an extremely stupid economic decision for them. I really can't think of any other recent scenarios in which a country decided to do something that was considered to be economically stupid but did it anyways for emotional reasons.... oh wait Brexit "Foreign nations are fucking with your economy to influence you politically" is a damn good reason to take an economic hit on principle to prove a point. And often the plebs understand that better than those in power. It's a quote I very much I agree with. It's actually a big reason of why I support Trump - the people who claim oh look Brexit was such a failure, look how the the pound dropped, etc... And only looking after the short term effects. I think everyone, Trump supporters included should understand that there will be short term costs to such hostile policy, particularly on immigration, it's long term where these benefits can be realized. So from my viewpoint, the US can wave its power and say how it's going to get Mexico to build a wall, because the benefit of having Mexico as a trading ally is a lot smaller to the US and to Mexico. Understand that around 25% of the GDP of mexico comes from US trade, and around 1-2% of GDP of the US comes from Mexico. Not only that, but the US has other markets that could easily replace Mexico in sight, not to mention bring jobs back to US from that lost 1-2% to supply them to the economy instead. Meanwhile, Mexico has absolute no wealthy market to drop its goods off to, and are completely fucked if the US stops trading with them. US trade is the main driving factor in the recent prosperity in Mexico. When Trump mentions this bargaining power difference, it's a serious thing, the US doesn't have good deals. This is exactly what the US needs to do, it's like playing poker, either you're playing with a stupid opponent who's going to play emotionally and lose everything, or they'll cut their losses and run - i.e. renegotiate a new contract with the US, which includes paying tariffs, and other things that will make it more favorable to do business from within the US. Mexico will gladly pay these tariffs (or help pay for building a wall), because trade with the US makes sense for them. Trump doesn't have to say it in such a harsh way, because it will alienate Mexico a bit, and they might vote emotionally, which will be good for neither party. At the same time, he's telling the US citizens that we are the shit, so maybe that makes up for it, as it's a thing of national pride and strength. The anti Brexit case has always rested on the negative long term impact of potential economic growth of leaving the single market. The pound falling as far as it did is partly a consequence of worse long term expectations. Your argument is fundamentally wrong because the point of free trade is that both benefit and that with tariffs in the long term both lose out. Trade does not just make sense for Mexico it makes sense for the US as well. You're asking Mexico and the US to both make sacrifices for a symbolic wall. en.m.wikipedia.orgIf you want I can post studies on comparative advantage and thst it does indeed exist. I have an Econ degree, I'm very familiar with comparative advantage, not to mention these little graphs that show the cost of tariffs in classical economics: http://thismatter.com/economics/images/economic-effects-of-tariffs.gifSo yes, clearly you are making the economic pie smaller, as shown by the deadweight loss in that diagram. My whole argument is that classical economics doesn't work here. My argument is that by engaging in trade (which classical economics says always benefits a party, due to comparative not absolute advantage)... You tend to remove all industries in your country that you don't have a comparative advantage in. This results in Mexico and China having all the production facilities, and in general a technological inflow, that stimulates the society in positive ways, encourages education, so forth. Meanwhile, the US becomes a service based economy, that experiences capital outflow. Its viable industries sink to natural resource, healthcare, high-tech like transportation (air,water, ground), and so forth. However with other countries having higher standards to work, it gets more beneficial to move companies elsewhere, or at least outsource work to them, because the English in their workforce is improving, education standards are improving, so on.
So what will happen soon imo, is that the US will lose more and more high-tech markets to emerging economies (electronics is a big one that Japan and US have been losing recently), and then actually be at a bargaining disadvantage simply due to lacking infrastructure. When you're a leader in a field, it gives you implicit benefits on the market, and in the 1970s and 1980s, at least from what I've read, it looked like the US was a leader in almost everything. This kind of technological hub has massive economic benefits, power benefits, educated people in the field, etc. By letting go of these industries, simply because other places are able to produce them cheaper means that you give up a lot of these advantages, and more and more things around you become black boxes - all in the name of a short term economic benefit. The manner in which the US maintained its leadership in "everything" was never going to last. It was a WW2/Cold War bump. while everybody else except the major allies was rebuilding and the US was selling them everything they needed to do it. If you think the US is going to go back to being a major manufacturing hub based economy or even go close to being as competitive as India or China or whoever, based on protectionism then I suggest you burn your econ degree. Hang on to what you can as much as possible. Yes, it's not going to be a China in manufacturing, but you'd be shocked just how much Engineering work gets outsourced to China. It's not just factory workers on an assembly line. It's things like drafting and design on the "easier stuff". Engineering is the field I'm familiar with, hence that example, but I imagine there's a lot more. Furthermore, a lot of manufacturing these days is very automated, and requires only a few skilled workers. It'd be beneficial for the US for that kind of manufacturing to stay there for example. The low skill labor sweatshop esque things, yes, keep those elsewhere. You're right that what created the US dominance was WW2 (cold war, not so much, that's just a product of WW2)... But once you're the leader in something, it's much easier to stay there than for someone new to come along. Same way how Facebook controls most Social Media, and how most email belongs to Google. It's about that technological momentum, and the difficulty switching its path due to the big hub and infrastructure already developed in the US. If it was a 100% free international market with low barriers to entry, no asymmetrical information, among the other points, then yes, I'd agree with you, but it's not. Im well aware of how much nuts and bolts work even that isnt unskilled labour gets outsourced. Ive been heavily involved in the process. But thats the same for every industry that the US is a leader in aswell, including tech. Google does it, Facebook does it, Microsoft does it. Heck even Apple started doing it, My room mate in Seattle worked at Amazon and most of his time as a PM was spent working at home at night with a team in Guangzhou. But they arent losing there to anyone so ....
