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Economics
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People in metro areas are more likely to move up than down? I bet if you adjust for local cost of living, you will find that it's much closer to 1 to 1. Cost of living is higher in metros therefore we can assume people earn more there as well. For every person that leaves the middle class, someone must replace them. Everyone cannot just magically get rich unfortunately, which is what such a trend would ultimately lead to.
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Economics
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> For every person that leaves the middle class, someone must replace them.
That is completely wrong. The middle class used to be about 60% of the population, now it is about 49%. Or something, I am pulling these numbers from memory, the actual numbers don't matter. What does matter is that the middle class has shrunk by 11% of the population. 11% of the population left the middle class without being replaced. You may be confused about the definition of "middle-class." Middle class is defined as aboved 2/3 of the median income and below twice the median income.
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Economics
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Lol so "middle class" is now two people working full-time earning about 30k each? Lol.
If you making 30k you are not middle class, your poor.
You certainly do not have enough to buy a decent car, Apt, putting money away for retirement or your kids education on 60k.
If you can't do those things you are not middle class. You are poor.
People think they are Middle class in America when they can't even afford to live without roommates. The levels of delusion people have it's amusing
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Economics
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I would love to hear you tell someone in Cambodia that being poor in America means having to rent an apartment, have a car payment, not eat out all the time, and not be able to pay for your kids college in cash. (Your kids can still go to college, they just must leverage debt).
$60,000 per household is definitely middle class and allows the household to live very comfortably in America.
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Economics
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Its incredible that you call others delusional when you seem to have no connection, no awareness whatsoever of the world you live in.
I had the misfortune of growing up in an actual poor country where the lifestyle you consider "poverty" would be something people would kill for (in some cases literally- I had friends that went down some very dark paths just to escape the grind of their shitty lives... lives that consisted of actual poverty).
On 60K in the USA you can absolutely afford a car and a house if you have some basic budgeting skills. Life for a middle class American on 60K a day is not easy but is significantly, almost immeasurably better than it is for the average person around the world. To call it poverty is shockingly ignorant.
So yea what you said in that stupid little post is downright offensive. Youre a clown and I hope no one takes you seriously. I dont know what else to say.
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Economics
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Or living and working in a cheaper city. Cheaper cities are usually Southern and Midwest cities, but many poor people on the coasts will never stoop to moving to the South or Midwest, even for a good job. I've interviewed 'em and watched good offers be declined because they weren't in one of the three areas of the country the interviewee was willing to live even though they were currently unemployed.
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Economics
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Children are expensive from age 0-4 when they aren't in public education and one parent needs to stay home or put the child in daycare. Once both parents are working the costs are exaggerated. With the scenario above the annual income after taxes is going to be around 45k and mortgage/utilities is going to be around 23k. That leaves 22k per year for cars/food/entertainment. It's not a glorious life filled with luxury but with proper budgeting its completely feasible, I see people in my own community only an hour away from NYC do so. The biggest thing that help lower middle class individuals would be more cuts to the personal income tax.
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Economics
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Yea, but a lot of those people you see doing it may have a decent chunk of debt. I think children may get a little less expensive as they get older, but prob not by much. You trade daycare expenses for after school care, whatever activities they may be in, increased food costs, school supplies and books. also, living in a small, cheap apartment is much easier when you don’t have teenagers. Don’t get me wrong, it’s doable, but families on that income with more than one kid are probably not saving as much as they should for retirement. And you prob aren’t bringing home 3500 unless you aren’t paying for healthcare. Prob bringing home more like 3000 if you are paying for healthcare and saving for retirement. Meaning half of take home Og would go to mortgage.
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Economics
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> Lol so "middle class" is now two people working full-time earning about 30k each? Lol.
Where is this coming from? The median household has 1.2 workers, not 2.
> If you making 30k you are not middle class, your poor. You certainly do not have enough to buy a decent car, Apt, putting money away for retirement or your kids education on 60k.
Maybe you should take a trip outside of your little bubble and see how the vast majority of people live? You can absolutely do all of these things on $61K.
> People think they are Middle class in America when they can't even afford to live without roommates. The levels of delusion people have it's amusing
The vast majority of households don’t have people living as roommates.
It’s very clear you have a political motive here and it runs counter to the data. Stop with the jealousy politics and pay attention to what the data is telling you.
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Economics
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The middle class is a quantitative term, the middle 3 quintiles. Poor is a qualitative term, having a low quality of life due to financial constraints. The reality is that the middle class is poor in America, especially the second quintile.
Also, the fifth quintile in America are called upper middles because calling them rich would be a misnomer. The truly rich in America are statistical anomalies, not a part of the normal percentile distribution. This is what inequality looks like and it is a trend that continues and as time goes by the percentile threshold you need to reach in order to not feel poor will increase, i.e. the more people in America who will be poor. At some point it may even become the majority.
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Economics
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> Lol so "middle class" is now two people working full-time earning about 30k each? Lol.
Think before you leap to conclusions.
30% of household with children are single parents. Only a single income is counted,
(child support is not counted.)
Single people living alone also have one income.
(28% of elderly people live alone, many with low incomes. (Even if they are quite wealthy)
Median means half above, half below the median.
I imagine the number of households with two incomes in the upper half is much much larger than in the bottom half.
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Economics
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It is an argument I'm willing to consider but the article does a pretty weak job of making its case. These are the only two things Bush actually did according to the article:
* when the head of the Federal Reserve and his Treasury Secretary told him they needed to bail out AIG, Bush agreed with them.
* during the TARP negotiations he lobbied a single Republican congressperson to support the program
I mean, it seems likely that he did more but the article certainly doesn't make for a very compelling argument. Reading between the lines it seems that the argument is that Bush was willing to allow pragmatism trump ideology in ways that, e.g. the Tea Party or Trichet at the ECB or Merkel in Germany (or German voters for that matter) weren't.
Not to disparage that. Bush is quoted as saying "if we suffer political damage so be it" while under similar circumstances Merkel shot down proposals saying "I won't kill myself".
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Economics
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Really, come on, you guys! Can we please stop making pretend that it's the nominal debt that matters and not the debt relative to GDP? We can do adult economics here on r/economics.
Like, I know you actually know how this works, you guys aren't dumb.
As the dollar gradually loses it's preeminent reserve status globally, we'll want to print less dollars, and that's fine.
But it's also fine to print more money now. GDP and wage increases are showing that MMT is right, and soon the debt ratio will stabilize or possibly decline.
**Edit: Unbelievably, I hadn't actually noticed yet that the debt ratio actually did decline already in 2017!**
https://tradingeconomics.com/united-states/government-debt-to-gdp
Note that the 2015 decline is associated with a combination of preceding higher deficits, fueling the strongest GDP growth Obama got, combined with his lowest deficits, which then caused the decline in GDP growth in 2016. Had Obama kept deficits higher longer, he could have been an actually OK president. I'd say good, except I care about other issues than economic policy like extrajudicial executions etc.
