Imagine for a moment if you ran your family the way we run America: you consistently "import" (buy) more than you "export" (sell or earn). If your spending consistently exceeds your income, there are 3 things you can do:
1) put it on the credit card.
2) go to the pawn shop.
3) get a higher paying job.
Obviously, #3 is preferable, since #1 and #2 both lead to insolvency eventually.
It's no different for a country. When we run a trade deficit nationally (our imports exceed our exports), those 3 choices are the same:
1) borrow money from foreigners (usually as corporate bonds or T-bills)
2) sell assets to foreigners (usually real estate and shares of US company stock)
3) make more stuff to sell foreigners (exports)
Just like in your family, #3 is preferable since #1 and #2 eventually lead to insolvency.
Fredrich Hayek groupies (libertarians) will deny this and throw lots of FUD to confuse you because they have degrees in economics and you don't. I also have a degree in economics, and I assure you, they're lying. It really is this simple.
As Adam Smith says in Wealth of Nations: "what is prudence for a family could hardly be folly for a great nation."
BTW: To extend this analogy, a sales tax is basically a tariff on your family. It's a tax on what you "import" into your family (what you buy). Sales taxes are the most common taxes in the world and the most widely accepted as legitimate by both economists and the public. So why are people who are fine with a "family tariff" so adamantly opposed to a "national tariff"?
Well golly, I have an economics degree too and I musta missed that class. If only I'd known how simple the world is, dagnabbit. I coulda got me some straight A's.
These pages are filled with folks who dislike America, who have unending complaints, and actually feel we're the exploited ones. They tell us how good we had it in the past, and how fervently they want to return to those times. I've increasingly felt the opposite the more I travel internationally, and the more I read history. It makes me wonder where they wish their kids could live their upcoming lives. And, which period are they pining to return to, given their fixation on the past? Here's hoping our decadence and grievance aren't our undoing.
How many decades does the "new" right need to be in charge before they take responsibility? And, if neocons are still in charge, doesn't that mean MAGA is either stupid, or inept, since they literally hold all the power? Why is MAGA so beta?
I'll take your silence as support of Don's crypto corruption, and your support of future D presidents doing the same. A few hundred mill from a Chinese crypto criminal, AOC thanks you. And I acknowledge your support of the right of the government to shoot unarmed citizens in the street, then lie about the victim, and keep the identity of the masked shooter secret. And again, future D presidents also have your support to roam red communities in search of hostiles. And when video surfaces showing President Newsom and his administration are lying, you'll rush forward to defend them, right? Who ya gonna believe, me or your lyin eyes...
Would you at least agree that Don's true colors on the 1st and
2nd amendment have surfaced. They literally justified the murder, through their official statements, by saying he deserved it because he was legally carrying a gun at a protest. This also means you support the capitol police shooting Ashli Babbitt, right? I love irony, but this is disgusting.
I think you'd have many excellent choices for places to send your children to live in the past. North Korea allows the above, I hear it was quite lovely in the 90's. God knows it wouldn't be America.
If you have an economics degree, then explain to me why all the economists keep failing to see that massive international tragedy of the commons that is created when you disconnect trade from mutual defense and rule of law. Tell me how the French can spend enough on defense while the Irish spend virtually nothing and use the saving to under cut the French on taxes. How long can Finland defend the undersea cables from Russia's shadow fleet while Google and Meta hide behind Ireland's lower taxes.
How long can Canada keep sending its navy to help patrol for pirates and protect the supply chains feeding those Mexican factories. You were sold a false ideology and cling to it despite the growing evidence that free trade is failing. Pride goes before the fall.
So was your father and grand father just as obstinate in believing Reagan and all his supply economists were nothing but wrong. It's never entered you mind that once again, all the grand poohbahs of finance and economics might have missed a fairly important issue when is comes to the economy. Like just how we should approach trading with non-allied and corrupt nations.
How about pull the blinders off your face and the fingers out of your ears and quit trying to prove that your ego is bigger than you intelligence.
