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Free Minds & Free Markets

America's Trade Deficit Is Still Growing

And that's just fine.

Judging by President Donald Trump's favorite metric—America's trade deficit—he is losing his trade war.

Luckily, trade deficits don't matter too much.

According to data released Friday by the U.S. Census Bureau and the U.S. Bureau of Economic Analysis, America's trade deficit rose to $46.3 billion in June, up from $43.2 billion in May. A trade deficit is the gap between the amount of goods a country exports and imports—the amount it "sells" versus the amount it "buys"—and June's increase was driven by a less than 1 percent uptick in imports along with a comparatively small reduction in exports.

Source: U.S. Census Bureau and the U.S. Bureau of Economic AnalysisSource: U.S. Census Bureau and the U.S. Bureau of Economic AnalysisTrump worries a lot about the trade deficit. He's argued that America's trade deficit is such a threat to domestic manufacturing that it justifies an expensive trade war. In announcing tariffs targeting Chinese goods in March, Trump specifically pointed to America's trade deficit—"it's out of control," he said at the time—as one of the justifications for the bellicose trade actions. Going back to his time as a presidential candidate, Trump has singled out the trade deficit as a serious problem, pointing to it as evidence that China is "killing us" on trade. As president, Trump has made reducing the trade deficit a main policy goal, asking not only Chinese officials but also those from the E.U. and Canada (a country with which America has a trade surplus) to reduce their deficits by buying more American goods.

Politically, Trump has used the trade deficit as an easy way to signal his support for blue collar workers and to justify protectionism. Economically, though, there's really not much reason to worry.

In fact, a rising trade deficit can be a good thing.

"Despite the false narrative of rising trade deficits leading to U.S. job losses, the exact opposite has been true for nearly the last half-century," says Mark Perry, an economist at the American Enterprise Institute and editor of the think tank's Carpe Diem blog. "Increases in the U.S. trade deficit are associated with rising, not falling, employment levels in the U.S."

Source: Mark Perry, American Enterprise Institute; Bureau of Labor Statistics; Bureau of Economic AnalysisSource: Mark Perry, American Enterprise Institute; Bureau of Labor Statistics; Bureau of Economic Analysis

It's also worth keeping in mind that the trade deficit isn't something that the leaders of two countries can really negotiate. Sure, governments can impose policies that favor or disfavor trade, but the existence of a trade surplus or deficit is the result of millions of individual decisions made by businesses and consumers in the United States and China.

"People typically forget that the imports that make up the U.S. trade deficit are, like all American imports, goods and services that Americans voluntarily purchase—meaning, goods and services each of which is judged by its American buyer to be worth more than the money paid for it," writes Don Boudreaux, an economist at the Mercatus Center, a free market think tank based at Virginia's George Mason University.

None of those exchanges are forced. American consumers and businesses voluntarily trade their dollars for imported goods. Cutting off that trade, Trump has argued, would "save us a hell of a lot of money," but that really misses the point. You'd save a hell of a lot of money if you didn't buy groceries every month, but you probably wouldn't be better off.

As long as the national economy remains strong, America will likely continue to run a trade deficit and an investment surplus—the result of personal consumption being high and the United States remaining an attractive place for investments. Indeed, the trade deficit essentially disappears if you also consider foreign investment in America as a form of trade, which it really is.

Trump's continued obsession with the trade deficit remains a bit of a mystery. It could be, as Reason editor-in-chief Katherine Mangu-Ward speculated on yesterday's edition of the Reason Podcast, that Trump fails to understand the distinction between the budget deficit and the trade deficit. This actually makes a lot of sense, particularly in light of the president's bizarre tweet over the weekend suggesting that tariff revenue could be used to pay down the national debt. After all, tariffs generate tax revenue and tax revenue is what you need to reduce the deficit—the budget deficit.

But economists mostly agree that tariffs won't do much of anything to reduce the trade deficit—though tariffs could have a secondhand effect on the trade deficit if they become severe enough to slow the economy as a whole and reduce consumer spending, which is the thing that really drives the trade deficit.

"A country is far more likely to run a trade deficit when its economy is booming and personal consumption is high," writes Daniel Drezner, a professor of international politics at Tufts University, in The Washington Post. "If Trump really wanted to shrink the trade deficit, he would push to revoke his own tax bill. But he really does not want to do this."

Unfortunately, a widening trade deficit combined with Trump's apparently faulty understanding of what's driving the trade deficit could be a formula for an escalating trade war—a war that could do a lot of damage without accomplishing what the president wrongly thinks it will.

Photo Credit: Imagine China/Newscom

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  • Leo Kovalensky II||

    Eric, you obviously don't play 3D chess, brah.

    Please nobody show this data to Trump. He'd likely see that recessions are pretty good ways to reduce the trade deficit. Bigly.

  • loveconstitution1789||

    Its not 3D chess dum-dum. Its 'n'th D chess.

    Is that thats many dimensions because you people cant even checkers.

  • Leo Kovalensky II||

    Cue the Republican protectionists saying that we just need to give the plan more time in... 3... 2... 1...

  • Shirley Knott||

    Do you suppose this time we might see a cite to an actual occurrence of 'winning' a trade 'war'?

    No, I suppose not.

  • Leo Kovalensky II||

    Shirley, you can't be serious... Trade wars are so easy to win, you don't need to cite it. Trump told us so.

  • loveconstitution1789||

    Cue the lefty protectionists in 3...2.....1...

  • JFree||

    Indeed, the trade deficit essentially disappears if you also consider foreign investment in America as a form of trade, which it really is.

    Ok. So why isn't that 'form of trade' (ie the purchase of reserve dollars) surplus considered protectionism of the financial sector then?

    A country is far more likely to run a trade deficit when its economy is booming and personal consumption is high

    Well that's just nonsense. There's only three countries that run perpetual trade deficits - US, UK, and India. The US and UK because they are financialized economies that heavily protect thier financial sector in order to serve a reserve currency role in the world. India because the stats get all fucked up with deciding how to deal with gold imports - is it a commodity or is it a currency?

    Everyone else - their trade deficit self-adjusts via their currency exchange rate

  • Kenneth Kelly||

    Since 1960, Australia has run a trade surpluses with the rest of the world in fewer years than the UK (10 vs ~15). France has run substantial deficits every year since the mid-oughts.

  • vek||

    Does any of that change the fact that that statement is a load of horse shit?

    Running a trade deficit is NOT a sign of a good economy. It is a sign that your economy cannot produce as much stuff to export as you want to import. That is all. Many countries have had great economies and NEVER had a deficit. Like Germany I would assume, since I don't think they ever went negative even during downturns.

    We're simply importing more stuff than we export. That is all. It's not a good thing, but you can argue it isn't the worst thing ever either. But it is definitely not an unambiguously good thing. If we could produce say 100 billion a year more of that stuff here, and employ saaay a couple million more people making that stuff, that would be a net positive for our economy. Obviously.