Alright fair enough, I wasn't sure at what level you're familiar with it.
I know it's a common occurrence, and a few companies here started to bring the labor back simple due to some of the difficulty working with oversea teams, and not having people on site at the location, etc.
Seeing that many companies do it, but many don't, that suggests to me that it's not some gigantic cost saving that cannot be helped. In that sense, I think that a relatively small cost to the country can keep a lot of the jobs and industry here, which has the benefits which I discussed in my previous posts.
I'm not fighting for an extreme, just a slightly greater focus on these issues to keep the industry that's easier to keep here. This is a topic that can be heavily debated, and it's a continuum, not a isolationist vs free international market kind of deal. US and Canada imo aren't doing enough to protect its industries when looking at the long-term.
@Yango Well, a degree gets you so far. Most of these kind of issues weren't brought up much (or at all), so it's mostly just having an economic framework to analyze some things, and making it easier to start reading papers and learning more.
The typical lesson in a microeconomics class is discussing the terms, showing an example of comparative advantage and explaining it. And voila, trade is always good... And then some criticisms are listed without being explored much. Most economics programs in North America teach Chicago school economics, which I'm personally highly critical of. It's focus is overly on profit maximization without social or psychological considerations. Also, it seems a bit out of touch with modern reality, and bringing up medieval examples and justifications, rather than dealing with more modern information technologies, software, etc. Anyway, kind of hard to explain my dislike of it (and more complex than what I said here), but in general, it's a very logical, world is perfect type of approach, and tries to remove as much of the chaos as it can, when some of these factors can't be neglected, however it's done for the favor of a nice rigorous math result.
There aren't many alternatives, and hence you work with what you've got, but it's good to understand the limitations, or where it might break down, and that comes from understanding all the assumptions in making the theory weve made.
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Didn't they change their methodology a while back?
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On September 04 2016 02:51 Rebs wrote:Show nested quote +On September 04 2016 02:24 FiWiFaKi wrote:On September 03 2016 20:23 RvB wrote:On September 03 2016 14:32 FiWiFaKi wrote:On September 03 2016 13:11 LegalLord wrote:On September 03 2016 12:32 Toadesstern wrote:On September 03 2016 12:06 FiWiFaKi wrote:On September 03 2016 11:35 Toadesstern wrote:Am I late on this? Mexican senator to propose anti-Trump expropriation law
A Mexican senator is proposing legislation to empower the government to retaliate if a U.S. administration led by Donald Trump inflicts expropriations or economic losses on his country to make it pay for a border wall.
Republican presidential nominee Trump has vowed to have Mexico fund the planned wall to keep out illegal immigrants if he is elected, and threatened to fund it by blocking remittances sent home by Mexicans living in the United States.
Armando Rios Piter, an opposition senator for the center-left Party of the Democratic Revolution (PRD), will next week present the initiative he hopes will protect Mexicans, and highlight the risks of targeting them economically.
The plan offers a taste of the kind of tit-for-tat measures that could gain traction between the two heavily-integrated economies if Trump wins the presidency at the Nov. 8 election.
In a preliminary summary of the proposal, which also foresees giving the Senate the power to disavow international treaties when the interests of Mexico or its companies are threatened by other signatories, it states:
"In cases where the property/assets of (our) fellow citizens or companies are affected by a foreign government, as Donald Trump has threatened, the Mexican government should proportionally expropriate assets and properties of foreigners from that country on our territory."
