Type-o: This sentence: "The raising of various trade barriers - not least tariffs - is reducing the opportunities for the U. S. to sell to overseas market, leading to declining production and decreasing unemployment."Should read: "The raising of various trade barriers - not least tariffs - is reducing the opportunities for the U. S. to sell to overseas market, leading to declining production and INCREASING unemployment."Sorry, this one has more than its fair share of type-o's. That's what I get for writing under the influence of insomnia.
Ok, I want to ask some questions. How can Trump do tariffs given the World Trade Organization structure and so much trade governed by previous trade agreements guaranteeing "free trade" or very low tariffs? Is he breaking agreements? Or there aren't agreements? Are any countries threatening WTO actions? How much credit/blame do you attribute to the President for the economy?I think George W. Bush admin saved economy. I liked him, and thought he was a good president.CONTD
How did the government reduce debt after WWII when debt to GDP ratios were even higher than now? What were GDP growth rates 1945-1965? Do you think U. S. consumer debt levels are a problem?Do you think the Chinese debt buildup is a crisis?
If manufacturing goes to other countries, and to automation, what will provide Americans an adequate # of satisfactory high paying jobs for the 6/7 who don't work for the government? By the way, quite possibly if you count:- military- federal, state, local government- FTE contractors working onsite or off-site under service contracts for government agencies- teachers, police, other public workers- and how about employees at private companies whose revenues are derived 75% or higher from government, then I bet the number of "government" employees would be WAY higher. Government spending is about 1/4 of economy, and probably 1/4 to 1/3 of people work for govt in one way or another.
In answer to your first question, the Baby Boom played a huge part. People came home from the war, got an education, got jobs and made more future little taxpayers. That increased demand thereby spurring the economy which produced more revenue and so on.The main problem now is that the Baby Boom is past, the population is aging and the workforce is shrinking relative to population. This means, over time, more beneficiaries with fewer people to pay the benefits. (This leaving aside the willingness, or lack thereof, of the public to pay for what it buys.)Yes, debt levels in both China and the USA are a problem. Partly because of the demographics above - China is aging too, partly because the debt is going to consumption rather than to savings, investment, and infrastructure. Thus future productivity, and thus future revenues, are being sacrificed to current consumption with the difference being left to future (smaller) generations.Your second posting is poorly written and I cannot follow it. All I can say is that we have been here before. In the 19th century we transitioned from a rural/agricultural economy to an urban/industrial economy. The cry rose up about how the new urban populations would eat and where would the food come from? There also followed a populist movement not unlike the current one. In that William Jennings Bryan was the Donald Trump of his day. (That is if you can imagine a devout Christian eloquent Donald Trump. If you can, get professional help. (Yes, that was a joke.))In truth, in relative terms, manufacturing jobs will become less profitable and will command lower wages and - this will take time - the workforce will shift to better paying jobs. (Why do you think there is downward pressure on wages right now? The demographics - and to a lesser extent the education system - have not yet caught up to the economics and the new technologies.)Not sure if that is what you were asking, but ferreting out what you wrote, I hope that helps.
There's a downward shift on manufacturing wages from international competition and automation is what you're saying? Yes, I agree. The problem is that computers and robots can do most jobs better than humans. We will have a surplus of labor. Only jobs will be at fast food and clothing stores and government related industries.
You missed questions on tarrifs and WTO at top.
There is a downshift because of technology, foreign competition, immigration, demographics, etc. The list is long - and as I say, we have been here before. The comparisons between the mid-19th century, a transition from rural/agricultural to urban/industrial to the 21st century, a transition from an urban/industrial to a service based/tech economy, are striking.We've been here before. It takes time for the education system and the demographics to catch up to technology and economics. In the fullness of time, they do. There is no logical reason to believe that process has suddenly stopped. (Just for starters - as Silicon Valley will attest, the demand for high educated tech workers is skyrocketing wages in that area. As the population and demographic catch on, that will move wages generally, though the spike will with time mellow somewhat.)As to your tariffs and WTO question. I am sorry, what was it again? I just did a quick perusal and don't see it.
How can Trump do tariffs given the World Trade Organization structure and so much trade governed by previous trade agreements guaranteeing "free trade" or very low tariffs? Is he breaking agreements? Or there aren't agreements? Are any countries threatening WTO actions? How much credit/blame do you attribute to the President for the economy?I think George W. Bush admin saved economy. I liked him, and thought he was a good president.CONTD
No CONTD. That was first part of my series of questions you had answered.
Did you see tariff question? How can Trump do tariffs given WTO and other previous trade agreements?