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Economics
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I just edited to link to the debt to GDP ratio data, showing that increased deficits can reduce the ratio. We don't really know exactly how much deficit spending the economy wants in order to leverage it into real growth, but we find out by increasing the deficit until we get much higher inflation, which we don't have yet. And when we do get higher inflation, that still doesn't mean we should reduce the deficit - raising rates might be a better choice, as long as the debt ratio will stay under control.
The takeaway to understand, as a non-economist, is that it's the debt ratio that matters, not the debt. So anyone who ever makes an argument just based on "deficits are bad" is bullshitting you.
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Economics
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It does, IF producers are able to employ unemployed resoureces to expand production in response to the extra demand. The evidence is that, even when there is already inflation and a tight job market, to some degree additional demand can create additional output, because of the added monetary incentive.
https://www.ineteconomics.org/uploads/papers/WP_70-Stirati-Demand-Expansion.pdf
This all follows from Keynes, really obviously, so that's why MMT is really just a rebranding of post-Keynesianism. So this is all what Minsky said, what Godley said, what sane economists have been saying for 50 years. Y'all can live in delusional neo-liberal fantasy land as long as you want, it won't change reality, and it won't change that Trump's tax cut is working better than nothing, for obvious reasons.
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Economics
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Let me repeat what I wrote:
>It does, IF producers are able to employ **unemployed** resoureces to expand production in response to the extra demand.
I put the word **unemployed** in bold for you.
So, exhibit A, your comment:
>I find it truly fascinating that people think printing money somehow tricks people in to doing more work than they otherwise would have.
This comment is, sadly, completely unsubstantive and rhetorical in the worst way. It in no way deals with the argument at hand.
I am talking about unemployed resources, you are talking about people doing work they otherwise wouldn't have. The definition of unemployed resources is resources available to do work they aren't currently doing. Please check the link, which empirically demonstrates the falsity of your neo-liberal religion. You underestimate the availability of unemployed resources, of various kinds.
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Economics
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It's not about just unemployment of people! It's like you didn't even read what I wrote?
Are you actually just a troll, or are you an adult? Also, just read the link, dude, the data is there. More demand out of thin air demonstrably increases GDP permanently with no reversion to some trend due to crisis or whatever bullshit... just read the link.
But anyway,
Unemployed resources/factors of production include capital/technology and natural resources, which when employed allow greater productivity. That's why it works at full employment, when there's already inflation.
So I will put it again in bold for you, I think that might have helped?
**It's not just about unemployed people or people working more hours.**
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Economics
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You're just literally trolling me with semantic arguments here.
But out of charity, assuming you're just not really well read enough to understand from context when I'm talking about nominal demand and when I'm talking about real effective demand, I'll help.
If inflation is proportional to the increase in nominal demand, obviously real effective demand does not go up. So if people's expectations lead to inflation, which causes the increase in nominal demand to be nullified, then no, that does not increase real effective demand.
But real effective demand can be created by increased nominal demand, *insofar as there are unemployed resources*.
So to repeat what I said at first: If there are unemployed resources, then printing nominal money can create real growth.
**As is proven by the damn article you should just read.**
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Economics
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I'm not making a semantics argument. Since we're doing the bold thing, **printing money does not increase demand. Printing money does not create new resources. Printing money does not print prosperity or create wealth.** :)
I'll actually take it a step further, printing money distorts the market for loanable funds causing malinvestment, and capital and labor expenditure on projects that the market does not demand. It causes a real and unrecoverable waste of real resources.
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Economics
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>It does, IF producers are able to employ unemployed resoureces to expand production in response to the extra demand.
Why bother? If I knew government was printing money, I'd raise prices; expecting an inflating money supply. If enough businesses do this, inflation goes up, and then I don't hire anyone because I have to create a warchest of cash to buy up assets on the cheap in the next downturn after the Fed tightening reverses.
That's literally my gameplan.
Besides, this last fiscal stimulus was largely just tax cuts, not some huge infrastructure investment. It's one thing to assume businesses will hire more people if they have more cash, and another for the government to directly purchase goods/services to push up demand.
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Economics
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Nah, economics is really pretty basic and boring, that's why it's so annoying that y'all can't get some basic points through your heads.
What will be fascinating will be watching your cult implode over the next year as the stimulus kicks in. Of course there's already plenty of evidence, which you can see in the article, which I linked for you, if you recall. But this time you all are so invested that the religious edifice you've built up just really will not survive.
Watch and see, it really is a fascinating time to be alive.
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Economics
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This is the tired monetarist line, that inflation expectations will nullify the increase in the money supply, and real effective demand won't increase.
Fortunately for the country/world, you're just empirically wrong:
https://www.ineteconomics.org/uploads/papers/WP_70-Stirati-Demand-Expansion.pdf
I know your theory is nice and internally consistent. But so is MMT. The difference between them is that one explains real world data and the other doesn't. Basically, your team underestimates the availability of un/underemployed resources, and the ability of additional monetary incentive to drive greater real production as a result.
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Economics
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Why not? Trump, Xi, and Lagarde all understand what has to happen. They'll manage the transition just fine.
The only economists who don't understand what's going on in the world are neo-liberals in isolated ivory towers in the US, who only have careers (for now) because they are essentially kept as pets by Wall St. to be trotted out in front of congress to spew the same filth theories and policy advice whenever the legislature starts considering actually helping regular Americans.
Most everywhere else in the world, and at plenty of institutions in the US too, economists actually understand Keynes and don't try to pretend like history has never happened.
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Economics
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The piece missing from /u/Diningbat 's posts is that rising prices also have an effect on technology. Rising wages and rising prices make technological innovations "cheaper" to implement relative to prices. As prices rise in aggregate, innovations that were, at a lower price level, not cost effective to implement, gradually become more cost effective. What most Keynesians (and Post-Keynesians) have built into these models is a technology function driven by increases in consumption demand over and above available real resources.
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Economics
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>Also, if one were to raise taxes that could make the situation worse by stifling growth.
Only if you use the taxes to reduce deficits. If you increase spending, to maintain the same deficit, taxes are just a policy choice. The same effective demand can be created through different policy choices, I know that might be hard for you to understand, but believe it or not, in fact, the government can actually take a dollar someone was going to spend and spend it for them instead.
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Economics
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Be careful shopping that paper around. They analyze only short-run hysteresis effects, not long run aggregate demand. It doesn't actually tell us much about long run productivity and capital formation, which are long run growth effects. They point this out in the paper:
>Our empirical results lead to the question of what the economic mechanisms working behind these results are, and which analytic framework would be consistent with them. Clearly, a positive link between non-investment autonomous components of aggregate demand, GDP and capital accumulation in the long run is inconsistent with macro models in which an increase in public spending, or any other autonomous components of demand cause a crowding out of private investment and/or private consumption. **More generally it is inconsistent with the view that an increase in the autonomous components of demand will cause rising inflation while only temporarily, if at all, leading to an increase in output, which in the medium to long run must be regarded as determined by factor endowments, technology and institutions – all of them independent of aggregate demand**\*.\*17
​
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Economics
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>more nominal demand has in reality elevated output, permanently, in many real countries, in real history, in conclusive contradiction to monetarism.