You brought up ole Ronnie, not me. He's long dead, and even longer out of office. He's not remotely as relevant as the imbecile in office now. It's time for Don and MAGA to man up and take responsibility. He's in charge of the entire federal government. Why the hell does Reagan matter? Don is a classic demagogue, and diverts people's attention with a never ending series of grievances and bogeymen. Oren does the same, harping on irrelevant figures from the past as a way to stoke resentment. It's much easier to trick the unsuspecting to be against things than to articulate a positive vision for today, let alone tomorrow. Don't fall for it, hold the people in power today accountable.
Another outstanding article on Commonplace where I find so many clear, and "of course that is true" type of articles. I read articles like this and wonder how so many important things have been obfuscated for decades. Thank you so much for concise, clear thinking and the absence of silly and deliberately confusing jargon and mumbo jumbo!
It's so comforting to know that Don's taco tariff strategery is unspooling as planned. His laser like focus, his unparalled brilliance, and his doggedness in pursuit of a clear goal are on full display. His clever approach of intentionally driving our closest allies into China's arms, instead of rallying them to jointly confront China, only seems silly to those not familiar with 4D chess. His tariff threats over Greenland, immediately withdrawn, are just the latest example of Don's art of the deal, rivaled only by his tariffs on Brazil for prosecuting his fellow coup plotter, Bolsonaro. It's all coming together... At least, so the red pilled among us claim.
Of course, these are the same folks who rush to defend Don's masked, barely trained thugs as they shoot our fellow citizens in the back, ten times, after disarming them. Their silence is deafening as our government then openly lies to us about what has transpired, even though we can watch reality on video. Without evidence, our government immediately calls our fellow citizens "domestic terrorists", a "would-be assassin", seeking to do "maximum damage and massacre law enforcement". Welcome to East Germany.
Shame on our government. And shame on those who remain silent.
Governor Walz got that man killed. Mayor Frey got that man killed. And why did they rally the modern day KKK to go out and fight ICE, to protect their own corruption. To protect all the rich businessmen in Minnesota making money off the Neo-segregation Democrats have created through the lack of immigration enforcement. Rich men protecting their ability to exploit the illegal immigrant is all this is.
Trump gave them the ability to legalize the dreamers and step up immigration enforcement during his first term. The democrats took a hard pass. Of course it's worth mentioning that the old Neo-cons like Bush and Romney held up the funds needed for proper immigration enforcement for over a decade to try and get a guest worker program so they could legalize the corruption.
You want to discuss this openly blatant corruption some more, because the gambit of just pulling on people's heart strings over and over is how you kill a mans compassion and get him to order his own set of jackboots.
China isn't manufacturing EVs, they are manufacturing carbon credits to sell to European car makers as they try to survive in the face of green lunacy. China is probably losing money on the cars but making it up on the carbon credits. Then they out-compete the Euros on price. Europe is funding its own deindustrialization. They are doomed unless they reverse course which they won't. The US needs to get out of the blast radius.
Excellent article. Trump (awful human being though he is) has shown top-quality political instinct in identifying what is ailing the US (you can't run a modern economy in immigration and outsourcing in perpetuity) and in doing something about it.
A few more years of these tariffs and the world will be transformed for the better. However, I do think policymakers need to start thinking about a system to replace that creates balanced trade, to replace the WTO, as knee-jerk tariffs aren't a long-term answer.
A good article and an accurate description of what's going to take place over the next few years. Unfortunately, too few people are really seeing why it all went so wrong. Yes market access is important, but equally if not more important was disconnecting trade from mutual defense and shared values (democracy, rule of law, protecting human rights and the environment).
You can't disconnect these things without creating a "tragedy of the commons". While I still support what Trump is doing, at the end of the day, Canada is an ally that is much less corrupt. Mexico is a chronic national security problem and racked by corruption.