Sorry to be late in replying. I am back on the horse after the Holidays and, although I work from home, I had a bunch of meetings today plus I do like to spend at least a little time with the family.In answer to your question, there is nothing in the WTO that precludes the President from imposing tariffs. It merely sets up mechanisms by which other states may challenge the legality of such tariffs relative to what the WTO allows. Indeed, the WTO has numerous national security and other exceptions and loopholes that nations can exploit.In fact, China has been breaking the rules right and left and there are about a dozen cases that have been brought by the U. S. and other powers before the WTO. That said, even if the WTO rules against China, about the most it can do is give legal sanction to the states that brought suit to impose retaliatory trade restrictions. The WTO itself has no real authority to impose penalties.As to your last two questions, Presidents have some influence at the macro level. They can create an environment through taxes, regulations, etc. that is conducive or not to a flourishing economy. However, the instruments are crude and the capacity to influence the economy is general.The kinds of micromanaging that Presidents would need to do to alter the economy in specific ways is simply not possible.Example: There is no doubt that Reagan's policies improved the economy from what it had been in the 70s. Yet, the theory was that you cut taxes, that creates economic growth, that then generates revenues that balances the budget. In truth, it worked sort of. The economy grew, but only after a deep recession, and revenues increased, but not nearly enough to balance the budget. Thus, instead of a supply-side boom, Reagan unintentionally created a demand-side boom.CONT.
On balance, his policies worked well and it was a massive improvement over the Keynesian policies that came before him. However, it produced its own problems - some of which we still wrestle with. Not least being the nation's addiction to debt and deficits.So yes, there is an effect, but less than meets the eye and it is not always as intended.As to Bush, Jr., his economic policies were non-descript. He basically inherited an economy that was experiencing a the second shallowest and shortest recession of the post-war era. It was basically a cyclical recession and Bush's policies did not greatly change its trajectory.Of course as he left office the economy took a massive plunge. Second only to the Great Depression in terms of economic growth and third only to the 1980-82 "double dip" recession in terms of unemployment. (10.8% in October, 1982. 10.1% in November, 2017.)Mr. Bush's response did save the economy from doing much worse, but only because he was willing to bail out some major banks. I don't disagree with what he did - and I am amused that some Democrats are - but it did fly in the face of GOP free market orthodoxy.Call it the law of unintended consequences. Bush acted against his own economic philosophy and salvaged an economy that was about to go off a cliff. That said, the recovery took place under Mr. Obama and was well below the historic average.In that, frankly, I don't find either man to have been too impressive.
Type-o: I wrote "November, 2017" I meant November, 2007.
I think the main thing that Trump has done to spur the economy is that he lowered taxes for middle class people. That created additional revenue for wide swaths of the population, and therefore, was like a Keynesian stimulus to a population starved of discretionary income. Yes, there was some deregulation, like allowing additional gas/oil drilling in additional lands.I looked over the demand vs. supply-side distinction, and can't say I fully understand. But cutting taxes, also creates demand, as done under Trump above. I want to see this movie Vice, but the American population is so misguided about George W. Bush. First, they are so convinced that Iraq was this utter disaster. It isn't. One view that it isn't is it's economy: data.worldbank.org/.../NY.GDP.MKTP.PP.KD Second, he truly did save the economy from depression. I know, a tangent. The problem with the tariffs is that structurally it will never be profitable for manufacturing to return to the U. S. So, what's the point? What good will they do but antagonize other nations? Anyway, thank you.
Not at all, my pleasure.In response to your points, in brief:1) Undoubtedly the tax cuts helped spur the economy, though I think you underestimate the importance of deregulation. The recovery from the 2007-08 recession was wildly below the historic average and that created pent-up demand. That demand would have been there, tax cuts or no.The real issue, then, is what depressed the recovery? The answer was the uncertainty caused by the profusion of regulations that came from the Obama Administration. Business - particularly small and medium sized business - did not know how to plan going forward and this reduced both hiring and wages. (Other factors were at work, too, but these were most directly attributable to the government.)2) Supply side theory takes Keynsianism - "Demand creates its own supply," and turns it around - "Supply creates its own demand." It assumes that if you create conditions that spur business to produce, the producer will hire the worker, and the worker will then spend. So government must stimulate production, and increased demand will follow.As to the tariffs, there are too many other factors at work to draw that simple a conclusion. Structurally manufacturing is the wave of the past as the economy shifts toward a tech/service base. However, in the short to medium term, that will fluctuate - as indeed it is now. The latest data showing an substantial increase in manufacturing jobs, although manufacturing as a proportion of GDP is about where it has been.Anyhow, I am not unsympathetic to tariffs if they are a short term tool to force China (and others) to change their ways. As Disraeli said, "Protection is an expedient, not a principle." In that light, they are acceptable.Finally, "Vice" looks like a very funny movie. Satire is always fun. I have not seen it yet, but if they are treating it seriously, it will be a bore. If they are treating it as a comedy, it could be fun. If you happen to see it, let me know.A pleasure.
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