Total remittances to Mexico from abroad - most of which come from the United States - were worth nearly $25 billion last year, according to the central bank. Bilateral trade between the two nations is worth about half a trillion dollars a year.
Trump has also threatened to tear up a trade deal with Mexico if it is not recast in the United States' favor. He met President Enrique Pena Nieto in Mexico City this week, sparking fierce criticism in Mexico of the government for hosting him.
Afterwards, Trump repeated his pledge to make Mexico foot the bill for the wall. Mexico says it will not pay.
It is yet to be established how such expropriations could work, nor is it clear what chance the bill could have of passing. The PRD and other leftist parties hold less than a quarter of the 128 seats in Mexico's Senate.
Rios Piter said his aim was to counter threats by Trump to target Mexicans in the United States and to stress that the economic welfare of both nations is at stake.
"At a time like this, it's vital for us to understand why this relationship benefits both. We're neighbors, we're friends, we're partners," he said. "He's putting (that) at risk."
The initiative also seeks to protect Mexico against unilateral changes to the 1994 North American Free Trade Agreement (NAFTA), which Trump has threatened to ditch. http://www.reuters.com/article/us-usa-election-mexico-idUSKCN1182PLwho would have thought It's okay, it would hurt Mexico 10x as badly as the US. The bargaining chip is on the US, and Mexico can try their silly antics, but its just a bluff or an extremely stupid economic decision for them. I really can't think of any other recent scenarios in which a country decided to do something that was considered to be economically stupid but did it anyways for emotional reasons.... oh wait Brexit "Foreign nations are fucking with your economy to influence you politically" is a damn good reason to take an economic hit on principle to prove a point. And often the plebs understand that better than those in power. It's a quote I very much I agree with. It's actually a big reason of why I support Trump - the people who claim oh look Brexit was such a failure, look how the the pound dropped, etc... And only looking after the short term effects. I think everyone, Trump supporters included should understand that there will be short term costs to such hostile policy, particularly on immigration, it's long term where these benefits can be realized. So from my viewpoint, the US can wave its power and say how it's going to get Mexico to build a wall, because the benefit of having Mexico as a trading ally is a lot smaller to the US and to Mexico. Understand that around 25% of the GDP of mexico comes from US trade, and around 1-2% of GDP of the US comes from Mexico. Not only that, but the US has other markets that could easily replace Mexico in sight, not to mention bring jobs back to US from that lost 1-2% to supply them to the economy instead. Meanwhile, Mexico has absolute no wealthy market to drop its goods off to, and are completely fucked if the US stops trading with them. US trade is the main driving factor in the recent prosperity in Mexico. When Trump mentions this bargaining power difference, it's a serious thing, the US doesn't have good deals. This is exactly what the US needs to do, it's like playing poker, either you're playing with a stupid opponent who's going to play emotionally and lose everything, or they'll cut their losses and run - i.e. renegotiate a new contract with the US, which includes paying tariffs, and other things that will make it more favorable to do business from within the US. Mexico will gladly pay these tariffs (or help pay for building a wall), because trade with the US makes sense for them. Trump doesn't have to say it in such a harsh way, because it will alienate Mexico a bit, and they might vote emotionally, which will be good for neither party. At the same time, he's telling the US citizens that we are the shit, so maybe that makes up for it, as it's a thing of national pride and strength. The anti Brexit case has always rested on the negative long term impact of potential economic growth of leaving the single market. The pound falling as far as it did is partly a consequence of worse long term expectations. Your argument is fundamentally wrong because the point of free trade is that both benefit and that with tariffs in the long term both lose out. Trade does not just make sense for Mexico it makes sense for the US as well. You're asking Mexico and the US to both make sacrifices for a symbolic wall. en.m.wikipedia.orgIf you want I can post studies on comparative advantage and thst it does indeed exist. I have an Econ degree, I'm very familiar with comparative advantage, not to mention these little graphs that show the cost of tariffs in classical economics: http://thismatter.com/economics/images/economic-effects-of-tariffs.gifSo yes, clearly you are making the economic pie smaller, as shown by the deadweight loss in that diagram. My whole argument is that classical economics doesn't work here. My argument is that by engaging in trade (which classical economics says always benefits a party, due to comparative not absolute advantage)... You tend to remove all industries in your country that you don't have a comparative advantage in. This results in Mexico and China having all the production facilities, and in general a technological inflow, that stimulates the society in positive ways, encourages education, so forth. Meanwhile, the US becomes a service based economy, that experiences capital outflow. Its viable industries sink to natural resource, healthcare, high-tech like transportation (air,water, ground), and so forth. However with other countries having higher standards to work, it gets more beneficial to move companies elsewhere, or at least outsource work to them, because the English in their workforce is improving, education standards are improving, so on.