We seem to be drifting into possibly doing more trade with Mexico rather then Canada. Hopefully this is a temporary state of affairs. If Canada gets its head out of its rear, it's worth remembering that they help us fight pirates and chase terrorist, while Mexico smuggles people and drugs into our country.
It's also worth remembering that the "tragedy" that happens when you ignore a commons problem is that we all wind up worse off. The biggest losers tend to be the ones that seemed to be "winning". The children of those 1970s and 80s single moms we helped create through our welfare programs didn't win in the end. Likewise, if free trade was so great for Mexico, why do Mexicans keep trying to come here and mow our lawns. The Chinese people are heading to become the biggest losers. They will be in a bankrupt country that has destroyed it's environment and watch as all that infrastructure built over the last dozen years falls down around them way too soon.
Paul Krugman- ugh was wrong so many times it is getting hard to keep count with him.
Great article thank you. China started whacking the world economy long before the early 21st century.
I remember reading about Les Wexner the Epstein financier back in the 80's. He was the first in the 1970's to run to Asia to get his stuff made. Cheap labor no environmental rules and regulations he started to make a killing by the 80's. They called him brilliant and a great entrepreneur back then? I thought even back then WHAT? he's just going to Asia for cheap stuff? that's being innovative and a great entrepreneur? Whatever...
We been off shoring for the last 50 years to run the old neo con system to buy people off. Don't know if we did permanent never to recover damage, hope not. We will see hopefully if keep the liberal nihilists wokes out of the way.
The university = The "New Religion" (religion of nihilism)
One of the few pieces on Commonplace that present a case and make an argument without attacking other’s viewpoints, qualifications or character. Very good. My question is what can America physically manufacture anew that Americans can afford to buy with American labor priced in? I ask as a lot of consumer and business budgets are seemingly based on cheap goods and services from afar.
Imagine for a moment if you ran your family the way we run America: you consistently "import" (buy) more than you "export" (sell or earn). If your spending consistently exceeds your income, there are 3 things you can do:
1) put it on the credit card.
2) go to the pawn shop.
3) get a higher paying job.
Obviously, #3 is preferable, since #1 and #2 both lead to insolvency eventually.
It's no different for a country. When we run a trade deficit nationally (our imports exceed our exports), those 3 choices are the same:
1) borrow money from foreigners (usually as corporate bonds or T-bills)
2) sell assets to foreigners (usually real estate and shares of US company stock)
3) make more stuff to sell foreigners (exports)
Just like in your family, #3 is preferable since #1 and #2 eventually lead to insolvency.
Fredrich Hayek groupies (libertarians) will deny this and throw lots of FUD to confuse you because they have degrees in economics and you don't. I also have a degree in economics, and I assure you, they're lying. It really is this simple.
As Adam Smith says in Wealth of Nations: "what is prudence for a family could hardly be folly for a great nation."
BTW: To extend this analogy, a sales tax is basically a tariff on your family. It's a tax on what you "import" into your family (what you buy). Sales taxes are the most common taxes in the world and the most widely accepted as legitimate by both economists and the public. So why are people who are fine with a "family tariff" so adamantly opposed to a "national tariff"?
I also have a degree in economics and I endorse your comment.
Well golly, I have an economics degree too and I musta missed that class. If only I'd known how simple the world is, dagnabbit. I coulda got me some straight A's.
These pages are filled with folks who dislike America, who have unending complaints, and actually feel we're the exploited ones. They tell us how good we had it in the past, and how fervently they want to return to those times. I've increasingly felt the opposite the more I travel internationally, and the more I read history. It makes me wonder where they wish their kids could live their upcoming lives. And, which period are they pining to return to, given their fixation on the past? Here's hoping our decadence and grievance aren't our undoing.
Good luck America.
How many decades does the "new" right need to be in charge before they take responsibility? And, if neocons are still in charge, doesn't that mean MAGA is either stupid, or inept, since they literally hold all the power? Why is MAGA so beta?