    As long as your economy is growing overall more than your current trade deficit, the net worth of the country is still rising. If economic growth ever slowed to where your economy grew less than the trade deficit, your national economy would be in a depression fueled at least partially by that deficit. We're not running in reverse net worth wise on an annual basis, but that ~$500 billion a year is $500 billion Americans don't get to keep, and that foreigners now get to buy US based assets with. Not a big deal in any one year, but over time do we really want the Chinese owning $20 trillion in assets in our country? I dunno...

  • christwasnotarepublican2||

    We are still the world's reserve currency. That one neat trick negates the negatives of a trade deficit in goods. And we also run a trade suplus in services, including financial services. Just because they aren't real goods does not make them worthy of oversight.

  • Mcgoo95||

    Every President needs a signature catastrophe. Might be a bit too early to call, but losing a pointless Trade War might be Trump's. Let's hope he's limited to one.

  • Iheartskeet||

    Indeed.

    One thing I can see with my crystal ball is that even if the economy stays strong, people will conflate "because of" with "in spite of", and claim those strong employment numbers etc are all or in part due to this trade war or whatever.

  • Mcgoo95||

    I suppose it depends on the definition of 'winning'. If the purpose of all these tarrifs is to create lower tarrifs for US products and get closer to true free trade (no tarrifs) and that's what 'winning' is, there is a good chance the US will lose thanks to Trump (acting unilaterally with powers he technically doesn't even have, or shouldn't). I would argue that the number of jobs is a terrible way to evaluate the effectivness of the tarrifs he's imposing. Slaves had jobs too.

  • ||

    Might be a bit too early to call, but losing a pointless Trade War might be Trump's. Let's hope he's limited to one.

    Again, I'm not gonna lie. I still think losing a pointless trade war that you really only lose by inventing a better scenario and then saying "That's what we should've done!" is a helluva lot better than 'winning' an actual war in Syria, Iran, Iraq, Crimea, Afghanistan, against Terror, against Drugs, against Poverty, against HIV, against Cancer, against Healthcarelessness, etc.

  • Mcgoo95||

    Agreed,,,except the part about winning a war against HIV and Cancer. Those would be better.

  • ||

    Agreed,,,except the part about winning a war against HIV and Cancer. Those would be better.

    We spent $32B combating HIV in FY2017, Trump/Congress agreed to spend another $32B this year, "a marked decrease". This is a disease phenomenally less communicable than zika, ebola, polio, hookworm, or smallpox.

    The war against cancer would 'be better' and the war against poverty wouldn't? Racist! I'm telling Eric Garner on you!

  • Mcgoo95||

    19 million people in Africa have HIV and you are calling me the racist?

  • ||

    I'm not saying you're a racist, I'm just noting that I said 'HIV' and you assumed 'Africa'.

  • Nardz||

    So, by war against HIV you mean genocide of Africans.

    Real classy, Mcgoo. Good progressive.

  • Mcgoo95||

    Hahahaha....nice, but I prefer 'Progtard' or 'lefty'. The only point I was trying to make is that none of the things you listed except HIV and cancer were "winnable." (which I think was your point?) A cure for Cancer or HIV would be a pretty clear win, albeit unlikely in the near future. Anybody see what Elon Musk just did? That's also called 'winning'.

  • ||

    except HIV and cancer were "winnable."

    What, exactly, makes HIV or cancer winnable but not others? There's plenty of evidence that drugs , cancer, and HIV are rather mechanistically bound together in their 'unwinnability'.

    I saw what Musk did. (Assuming we're talking about the same thing) Cloistering yourself and your company off after a few years of being an edgy/kooky upstart in the public eye is less 'winning' and more like 'becoming a recluse' and 'quietly admitting failure'.

  • ||

    Cloistering yourself and your company off after a few years of being an edgy/kooky upstart in the public eye is less 'winning' and more like 'becoming a recluse' and 'quietly admitting failure'.

    Yeah - this was my take, too.

  • Mcgoo95||

    "I saw what Musk did. (Assuming we're talking about the same thing) Cloistering yourself and your company off after a few years of being an edgy/kooky upstart in the public eye is less 'winning' and more like 'becoming a recluse' and 'quietly admitting failure'."

    Failure? Then you clearly aren't paying attention to the stock market. He might've just initiated the biggest short squeeze in stock market history if he actually did secure the funding. If he's bluffing he'll probably be going to jail.

    "What, exactly, makes HIV or cancer winnable but not others? There's plenty of evidence that drugs , cancer, and HIV are rather mechanistically bound together in their 'unwinnability'."

    Ummm the possibility they can potentially be eradicted without killing a shitload of people? Your second statement is complete gibberish. I guess I didn't, and still don't understand your initial premise then. My bad.

  • Nardz||

    I've grown fond of proglodyte, but I like to keep it technical.
    And my point was just to give you shit for (I assume inadvertently) suggesting mass murder.

    As for Musk, I've been suspecting that he's going a bit nuts lately. But, perhaps, this was just a very shrewd move...

    "If funding is secured, then it's a factual statement," says John C. Coffee, director of the Center on Corporate Governance at Columbia Law School. "But if he can't prove that, he's in some danger of a big lawsuit because short sellers will be devastated by this."

    On Aug. 7, Musk tweeted: "Am considering taking Tesla private at $420. Funding secured." Those nine words sent the stock soaring from $342 to around $370, an 8% jump. Then the Nasdaq exchange temporarily halted trading in the shares, pending clarification of material news by the company.

    About three hours after his momentous tweet, Musk posted a message to employees explaining his rationale for going private. He cited "wild swings" in the stock price and frequent attacks by short sellers as "a major distraction for everyone working at Tesla." He cited Space X, the rocket-launching company where Musk is also CEO, as an example of a privately owned company better able to focus on a complex long-term mission. "A final decision has not yet been made," he said.

  • Mcgoo95||

    "As for Musk, I've been suspecting that he's going a bit nuts lately. But, perhaps, this was just a very shrewd move..."

    His actions have been very erratic and a cause for concern (if you are an investor). If he really has secured financing and found a bank(s) to underwrite the LBO, it is a true master stroke. Seems likely the Saudis are gonna underwrite this. Proglodyte...I like it!

  • Kenneth Kelly||

    That's east and southern Africa. There are another 6 million in north & west Africa.

  • Echospinner||

    HIV could very well be eradicated, or nearly so, in the near future.

    One example of a promising vaccine currently in clinical trial in South Africa

    https://tinyurl.com/ybxwgcs8

  • Mcgoo95||

    And that is good news and could lead to a clear 'win', imho.

  • Echospinner||

    Yup. Even if this is not the one the fact that they came up with a preventative vaccine that does something at all is a major breakthrough. This is not the time to back off. It is an international effort and this virus can be eradicated.

  • Cynical Asshole||

    Trump's continued obsession with the trade deficit remains a bit of a mystery. It could be, as Reason editor-in-chief Katherine Mangu-Ward speculated on yesterday's edition of the Reason Podcast, that Trump fails to understand the distinction between the budget deficit and the trade deficit.