So what will happen soon imo, is that the US will lose more and more high-tech markets to emerging economies (electronics is a big one that Japan and US have been losing recently), and then actually be at a bargaining disadvantage simply due to lacking infrastructure. When you're a leader in a field, it gives you implicit benefits on the market, and in the 1970s and 1980s, at least from what I've read, it looked like the US was a leader in almost everything. This kind of technological hub has massive economic benefits, power benefits, educated people in the field, etc. By letting go of these industries, simply because other places are able to produce them cheaper means that you give up a lot of these advantages, and more and more things around you become black boxes - all in the name of a short term economic benefit. The manner in which the US maintained its leadership in "everything" was never going to last. It was a WW2/Cold War bump. while everybody else except the major allies was rebuilding and the US was selling them everything they needed to do it. If you think the US is going to go back to being a major manufacturing hub based economy or even go close to being as competitive as India or China or whoever, based on protectionism then I suggest you burn your econ degree.
One major component of the TPP is the consolidation and protection of a pro-US intellectual property regime. It's not all freeing of trade when member countries agree to enforce and propagate US-based monopolies on a variety of increasingly flimsier patents and increasingly lengthy copyrights. Signatories are also going to be enforcing US-based trade secrets practices in member countries, privileging the property rights of foreign capital over domestic, and agreeing to US-based corporate arbitrations in property (physical and intellectual) disputes.
So in that sense the TPP tightens US grip on the higher-end of the tech tree and the service industry which also has deep ties to the increasingly important intellectual property regime. By integrating "trading" standards and ensuring protections for US- and multi-nationals to continue to collect monopoly rents according to US timetables and legal standards, the US is ensuring that it retains a solid grip over the top of the production pyramid.
The TPP is designed to open up more consumer markets in the Pacific. They want to do this because demand is nearing its apogee in the West. This will become apparent when the next crisis hits, this year, next year, or in 5 years. One only has to look at the EU's anemic growth, the US trade balance, and the sclerotic consumer credit markets.
The problem with the TPP is that by shackling the Pacific signatories in place within the production pyramid by consolidating the US ownership of knowledge capital it is failing to address the demand problem. It ignores the relationship between the lowest and highest organic composition ends of the pyramid and the transfer of surplus-value from lower to higher branches for the latter to be able to achieve at least an average rate of profit.
@TMagPie
Your simplistic description of markets as ways to "transfer resources" and your description of the economy as a cyclical movement from agrarian -> urban/tech -> back to agrarian modes of economic production is completely unsupported by historical fact and divorced from the realities of present day finance/cognitive capitalism. The US isn't just going to send capital abroad to make stuff to sell to Third Worlders and dissipate itself. It will just stop spending money investing in further production all together. If capital can't reproduce itself with interest it becomes a simple hoard.
*Also note that when I reference "the US" I am referring to US-based capital, not "the citizens" of the US in toto. The TPP is designed to keep the capital reproducing itself. It is just assumed by those in favor of it that "cheaper goods" will result in a benefit to "the citizens" which is not a necessary result.
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On September 04 2016 03:47 oBlade wrote:Hey, we all do that at our jobs.
No, at your job your IT department would take an hour or so wiping the drives before sending it in for recycling, where they would break it into tiny little pieces.
A hammer may be unorthodox, but there certainly is a time-honored tradition of just breaking your electronic shit in half when you're ready to get rid of it.
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They actually have video evidence of the destruction of electronics too:
+ Show Spoiler +
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Allow me to inject that I'm really enjoying reading the economic discussion currently ongoing. Thanks everyone for the attitudes.