This is not a claim put forward by any Post-Keynesians, and is also not a claim made by the paper you linked. They frame hysteresis as short-run *persistence*, not long-run *permanence*. They are very clear to point this out in the paper, and is in line with all Post-Keynesian growth models. Long run growth in aggregate supply is, as all Post-Keynesians know, is a result of technology and productivity growth, not consumption and wages on their own. You can show short-run aggregate (and effective) demand increases via fiscal expansion, but that's not *news* really. Even mainstream economists know that. This is just a restatement of the mainstream principle of short-run aggregate demand within a Post-Keynesian framework.
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Economics
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What are you even talking about dude? Are you joking, or can you just not read?
This paragraph clearly states that their empirical results **contradict**
>"the view that an increase in the autonomous components of demand will cause rising inflation while only temporarily, if at all, leading to an increase in output, which in the medium to long run must be regarded as determined by factor endowments, technology and institutions – all of them independent of aggregate demand."
They're saying their empirical results **confirm**
>"...a positive link between non-investment autonomous components of aggregate demand, GDP and capital accumulation in the **long run**..."
So you literally just misread the paragraph here, like you read it completely wrong. Really, reread it. Sorry they are Europeans and so learned English better than you did.
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Economics
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> I didn't say it was created out of nothing, and it's not money
Me: Where does currency come from?
You: It emerges naturally in the market.
You Again: If I go to a store and the owner says I can pay next week, is that out of nothing?
Me Again: Currency was not created through non-payment.
You: it's not money, it's a short term loan
Me: *Double-checking the thread to see wtf just happened*
Fuck it. This conversation is officially derailed.
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Economics
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As I said in my other comment, you misread the paper, the empirical results do confirm long run impacts. Please reread the paper before you reply again, if you want to at all. Regarding PK theory, yes, long run supply increases with technology/productivity, but productivity gains/technological innovation are *accelerated* by short term increases in output, and thus short term increases in output create long term increases in output.
It is really all so awfully simple, it is just astonishing the knots you will twist into to lie about the very clear evidence, which is in the paper, which you should reread, since apparently the first time you just skimmed it for the one paragraph you thought you could twist to fit your warped worldview, but then failed hillariously.
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Economics
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You're totally missing the thread here. In this comment thread here I was explaining how the tax rate was a policy choice that was somewhat arbitrary, which was why you should look at debt/GDP rather than debt/Revenue.
He tried to make the argument that you couldn't just change the tax rate, because if you increased taxes, you would decrease demand, but I pointed out that that is not true, because exactly as you say, it doesn't matter who spends the dollar between you or the government - you only reduce demand if you tax the dollar and then use it to reduce deficits, rather than spending it, keeping deficits constant. So you are agreeing with the point I was making here.
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Economics
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Mmm sorry, I'm surprised someone else was looking at this thread still.
Anyway, something you critically miss in your analysis is that private banks already print money, just like I'm proposing the government should. Then, if their happen to be savers who want to buy the loans, the bank then has more capital to leverage to print more money. But the money printing comes first, and doesn't require the savings. So every argument you would apply to the government's money printing being a "trick" can equally apply to bank money printing.
So, read the paper, and it's also important to point out that it's not just money printing - money flowing in in the form of running a current account surplus has the same effect - that's why they're analyzing "autonomous demand" and not just fiscal deficits.
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Economics
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So, as a fellow Post-Keynesian who is deeply familiar with the various heterodox models of demand and wage led growth, I thought I'd help you out with some misapprehensions you have about that paper and the broader literature, but that appears to have failed.
Furthermore, while I had hoped to redirect the conversation to something productive like the merits of the paper instead of mudslinging and making pretensions of knowledge, you've deliberately chosen to be rude, aggressive and quick to resort to insults.
I overlooked this in your previous comments toward other redditors, but since you have continued your assault fairly uncritically, I am forced to take action.
Maybe after you've had some time to cool off, we can discuss this topic civilly and productively.
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Economics
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>private banks already print money,
Yes, I reconize that. This is a problem sometimes like it was in 2008. Otherwise, they are constrained by the market and Fed policy.
>So every argument you would apply to the government's money printing being a "trick" can equally apply to bank money printing
I don't doubt the governments ability to induce market activity, and stimulate the economy at least in the short term. MMT is a poweful force, especially in very competitive markets where prices are rather sticky. Not every business has or will use pricing power either, so the government can (and does) grant a 'free lunch' without causing broad inflation or negative economic problems. This is desirable in some ways. Higher inflation helps liquidate markets that would otherwise be trapped in deflation too. Few will identify the seignorage tax in transactions until they look at historical prices.
What I mostly disagree with is *how* the government spends (and taxes). That's why I approach ideas like money printing with skepticism.
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Economics
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Economics
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Loans create money. In fact far more is created via loans than printing. What matters is the effective money size and whether it is sufficient for all the growth people want to do. If there was only 1 dollar in the world printing a million more would create value since that 1 dollar is just not sufficient to drive economic progress. It is why commodity based currencies do not help growth, they can constrain it.
Almost all money was created via loans and you also want inflation to be positive (since otherwise people just throw it under their pillow and they may make money via deflation ). Almost all business opportunities are a form of arbitrage. If I spend X dollars I will get X+Y dollars. If I can't get X dollars then in a real sense we are creating less real value. If the return on X dollars is greater than the cost of creating the money (via loans) then you want to create the money.
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Economics
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Okay that is not what I am talking about. Money creation is far more complicated than you think. I am not talking about money can be divided. I am saying Banks don't need to have the money they loan to make a loan. They can just create it. There are nuances here the wiki is okay:
https://en.m.wikipedia.org/wiki/Money_creation
Also this book is good: Where Does Money Come From? https://www.amazon.com/dp/1521043892/ref=cm_sw_r_cp_apa_E6BNBbBXYDXHY
The money supply is constantly growing and shrinking right now according to needs (well mostly increasing).
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Economics
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My point is that printing money can create value in the same way loans can create value (and hurt in the same way as well). Also, making sure there is some inflation is important because otherwise you can make money (or not lose money) by just sitting on it which takes money out of circulation. Money is just like any commidity it's value is affected by supply and demand. You want to print more so that the value of money doesn't go up because then no one uses it.
Other point is no one is really printing money anymore. Almost all of it is created via loans which clearly provide value.
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Economics
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Printing money creates value in the same way me lending out my neighbors lawnmower to my other neighbor creates value.
The idea that money must go down in value to be used doesn't make sense. People sell appreciating stock all the time to pay for things. Additionally, people are mortal. Things now are more valuable than things later. You spend money when you want the thing your buying more than the money, and people must consume or they die. The same logic you use to say money can't go up in value or people wouldn't use it also works the other direction. If no one ever uses money, then it would not have value. If money doesn't have value, then no one would hold on to it.
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Economics
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Hm, I see.