    I think it's more likely that he's just stuck in the late '80s. I seem to remember a lot of hand wringing back then about the trade deficit with Japan and how "the Japs are gonna take over" and all that shit. Although IIRC most of that hand wringing was being done by the Dems because they just wanted a club to beat Reagan and Bush Sr over their heads with, and to appease their blue collar union base. The same base that Trump is playing to now. Go figure.

    This actually makes a lot of sense, particularly in light of the president's bizarre tweet over the weekend suggesting that tariff revenue could be used to pay down the national debt.

    Have people still not realized that it's pointless to bother trying to figure out what any of his tweets mean?

  • BYODB||

    So, I take it you're slowly coming around to my contention that Trump is merely a New York Democrat with a time machine? It becomes less absurd every day.

  • Cynical Asshole||

    I came around to that realization a while ago, actually. I probably just didn't articulate it before now.

  • BYODB||

    More domestic manufacturing, more blue collar blue state union jobs am I right boys?

  • christwasnotarepublican2||

    Robots do not contribute to an increase in aggregate demand, nor do they require health insurance. They can even be written off on corporate taxes over several years. Unless a handgun worker can provide the same benefit, manufacturing jobs will continue to decline.

  • sarcasmic||

    Ah, come on! Everyone knows that a deficit is a bad thing! Budget deficit, attention deficit, trade deficit.... it must be bad because deficits are bad! Don't confuse things with economic mumbo-jumbo! Lalalalala! I can't hear you! Lalalalala!

  • Nardz||

    Just jackin it

  • Ken Shultz||

    "Politically, Trump has used the trade deficit as an easy way to signal his support for blue collar workers and to justify protectionism."

    There really is good reason to blame the social justice warriors for this mess.

    Tricking white, blue collar workers in rust belt, swing states into believing that elitist Democrats on the coasts hold them in complete contempt was easy peasy--especially since the social justice warriors that control the Democratic party really do hate white, blue collar, Christian, heterosexuals for being white, ignorant, Christian, and heterosexual.

    Once that mission was so easily accomplished, all Trump had to do was pretend he cared about the financial well being of the rust belt by demonizing such easy targets as trade with China. Now that he's actually followed through on those threats, it's hard to imagine him losing the swing vote in the swing states that made him president--no matter what happens nationally in the midterms.

    In the meantime, the social justice warriors still can't shut up about how much they hate white people.

    "The Utility of White-Bashing"

    http://www.theatlantic.com/pol.....ng/566846/

    Politically, why should Trump stop ratcheting up pressure on trade with China?

  • BYODB||

    Alternate Headline:

    The Utility of Jew-Bashing

    God I love browser word-replacement filters. It makes reads like that almost entertaining if it wasn't for the hateful undercurrents of racial purging.

  • Tony||

    Don't need to read beyond the title to know you're outraged?

  • BYODB||

    Oh, I read the whole thing. I just mean the headline itself. The article was a fair description of the deep and flagrant dishonesty of the left.

  • Tony||

    You gonna start bitching about black comics going after whitey too? How much free speech do you intend to gripe about?

  • ||

    You gonna start bitching about black comics going after whitey too?

    You must have missed the main thrust of the article having been about affluent folks of Asian descent using 'white bashing' as a way to ingratiate themselves to upper class whites by emphasizing their shared hatred of lower class whites.

  • Tony||

    What I'm missing is why any of this is a problem for libertarians. And why so many of them don't give a crap about racism until white people are the "victim."

  • ||

    And why so many of them don't give a crap about racism until white people are the "victim."

    That's true, and something I've commented on before myself (most recently in one of the articles on Jeong), but I'm not so sure it's true of Ken and BYODB.

    This has been pointed out to you before, but just because someone comments here, that doesn't mean that they agree with everything that gets said here.

  • BYODB||

    I genuinely believe in a colorblind society, but one part of that which is constantly overlooked is allowing minorities the same level of autonomy and consequence for their actions. Curiously, most of the progressive left doesn't feel that minorities are even capable of that level of autonomy, and thus feel that these minorities need their help to reach the appearance, but never actuality, of equality.

    Thus, they must constantly flagellate themselves publically for their 'crime' of being white while privately being quite confident of their own superiority.

    Obviously this is a very rough caricature, no doubt it doesn't fit a large number of people. However, the people it does fit have an outsized say in modern society (Academia, Politics, Media, Education).

    Malcolm X, just by the way, recognized these people for what they were. Just new, kindlier slave masters by a different name.

  • Tony||

    Racial minorities would like a colorblind society as well, but they're not the ones standing in the way of it.

    Why do Trumptard redneck assholes never have to take responsibility for anything they do or say?

  • BYODB||


    Racial minorities would like a colorblind society as well, but they're not the ones standing in the way of it.

    Uhh...pray tell who is?

  • ||

    Racial minorities would like a colorblind society as well

    I think you missed a memo.

    Why do Trumptard redneck assholes never have to take responsibility for anything they do or say?

    When did you stop beating your husband?

  • Azathoth!!||

    What I'm missing is why any of this is a problem for libertarians. And why so many of them don't give a crap about racism until white people are the "victim."

    The ideals of libertarianism are...not 'anti-racist' so much as un-racist. They seek to minimalize the importance of group identity that is not expressly chosen voluntarily.

    So why do thay freak when whites become the victim?

    Because whites are the source of anti-and un racism. No other race or ethnicity anywhere on the planet cares about stopping THEIR racist attitudes at all. Without whites endlessly re-inforcing the idea, the world devolves back into the morass it was.

    Worse, if whites get to the point where they are forced into the 'race' position that everyone else holds they don't react well.

  • BYODB||

    I genuinely have to assume you yourself did not read the article since nobody at all, except apparently yourself, is talking about comedians or free speech.

    Which is about par for the course for self-styled 'intellectual' leftists, and it's incredibly amusing that you walked into this one as an actual textbook example of the attitudes discussed in the article.

    I'm starting to go back to wondering if you are indeed a satirical account after all.

  • Tony||

    So you're just having playtime with find-and-replace and definitely not channeling false-equivalence racial grievance that, as Ken as so ably informed us, is a primary motivation for an important part of the electorate, the ones who are, objectively, the most racist people in the country? Whatever floats your boat I guess.

  • ||

    you're just having playtime with find-and-replace and definitely not channeling false-equivalence racial grievance

    Tony - seriously - read the article. You're 100% missing what Ken is saying, and instead acting it out.

  • Tony||

    I read the article, but I've long made my peace with minorities bashing whites in humor and in-group social situations, because it's not actually a problem that hurts anyone, unless you count certain people's very delicate feelings.

  • BYODB||


    I read the article, but I've long made my peace with minorities bashing whites in humor and in-group social situations, because it's not actually a problem that hurts anyone, unless you count certain people's very delicate feelings.

    *facepalm*

    Ok, now do black people.

  • Nardz||

    This was hilarious.

