The fallacy of a trade deficit is that it is unfair.
If I go to a McDonalds with a dollar, and I buy an iced tea, I give them the dollar and they give me the tea, I walk out with zero dollars. From a ballance of trade standpoint, its a horrible 100% trade deficit, McDonalds got 100% of the "trade" and I was left with no dollars. Is that unfair?
No. I bought something, McDonalds has $1 and I have an iced tea. Assuming you accept that $1 is a fair price for a large iced tea, then we both broke even on the transaction.
The problem with measuring a "trade deficit" is it only takes into account the currency being exchanged, not the net sum of goods and services. If I buy a Chinese cell phone, yes they end up with the money, but I end up with the cell phone.
Being a rich, materialistic nation, with tons of disposable income, we will always have a "trade deficit" because we have a lot of money to buy stuff and we like to buy foreign stuff, especially finished consumer goods which have the highest value added. We won't get a trade surplus with China until they have a population with enough money to buy a lot of American made consumer stuff (assuming we make something they want to buy and its regarded as higher quality).
Dave H. Painted side goes up. My website : wnbranch.com
Umm....The Doller that you paid for the Ice Tea at Mcdees goes to pay the worker who made the tea for you,the payment on the Ice Machine, the grower of the tea, The railroad that hauled the sugar for your tea and the power company. If all those are US based thats good because the doller stays here to be recycyled here in the USA. If the doller goes to pay for a Ice Machine that is made in China then we might not ever see that doller again and that doller is not avalible for lending bt our banks here but the Chi-Coms get to decide what to do with it.
CandOforprogress2 Umm....The Doller that you paid for the Ice Tea at Mcdees goes to pay the worker who made the tea for you,the payment on the Ice Machine, the grower of the tea, The railroad that hauled the sugar for your tea and the power company. If all those are US based thats good because the doller stays here to be recycyled here in the USA. If the doller goes to pay for a Ice Machine that is made in China then we might not ever see that doller again and that doller is not avalible for lending bt our banks here but the Chi-Coms get to decide what to do with it.
And thus their economy grows richer.. their people become more affluent.. and they buy more ice tea from McDees as McDees opens up branches in China to service that growing market.
Well, if the USA would try to produce everything in the USA it will get costly for customers and companies.
The web has some comparisons of Apple iPhone 6. Produced in the USA it is estimated to cost about the twice the China-made price. Than there is the workforce question. Foxconn, Apple's Chinese factories, employ about 150,000 people. Would the USA have these people with the necessary abilities?
A third point: About two thirds of the iPhone production is sold outside the USA. At twice the price Apple clearly would loose this foreign business not being competetive anymore.
Many other products are similar, jeans, sneakers, solar panels.
If you want Made in America again and not pay more, workers would have to accept massive wage cuts and they would have to expect additional steps in automation of industrial production.Regards, Volker
In order to compete in world market we workers have to live like the rest of the world.aka the 3rd World...Grass Huts and No Flush Toliets...Drive a donkey or a camel to work.
CandOforprogress2 In order to compete in world market we workers have to live like the rest of the world.aka the 3rd World...Grass Huts and No Flush Toliets...Drive a donkey or a camel to work.
The harsh reality is that we (Americans, Canadians, and most Europeans) have been prospering on the backs of third world nations who exploit their workforce and don't give a rat's behind about the environment. It's easier to create everyday cheap products like T shirts and ironing boards when you can pay child labor wages with no bennies. Think about that the next time you shop discount. Right now we have it pretty good: most of us have decent jobs that allow us to own homes and vehicles that are made here... but all the other stuff like our clothes and appliances etc are made cheaply elsewhere.. And next time we go on vacation in Mexico or Dominica, don't forget to ask what the resort people get paid.. peanuts really.. So we in the west really can't claim to be hard done by.. most of us are overweight because we don't walk more than 100 paces in the run of a day.. And those of us who do require some physical exertion as part of our daily routine... it's still nothing compared to what others contend with around the world. We have it pretty good really.. thanks in no small part to the unsung sweatshops around the world that have made it possible for us to supersize ourselves and our already outsized lifestyles.