But how would the alternative (letting the banks fail) be any better? The banks are the ones that provide loans and investment opportunities to individuals and businesses after all, so wouldn't letting that system just collapse have extreme economic consequences?
> Don't recall the government bailing out individual taxpayers like the banks and institutional investment houses.
Wasn't that the whole point of the 2008 tax rebates? And if I recall correctly, they weren't really that much of a stellar success story.
I completely support reforming the system to prevent banks from failing in the first place, but what choice was there but to bail them out once the collapse actually happened? Again, I'm just trying to understand other people's perspectives here, and I appreciate your input.
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Economics
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>The banks are the ones that provide loans and investment opportunities to individuals and businesses after all, so wouldn't letting that system just collapse have extreme economic consequences?
You're making a false equivalency here, and trying to slip it under the radar, you neo-liberals are all so sneaky.
Let me explain. Private bank credit is only one source of new money which sustains demand. You are implying that it is the only source, and that if it dries up demand growth will too, with "EXTREME economic consequences".
But, of course, new demand can also be created with new money created by the public bank, very obviously.
So, I'm not going to go into details about what exactly I think the appropriate response to the financial crisis was, because the real answer was "don't blow up private debt in the first place", but I just wanted to point out that your arguments were premised on a false equivalency/assumption.
It's not just you though, it's the neo-liberal ideology to religiously not talk about how money and fiscal policy actually work in the real world, in real history, in real countries.
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Economics
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The federal reserve printed money to force interest rates across the curve below the rate of inflation. This, in turn, forced money out of bonds and back into stocks. Additionally, it allowed buyers to continue paying stupid prices for homes. Homes which - surprise - banks now owned a massive number of thanks to the flood of foreclosures. With homes being back above water, banks were “solvent” and the bailout loans were repaid.
Who paid for this bailout? Well, you did. When the fed set interest rates below inflation, your savings lost value. And the years following the recession when employers refused to give raises? Your salary lost purchasing power.
Hilarious that most working class people don’t realize the game the fed played to fuck the average person to keep assets owned by the wealthiest propped up. But remember: inflation is good for you! War is peace!
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Economics
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Are you saying that they should not have engaged in expansionary monetary policy during the financial crisis? Austerity isn't a commonly held belief among most economists, at least in the sense that you make fiscal and monetary policies tighter to shrink the economy while it is shrinking.
And I don't know, I'm pretty average and have done pretty well from the Fed lowering interest rates. Pushed money into stocks and I've made a quick buck from it. There's always going to be winners and losers.
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Economics
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Even if what you said were true, private bank credit is still a major source (if not “only”) of new money nonetheless (and quite frankly, that’s an understatement). You can’t just allow the entire private sector of banking to fail without repercussion—it’s impossible. You can support an incrementalist transition from our current system of finance to a publicly-run bank, but allowing an entire industry which sustains the economy (to a significant extent) to tank is dangerous to say the least—and yes, even in the real world.
> It's not just you though, it's the neo-liberal ideology to religiously not talk about how money and fiscal policy actually work in the real world, in real history, in real countries.
Okay, I support fiscal policy as well, but that's not what I'm arguing here. The reality is that the U.S. doesn't take a fully Keynesian approach to the economy (I'm sure we both agree there), and if it were to transition into doing so (whether it be a good idea or not isn't what I'm arguing), letting the entire system collapse on itself and rebuilding is probably the worst method.
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Economics
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You're right, it's not austerity; what I meant was if you were asking for an austerity-like situation where you contract the economy despite it stalling or shrinking.
That said, you haven't really made a convincing claim as to why we shouldn't have engaged in it. Being upset that a move made to save the economy altered wealth (as it always does) is not a very convincing argument, at least from an economics standpoint. What you're arguing from is more of a philosophic/political standpoint.
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Economics
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That's a fair argument, but not really related to what he was saying. But then again, how often does the Great Depression or Great Recession hit us? It's not that farfetched to think that even secure banks would go bankrupt. If the Fed always assumes recession, we would cause a recession because banks wouldn't be able to lend in the first place.
So I agree that it would be nice if banks didn't need a bailout, but a world economy doesn't crash every day, you know?
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Economics
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To me, something that always struck me as odd is that many students are willing to choose a not great private school.
For instance, an undergraduate degree at the [State University of New York is $6,870 tuition + $1,610 fees](https://www.suny.edu/smarttrack/tuition-and-fees/#foot5), [California State is $5,742 + campus fees](https://www2.calstate.edu/attend/paying-for-college/Pages/campus-costs-of-attendance.aspx), University of Texas is $10,136 for tuition and fees (got that average in state number from google). [The average public school is ~$9000 a year in tuition and fees, while the average private school is a lot more.](https://www.usnews.com/dims4/USNEWS/a08730d/2147483647/resize/970x/quality/85/?url=http%3A%2F%2Fmedia.beam.usnews.com%2Fa4%2Fb8%2Fa40b61e148f7b0d6391de00b9df9%2F180905-tuitionjpg-design.png)
Now there exists a few top tier private schools that charge way more than your local state school, but what you are getting is an extremely quality and prestigious education. So in this category you have your Stanfords and Yales and so on.
So to me, these are the two category of schools that make sense to me. You can either go to your local state school for an moderately prestigious degree at reasonable prices, or you can pay 3-5 times as much to go to a top tier private school for a very prestigious degree.
But then what gets me is the mediocre private school, where you'd go to a school that charges 3 - 5 times as much as your local state school, for a degree that is no more prestigious. Hell, I'd argue, that when you leave your state or the US, your local public school is probably more well known (Hey, I've heard of New York, so ya know, if you say you went to State University of New York I wouldn't draw a blank. But I would draw a blank for 90% of the private schools in New York).
There are 1,845 private colleges in the United States, and I have to say, unless you're getting massive student aid, or if youre studying a super rare major not available at your state school, I don't get the point of going to the majority (say, 1500?) of them.
Or to use an analogy, you can either get a Toyota Camry, an average car for a low price (your local state school), or you can get a Porsche 911, a very prestigious, top quality car for multiple times the price (a top private school). What I don't understand, are people who are willing to pay multiple times the price of a Camry for a damned Nissan Altima (mediocre private school).
In fact, car buyers seem to understand this. Badge engineered luxury cars (where you take a pedestrian car and stick a luxury badge on it) sell very poorly. But here's the thing, a Cadillac Cimmeron might be just a much more expensive Chevy Cavalier with leather and slightly better interior trim, but at least you're getting a Cadillac instead of a Chevy. Hell, I'd even understand it if your paying multiple times as much for SUNY grade education but a degree that says Harvard. But like, the current students who go to mediocre private schools that nobody's heard of is like paying multiple times as much for a Pontiac instead of a Chevy!
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Economics
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For reasonably good students, many -- perhaps most -- private universities are not much more costly than state schools, for two reasons:
1) Private universities typically have more access to endowments and scholarships, so their listed tuition cost is much higher than what most students actually pay.
2) Public universities are now much more expensive than they were, due to tax cuts that forced states to shift most of the cost burden from taxpayers to students.
