He's "Ready to Go"

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Economike
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Mike G. -

Mike G. -

I'm sure that the person you're addressing who expects free trade to happen will respond to your comment soon.

Meanwhile, why not hold your breath?

Mike G
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Or I could just hold my

Or I could just hold my breath expecting the Centrally controlled economies to provide Life, Liberty and the pursuit of Happiness.

anonymous_coward
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Economike: "One of the clever

Economike: "One of the clever tricks Japan used is still in use today: dumping. Artificially lower the price of a product until competition is driven out of business - thereafter, pricing can be whatever is desired.

And how's that working for Japan? Perhaps not so clever? Despite the obvious fact that "dumping" is a favorite argument among protectionists, there's little evidence that dumping actually works to capture long-term market share. In order for dumping to succeed, we'd have to observe relative inflexibilty of production possibilities. And if we're thinking about "dumping" as a nation's industrial policy, we'd need to assume that government central planning actually works to improve a nation's prosperity. If this amounts to "cheating" it strikes me as a counterintuitive proposition: a company (or nation) chooses to give away a portion of its production in hope of gaining it back with interest someday."

Another example of failed "dumping" is OPEC (read: Saudi Arabia) artificially boosting production to try and kill the U.S. renewable energy & fracking industries.

Now, Saudi Arabia has burned down a big chunk of their coffers and has had to actually levy an income tax on their people and try to take Aramco public.

anonymous_coward
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Economike: "If you think

Economike: "If you think dumping works, would you be in favor of the United States government implententing such an industrial policy? Keep in mind that such a policy would require government planning and control of production, necessarily over-riding the preferences of individual producers."

Relevant link: https://www.npr.org/2018/07/24/631953880/trump-administration-to-provide...

Essentially Trump is taxing you to pay for farmers hit by a tax that he (indirectly) assessed.

anonymous_coward
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@Mainemom: "And that was

@Mainemom: "And that was really my point. Who is a free-trader and who is protectionist now comes down to which tribe you're in and which tribe holds the White House."

... or, who has bothered to take an economics class. I am the rare liberal that supports cheap plastic chinese crap as well as the massive expansion of Walmart.

Walmart has done more for poor people by keeping prices low than pretty much any government program in existence (except maybe the experimental UBI programs out there in Europe).

Economike
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Thank you for your informed

Thank you for your informed contributions, anon. (In passing, I note that the consumer surplus created by Wal*Mart has been of greater value to low-income Americans than the entire Food Stamp program.)

In sum, the whole conceptual edifice of trade "cheating" and "dumping" depends on several dubious assumptions. Here are two.

(1) Predatory "cheaters" have greater access to capital than their industry "victims." That is, the "victims" - despite their ability to compete long-term if they can survive dumping - can't raise capital despite their evident profitabilty, while "cheaters" can.

(2) Entrepreneurs will ignore opportunities created by "cheating." That is, once a "cheater" has successfully run its targets out of business, it can collect monopoly rents without competitors entering the market.

Toolsmith
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1. Greater access to capital

1. Greater access to capital means the stock market, which is busy demanding higher short term profits. Has any company managed to convince Wall Street to back *any* long term strategy? How about getting backing for a long term "loss leader"?

They don't have better access to capital... they have the willingness to use the capital that way.

2. Any new car companies pop up in the USA lately? Steel companies? Computer chip makers? Solar cell makers (that survive - Solyndra couldn't even make it with a government bailout)? Oh yeah, there have been some... in Korea & China.

Yep, sure. I just watched that overseas company eat a domestic company for lunch. I'm gonna jump right in so they can wipe me out next. Great idea.

Economike
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1. In other words, up-and

1. In other words, up-and-coming foreigners are smarter, better investors than Americans. Possible, I suppose.

2. In an era in which capital is increasingly intangible and manufactured goods become commodities, it's easy to find evidence of the "loss" of manufacturing to globalization. That doesn't translate into "unfair" "cheating."

Toolsmith
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1. No, business leaders take

1. No, business leaders take the long view. Investors do as well. The short-sightedness of Wall Street is clear, and is reflected in the behavior of business leaders catering to the stock "fundamentals". Do any of those "fundamentals" reflect long-term priorities or plans?

2. Really? So when the market is so flooded the items become mere commodities... what, they weren't commodities before? Of course they were. They're just being made somewhere else now. Capital has been intangible for quite a while - nobody brings piles of gold to the table - how does that make any difference?

Economike
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OK, you've got me now.

OK, you've got me now. Investors and businessmen aren't short-sighted, but Wall Street is.

My point about manufactures becoming commodities is, I like to think, more subtle than your interpretation of my comment. Things that used to be more expensive, labor-intensive goods, such as most consumer goods, can be produced so inexpensively with robotics that they comprise a shrinking proportion of market transactions. The role of intangible capital is hard to quantify, but comprises a growing source of value.

Improved productivity isn't flooding the market. It is the nature of the market.

I might add that neither of us is going to "win" this conversation without a clearer definition of terms and some facts.

Mike G
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I am the rare liberal that

I am the rare liberal that supports cheap plastic chinese crap as well as the massive expansion of Walmart.

As if it was just beanie babies, Hilarious, and the offshoring of millions of formerly well-paying jobs to elsewhere.

anonymous_coward
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@Toolsmith: " Has any company

@Toolsmith: " Has any company managed to convince Wall Street to back *any* long term strategy? "

Amazon did. Bezos basically said we're not going to post a profit for several years, and the majority of the analysts pretty much ate it up.

There were a few curmudgeons that remained skeptical but he threw them a profitability bone a few years ago to shut them up but then went back to plowing all the profit back into the business.

anonymous_coward
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@Mike G:"As if it was just

@Mike G:"As if it was just beanie babies, Hilarious, and the offshoring of millions of formerly well-paying jobs to elsewhere."

Hate to break it to you but you have to keep improving your productivity to keep up in this world. You can't keep making the same number of widgets per hour - you have to make more and more, every year, or else you fall behind.

Just the nature of the beast, I'm afraid.

Mainelion
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Does that apply to the

Does that apply to the education empire? How about the govt/none-profit complex?

Melvin Udall
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No, emphatically. In fact,

No, emphatically. In fact, they prefer negative productivity "increases."

Economike
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Hate to break it to you but

Hate to break it to you but you have to keep improving your productivity to keep up in this world. You can't keep making the same number of widgets per hour - you have to make more and more, every year, or else you fall behind.

This is the idea I'm trying to convey when I talk about "commoditization" of manufactures. (A commodity is a commonly available primary product, like coffee or copper.) There are numerous and cumulative productivity effects operating in today's economy that are not caused by faulty free-trade agreements or outsourced jobs. Reduced costs of transportation, information, and automation combine to make manufactured goods once both expensive and labor-intensive more like commodities than products. Formerly, Americans enjoyed "good jobs" like bending over sewing machines to make shirts or repetitively popping rivets into lawn chairs. The reason Americans don't have these jobs any more is that these jobs don't pay well and Americans don't want them. (And, increasingly, neither do foreigners. Manufacturing jobs in China are also decreasing.)

These sweeping economic changes would have happened if no one had negotiated a new trade agreement or reduced a tariff in the past several adminstrations.

Melvin Udall
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If you've got nothing better

If you've got nothing better to do on a Sunday, watch a couple of episodes of "How Its Made."

I'm frequently astonished by the degree of automation in so many of the products.

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