Ulrich CandOforprogress2 In order to compete in world market we workers have to live like the rest of the world.aka the 3rd World...Grass Huts and No Flush Toliets...Drive a donkey or a camel to work. The harsh reality is that we (Americans, Canadians, and most Europeans) have been prospering on the backs of third world nations who exploit their workforce and don't give a rat's behind about the environment.
The harsh reality is that we (Americans, Canadians, and most Europeans) have been prospering on the backs of third world nations who exploit their workforce and don't give a rat's behind about the environment.
Well said!
Luckily we just need to accept that some work is better done in low wage countries if we want to keep our high standards. The globalization has proceeded too far to turn it back without endangering our wealth.Regards, Volker
A lot of the manufacturing would be automated if we didn't use 3rd world countries.
azrailA lot of the manufacturing would be automated if we didn't use 3rd world countries.
And by that same token there would be a upswing in the machine tool sector to build those additional automation tools.
There is no perfect world.
Never too old to have a happy childhood!
Just to throw in a little bit of information about Lieutenant General George Patton, here is an excerpt from paperlessarchives.com Third Army After Action Reports:
Under the command of Lieutenant General George S. Patton, Jr., the Third Army participated in eight major operations and gave new meaning to "hard charging, hard hitting, mobile warfare." The Third Army's swift and tenacious drive into and through France, Belgium, Luxembourg, Germany, Czechoslovakia, and Austria contributed immeasurably to the destruction of the Nazi war machine of Adolph Hitler's Germany.The Third Army liberated or captured 81,522 square miles of territory. An estimated 12,000 cities, towns, and communities were liberated or captured, including 27 cities of more than 50,000 in population. Third Army captured 765,483 prisoners of war. 515,205 of the enemy surrendered during the last week of the war to make a total of 1,280,688 POW's processed. The enemy lost an estimated 1,280,688 captured, 144,500 killed, and 386,200 wounded, adding up to 1,811,388. By comparison, the Third Army suffered 16,596 killed, 96,241 wounded, and 26,809 missing in action for a total of 139,646 casualties.
This is not a commentary on the current economy, politics, etc. It is just some factual information about the performance of General Patton.
Some more factual info about Patton:https://en.wikipedia.org/wiki/Task_Force_Baum
The head of the US Chamber of Commerce said as much before Congress some years ago. I just happened to catch it on C-Span. Maybe not in the same words as C&O put it, but saying we can't compete because of worker's rights, minimum wage, environmental laws, regulations for this and that, etc.
To this day, I'm not sure if he was just listing things on why we can't compete, or if he was actually advocating to have all the things he listed repealed.
Jeff
The calculations vary by source, but the scientific community in general agrees that we would need multiple planet Earths for the world's current population to all live like the average American (or Canadian, I assume).
Unfortunately we only have one, and that ain't changin anytime soon.
Greetings from Alberta
-an Articulate Malcontent
SD70Dude The calculations vary by source, but the scientific community in general agrees that we would need multiple planet Earths for the world's current population to all live like the average American (or Canadian, I assume). Unfortunately we only have one, and that ain't changin anytime soon.
Source?
charlie hebdo SD70Dude The calculations vary by source, but the scientific community in general agrees that we would need multiple planet Earths for the world's current population to all live like the average American (or Canadian, I assume). Unfortunately we only have one, and that ain't changin anytime soon. Source?
Here at BBC for example: https://www.bbc.co.uk/news/magazine-33133712
I found it using a Google search: https://www.google.com/search?num=50&newwindow=1&ei=upVQW_jWBMbEwQL3oajIDg&q=developed+countries+need+two+earths+&oq=developed+countries+need+two+earths+&gs_l=psy-ab.3...127725.149935.0.150549.17.17.0.0.0.0.176.1780.9j8.17.0....0...1c.1j2.64.psy-ab..0.11.1133...0j0i7i30k1j0i67k1j0i22i30k1j0i19k1j0i22i30i19k1j33i22i29i30k1.0.HVHYoWjIx84
The are additional reports od different sources.Regards, Volker
Pure nonsense. Bending and twisting facts and data to fit.