This is largely covered in the article.
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Economics
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> To me, something that always struck me as odd is that many students are willing to choose a not great private school.
These are often the students without any better option. Unfortunately society has told them that college is the answer. Employers know graduates from those schools had no better option, and stay away from hiring those graduates.
So the poor young adults are left with a lifetime of debt, and a piece of paper that adds very little to no value, because they never had the aptitude of a better school.
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Economics
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That's exactly how I made my decision to apply to colleges back in the day. If the school wasn't extremely good (top ~20 national universities, maybe top ~10 LACs), there was no way the upside of the school itself was going to beat a full ride to my decent state school relative to the cost. It's a pretty clear dividing line - so many of these make no sense - there's no way there are 300+ private colleges (that cost more than a state school) that are worth the price tag.
I know people who are way stricter with their kids as well - knocking their top tier alma maters off the list because they think the return on the top ~5 or so schools is the only one worth the price relative to a decent state school.
We should train guidance counselors make a much more rigorous effort to teach kids to think about the cost/benefit of both specific school and major choices. The systems in other countries (e.g., Germany or the UK) seem to do a much better job of forcing that tradeoff or guiding kids towards a different path. In the US it's just "you have to go to college", "you have to get a degree" and so kids / their parents don't think much beyond that. We might solve some of our incredibly inefficient allocation of education resources.
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Economics
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> I don't know how true it is, but I've heard people talk about how some industries respect private, ivy league schools over public schools.
Well that's the problem, they respect some private schools over some public schools, but it's a pretty small fraction. The problem isn't with the people who go to excellent / tippety top private schools, the problem is for everyone else going to a relatively mediocre private school - where the upside pretty quickly falls off a cliff.
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Economics
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> College is absolutely an economic decision. The fortunes of those without a college degree are abysmal. This is noted in the well written and sourced article.
College is an economically beneficial decision.
This is distinct from an economic decision. While it usually benefits them economically, it is not clear whether the economic benefits are the real reason people choose to go to college. People's choice of school, major, etc., throw significant doubt at the idea that people are thinking rationally about college.
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Economics
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That logic does not make sense economically and was used to make the program politically feasible. Any type of worker will be found in the US for a certain price and H1-Bs will always make that price cheaper.
With that said, the H1-B program is certainly a net benefit to the US economy and should be maintained. It's just important to realize that the oft-stated reason for its existence is not a valid one.
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Economics
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Living in Canada, I can't help but notice the stagnating living standards of many middle Americans. Travelling to northern New York seems like a time-warp from the 90s. The mall in Watertown, NY, for example, looks like it hasn't changed since 1995. I knew people here who used to shop at that mall in the 90s and it was "upscale" vis-a-vis Ontario malls. Now it's the opposite. Trump signs everywhere, too. Odd.
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Economics
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That's one graph and it is not the tell all sign of an economic well being for people. You need to stop posting things like that because you don't understand it. This sub is filled with too many kids who post who one thing and say the world is flat. While covering their ears on other view points. Median income is 38k but the cost of living is high, goods are more expensive or healthcare keeps rising. Next time don't just post one graph and say that is it. Please don't do that again you're better than that.
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Economics
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>A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it.
- Max Planck, Nobel Prize winning physicist
A lot of "science" tends to be dogmatic. You're not learning how to conduct clinical studies, understand sound statistical methodology, or interpret advanced statistics. You're learning established dogmatic practices. Once you're degreed and certified, there is comparatively minimal continuing education and it's more of the same. It's hard to accept that much of what you were taught (and how you've made your living) was based on faulty data/logic/methodology. See: the food pyramid only recently being changed and USDA dropping "calories from fat" from nutrition labels and FINALLY adding "added sugars".... in 2018.
/rant from a statistics nerd who worships data and logic
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Economics
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Do you think that this will trigger a recession or cause a recession?
I think it might trigger a recession, but not what is causing the inevitable recession. I think the main cause will be (even moderately) higher interest rates.
Not that higher interest rates aren't good!! We should have higher interest rates. But after a long period of low interest rates and "free money" everyone is overly loaded with debt. Higher interest rates will cause a lot of corporations we consider to be stable to start having problems. It will also cause a big problem in countries with a lot of $-denominated debt. We "fixed" the Dot-com bubble by lowering interest rates and giving out free money. Then we "fixed" the 2008 crash by lowering interest rates even further and gave out even more free money. Once that happened, a crash is inevitable, unless we choose to seriously rethink how our monetary system works. Since no one has done that, I think a crash (and a recession) is basically inevitable.
Of course a lot of other things can trigger a recession as well.
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Economics
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Oh, yes. This is by far my biggest worry. It will all be the "fault" of Trump and the tax cuts. Not that the tax cuts aren't making matters worse, of course they are.
The question is how will the Fed "solve" the next crash. With negative interest rates and even more QE? I doubt they can just keep repeating the same strategy, because every time the bailout has to become larger and larger. And this time, the Fed can't do everything by itself, without anyone even noticing. Because of Dodd-Frank, Congress has to step in.
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Economics
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It went up because he ran on expansionary monetary policy in the midst of a period of relatively stable economic growth. If someone was elected on a platform of “mail everyone $10,000” the stock market would also jump.
That seems the most likely scenario at least. Also the fact that he quickly showed that he saw the stock market as central to defining his success, suggesting he would prioritize the market going up over other policy concerns.
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Economics
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We had it, in futures, for a few hours. It was like a 5% drop. Then Trump gave his first speech and people decided that he wasn't literally insane, and futures began to bid. Man, that was a crazy time for the stock market, end of 2016, beginning of 2017. Really entertaining.
I'm not going to call it irrational. As soon as investors realised that Republicans = corporate tax cuts, they priced in the effects of the tax cuts. The effect has been good for corporate profits and buybacks.
What I think is irrational is the market, especially FAANG, is STILL going up.
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Economics
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Seriously, I don't know what the hell is going on anymore. The only thing I can chalk it up to is consumer sentiment, but the CCI is starting to wane in the past couple months and the market indexes still manage to chug uphill.
I'm thinking a lot of less-informed consumers are expecting overly-optimistic personal windfalls from these tax breaks. Once this tax season goes by and consumers realize that a lot of the tax rate drops are eaten up by the loss of personal exemptions/home equity credit interest/etc, I think things might start correcting.
Unfortunately, since things seem to be pretty inflated, instead of a normal correction we can possibly see the market shitting the bed. A market rising on sentiment falls hard at the lack of it.
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Economics
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IMHO, positive sentiment is nearing infinity for some darling shares like $AMZN, $MSFT and $AAPL and because these are huge companies, they can move the S&P500 up by themselves. The first two at least are growing from the expansion of the internet and ecommerce.
I really don't understand how $AAPL is doing so well. Half of its revenue comes from iPhones, when are people going to stop buying those overpriced things? I paid $300 for my Android phone! I'm not going to say it's as good, but I have much better uses for the $1000 I saved. Yes, they have services too, but that's a far smaller part of the money the company makes. Is it buybacks, or the mountains of cash that the company has no idea how to use??