I'll take your silence as support of Don's crypto corruption, and your support of future D presidents doing the same. A few hundred mill from a Chinese crypto criminal, AOC thanks you. And I acknowledge your support of the right of the government to shoot unarmed citizens in the street, then lie about the victim, and keep the identity of the masked shooter secret. And again, future D presidents also have your support to roam red communities in search of hostiles. And when video surfaces showing President Newsom and his administration are lying, you'll rush forward to defend them, right? Who ya gonna believe, me or your lyin eyes...
Would you at least agree that Don's true colors on the 1st and
2nd amendment have surfaced. They literally justified the murder, through their official statements, by saying he deserved it because he was legally carrying a gun at a protest. This also means you support the capitol police shooting Ashli Babbitt, right? I love irony, but this is disgusting.
I think you'd have many excellent choices for places to send your children to live in the past. North Korea allows the above, I hear it was quite lovely in the 90's. God knows it wouldn't be America.
If you have an economics degree, then explain to me why all the economists keep failing to see that massive international tragedy of the commons that is created when you disconnect trade from mutual defense and rule of law. Tell me how the French can spend enough on defense while the Irish spend virtually nothing and use the saving to under cut the French on taxes. How long can Finland defend the undersea cables from Russia's shadow fleet while Google and Meta hide behind Ireland's lower taxes.
How long can Canada keep sending its navy to help patrol for pirates and protect the supply chains feeding those Mexican factories. You were sold a false ideology and cling to it despite the growing evidence that free trade is failing. Pride goes before the fall.
Breathe deeply. Through your nose. Change is hard, hang in there.
So was your father and grand father just as obstinate in believing Reagan and all his supply economists were nothing but wrong. It's never entered you mind that once again, all the grand poohbahs of finance and economics might have missed a fairly important issue when is comes to the economy. Like just how we should approach trading with non-allied and corrupt nations.
How about pull the blinders off your face and the fingers out of your ears and quit trying to prove that your ego is bigger than you intelligence.
You brought up ole Ronnie, not me. He's long dead, and even longer out of office. He's not remotely as relevant as the imbecile in office now. It's time for Don and MAGA to man up and take responsibility. He's in charge of the entire federal government. Why the hell does Reagan matter? Don is a classic demagogue, and diverts people's attention with a never ending series of grievances and bogeymen. Oren does the same, harping on irrelevant figures from the past as a way to stoke resentment. It's much easier to trick the unsuspecting to be against things than to articulate a positive vision for today, let alone tomorrow. Don't fall for it, hold the people in power today accountable.
Another outstanding article on Commonplace where I find so many clear, and "of course that is true" type of articles. I read articles like this and wonder how so many important things have been obfuscated for decades. Thank you so much for concise, clear thinking and the absence of silly and deliberately confusing jargon and mumbo jumbo!
It's so comforting to know that Don's taco tariff strategery is unspooling as planned. His laser like focus, his unparalled brilliance, and his doggedness in pursuit of a clear goal are on full display. His clever approach of intentionally driving our closest allies into China's arms, instead of rallying them to jointly confront China, only seems silly to those not familiar with 4D chess. His tariff threats over Greenland, immediately withdrawn, are just the latest example of Don's art of the deal, rivaled only by his tariffs on Brazil for prosecuting his fellow coup plotter, Bolsonaro. It's all coming together... At least, so the red pilled among us claim.
Of course, these are the same folks who rush to defend Don's masked, barely trained thugs as they shoot our fellow citizens in the back, ten times, after disarming them. Their silence is deafening as our government then openly lies to us about what has transpired, even though we can watch reality on video. Without evidence, our government immediately calls our fellow citizens "domestic terrorists", a "would-be assassin", seeking to do "maximum damage and massacre law enforcement". Welcome to East Germany.
Shame on our government. And shame on those who remain silent.
Governor Walz got that man killed. Mayor Frey got that man killed. And why did they rally the modern day KKK to go out and fight ICE, to protect their own corruption. To protect all the rich businessmen in Minnesota making money off the Neo-segregation Democrats have created through the lack of immigration enforcement. Rich men protecting their ability to exploit the illegal immigrant is all this is.