    Tony, you're the best progressive

  • ||

    I read the article

    Then you must have caught the part about white-bashing being a form of social signalling meant to endear oneself to the most wealthy and powerful segments of society so that you, too, can be part of the elite club who talk over champagne and caviar about how much "those types of white people" (i.e. poor ones) suck and deserve what's coming to them.

    No one getting hurt, here. No one who counts, anyway.

  • BYODB||


    No one getting hurt, here. No one who counts, anyway.


    That sums it up pretty well, I think.

  • Tony||

    If poor whites want to be mollycoddled by politicians, they should just say so. Because they've been saying they want government to leave them alone all this time.

    There's nothing wrong with looking out for the interests of the underprivileged. Welcome to being a liberal! It just seems a bit selective here.

  • BYODB||


    If poor whites want to be mollycoddled by politicians, they should just say so. Because they've been saying they want government to leave them alone all this time.

    It couldn't be more bizarre that you're absolutely unaware of your glaring double standard. You really do believe that whites are the superior race, and that it's responsible for the happiness and outcomes for all other races. It's the same implied superiority that feminists ascribe to men.

    I mean you say the opposite, loudly and publically for everyone to hear, but then what you do and the language you use shows it to be nothing but a public façade. Exactly like the article, that you still haven't read, describes.

    You are the death of the dream of a color blind society, where individuals are judged by the content of their character instead of by group characteristics. You might as well have put the bullet into MLK yourself.

  • ||

    If poor whites want to be mollycoddled by politicians, they should just say so.

    So the poor white trash guy saying to the guy in the limo "please stop spitting on me as you drive by" is "wanting to be mollycoddled?"

    Because they've been saying they want government to leave them alone all this time.

    That's weird, because if we're going to be collectivizing poor white people (in a way that might be described as both racist and classist), it seems to me like "they" have been asking for government favors for quite some time, and that's exactly why "they" supported Trump rather than the party of "poor white trash people are the worst."

    Welcome to being a liberal!

    What would you know about being a liberal? How is supporting race-based class-elitism "looking out for the interests of the underprivileged?"

  • Tony||

    It's really just the ignorant part. And your describing them as easily duped, excitable morons kind of justifies that contempt. After all, they saddled us with this nonsense. They're not default Americans. And their constant whining is no more legitimate than anyone else's. Less so, because they're so poorly informed.

  • Ken Shultz||

    You're an elitist shithead, Tony, with nothing to be elitist about . . . and that would be bad enough even if you hadn't spent countless hours, here, railing against Wal*Mart and trade with China.

    Your head is a bottomless pit of ignorance.

    P.S. Fuck you.

  • Tony||

    So it's elitist to talk about morons who I think are ruining the country? What will any of us do with ourselves?

  • MWG||

    Many of those 'morons' you think are ruining the country voted for Obama in the last two elections and big labor democrats in general since the 90s.

  • Tony||

    They're not going to make that same mistake twice.

    But how thoughtful of them to gamble the future of the country on the theory that throwing a grenade into a room might have the effect of cleaning it up. Hey, there's a chance!

  • MWG||

    No, they actually will.

    By starting these shitty trade wars, Trump is following through on things the left had been promising for over 30 years now. It'll take longer than 2-3 years before the results of such economic idiocy are really understood.

    The left has driven economic ignorance combined with class warfare (remember Hillary's 'Time Out On Trade (TM)"?), but now that Trump is in the driver seat it's hilarious to see you're having second thoughts.

  • Tony||

    Democrats have been getting shit from the left for their liberal trade policies my whole life. I came out in favor of TPP during the election and kept that position even after Hillary caved to the pressure. I don't like protectionism much whether it comes from the left or right. I didn't give trade much thought until this cycle, however.

  • MWG||

    "Democrats have been getting shit from the left for their liberal trade policies my whole life."

    Which is exactly the point I was making when I said 'Trump was following through on things the left had been promising for over 30 years now.'

    "I didn't give trade much thought until this cycle, however."

    So now you're a free trader. Awesome.

  • Tony||

    I do not align myself with the Bernie left on trade, no.

    So your point is Trump's terrible policies are all the left's fault. Does that not sound as pathetic and cunty to you as it does to me?

  • ||

    So your point is Trump's terrible policies are all the left's fault things the left has been selling to its base for decades, while doing very different things once in office.

    FTFY

  • Tony||

    The left has not been selling Trump's tantrum-tariff policy.

    They also have no power. Why are you so fixated on them?

  • ||

    The left has not been selling Trump's tantrum-tariff policy.

    Gee, look at this article just sitting right here.

    They also have no power. Why are you so fixated on them?

    You're equivocating. Left-wing economics is ascendant right now, and its name is "Trump."

    If you're saying that the Dems are now the party of Wall Street and "Neo-Liberalism," you are largely correct, which makes them no longer "The Left" in the traditional, economic sense (as you argued above when it served your purposes). This is the "Neo-Liberal" mainstream of the Democrat Party that Bernie was railing against, and you have been pissing all over Bernie for it ever since summer of 2016.

    We all know that HRC was never actually going to kill the TPP, but Bernie was, just like Trump did.

    Your "left-right" rubric that you use to answer all questions is worn out - it doesn't work anymore. Abandon it.

  • BYODB||


    We all know that HRC was never actually going to kill the TPP, but Bernie was, just like Trump did.

    And, notably, plenty of us were saying even at the time that Trump and Bernie were functionally identical on plenty of trade issues making both of them unelectable idiots.

    Boy, that worked out well for us. To the Republicans credit, they seemed incredibly surprised by this turn of events. Unfortunately, this is serving to push Republicans even further to the left which is all the more baffling.

    My question is what exactly do we think the tea party types are going to do this time? Arguably, if there were enough 'not racists' in their ranks they should be appalled by this shift. Yet, where are they?

    The same question goes for the left. They got their economic policy in Trump, yet seem horrified by it.

    Nothing makes sense. Up is down. Cats living with dogs. Feelings as logic.

    Maybe this is the inevitable end point of secular government unmoored from any moral system.

  • BYODB||


    The left has not been selling Trump's tantrum-tariff policy.

    Uhh...are you retarded or did you just now wake up from a coma and missed Sanders being popular with the left?

  • MWG||

    My point is that Trump is only doing now, what the left has been arguing for for decades. If that sounds 'cunty' to you, then you've got a pretty pathetic threshold for 'cuntiness'.

    Remember, I'm not a republican and I think Trump is economically illiterate. About as literate as the LEFT that came out to protest the WTO in Seattle in the 90s and those on the left who have been bitching about 'globalization' ever since, also largely on from the left.

  • BYODB||

    But big labor is anti-immigrant, golly gee maybe if we amnesty in enough latinos we can shift our base enough to...ah FUCK their kids are joining the union?

    Back to amnesty again, I guess.

    -The Democrat Machine

  • MWG||

    Tony should be singing Trump's praises for enacting the exact types of trade policies his party has traditionally idealized...

    OTOH... it's funny (depressing?) to see so many supposed libertarians and republicans now defending those policies.

  • Ken Shultz||

    "Tony should be singing Trump's praises for enacting the exact types of trade policies his party has traditionally idealized..."