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On September 04 2016 00:53 Thieving Magpie wrote:Show nested quote +On September 03 2016 23:57 puerk wrote:On September 03 2016 23:33 Yoav wrote:On September 03 2016 15:23 FiWiFaKi wrote:On September 03 2016 15:15 Toadesstern wrote:
try selling that to your people as a mexican politician without people going crazy with how much they hate the man Tariffs have always existed, they have always been the norm. Well, yes, but every major step forward in the eradication of the things was a step forward for the economy of the region doing so, starting with getting trolls out from under bridges and moving through keeping every petty feudal lord from exercising his ability to shake down traders for money and into the gradual demolition of mercantilist schemes. Tariffs are utterly foolish, especially in a world where increasing them ultimately puts your entire economy at a competitive disadvantage. But I know, we all have to talk about stagnating wages and not realize that in the last 40 years our quality of life for equivalent purchasing power has gone way up, thanks to cheap imports. Yeah, it would be great if wages were going up, and yes, we should probably raise income taxes at the higher end to smooth the curve, but you guys have been alive recently. Imagine if all the crap we get for super cheap from China was still produced in unionized US factories. We'd be poor as shit, even imagining we still made as much money (which we wouldn't, because cheap goods and services are a direct economic benefit to US companies and workers). it is not that simple. not partaking in the race to the bottom is not necessarily going to hurt all of the population. especially the stability and existence of a broad middle class of people with high and rising living standard and a feeling of economic participation, were not happening because of free trade but because unionized labor prohibited the race to the bottom. If you treat your workers like shit to compete with china, your workers can only buy cheap shit from china and your company runs out of work. German car makership is ridiculous at face value: the price for a new car that i would find desireable is so high compared to anything that happens in sectors with full devotion to the free trade race to the bottom (like smartphones), and yet it works out, because it strengthens communities, because it gives people a purpose, workers at the auto makers are proud of them and their work, not only because they believe in the product, but also because they get long term job security and good pay, which actually makes them able to buy them aswell. The real issue why this model will stop working, is not that countries have to give up competitive disadvantages like unionization to please the gods of free market™ but because labor demand is quickly collapsing under the pressure of automation replacing every last bastion of human endevour. Quicker or more determined pacing to the bottom will not aliviate the comming problem: people are useless to the economy as suppliers, and only useful as demand. Free trade even though a good idea in principle also will not adress that there will be no more place at the table for the people who are not owners of the means of production. The only way to solve this issue (if you consider fellow humans worth of living, thich not all of you do ofc. but i as a tiny cog in a machine working to replace other people with automation (document generation for banks) with software, i hold no illusions that i am fully replaceable as well, and i somehow cling to living) is massive redistribution of the gains of this comming new economy. "Massive redistribution of gains" => economics. How does stuff from one place, get transferred to another place, with both sides being happy. Free markets are what happens when one person has stuff, and other people want stuff, so they redistribute among themselves. This "race to the bottom" crap never makes sense to me--because "demand" only happens so long as there is a customer base able to buy. As more people lose wages, less stuff gets bought, less stuff gets sold, we move back to a more agrarian lifestyle. Automation becomes less valuable, and companies dissolve with lack of demand. Once things re-stabilize again, then we start back from scratch. Companies reform, automation takes precedence, people become sources of demand once again, etc... There is no "race to the bottom" where things stagnate down there--that's not how resource exchanges work. At some point, communities will find it easier to just make goods for themselves than afford goods from outside. You be okay that you don't have smart phones and go back to the old ways of life. Things eventually stabilize. The only "race to the bottom" is if the end goal is for everyone to have an upper class lifestyle instead of there being no end goal, and that the economy is just something that happens.
If i have nothing of value i can not trade.
There is no fundamental reason that everyone should alwas have some tradeable value.
Your claim that "both sides" are "happy" with deals in our current economy is not only laughable but also insulting: people are forced to do terrible shit to survive. Nobody is selling their kidneys in india because it makes them "happy". The choice between survival and death is a faux one due to our inherent survival instinct.
The second issue i take with your post is that you switch from individual views to societal to community level as it suits your argument, when a conistent scheme would fall apart:
maybe societies can adjust to the shock if described on a community level, but those communities do not exist, people live in really really big cities, that are unable to dissolve themselfs into peaceful coexisting sustainance farmers in the wilderness.
Current people, who do wage labor, who will be no longer in demand, who have nothing to "trade" to someone able to sell them food, provide them with housing and energy (cooking/heating), will suffer.
Current people who are deemed by the owners of means of productions to hold no value (who are unemployable), actually already face those issues. Homeless people for instance suffer and die all the time. You saying adding millions and millions of people to the ranks who have no marketable value, will be fine, when current events already tell you the opposite is naive at best and dangerous at worst.
I know it is on some level selfish of me to consider it a problem that i and all the people like me will inevetibly become obsolete. I like living, i like to have a warm dry flat, plenty of food, friends, social events and entertainment.
When i become obsolete in form of labor, i can not become a sustainance farmer as you propose as i do not own land. I also am not prone to violence to obtain land and defend land against other people with the same urge for survival. In a time when everyone needs his own plot of land to sustainance farm in little communities as you propose, the demand for land will outstrip the supply thousandfold. That will inevetible cause violence, disruption and a lot of suffering.
What you portrait as smooth downsizing is nothing less than social darwinism: some will survive and maybe eventually strife, but it will be payed and paved with millions of "losers" falling by the wayside.
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Gotta find the humor in it all this election.
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EPT
