American Economics Thread


AssassinsMace

Brigadier
This is why there will be no tariff exemptions.

Please, Log in or Register to view URLs content!


It would be admitting Trumps trade war was all for nothing.

The US is stuck with the system it created. Look at oil. During the Obama Presidency, he declared the US was energy independent because of fracking. Yes the US is oil independent but it doesn't have controlling influence in oil politics. That's why Saudi Arabia has so much power. Since the US likes its power in the world, it has to be actively involved like in the geopolitics of the strategic importance of oil in the world. Yes the US has many different resources within its own borders but it doesn't have everything meaning they still have to be involved in the world in order to get those things. This isn't a hundred years ago when the West was the only game in town.

Why doesn't China just cease to exist so the world can go back to 100 years ago? Because China is an alternative to the US. All those resources the US needs that it doesn't have is going to cost more because it's called capitalism. Other countries want China around because they'll get more money selling the raw materials the US needs. Go ahead and find rare earths somewhere else. It's still going to cost more. They threaten it like it's China's loss. China was ready to reduce rare earth exports to the US and its allies overall and they went running to the WTO to stop it. Do they know that's the same outcome? Outsourcing is like water. Water seeks to find the lowest level. In outsourcing that means where it's the cheapest. If it's in China and that's where they get it, it's because that's where it's the cheapest. It's not some humanitarian gesture from the West to give jobs to poor people around the world. When it comes to motive, it's quite the opposite where they're just exploiting cheaper sources.

Threatening to leave China will only cost them more. Those jobs don't have to go back to the US. They can exploit the next cheapest country... but it will still cost them more in ways beyond just labor. And just because the US abandons China or outsourcing all together, what makes Americans think the world will follow and not outsourced themselves like when Americans threaten war, they automatically believe the rest of the world blindly join them? All you have to do is look at the US's fight over 5G with China. US allies aren't following blindly. I'm sure they would rather not buy from China but what's the common reason why they have to open the door to China? They get more bang for the buck. Ideology doesn't beat cheap. If it were so simple like the US wants to believe, why don't they at least pay the difference for allies to turn their backs on China? Because the costs would be at the levels of the Soviet Union going bankrupt because they couldn't keep up with the US at the end of the Cold War. How many countries in the world are going to exploit the US and pull out the China card and get free money for not choosing China...

The latest is the US is going to impose on every country that uses their technology to make other technology restrictions on who they can sell it to namely China. China is the largest buyer for most of the chips that the world makes. A lot of those foreign companies are going to go bankrupt. The US thinks, again like everyone will follow the US blindly into war, everyone is going to do nothing and accept it. If some country told the US who they can sell their products to, Americans would not react well yet they think other countries will do nothing and just accept it. No, just as China will, everyone is going to develop their own technology to bypass the US having the final say.

When all is settled, it's the US that's going to be in a world of hurt because it will have themselves surrounded by walls built with import/export restrictions of their own making while everyone else is trading with one another. Again they're betting it all on the belief that the US is the only one buying things in the world.
 

Chish

Junior Member
Registered Member
No country if given a choice would want to choose between these two big superpowers. In today's world, each country own interest comes first but circumstances decides why they have to choose one over the other. Best option for these countries is to be more united and independent, thus more freedom of choices, more competitions, more markets, foods security, techology independence etc. They must find ways to spread the risks from the big two or maybe three (Russia?) without taking sides.
 

AssassinsMace

Brigadier
I'm watching Trump's daily coronavirus update and a journalist ask him about the US putting tariffs on foreign oil. Trump says the US is energy independent so it doesn't need foreign oil but he's going to impose a tariff to protect US energy companies. So what's the point of the tariff if the US doesn't need foreign oil. Is China paying the tariff? It might cause a fake emotional rise in the price of oil but if the US isn't buying foreign oil, The US tariff doesn't costs anybody else. What does he think is going to happen? It'll increase the price of oil so US oil companies can make more money because oil is traded and priced by the world market?

This is an example how the US threat to manufacture everything at home will in fact due more harm to the US. The US has little influence with Saudi Arabia and Russia on their conflict which results in low oil prices. Don't buy foreign oil and now China is the biggest importer. So which country is going to be accommodated more by oil producing states? The US that buys zip from them or China that buys more? And then at home protecting US energy producers means keeping oil prices high. They would have to break away from the world oil trade to make oil prices higher than the world market. Who's going to buy oil that costs more? Only American consumers that have no other choice. China can buy oil from countries the US doesn't want anyone to business with? How are they going to punish China for doing that? They stopped importing from China because everything is Made in America now because they don't want their money going to China. The only leverage they have left is to go to war with China. All because China is buying general things from countries Americans don't like?
 

hydrogenpi

Junior Member
Registered Member
I think given that AI is the future and automation is unavoidable, and now with the COVID situation accelerating that trend of shifting towards autonomous economy (the only way for a nation like US to deglobalize and decouple supply chain and go back to domestic manufacturing at scale is to use AI to keep costs down and boost productivity rather than rely on human labor) and pulling the rug underneath the feet of the people in terms of traditional notions of work/labor/employment/etc that Andrew Yang's notion of UBI was on the mark and even Bernie is calling for everyone in the US to get $2000 / month cash from US government at least until this crisis is over...