    It doesn't have anything to do with policy. Reading him these days, you'd think he was all about free trade.

    He's a wind sock.

  • MWG||

    Tribalism is a disease.

  • BYODB||

    And here we have an example of one of the very people that alienated the base of the Democrat party so badly that they fled straight into the Republican party, thus ensuring Democrats have reduced potential to succeed in the future and ensuring more 'conservative' Democrats switch parties.

    You should try harder to have a modicum of self-reflection Tony, unless your goal is to be a parody.

    There aren't enough social justice warriors and minorities in the United States to secure a winning voting bloc. I guess you'll just need to kill all those kulak's and sieze the reigns, huh?

  • Tony||

    Democrats or lean Democrats are 50% of the country compared to 42% for Republicans as of 2017, the largest gap since at least 2009, with a marked shift taking place in 2016 (gee I wonder why). Who's fleeing what, now?

  • Don't look at me.||

    Who lost last time?

  • Tony||

    I'm responding to Ken's lies. For the record, the party that he's so pathetically defending no matter how absurd it looks is not supported by a majority of voters or the population. So by "lost" do you mean who failed to cheat to win?

  • ||

    the party that he's so pathetically defending no matter how absurd it looks is not supported by a majority of voters or the population

    Neither is the party that you so pathetically defend no matter how absurd it looks.

  • BYODB||

    And, just for the record, I intensely dislike both parties. I selectively defend certain Republicans because they happen to reflect my own values, but by-and-large my views are not mainstream Republican and are actual honest-to-god anathema to most Democrats.

    Thus, it should not be surprising that my praise for Democrats is far between compared to praise for Republicans.

    Fuck, if the Democrat party could just find it in themselves to actually be liberals again I would be overjoyed. Their shift to full-bore progressivism will be either their rise to tyrannical power, or the death of their party. We shall see which.

  • Tony||

    You should entertain the possibility that this supposed shift to far-leftism is to some extent a boogeyman that Republicans are only too happy to exploit. Especially the extreme cases. They are, against my better judgment, flirting with ideas like "They're gonna call us socialists anyway, why not call ourselves that?" Not the best.

    But if you are turned off by what you perceive as the general shift of Democrats (who in actuality are mostly just normal people with common sense), you should take a look at the log in the eye of the Republican party. I linked elsewhere to a poll that showed a plurality of Republicans think Trump should be able to shut down media he doesn't like. And then there's the race-baiting stuff and the terrible anti-human policies.

    I would go so far as to say that most of what you fear from the left is a distraction tailored to you so you don't pay attention to the bona fide fascism developing on the right. It's simply the much bigger problem, and threat to freedom, not least because they're the ones actually in power.

  • BYODB||


    You should entertain the possibility that this supposed shift to far-leftism is to some extent a boogeyman that Republicans are only too happy to exploit

    I've literally watched it happen, or did you sleep through the 90's? Listen to Clinton's speeches on immigration from the 90's you revisionist chump.

  • Tony||

    Clinton in the 90s was busy being center-right to not-so-center right on a host of issues, immigration perhaps especially. Many a progressive will screech at you about this whenever you defend a Clinton.

    Or am I misunderstanding? You're complaining that they're becoming more liberal on immigration now, maybe even approaching Reagan policies? And is far-left how you classify anything to the left of building the wall?

  • BYODB||

    Oh my good god, are you seriously so stupid as to use the shift of the Democrat party to the left as some sort of evidence that they haven't had a shift to the left?

    Can someone be that dumb?

  • ||

    In fairness, I think what Tony is getting at is that the Democrats drifted to the right during the Clinton years, and what both sides are now agreeing to call "Socialism" is really just the Dems returning to the New Deal politics that dominated the party in the 30s-80s. It serves both sides since it makes Bernie sound more exciting than he really is to the left, and makes the Dems seem more threatening and scary than they really are to the right.

  • BYODB||


    what both sides are now agreeing to call "Socialism" is really just the Dems returning to the New Deal politics that dominated the party in the 30s-80s.

    Well, they're perhaps agreeing to call it socialist because in many respects it is socialist.

    Not technically, perhaps, (means of production being in private hands and all, even while the day-to-day running of those means of production can be dictated by the government...) but at least in it's aims to equalize society their goals are similar enough to make them allies.

    Progressivism and socialism might not be identical, but their end results are similar enough to make one wonder if one is just a more palatable stepping stone on the road to the other.

    Once place I do agree, though, is that this is made out to be scarier to the right than it should be considering that 'the right' is also skewing to the left and embracing socialist or progressive sentiments. They seem more accepting of socialist policies at least where it benefits them specifically, of course, as all socialists do.

    I don't think either of the two major sides have much, if anything, left of their guiding principles assuming they ever had any to begin with. Power for powers sake, with no accountability, is the name of the game. Just leave it to the President and Judiciary to sort it out.

  • ||

    I've heard more than one communist argue that FDR was the most evil president ever because his policies were more "pretend socialism" than anything, and were explicitly intended to safeguard a crony-capitalist system against impending communist revolution.

    I've noticed that most people who call themselves "socialists" these days are quick to let you know that what they mean by that is "I support having government-run social programs," and they don't really know that the term actually has a more specific definition than that.

  • Tony||

    Yes and those coastal progressives who've never actually met a Republican in the wild have those of us in flyover land tearing our hair out over such an unforced error. Why do they need to use the word? Why do they insist that good political strategy is patiently explaining to people that Medicare is actually a socialist program, derrr? Fucking Bernies. Of course they also think losing an election is sending a message about just how pissed they are that they don't get their way after elections, so not the brightest crayons in the shed.

  • BYODB||


    I've noticed that most people who call themselves "socialists" these days are quick to let you know that what they mean by that is "I support having government-run social programs," and they don't really know that the term actually has a more specific definition than that.

    So I guess these types don't want to just called themselves liberals because...they want to feel like edgelords?

    That does make a certain amount of sense.

    I've heard more than one communist argue that FDR was the most evil president ever because his policies were more "pretend socialism" than anything, and were explicitly intended to safeguard a crony-capitalist system against impending communist revolution.

    Wow, that type of person does sound like a true communist: totally unhinged. It's never 'real' communism though, so like libertarians they never need to face the real world potential of their own preferred system.

  • ||

    It's never 'real' communism though

    Oh, no doubt - whenever I heard that it was in the context of "why this never works in the real world."

    "True Communists," though, at least in the strictly Marxist sense, do see "Socialism" as the enemy, since in the communist view it's still an economically stratified society that has just enough of a veneer of communism to put off the Revolution.

    Of course, one of Marx's biggest mistakes was thinking that a violent revolution can ever result in a de-stratified society.

  • BYODB||


    Of course, one of Marx's biggest mistakes was thinking that a violent revolution can ever result in a de-stratified society.

    Fair point, I'd say, looking at history. Even just logically, since if it's a violent overthrow the previous classes must be suppressed by the new. Otherwise it wouldn't have been violent in the first place.

