Paul Krugman's takedown of Trump's economic blatherings.

[Ragnarök_62]

Quote:Really?  When an Chinese-manufactured iPhone sells anywhere in the world, how much of the revenue goes to China v. US?

Most of the income from Ishits goes to Apple as opposed to Foxconn. That income is then distributed to shareholders of Apple. I'd reckon most of said shareholders reside in the US.

Quote:And again, the U.S. is much more a self-contained economy.  China is trying to emulate us.

kinser\79 Wrote:I'm going to require evidence for this because every time I go to Wally World I see made in China (or somewhere that isn't the US or even North America) on most things that aren't in the grocery department.  Here's the truth that everyone else can see.  The US exports raw materials and imports finished goods.  The very sort of thing that third world countries do.  I highly doubt China is trying to emulate that...the CPC understands wealth is made by doing the opposite:  Importing raw materials and exporting finished goods.

and

playwrite Wrote:Yes, Kinser is right here, china is doing the smart thing and creating wealth by exporting real industrial products and importing raw materials. It is we who are being stupid by being a primarily consumer economy.

We're being stupid as fuck because we blow a lot of dough on our empire. We also buy shitty things like the F-35.
Then the cherry on top is we're #1 in prisoners/capita.

All of that stuff is banana republic stuff along with Kinser'79's obervation about the trash to be had at Wally World. Case in point are the cheap ass plastic *Soda Stream systems at Wally World.


* Cheap ass made in China Soda stream.  I broke the thing by pressing down too hard.  Idiots, there are a variety of humans known as "males".
*



I got the blue one of these US made Soda Stream machines. It's much more durable [made of metal] and pretty stylish.
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Quote:Gad, you two make a pair!   

I think I've asked you before, Cynic, when a govt employee comes into your business, can you tell the difference between his dollars and that of an employee of a private entity?  Likewise, can you tell the difference between the money you get from someone employed in the service sector from another employed at a manufacturing plant?  Do you report your income taxes on two or more forms to show all the "real income" and the "fake income?"  Would you be willing to send your "fake income" to me (I can provide a PO Box)?

Cynic doesn't want FRNS?  Hey, Cynic I'll be glad to relieve you of them.

playwrite Wrote:And for you Kinser, here's a pretty good graphic that explains much but not all -

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Be sure to check the story at the link - 

http://www.merics.org/programme/wirtscha...ystem.html

- to get the basic story of why China wants a distribution of their economy to look more like ours.

However, you will need to dig a little farther to get to these even more interesting aspects -

- Too much of that "investment" in China has gone into creating their "net exports" - the return on that has plummeted and they are losing market share, due to their own rising labor cost, to others (e.g. Vietnam, Indonesia, Mynamar).  

1. I think they're fixing to use robots due to said rising costs. That causes a different problem though.  That causes idle hands and minds. Idle hands and minds cause lots of mischief.
2. The US OTOH, has rotten infrastructure.  A infrastructure overhaul is pretty labor intensive so I think we can dial back consuming trash like the latest rev level of Ishits and whatever planned obsolescence of stuff like clothes. I wear shirts until they completely fall apart and get replacements at thrift stores.
3. Let's dial back consumption to what Germany has, add some for government and investment. The stuff in gray looks pretty.

Quote:- The other problem is their "household sector" has not been ready to take on that portion of their investment sector dedicated to domestic consumption - not only empty factories but "ghost cities."  

The US has a different problem. Inequity of income is it and that's another characteristic of a banana republic.

Quote:- Some of those mistakes have been glossed over because of the reality that the Chinese central government, a monetary sovereign, is the actual debtor of last resort.  However, they have gone out of their way to make it look like private sector investment (i.e., banks, developers) and it has created a lot of bullshXt in the entire market - take a t-baggers' worst myth of Freddie Mac and Fannie Mae and stuff it with powerful steroids - oh, and this time, the story is real, just a lot bigger.

I'm not sure what their myth is wrt Freddie Mac/Fannie Mae is, but housing != proper role of government. Abolish any subsidies to the housing industry.  I'd tack the money saved by getting rid of that along with [Department of Education, too many prisons, Homeland Security, too much military spending, DEA, black prisons, Guantanmo, all Mideast wars of choice, and NSA] and redirect to single payer healthcare and just apply it for demographic Baby Boomer Social Security.

Quote:Let's look at the US picture.  Notice the  negative 3.5% of trade's contribution to our GDP - that's our trade deficit.  Kind of puny compared to the other sectors, no?  That's also actually down to around -2.5% today, representing the difference between about 12.5% in imports and 10% in exports. 

Nawww, it just proves there is a free lunch. Other nations love our pretty FRNS and give us actual stuff for them.

Quote:Now, from a jobs perspective, one could say that those two numbers should actually be added together to reflect all that economic activity of us importing as well as exporting - go ask a longshoremen how long his job would last if he just handled the exports.  

Let's import stuff like  does.  This is one of Rag's ancestral countries.

Quote:Now if you did add the 10% and 12.5% together, you would have to re-normalize all the numbers so that they add up to 100% accounting.  When you do that, you get around 15%.  What that means is 85% of our economy is "closed"  - has nothing much to do with the rest of world.  That's not completely true because some of the investment sector results in products for exports - but the reality is the big market for nearly all our investment is domestic so investment solely for supporting exports is basically a rounding error.

Not bad, 85% autarky.

Quote:Now here's the thing about Trump (and to a somewhat lesser extent, Sanders) trade proposals.  First, any trade proposal, even those of NAFTA or TPP

TPP sucks green donkey dicks. That's not a trade agreement. It's a turn sovereignty over to multinationals who would be able to sue if some regulation fucked up their profits. That thing needs to die. NAFTA sucks because it costs jobs.

Quote:are going to be a small part of overall trade which is already a small part of the overall economy.  And even within the trade that a specific trade agreement deals with, it is working at the margins for the goods and services and labor involved.  And perhaps most important, it's likely that if you behave as an a-hole and put trade barriers up, you're trading partners are going to act like a-holes too and do the same thing - you're combined economy activity is likely to decline significantly.

Yeah, but don't sign give the store away trade agreements.

Quote:Bottom line and psssss, its a secret, if you're looking for big impacts on employment and wages, and you are looking at trade, you are looking in the wrong place.  You might as well be looking for one of these -
  *        

Uh, not really. Since we're already 85% there wrt autarky, I think we can get pretty close by fucking off Mideast oil and then fuck off that hellhole itself.

Quote:On the other hand, increase your investment sector expenditures on expanding out our domestic road, electric and Internet grids for e-powered, driverless transportation that includes cars, trucks and high speed trains for use by the household sector.... watch your economy boom.  

Precisely. I'd add renewable solar and windpower for the aforementioned evil Mideast oil. Nothing like whacking away at the carbon footprint.