Anyway we're going way off topic and I'm just an enthusiastic amateur, so yeah.
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Economics
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Your comment doesn’t really conflict with or connect to mine. I didn’t call his platform drastic, I just pointed out that at its root his economic plan was borrowing a lot of money and injecting it into an economy already almost a decade out of its last recession. That would almost certainly lead to stock market gains because any losses are deferred far down the line whenever the money he’s borrowing will be paid back.
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Economics
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Betting against the iPhone thus far has been a bad bet. People have been saying that the iPhone market is going to crash for years, and every year Apple still rakes in the vast majority of profits in the smartphone market.
The iPhone is basically the gold standard top tier phone on the market. Samsung is their only real competitor in that space. As long as Apple keeps making phones that people enjoy using, and want to upgrade to the next model, they will continue to dominate. It’s an incredibly profitable market and it also drives every other one of their business units such as services and accessories (AirPods and Apple Watch). Investors recognize this. This is why Apple is consistently at the top of the market. Investors know they will continue to see a return for the foreseeable future.
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Economics
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Dan Carlin makes an interesting point about WW1 that is relevant to this. He effectively argues that by the early 1900's western powers like england, germany, france, had reached a level of sophistication with their governments where the government had enough control over society that, if the government decided to drive society into hell, the government could ride that horse all the way down. There was no longer a safety valve where if things got too bad the government would be removed and the nation's direction changed.
​
A hundred years later it isn't just great governments that can do this. North Korea, Venezuela, Iran, Turkey have all reached a point in sophistication of their governments where the government can drive the country into hell without losing power along the way.
​
So to hear the leader of a country say things like this, to watch him take dictatorial powers, to watch him bump off his opposition... If you ask how badly things could go for Turkey as a result you need only look to Venezuela, or North Korea.
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Economics
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That's a great turn of phrase. But she when you check out Carlin's reading list to see just how many books he has read to put together his podcasts you will see they are as well sourced as any history paper. Also if you check out the peer reviews of his podcasts you will see that it is mostly minor quibbles as opposed to substantive challenges - amazing considering the volume of material.
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Economics
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That's great to hear - podcasts are new enough that I would not expect any of them to be reference grade.
I've seen Dan on the odd docu. on TV more than listened to his podcasts ( it's not a medium I'm particularly interested in ) and was surprised to see him in harness with other professional historians.
For the record, I consider narrative historians as valid and valuable. I'm just not 100% sure where to put Dan because the medium is different.
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Economics
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Perhaps Trump’s goal is to get Americans working in the factories, but not to build products for Americans.
Many people are very confused about the goals of this “trade war”. It is not to bring factory jobs back to America that are now in China. We will not beat them in many areas they dominate in now.
We do have products with advanced technology where if allowed to compete in China, our exports there would soar.
The goal is to open China’s markets up to America companies to same the degrees we have opened our markets to them.
There are hundred ways in which they suppress imports, some are too complex to type here, but here is an easy one to write and to understand.
>When we raised some tariffs up to 15 to 25%, China responded on tariffs on many products of over 40%. Why? Because they were already at 15 to 25% on American imports.
To punish us for doing what they have done for decades they slapped additional tariffs on top of their already high tariffs. The high tariffs are not even the worst of the barriers of exporting to China we have just accepted for years.
China’s upper middle-class is not as rich as America’s middle class, and it’s upper middle class is only a tiny 10% of their population.
10% of China’s population is 160 million people. A giant market we are shut out of in many, many ways.
Most American products sold in China are made in China, often because the manufacturers had no other choice that made economic sense. Not because of the cost of high cost labor in America, but because of Chinese trade barriers,
That has to change.
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Economics
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It's an attempt to give domestic companies an ability to raise prices and funnel more profits into stock pumping schemes, just like with the tax breaks, attempted change of insurance price caps from obamacare, roll back of net neutrality, increase in needless defense spending, increase in private prisons, a focus on public (money) private (profit) partnerships - these are all, without exception, stock pumping schemes without any foundational strength to them.
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Economics
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Many business cases for fast food restaurants, retailers and others are built on a requirement for having workers not much above minimum wage. America’s sells per outlet or per square foot is much lower than Europe’s.
In Europe they have fewer outlets but much higher sale volume per store, this is because the cost per employee (pay, benefits, vacations) is much higher in the US.
We don’t need 4 fast food restaurants on every corner. Starbucks within a mile of each other. As wages increase those will decrease.
**Business cases built on poverty wages almost single handily keep our current unemployment numbers low**. Those businesses will have to figure out a different plan (close low volume stores)if wages increase due keeping the supply of labor down by limiting illegal immigration and we can significantly increase exports of high technology manufacturered goods.
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Economics
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I’d be comforted if I were convinced Donald and his acolytes were genuine free traders who were using tariffs to encourage better behavior by China. I’d be happy to see that turn out to be true, but I really don’t think it is. There’s been a couple hopeful signs though so I don’t think you’re totally off base.
To the best of my knowledge, the best free trade policy for a developed country would be “we won’t levy tariffs or quotas except in the interest of national security.” Even if other countries levy high tariffs on your exports, it still doesn’t make economic sense to retaliate. Retaliation only makes sense in a game theoretic way, it’s not actually profitable in and of itself.
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Economics
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If he were smart, he would have said "we will match China's duty", but he didn't want them to eliminate them and not be able to use tariffs as a bludgeon.
It's a political winner to go "well, no one likes 40% tariffs, but we're just matching China. I urge my counterpart there to lower tariffs to 5% so that we may also do so."
The problem is that he wants them at 5% and us at 40%.
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Economics
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> China’s upper middle-class is not as rich as America’s middle class, and it’s upper middle class is only a tiny 10% of their population.
>
> 10% of China’s population is 160 million people. A giant market we are shut out of in many, many ways.
So... they're not very wealthy and a tiny fraction of China's population, but they're also a giant market that we want in on. Ok. Got it.
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Economics
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Your point 1 and 2 are ignoring the impact of market forces on labor supply and cost. You act if companies don’t have to compete for employees at full employment.
Your 3rd point ignores the fact that if a franchise owner can’t make a profit on his investment, he will try to sell it, if he can’t he will close his store without caring what HQ thinks. You really didn’t think this one out at all.
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Economics
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That is the downside of protectionism....however, free trade cannot be a one way street. Also, it is worth asking why China does so well behind a massive wall of protectionism if protectionism is so bad for an economy? I think the answer is that China has access to free markets elsewhere that force their industries to be competitive on the global market. In the USA, industries have free markets locally but face walls of protectionism in the EU and most Asian markets.
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Economics
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> Nike and Adidas are killing it
The US-China trade deficit is 375 billion. Be serious. Every single Chinese industry is protected to a great extent; it is all-but-law that if you as a foreigner want to set up a business in China, you need to give up your IP and trade secrets right off the bat. And that's not a guarantee that you'll be treated well, just that you'll be able to sell anything at all whatsoever. Using two examples out of decades of history is ridiculous. Protectionism is a pillar of Chinese economic policy.