Someone with a nice government grant trying to show the world how smart he/they are.
Agenda driven scare tactics ... worse they actually believe this garbage.
Malthusianism.
...old discredited outdated farce philosophy that belongs on page 38 of the worst tabloids, next to ads for." protect yourself from the coming apocalypse" stuff.
Miningman Pure nonsense. Bending and twisting facts and data to fit. Someone with a nice government grant trying to show the world how smart he/they are. Agenda driven scare tactics ... worse they actually believe this garbage. Malthusianism. ...old discredited outdated farce philosophy that belongs on page 38 of the worst tabloids, next to ads for." protect yourself from the coming apocalypse" stuff.
Not one of Google's citations is a research article in a peer-reviewed science journal, so give it up with the nonsense about someone with a grant. On the other hand, trying to discredit the obvious over-population sustainability crisis with old canards like "Mathusianism" is disingenuous.
Euclid-- Both!
...and here is my peer review " what a bunch of malarkey"
.....to which I add a little bit of Othello
Not poppy nor mandragoraNor all the drowsy syrups of the world,Shall ever medicine thee to that sweet sleepWhich thou owedst yesterday.
Miningman Euclid-- Both! ...and here is my peer review " what a bunch of malarkey"
Here is what I wonder. If we need more earths to support a population that lives at the standard of the U.S., and if this is to be incorporated into public policy, as one of the reference articles says; what would be the action plan for that policy?
It seems to offer two choices:
1) Go out to the used earth market and buy a couple of them for expansion of our civilization support.
2) Reduce the development and life style of the U.S., until there is room for the rest of the world's population to reach the same level of development as the U.S.
Here is the "Living Planet Report 2016": https://www.wwf.de/fileadmin/fm-wwf/Publikationen-PDF/WWF-LivingPlanetReport-2016.pdf
According to Wikipedia:
The Living Planet Report is published every two years by the World Wide Fund for Nature since 1998. It is based on the Living Planet Index and ecological footprint calculations.
The Living Planet Report is the world's leading, science-based analysis on the health of our only planet and the impact of human activity. Humanity's demands exceed the Earth's capacity to sustain us. The latest edition of the Living Planet Report was released in October 2016.
WWF is not the only institution working on the report. They are all listet in the linked report.On page 40 is the comparison of resources and consumption.Regards, Volker
Euclid Miningman Euclid-- Both! ...and here is my peer review " what a bunch of malarkey" Here is what I wonder. If we need more earths to support a population that lives at the standard of the U.S., and if this is to be incorporated into public policy, as one of the reference articles says; what would be the action plan for that policy? It seems to offer two choices: 1) Go out to the used earth market and buy a couple of them for expansion of our civilization support. 2) Reduce the development and life style of the U.S., until there is room for the rest of the world's population to reach the same level of development as the U.S.
Shadow the Cats ownerYes trade wars are bad overall however we as a nation can not keep sending half a trillion dollars in cash each year to China without it starting to hurt us in the long term.
Not really. Trade deficits with particular nations are not a problem at all. An overall trade deficit isn't really a problem either.
Why? Because all those dollars come back home as investment.
https://www.heritage.org/trade/commentary/why-trade-deficits-really-dont-matter-very-much
If you want to fix the trade imbalance, the place to start is with the budget deficit. The debt, in some part, is financed by those dollars coming home. Reduce the debt and there is more "home grown" capital for investment in the US.
But, instead of fixing that, we just made it much worse by a double whammy of a tax cut and a huge budget increase. Add in the inflationary and economic dampening of trade tarrifs and you are headed for trouble. Washing machine costs are up nearly 20% since tarrifs and Whirlpool stock and sales are down.