Please, Log in or Register to view URLs content!
 

canniBUS

New Member
Registered Member
From Asia Unhedged:
Please, Log in or Register to view URLs content!


Why American productivity has gone down the drain

Author:
Please, Log in or Register to view URLs content!
May 19, 2015
Please, Log in or Register to view URLs content!


Please, Log in or Register to view URLs content!


Please, Log in or Register to view URLs content!
,
Please, Log in or Register to view URLs content!
,
Please, Log in or Register to view URLs content!
,
Please, Log in or Register to view URLs content!


Former Fed Vice-Chairman Alan Blinder writes about the “
Please, Log in or Register to view URLs content!
” at the Wall Street Journal. Growth of output per manhour is the worst since the Great Stagflation of the 1970s.

Please, Log in or Register to view URLs content!


But why? Maybe it’s a statistical illusion, maybe it’s mean reversion from high productivitygrowth in the past, maybe it’s less rotation of workers through different jobs.

Of course, it could be the fact that capital investment is miserably low compared to past periods. Blinder allows:

A third hypothesis, weak investment, is more promising. The basic idea is straightforward: If the capital stock grows more slowly, as it has in recent years, workers will have less new capital to work with, and their productivity will therefore improve more slowly. But when it comes to making that intuitive idea numerical, the time period matters a lot. I’ll spare you the calculations, but the necessary data, which end in 2013, show that weak investment can account for about 70% of the sharp slowdown after 2010. But three years is too short a time period to draw any conclusions. If we date the productivity slowdown from 2005, weak investment accounts for only about 25% of the slowdown.

Here are two less conventional, even counterintuitive, hypotheses.

Wrong, wrong, wrong. It’s not just that overall CapEx is down, but that 40% of all CapEx in the S&P 500 has gone to energy, up from 28% in 2007. The U.S. invested disproportionate amounts of its dwindling pool of capital investment to replace imports of oil with domestic shale oil. That’s well and good, but it doesn’t have broader productivity effects like investment in computation and telecommunications.

Please, Log in or Register to view URLs content!




Maybe, Blinder continues, technological progress “actually slowed in recent years, despite all the whiz-bang stories you read in the business press.” He explains:

Impossible? Well, keep in mind that to an economist “technological progress” means getting more output from the same inputs of capital and labor. Does
Please, Log in or Register to view URLs content!
do that? Or Snapchat? Some popular online services might even reduce productivity by turning formerly productive work hours into disguised leisure or wasted time.

In somewhat different ways, John Fernald of the Federal Reserve Bank of San Francisco and Robert Gordon of Northwestern University, two leading productivity experts, have argued that the greatest productivity gains from information technology came years ago, and that recent inventions look puny by comparison. Compare
Please, Log in or Register to view URLs content!
with the Internet, or the Apple Watch with the personal computer. Maybe inventiveness has not waned, but the productivity-enhancing impacts of inventions have.



Those are good points, but Asia Unhedged has a simpler view of the matter: America used to have tech companies that produced disruptive technologies. Now it has stable consumer franchises run by patent trolls from the legal department rather than engineers. Our logic is simple: If it walks like Proctor and Gamble, quacks like Proctor and Gamble, and flies like Proctor and Gamble, it’s Proctor and Gamble. The S&P Tech Sub-Sector (the contents of the XLK SPDR ETF) traded with twice the volatility of the S&P 500 index in the late 1990s and early 2000’s, and now it trades with the same volatility of the overall index. In other words, tech isn’t risky anymore. It’s not risky because the patent lawyers have ringfenced their little monopolies, kept new entrants at bay with patent lawsuits, and turned into cash cows.

Please, Log in or Register to view URLs content!


Of course there’s no productivity growth! There’s less investment, and the companies that used to drive productivity growth now suppress it.

(Copyright 2015 Asia Times Holdings Limited, a duly registered Hong Kong company. All rights reserved. Please contact us about sales, syndication and republishing.)

Is this were China wins?
This is called the "falling rate of profit". All capitalist economies experience this. China is no exception.
 

Top