  • Gracchus||

    if the Democrat party could just find it in themselves to actually be liberals again I would be overjoyed.

    Not really sure what "actually liberal" means in this context. Are you referring to the Democratic Party of FDR and LBJ, which was closer to socialism than anything Bernie Sanders has proposed? Bill Clinton-style Democrats, who only emerged in the 1980s and 90s and are exemplified by Her Majesty? What exactly is the baseline that we're using?

  • Echospinner||

    "Who lost last time?"

    Libertarians but we are used to that.

  • BYODB||

    This just in: Democrats that voted for Trump might not readily identify themselves as Republicans since, to them, they're Trumpists.

    Or do you not understand what populism is?

  • Tony||

    But that's an easy one considering there were two candidates and we counted how many votes each got.

  • Don't look at me.||

    Yes, and Trump got more electoral votes. Not bad fo a guy who never ran for office up against many seasoned politicians. Pretty amazing.

  • BYODB||

    And, again, you fail to understand that the popular vote doesn't reflect anything whatsoever. How many people actually voted in the elections, again, even as a percentage of voting aged population?

    Jesus you're dense. At best, all you have is the idea that leftists and democrats voted more often than the republican side in that election in particular. That should surprise no one, since the Republican ticket was Trump and the Democrat ticket was Clinton.

    The only consideration for the election was who do you hate more, because virtually no one liked either of them. Unsurprisingly, the one with a record of actual political malfeasance lost.

  • Tony||

    Any conversation about the electoral college must be limited and arcane in scope. Any discussion about the actual popularity of the candidates must acknowledge which one got more actual votes.

    A three million difference is a travesty. It's not evidence of good strategery by Trump or of a genius system of checks on democracy. It's a failure in our system. Save for the 2004 election (post-9/11, and voter suppression was well underway), Republicans haven't gotten the popular vote since 1988. Think about if the parties were reversed. The will of the people being denied by corrupt elites used to be the one legitimate cause for revolution.

  • BYODB||

    *facepalm*

    So, you simply like to pretend that direct democracy isn't tyranny?

    Impressive since you, at the very same time, seem to believe that minorities should be protected.

    A curious logical disconnect, but then again I've never been under the illusion that you're one of the intelligent leftists. You should really get your money back from your liberal arts university, they did not educate you.

  • Tony||

    I believe there is simply no good reason the loser of the popular vote in a presidential election should get to be president. This isn't a check on direct democracy, this is straight up tyranny of the minority.

    You're conflating the concept of suspect minority classes with the subversion of democracy itself, and you're doing it disingenuously, unless perhaps you think you are actually making a point.

    The American system has more checks on direct democracy than any other democratic country. Something like 5 checks to their 1. We have the electoral college, we have the senate, etc.

    It would be a problem for you if your team were the one constantly losing elections despite being favored by the governed. That's the sad, base cynicism of it all. You don't give a crap about the will of the people at all. You give a crap about power for yourself and people like you. And you lecture me about liberty.

  • BYODB||


    I believe there is simply no good reason the loser of the popular vote in a presidential election should get to be president.

    Direct Democracy, something you advocated just a minute ago, is tyranny. Full stop. So you might want to consider laying off the direct election of President bullshit. True power is meant to be vested in Congress, and as dysfunctional as it might be it's better than a tyrant.

    The fact that this is a well-known criticism of democracy that's been around for, oh, say at least 2000 years should be a clue that you're really, really late to the party and more evidence that you should get a refund from your liberal arts university.


    You don't give a crap about the will of the people at all. You give a crap about power for yourself and people like you. And you lecture me about liberty.

    Yes, because I've demanded so much power from the government by advocating, often and loudly, that we cut it's nuts off and severely curtail it's reach and scope in everyone's lives. You see freedom isn't freedom unless it's dictated to you by some amorphous 'will of the masses'.

    Thus, we now see that slavery was totally the right thing to do because 'the people' willed it. God, you are dumb as a bag full of hammers.

  • Tony||

    Direct Democracy, something you advocated just a minute ago, is tyranny. Full stop.

    No it isn't. You overlearned something from 8th grade civics. Especially if the choice is between two alternatives, there better be a damn good reason why the loser should actually be the winner. That's tyranny of the minority in most cases.

    Direct democracy is how most collective decisions are made most of the time, be it picking a restaurant among your friends or Congress voting or any election anywhere that's not the presidential election. Why is it OK for all the other ones?

    The EC was yet another antimajoritarian compromise with slave states. It serves no function today. It certainly doesn't exist as the elite institution of wise people protecting us from our bad choices. That was disproven twice over in our lifetime with Bush and Trump.

    Direct democracy is the default, and reasons have to be given to deviate it. The filibuster rule has to be sold as a good thing. The EC has to be sold on its merits. What are those merits?

    As far as I can tell it's that it helps Republicans win more often than the people want them to, which is why you're defending it.

  • ||

    Why is it OK for all the other ones?

    Because scale matters, which is something progressives often fail to understand. Because a small village can make communal decision does not mean the US Federal Government = a small village.

    If we take your argument to its logical extreme, why wouldn't we subject everything to a worldwide, one-human, one-vote, end-all-be-all election to settle all questions for all times? How well do you think the liberal project of equal rights for all would fare?

    That was disproven twice over in our lifetime with Bush and Trump.

    What is "proven" when the EC overrides the popular vote is that you had two really uninspiring candidates and it essentially came up to a coin toss. It's not like the world would be saved now if Samuel Tilden or Al Gore had become president.

    Direct democracy is the default

    You keep saying this as if it's an axiomatic truth. Why? You still haven't answered my question about why the Nazis were wrong, since they were popularly elected and thus, in your thinking, must have been in the right.

    So is direct democracy how you determine what's right, or is there some other principle?

  • Tony||

    You're being incoherent. The people of the US get one president. You still haven't explained why the minority of voters should get their choice over the majority of voters--in any instance. "Uninspiring" isn't a word used in any defense or description of the electoral college. The most plausible argument is about the president being elected by state delegations rather than individuals, but that is one among many giveaways to small-population states that exist primarily to maintain the institution of slavery. So, freedom all around.

    The world would indeed be a lot different if Al Gore were elected. The longest war in American history would almost certainly never have happened, for one. But that's beside the point. The question is why should the minority get its way over the majority when the choice is between two people? Why are you struggling to see the problem here?

    And don't start up with the principle shit, especially while you're defending the indefensible on purely partisan grounds.

    If we follow your logic to extremes as you have mine, the Nazi party deserves power but only when it's in the minority. Sounds like a great system.

  • ||

    You still haven't explained why the minority of voters should get their choice over the majority of voters

    Because sometimes the majority is wrong, like with the Nazis (where you still can't explain to me why the Nazis were wrong).

    But in practice, in the United States, what you're talking about is not some case where some overwhelmingly popular candidate is undermined by sinister mustache-twirlers, like you're implying. It's Tilden vs. Hayes, Bush vs. Gore, Clinton vs. Trump. Three elections in which the American populace looked the two candidates up and down and gave an overwhelming "meh."