What frosts me the most is the notion that we are being taken unfair advantage of by other countries in trade. At best, there is an anecdote or two trotted out as evidence. But, there is never any reliance on data and analysis. Why? Because it shows things are actually pretty good and mostly fair!
So, why is Fritz worried about a trade war? It's not that UP will lose import traffic boxes. It doesn't matter where stuff comes from. It still has to move.
One reason is a trade war will depress the economy and there will be less stuff to move.
The other reason is that a trade war is inflationary which makes capital very expensive - and RRs are capital intensive industies.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
There is a solution!
John Scranton, author of a book on the same theme: We’re Doomed. Now What? Essays on War and Climate Change. He is a professor of English literature, although I think it fair to claim that neither English nor literature should be thought complicit in Mr. Scranton’s fifteen-alarm brand of climate lugubriousness and pitiless despair.
Prof. Scranton is not a cheerful boyo. No one will don the party hat after reading his explanation that one logical conclusion is “… the only truly moral response to global climate change is to commit suicide. There is simply no more effective way to shrink your carbon footprint. Once you’re dead, you won’t use any more electricity, you won’t eat any more meat, you won’t burn any more gasoline, and you certainly won’t have any more children. If you really want to save the planet, you should die.” Well, break out the marshmallows, throw another log on the fire, and tune up the ukulele — we’re going to have a sing-song.
-- an excerpt from Rex Murphy, column in the National Post this weekend.
Miningman There is a solution! John Scranton, author of a book on the same theme: We’re Doomed. Now What? Essays on War and Climate Change. He is a professor of English literature, although I think it fair to claim that neither English nor literature should be thought complicit in Mr. Scranton’s fifteen-alarm brand of climate lugubriousness and pitiless despair. Prof. Scranton is not a cheerful boyo. No one will don the party hat after reading his explanation that one logical conclusion is “… the only truly moral response to global climate change is to commit suicide. There is simply no more effective way to shrink your carbon footprint. Once you’re dead, you won’t use any more electricity, you won’t eat any more meat, you won’t burn any more gasoline, and you certainly won’t have any more children. If you really want to save the planet, you should die.” Well, break out the marshmallows, throw another log on the fire, and tune up the ukulele — we’re going to have a sing-song. -- an excerpt from Rex Murphy, column in the National Post this weekend.
Your post is mildly offensive and has nothing to do with railroading or this thread,
It goes to the ' multiple earths' discussion.
I didn't write it... Prof. Scranton entire article can be found recently in the New York Times. Rex Murphy wrote a column in reply in Canada's National Post this weekend.
It is all part of the discussion of UP CEO comments on trade and tariffs.
oltmanndWhat frosts me the most is the notion that we are being taken unfair advantage of by other countries in trade.
Me too. Yet that seems to be the stated reason for us taking action to level the playing field. The problem is that the other side will never agree that there is any unfair advantage. China thinks they are just making the products we want and selling them to us for less cost than what it would be if we made them. What's unfair about that?
The answer given for that question is that it is unfair for them to sell to us more goods and merchandise than the amount we sell to them. Since when is that unfair to the believers in free trade? If we expect to sell to them, we have to make our products attractive to them just like they make theirs attractive to us.
And because they will never agree that they are being unfair, they will retalliate with their own tariffs. Their tariffs on us, and ours on them will slow down the econmies of the world. So we all suffer because of some fake idea of fairness.
EuclidThe problem is that the other side will never agree that there is any unfair advantage.
And sometimes the countries are right. When you look at the trade balance alone between European Union and the USA, the USA has a deficit.
When you additionaly take services and profits US companies make in the EU and send back home as well as profits made by EU companies in the USA into the comparison the picture changes. The summery is balanced!
Reason is the dominant position of American companies like Google, Facebook, Amazon etc. on the European market.
But it doesn't seem to fit into the picture.Regards, Volker
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