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Economics
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I realize that. So why describe them as "not as rich" and "tiny" if you're then immediately going to lament the lack of access to it? It was really a comment more about your way of presenting information rather than disputing any particular aspect of it.
Although it is debatable whether or not that 10% of the Chinese population is as wealthy as the middle class in the United States. But that would depend upon how you are measuring wealth. They may have smaller lawns but better healthcare. Fewer cars but better pensions. And so forth.
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Economics
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In a time like now where automation is booming, it is the perfect time to try to generate more demand for jobs. Not just because of the need to fill in the lost employment because of jobs, but to create such a demand for labor, that our country's investors put more money into costly automation. If a McDonalds can't get five frycooks no matter how hard it tries, and needs five to deal with its daily needs, it will have no choice but to pay the many thousands of dollars to get the 'automated' frycooks to fill in the void from lack of labor. This in turn creates over the long term, a more profitable McDonalds location, and cheaper to make hamburger.
​
In a scenario like now, where you have so many unfilled positions, companies will start having no choice but to spend the millions of dollars to create more automated plants. This in turn makes lower costs for the companies as less labor is involved, and thus more competitive in the global marketplace. If it costs a sweatshop in asia 5 cents to make a pair of gloves, but 20 cents with a non automated usa factory, the asian market wins out. But because the USA factory had their hand forced in automating the factory due to necessity, it may now only cost them 5 cents to make the gloves. So over time, as the asian market becomes more wealthy, and their wages rise above sweat shop levels and it becomes more than 5 cents to make the gloves in asia, the USA market will win out.
​
​
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Economics
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What makes you think factory jobs wouldn't be built on the same poverty wages? Fast food jobs themselves are just that, a fancy factory. The manufacturing sector has some of the lowest wages in the world, where employees in india and the philipines earn an average of about $1/h. What makes you think americans would be better off and want to spend their whole lives turning the same screw over and over again 12h per day in a toy supply chain?
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Economics
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China is doing so well (in terms of trade surplus, not much in other aspects) mainly because they have a huge supply of workers (100's of millions) who are willing to work grueling hours in horrible conditions for meager pay. No American is looking to work 14 hour days doing a repetitive manual task all day long for $2/hr. I'm pretty sure that is China's main competitive advantage right now, it has very little to do with "a massive wall of protectionism".
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Economics
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Margins at fast food places are razor thin. Many literally cannot exist in their current configuration with either higher wages or lower sales volumes. If they increase prices to cover significant wage increases their volume will fall. Their business model require low wages. (Very high volume stores could raise wages, but that is less than 30% of outlets.)
Manufacturing of niche high technology goods is not dependent on low factory wages to make a decent margin.
The jobs are also not as redundant.
I am not talking about high volume consumer goods. Rather low volume manufacturing of high value goods sold to other businesses for their factories, unique commercial networks, testing and measurement equipment. There are thousands of such companies of which the public has never heard. Germany has as many as America, as they are great in these niches.
The value in such high cost units is in R&D, design, support and patents. Manufacturing cost of goods and labor are a small part of overall cost.
America cannot compete with the low manufacturing wages for consumer goods.
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Economics
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Interesting you pick Intel.
Certainly worldwide companies have worldwide manufacturing. Labor cost alone does not drive those decisions. In some low value function, such as assembling, cost becomes more important.
Most wafer fabrication for Intel is done in the US.
In 2018 Intel announced resuming construction on a plant that will employee as many as 10,000 high skilled workers in Arizona.
They seem to be pinning some hopes on recent tax reform and better trade policies.
https://www.nytimes.com/2017/02/26/technology/im-flash-intel-micron-manufacturing-trump.html
https://www.industryweek.com/workforce/intel-7-billion-semiconductor-factory-arizona-create-10000-jobs
**There are also many factories in China for the sole reason that China requires factories in country to sell to the Chinese markets. They also require full technology transfers and and a Chinese partner for ownership.**
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Economics
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https://www.oecd.org/els/public-pensions/PAG2017-country-profile-China.pdf
https://www.statista.com/statistics/263775/gross-domestic-product-gdp-per-capita-in-china/
https://tradingeconomics.com/china/gdp-per-capita
https://www.statista.com/statistics/270180/countries-with-the-largest-gross-domestic-product-gdp-per-capita/
https://chinapower.csis.org/china-middle-class/
China's GDP per capita is around 15k PPP. And 10k nominal. The average worker's earnings are 8,000 per year. We consider "small" pensions in the US to be around 10-20k. America's GDP per capita is almost 60, 000 dollars. That's considered poverty. And healthcare in China is a mess, except for that available to the lower rungs of the wealthy and above. What are you talking about? This is delusional.
https://en.wikipedia.org/wiki/Healthcare_in_China#Current_healthcare_system
https://supchina.com/2017/03/28/healthcare-us-compare-china/
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Economics
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I only looked at Intel due your earlier comment, which I took as saying Intel did not have a large number of well paying manufacturing jobs in the US.
Silicon chips is not an example of forced technology transfer I would have used, as I know little about them.
Obviously Intel is still investing in US manufacturing in a big way. (I threw the NYT article in because I found it and thought it was humorously on target. Common business sense says no company makes a multi billion dollar manufacturing decision in months after an election hoping for promised but not delivered change. The tax reform was not passed or in proposal form at the time of the article.
To answer your question on chip technology transfer to China, does this qualify?
https://www.eetimes.com/document.asp?doc_id=1333267
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Economics
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That joint venture is based on SoC development, which is basically useless without the foundries to print them at scale. I consider this as being pretty much as important as would be the acquisition of MySpace to eventually make a new Facebook for China. They are constantly playing catch-up and were never given a fair chance to begin with. They are at least 20 years away from being autonomous in the production of a Huawei phone despite what you believe, and will always depend on the US or its allies for their base materials in their supply chains. This whole IP transfer story is fear mongering, and even if the chinese motive was to thwart foreing surveillance, they cannot know what foundries have put on those silicon wafers because they will never have control of them.
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Economics
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I can tell you for a fact it is not just fear mongering.
Between 2008 and 2012 I worked for a small ($500m) company that practically owned a small niche in cellular networks around the world. Our only large worldwide competition was a Chinese owned company that had 100% of the Chinese market and 15% of the rest of worldwide market.
In building their product for the Chinese market for years they liberally used our patents and then ignored our ownership.
As China announced a upgrading of the national cellular networks my company was very much interested in competing for the close to $100 million in our type of equipment that was needed. After over two years of trying to get Government permission to sell into China the company said screw it, it’s not worth it.
The demands:
Joint ownership of a new company to sell in China, with 51% Chinese ownership.
Full transfer of the technology of all equipment to be sold in China to the new company, the new company would not be required to pay for use of patents owned by my company.
The new company could sell outside of China.
Manufacturing of all products sold in China would be done in China.
Large R&D center opened in China with full access “and sharing” of R&D of our US company.