    If it's close enough that the EC is what calls it, you're pretty much in coin-toss land.

    The world would indeed be a lot different if Al Gore were elected. The longest war in American history would almost certainly never have happened, for one.

    You keep saying this even though it's been pointed out to you repeatedly that Gore campaigned on taking a harder line against Saddam and taking military action if needed. Or were you thinking that if Gore had won, that al-Qaeda would have abandoned its 9/11 plans? Or that the government under Gore would have been magical enough to stop it, or something?

  • ||

    And don't start up with the principle shit, especially while you're defending the indefensible on purely partisan grounds

    What is it that you believe me to be defending? I've been trying for several days straight now to get you to state some sort of principle that you hold, but you seem to have none. Am I wrong?

  • Tony||

    Well, I don't believe in fundamental truths about how humans should behave in modern society, because modern society is a recent thing, and nature being of little help, we have only the long history of philosophical and political thought to consult.

    My first principle, if I'm required to have one, is to do what maximizes human well-being with an emphasis on individual liberty.

    Why? Because it sounds like a good idea. I try my best to have no gods or dogmas, so I don't value concrete principle as much as you might. It's always subject to revision, because we don't know everything.

  • BYODB||

    Of course direct democracy is tyranny. Specifically, to those not in the majority. As someone who believes in a positive interpretation of rights when you bother to believe in them at all, this should be a logical consequence in your world view and acknowledged as such. Since you are a potato person, you will not do so of course.

    Especially if the choice is between two alternatives, there better be a damn good reason why the loser should actually be the winner.

    Amusing, since this is literally what you are doing right at this moment. Tell me, when you watch a relay race do you declare that the winner really lost because one of the runners on the losing team was faster than all the rest of them?

    Probably not, because the rules say otherwise. In fact if the team with the fastest runner lost then declared that they really won you might be curious to find out why they were playing to a different set of rules than those everyone else was following.

    You assume that the results would be the same if the rules were different for everyone instead of, say, Democrats playing to a metric that doesn't win the race. Who is to say that, if the rules were changed, Republicans would not change their game strategy to focus on the general election that they currently do not play towards?

    It's an excuse, Tony. That's all you have.

  • Tony||

    I'm not saying we shouldn't follow the rules we have, I'm saying they are terrible rules. Let Trump campaign in California and see if he can make up a 3 million vote deficit. That's what I want! I want the president to be the guy the people actually chose instead of the guy they rejected. It would lend an air of legitimacy to the office.

  • Tony||

    And when the rules consistently favor one party over another, even you have to admit they are shitty rules. And if it were Democrats constantly winning the office despite losing the popular vote, there would be riots in the streets. Mitch McConnell would sit on every judgeship. Government would shut down until the president resigned and nominated the Republican to fill his place.

    Cheaters are especially not fond of it when the other side cheats them.

  • ||

    And when the rules consistently favor one party over another, even you have to admit they are shitty rules.

    Yeah, libertarians wouldn't know anything about that.

  • BYODB||

    Yeah, libertarians wouldn't know a damn thing about how insulating the two-party system from competition has bad outcomes. Nothing at all.

    Of course, Tony being Tony will turn around and say the electoral college is great assuming a Democrat wins. And he still hasn't noticed that I said that congress is and always was meant to be the most powerful branch and that they are currently elected by direct election.

    In congress, this is mitigated by how many of them there are. For a President...well if they can get 51% fuck the 49% right?

    Your desire for a righteous king never ceases to amaze, Tony.

  • Tony||

    I'd favor a system that permits inclusion of lesser parties, but I don't think it matters that much in terms of outcomes. Every decent country with a parliament is more progressive than we are, after all.

  • loveconstitution1789||

    When Tony says other countries are more 'progressive' than the USA he means socialist.

    When he tries to say the EC was a way to further slavery, he wrong on two accounts. One is the Founders included multiple checks to the tyranny of the majority and the Democrats were the slaves state controlllers.

    One check to the tyranny of the majority is the constitution.

  • BYODB||


    And when the rules consistently favor one party over another, even you have to admit they are shitty rules.

    Well, when the solution to so-called 'shitty rules' are a known worse quantity that doesn't even consider nuance than, yeah, I'm going to say 'too bad, what we have now is better than your suggestion'.

    The electoral college, for it's flaws, at least forces a potential Presidential candidate to campaign in most states. Direct election means you'd just have Democrats never leaving the coasts, and Republicans never leaving the heartland. That's not 'better', it's even more balkanized than it is now.

    Maybe Democrats need to stop pushing further and further left and they would win more electoral college votes. Let me guess, though, all those 'cousin fuckers' need to be told their place.

  • Tony||

    Well that doesn't make any sense. The EC makes candidates spend all their time in a handful of swing states, which aren't necessarily where a lot of people are. There's no justification for the residents of swing states getting such outsize influence on the policy of the country. It's a relic. Just because it helps Republicans doesn't mean you have to defend it.

  • jay||

    sometimes it is preferable for the people to change instead of being pandered too. That is a progressive mantra. Why can it also not apply to the progressives as well. Why should california get what it wants just because of who they are.

    Wasn't it clinton who didn't bother campaigning in places like michegan

  • Gracchus||

    Direct Democracy, something you advocated just a minute ago, is tyranny. Full stop. So you might want to consider laying off the direct election of President bullshit.

    Direct democracy can be tyranny. Doesn't mean that it always is. And in any case, directly electing the President =/= direct democracy. There'd be no president in a direct democracy. Incidentally, the presidency was seen by many (mostly Federalists) as a way to restrict direct democracy by taking some powers away from the popular-legislature.

  • jay||

    "will" ? If this was the standard of value for a person, he would probably be pretty irrational, and spend all his time spewing nonsense.

  • Leo Kovalensky II||

    Trump overplayed his hand, politically, Ken. If he had taken this trade thing piecemeal, he could have worked on renegotiating NAFTA and still thrown a bone to the people who elected him. That likely would have been a negotiation that he could have won, or at a minimum, not had to go all in on. He could have limited his damages. Not that I agree on tit-for-tat trade protectionism, but if you're going to do it, keep it manageable.

    Instead he goes all-in on taxing imports from all over the world. Once China retaliated he doubled-down and hit them back. It's not in his DNA to capitulate or to admit he might have been wrong. Instead he keeps digging the hole deeper, spooking the markets and hurting the little guys who would love to be able to sell into China.

    Had he left this alone we likely would be sitting here just ahead of the mid-terms with a strong economy and he wouldn't have put Republicans in the precarious situation of trying to support Trump and free trade simultaneously. In fact, the economy and markets would have most likely been better than the strong quarter we just saw without the tariffs.

    It was certainly a bad play economically. I think we're going to see that it was also bad politically, as rust belt workers are hearing from their employers almost daily how much damage the tariffs are causing.

  • Ken Shultz||

    It isn't about the midterms.

    It's about his reelection.