Trump gave them the ability to legalize the dreamers and step up immigration enforcement during his first term. The democrats took a hard pass. Of course it's worth mentioning that the old Neo-cons like Bush and Romney held up the funds needed for proper immigration enforcement for over a decade to try and get a guest worker program so they could legalize the corruption.
You want to discuss this openly blatant corruption some more, because the gambit of just pulling on people's heart strings over and over is how you kill a mans compassion and get him to order his own set of jackboots.
As if on cue, you’ve made my case. Thank you:)
Who ya gonna believe, me or your lying eyes…
I can’t type any slower. See above.
So your point was that you support this new segregation and exploitation. You root for more corruption that keeps wages down, and rents high?
China isn't manufacturing EVs, they are manufacturing carbon credits to sell to European car makers as they try to survive in the face of green lunacy. China is probably losing money on the cars but making it up on the carbon credits. Then they out-compete the Euros on price. Europe is funding its own deindustrialization. They are doomed unless they reverse course which they won't. The US needs to get out of the blast radius.
Richard! spot on! Concur!
Excellent article. Trump (awful human being though he is) has shown top-quality political instinct in identifying what is ailing the US (you can't run a modern economy in immigration and outsourcing in perpetuity) and in doing something about it.
A few more years of these tariffs and the world will be transformed for the better. However, I do think policymakers need to start thinking about a system to replace that creates balanced trade, to replace the WTO, as knee-jerk tariffs aren't a long-term answer.
A good article and an accurate description of what's going to take place over the next few years. Unfortunately, too few people are really seeing why it all went so wrong. Yes market access is important, but equally if not more important was disconnecting trade from mutual defense and shared values (democracy, rule of law, protecting human rights and the environment).
You can't disconnect these things without creating a "tragedy of the commons". While I still support what Trump is doing, at the end of the day, Canada is an ally that is much less corrupt. Mexico is a chronic national security problem and racked by corruption.
We seem to be drifting into possibly doing more trade with Mexico rather then Canada. Hopefully this is a temporary state of affairs. If Canada gets its head out of its rear, it's worth remembering that they help us fight pirates and chase terrorist, while Mexico smuggles people and drugs into our country.
It's also worth remembering that the "tragedy" that happens when you ignore a commons problem is that we all wind up worse off. The biggest losers tend to be the ones that seemed to be "winning". The children of those 1970s and 80s single moms we helped create through our welfare programs didn't win in the end. Likewise, if free trade was so great for Mexico, why do Mexicans keep trying to come here and mow our lawns. The Chinese people are heading to become the biggest losers. They will be in a bankrupt country that has destroyed it's environment and watch as all that infrastructure built over the last dozen years falls down around them way too soon.
Paul Krugman- ugh was wrong so many times it is getting hard to keep count with him.
Great article thank you. China started whacking the world economy long before the early 21st century.
I remember reading about Les Wexner the Epstein financier back in the 80's. He was the first in the 1970's to run to Asia to get his stuff made. Cheap labor no environmental rules and regulations he started to make a killing by the 80's. They called him brilliant and a great entrepreneur back then? I thought even back then WHAT? he's just going to Asia for cheap stuff? that's being innovative and a great entrepreneur? Whatever...
We been off shoring for the last 50 years to run the old neo con system to buy people off. Don't know if we did permanent never to recover damage, hope not. We will see hopefully if keep the liberal nihilists wokes out of the way.
The university = The "New Religion" (religion of nihilism)
One of the few pieces on Commonplace that present a case and make an argument without attacking other’s viewpoints, qualifications or character. Very good. My question is what can America physically manufacture anew that Americans can afford to buy with American labor priced in? I ask as a lot of consumer and business budgets are seemingly based on cheap goods and services from afar.
Thank you for updating this always-important argument with the comments from Davos - great post!
Agree, the Davos guy nailed it didn't he! Perfect!