I have seem this movie before with Brexit.
People who feel they have little to lose are seduced by these narratives.
It always ends in tears. Always.
The only question now (like Brexit), is how much poorer are these folks going to get, given that they seem to want to follow Trump down this particular garden path.
The graph that you show doesn’t take into consideration the debt issue. It’s easy to show that americans will be worse off when the cheap labor is cut off. But that cheap labor addiction has created a massive debt bomb. It’s like saying: “look how happy you are doing cocaine, please continue doing cocaine”.
If the system is working so well, they why do people keep voting against it? So they are just all stupid and ignorant, and need to obey the priesthood of economics? Lol.
This is not correct either. The primary reason the US is in a financial mess are their tax policies.
They keep refusing to raise taxes on the ultra wealthy while turning on the spending taps like drunken sailors.
Shrinking the potential output of the US Economy via tariffs will actually make the debt problem worse.
People vote against their own interests.
Happens in many countries.
it is absurd to think that chronic trade imbalances cannot lead to debt issues. Absurd. Shows a complete lack of econ 101.
“I know what is best for you, I am an expert”
As has been posted about 1000 times before:
If you want to improve that trade imbalance you need to focus on the main culprit (China).
This was totally doable as a united front.
“Please get a college degree to get a better job, I will lend you money and you will never be able to get out of it”
That has zero to do with trade policy.
You are moving the goal posts.
The fact that you write this shows a complete lack of understanding of the issue. USA went all in on services instead of blue collar work. Naturally they thought everyone would need a college degree for the “new economy”. Haven’t you noticed that many jobs require a college degree for no apparent reason?
The democratic party pushed neoliberalism, free trade, and then they emphasized greatly the need for a college degree, even to the point that the party became elitist towards people with non-college degrees. It’s all part of a package.
During the Biden 2020 campaign, he tried to reverse this image of the party. Emphasizing that you didn’t a college degree to get ahead and that manufacturing would make a comeback.
This has nothing to do with trade.
It has to do with pushing people into higher education and subsidising their loans.
When you have a lot more people with degrees that becomes the new standard for jobs.
The same thing happened in the UK
But that has zero to do with trade policies.
And if you actually looked at the trends, you would see that students are figuring this out. They are not taking on debt, and they are going for lower cost education options like community colleges.
See trend:
You’re going to have to connect the dots on this one for me. Whose debt bomb? The government’s? Cause that ain’t caused by cheap labor. That’s caused by politicians. Are you saying the current trading regime distorts capital movements? That I can understand, but I don’t see how that makes debt. ELI5.
Because the United States is unable to absorb capital inflows via a rise in investment, foreign inflows must cause a decline in savings, even if this does not occur through a rise in unemployment. As a result, the negative impacts of the current trade system do not show up in data through a rise in unemployment, but rather through a rise in debt and the erosion of the manufacturing share of the U.S. GDP.
The ability of America to absorb foreign money means that wages of oversease workers never rise (in USD) compared to american wages. So the american worker stays at a competitive disadvantage forever.
You are missing the other side of the equation.
From Pettis himself:
Can MAGA articulate what they want, that they believe existed 30 years ago, that they can not get today? What I see is a finance, tech, and medical industry that has created a lot of wealth in the US, where the wealth has been mostly concentrated in a small % of the population. But the average American? They are still doing better, but that device in their pocket reminds them hourly how much more other people have.
In this analysis, “middle-income” adults in 2021 are those with an annual household income that was two-thirds to double the national median income in 2020, after incomes have been adjusted for household size, or about $52,000 to $156,000 annually in 2020 dollars for a household of three. “Lower-income” adults have household incomes less than $52,000 and “upper-income” adults have household incomes greater than $156,000.
So everyone has more money, but fewer people are “middle class” and half of America feels left behind.
Useless college degrees have certainly become a problem, and “academia” deserves a lot of the blame for this. I had a real college experience - in a shitty 11x14 dorm room I shared with someone else, on a college campus with a mediocre cafeteria that educated people for a reasonable sum of money. That same school has turned into a 5 star resort that now costs 2x in yesterday’s dollars. Life coaches schedule bi-weekly updates with students to help them slowly transition to becoming an adult.
What we really need is a reality check. Trump is doing a bit of that, but what he is mostly doing is enabling those who have been making poor decisions to feel ok about it, that it wasn’t their fault, and that he is there to save them. It’s brilliant marketing - he gets to break everything conservatives have wanted to break for 50 years and people cheer him on. Once the bottom 99% are all poorer and there is less wealth differentiation, people will have less to complain about.
This is what I mean by crackpot…
This guy (Miran) is the chairman of the US Council of Economic Advisors.
Why is the US unable to absorb capital inflows in investments? Are foreigners forbidden from buying bonds of US companies? The evidence for this is what? And the foreign inflows of what cause who to save less? Foreign inflows of goods, or foreign capital? Too many jumps in the discussion for me to follow. It shouldn’t be too hard to make believe I don’t have formal economic training.
The poor will certainly get poorer, but I don’t think we’ll see less inequality. It’s like Brexit. A rejection of modern economic thinking in favor of emotional moves that fail to amount to anything but a regression back.