I was close friend with a lead negotiator on this and he said the demands were constant, non negotiable and unbelievable and our Chinese competitor was openly influential in the demands.
Our CEO finally said screw it and abandoned the entire huge Chinese market.
That happened. That is a real world example of Chinese trade barriers and protectionism.
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Economics
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It's like nobody listened in their history classes, that they're communist country like venezuela, cuba, north korea etc. Having an agreement to buy from them doesn't make things less state owned inside a rogue country. If we don't like it we shouldn't buy from them and that's it, but until now everyone has been happy with it and the cheap ways to improve our quality of life abusing their tortured slaves population.
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Economics
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> Spending less = saving more personally
Wrong again. If prices of goods rise, people can just as easily spend the same amount of money for fewer goods.
> nd note, we’ve been overdue for a recession. Look at the Shiller PE charts.
What is your economics background? And why do you think you can predict recessions? And why would you want to trigger a recessions solely because we're overdue? Do you think there are no actual economists that peruse this forum that could call you out? Because there are many economists that browse reddit.
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Economics
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There are lots of times that a cheap, low quality unit is more than adequate and spending more on a higher quality version of the same thing is not a good use of money.
If you're doing a plumbing project in your house, let's say, and you need to cut a few pieces of PVC. Obviously you need a cutter. Do you need a $5 tool that will last through the job, or do you need a $40 tool that will last through the job and any other similar job that may come up for the rest of your life but likely never be used again? Personally, I'd rather have the $35 than a high quality tool I'll never use again. Even if I have to buy the $5 tool again, I'm still $30 ahead.
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Economics
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The US right now can’t compete on labor prices, especially when cities are vowing for $15/ hour minimum wage.
How can they compete with people in India and China working for a few dollars an hour; if that?
This isn’t why products overseas are cheaper.
So Trump, I believe, see Tariffs as a multi win win approach,
- get taxes through Tariff,
- Force citizens to not abandon fellow citizens for higher priced products.
- improve quality of products
- increase jobs
But yes, automobile companies will have to step up their game.
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Economics
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Renting is not all that practical in a lot of situations. First, there's an opportunity cost to renting in the form of the time it takes to go rent the tool and also to return it. That can easily add two or three hours to the task. Second, some tools are just not worth renting to begin with, things like screwdrivers, hammers, utility knives, drill bits, and so forth. Third, by the time you've rented a tool two or three times, you probably could have bought one instead.
Plate compactor? Rent it. Cement mixer? Rent it. Crowbar? Buy it. Dry wall panel hoist? Rent it. Hammer? Screwdrivers? Pliers? Buy those. Cordless drill? Buy it.
Not everyone needs a fancy, high end drill and they are more than happy with the lower quality, cheap ones that will do the job for infrequent use. They probably don't want to go rent a drill when the need comes up, and they don't want to drop $200 to have one in the house.
All of that aside, the tariffs will make goods and services more expensive in America for everyone. People who are already struggling to make ends meet will have less buying power since wages will not be rising with the prices. That $100/week for whatever probably won't buy nearly as much as it used to. People won't buy more expensive versions of stuff they can barely afford already, they'll just have to not buy it at all.
There will be the same amount of money spent, but it will buy less stuff. People won't be saving money. They'll be spending more of it to get the same things they were already buying.
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Economics
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it wouldn't happen as quickly... there wouldn't be hundreds of billions of dollars being poured into the industry
"found that the total amount that the United States spent on medical and health R&D in 2016 reached $171.8 billion.
The biggest contributor to R&D spending over the study period was industry, which includes biopharmaceutical developers, medical technology developers, and healthcare service companies"
.....
if the chance of profit isn't there that money goes to another industry. Private equity backed healthcare companies disappear, PE money goes somewhere else.
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Economics
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I'm not sure why you think your age is relevant. Population levels in most farming communities are declining, not growing. The margins on farming are razor thin. Combined, these things mean lower property values for farmers (in terms of real dollars). Not higher. It doesn't matter whether a few farmers living close to growing population centers get a few million for selling out to developers, what matters is the overall trend.
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Economics
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There's not really any "winning" a trade war. From a purely economic standpoint, the participants are always worse off during and after it than they were beforehand. So countries other than China and the US are benefitting by getting a bit closer to being top dog, but of course not nearly enough to have any big disruption.
One thing a lot of people miss about the trade war though is that it really has nothing to do with economics. It's all political. China is targeting Trump's voting base to try to punish him and get him out to hopefully get someone who is more pro-China. It's less obvious what America is targeting, but it's quite possible they are trying to pop the bubble of bad credit in China in hopes of causing a recession.
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Economics
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I think you need to shift your perspective. Do you think seamless trade is good? Do you think more trade = larger GDP? Do you think less regulations and barriers in an economy are good? Most economists at a macro level think those things are good.
Obviously it results in different winners and losers compared to when there are tariffs so a few classes would prefer certain tariffs, but on the whole, most economists think more trade is expansionary and better for the econom. It’s not a how big are our tariffs vs how big are there’s. Both result in barriers to trade.
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Economics
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If you define "winning" as "Americans are paying at lot more in taxes thanks to these actions than ever, and soon will be paying 25% percent tariffs on things like consumer electronics", then yeah, we are "Winning".
I don't see the ability to put crippling tariffs on things for which there is no reasonable replacement as winning. I don't see the coming economic downturn as winning. But to each his own.
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Economics
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I view the problem to be a little more complicated than that, because these things are not a zero sum game. Trump just put a tax on 200 billion dollars worth of goods that we import and China responded by making our exports more expensive to a smaller subset. In addition to this, China has been cozening up to North Korea a lot lately and Trump seems to have forced both Xi and Kim to have a much closer relationship because of his actions.
I guess if you look at this only in regard to the Trade War maybe we are presently losing less than China does, but only because we import more than they do.
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Economics
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> I can't believe I'm saying this, but it sounds like trump is winning this battle. Am I misunderstanding something?
At least the fact that whoever puts higher tariffs is not the winner. It is a situation where both parties lose. Just because one party may lose a little less than the other, it doesn't mean they're winning in the absolute sense.
China may also be betting on the midterms, after which they may expect most of the tariffs to be undone, and thus are hesitant to antagonize the US by escalating the tariffs.
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Economics
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China expertise and businessmen will just shift to SEA countries. The successful SEA in those country before the recent rise of China has been...Chinese anyways lol
During the Vietnam War era...the actual Viets held animosity to successful Chinese business-minded folks. Most Americans probably don’t know that Vietnam had 1 million ethnic Chinese that preserved their culture and language learning in segregated schools.
Lol. But America doesn’t care about real Asian American history or actual contemporary Asia history xD
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Economics
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Tariffs are only one tool in the trade war toolbox.
For example, since the introduction of tariffs, China's currency has declined by 6% vs. the US dollar. That eliminates most of the increase in cost for Chinese goods in the US, but adds to the cost of US goods in China.
There is also little the US can do about that. Inflation is creeping up, and interest rates are already historically very low. If anything, the dollar is likely to rise in the near term.
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