    And among Wisconsin, Michigan, Ohio, and western Pennsylvania, he won't lose a single one of them because he slapped tariffs on China.

    That's what they've been wanting some Democrat to do since Bill Clinton was in office.

    They're not mad a Trump for actually doing it.

    Not even if it hurts in the meantime--and so far, it isn't hurting them much. There haven't been so many new opportunities for unskilled labor since I don't know when. A lot of that is because of deregulation and tax reform, some of that is probably from immigration crackdowns. Regardless of whether that's what we want or whether we like it, that's the way it is. Tariffs are bad for consumers. The hopelessly unemployed in the rust belt weren't consumers until they got jobs because of Trump's reforms--and they will reward him for that come 2020.

    What are the Democrats going to run against him on in the rust belt, swing states? Say that he's shipping our jobs overseas? Say that he isn't being hard enough on China? Say that he gropes women's' privates? They don't have anything to get traction against him on--in the swing states that really matter.

    Trump will get clobbered in the midterms.

    He's going to be reelected in 2020.

  • Tony||

    That you express so many degrees of delusion is what makes me confident that his supporters aren't going to see his shellacking coming, in whatever form it takes.

    He only makes it to 2020 by Republicans hanging themselves by the rope he gives them.

  • loveconstitution1789||

    It will be a Democrat bloodbath in election 2018 and 2020. The elite Left knows it and the
    Lefty media knows it.

    It why the media ran a bunch of stories today about swing states being a referndum on Trump. They tried the same bullshit in all the special,electiosn that Lefties lost last year and this year.

  • Tony||

    It's comforting to me that you apparently don't read or watch any real news.

  • Leo Kovalensky II||

    Blue collar workers like shopping at Walmart. Their are quite a few examples in these districts where companies are saying they aren't expanding because of tariffs. One needs to just point out that Trump's tariffs are hurting workers in both cases.

    They can also point out the cronyism behind the tariffs. No workers want to hear that politicians are giving handouts to CEOs.

    There is a reason why China picked tariffs which hurt Trump states the most. This is a losing issue for everyone who isn't directly helped by these tariffs which as far as I can tell is only steel workers. Even the aluminum companies like Alcoa are claiming the tariffs are hurting their bottom line.

  • loveconstitution1789||

    Flyover America is fine with sacrifice for a greater gain in the future.

    Its what Lefties never understand about America.

  • Gracchus||

    Not sure why Reason is going full-helm on this notion that the trade deficit isn't a problem. Trade deficits (and surpluses, for that matter) aren't a big deal if they're small; usually reflects swings in currency valuation, minor budget deficits, or small shifts in the economy. Unless you're a developing country, in which you either want a large trade deficit (importing capital goods for industrialization) or a large trade surplus (export-oriented growth a la China and South Korea).

    But the idea that trade deficits are never an issue is ridiculous. Much of the U.S. trade deficit goes toward financing the purchase of U.S. securities, especially Treasury notes (i.e. the national debt). If those securities are truly "worthless pieces of paper", then the whole issue of the U.S. national debt being too large is partially invalidated. After all, if foreigners (and natives) are willing to loan the government money for free to finance consumption, there's a free lunch right there that we should be taking.

    In reality, the large U.S. trade deficit is a product of extraordinary-low savings on the part of U.S. households and an oversized financial sector designed to deal with this low savings rate. It's probably not as big of an emergency as Trump makes it out to be, but at the very least it's somewhat concerning.

  • ||

    Wouldn't that be more of a "debt bubble" problem than a "trade deficit" problem?

    OTOH, macroeconomics is far from my area of expertise, and while people I tend to like and trust are telling me trade deficits don't matter and that tariffs only hurt those who impose them, I find myself wondering why other countries are so pissed off about the tariffs if we are only hurting ourselves with them.

  • Leo Kovalensky II||

    I find myself wondering why other countries are so pissed off about the tariffs if we are only hurting ourselves with them.

    Let's face it, most politicians the world over believe in the notion that planning is essential to an economy. That's why they're politicians. They also, like Trump, appear to all subscribe to this zero-sum gamesmanship of international trade.

    "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."
    ― Friedrich A. Hayek

  • ||

    But hasn't the Chinese economy in fact suffered? Haven't Chinese companies' valuations actually gone into decline? Am I misinterpreting?

    And isn't one of the reasons that imposing tariffs is bad that the other party might impose retaliatory tariffs? Isn't that why Smoot-Hawley was so bad?

    Honestly asking - again, my knowledge of macroeconomics is pretty superficial.

  • Leo Kovalensky II||

    China has suffered for two reasons (theoretically). Their own retaliatory tariffs have disrupted their market. There's also the potential impact of American consumption being reduced, thus hurting Chinese exports (the supposed intent of tariffs in the first place).

    Again, I don't have data to support these claims, but that's what the economic theory would suggest.

    Nobody wins in a trade war. Both economies will suffer, at least in the long-run. That's why free trade is beneficial for everyone. Your friends are partially right. The country that imposes tariffs hurts themselves. But the disruption in the global economy of two major countries engaging in a trade war is really going to have ripple effects everywhere, not just internally.

  • Nardz||

    "Over the weekend, Trump boasted that he has the upper hand in the trade war, while Beijing responded through state media by saying it was ready to endure the economic fallout. Judging by the US stock market, which has risen by $1.3 trillion since Trump launched his trade war with China, which has crushed the Shanghai Composite, whose recent drop into a bear market has been duly noted by Trump, the US president is certainly ahead now, even if the market's inability, or unwillingness, to push US stocks lower has led many traders and analysts to scratch their heads."

  • vek||

    The fact is that tariffs do EXACTLY what they're intended to do: They shift jobs and production from one place to another. The question is is this overall something useful to try to do, and does it create a net benefit.

    I think Smith/Ricardo etc were 100% correct with their theories in their time. The looked at the known variables, created an equation, and it worked. The problem is that we have since added new variables.

    In their time all money was hard currency. There was no minimum wage. And there was no unemployment, because anybody who couldn't find something better paying went back to working the land.

    Today, we have none of those things. So if we lose 1 million jobs to shave 10% off the cost of a widget, and we then have to support 1 million people on welfare... Did we have a net benefit? Our labor force participation rate is hovering around the worst point in half a century, and that's mostly low education folks. We certainly have the workforce to do more work, but instead we're supporting deadbeats.

    If you add on a 15% tariff to widgets, and it puts 1 million people back to work, producing more net value, and makes less currency leave the country annually... Is that not a net benefit?

  • vek||

    This is why I don't think ALL instances of trade are in fact a net benefit. The problem lies in picking and choosing winners/losers, which things make sense versus not. This is why I would be okay with broad based tariffs as a replacement for saaay income tax, but picking and choosing is too cronyist for me to really like.

    It's like Newtonian physics versus modern physics. Newton's stuff worked to approximate things, but falls down in complex situations. I think free trade theory is simply insufficient to do the math in the modern world with welfare, fiat currencies etc.

  • ||

    Well, part of the issue is that some people like to pretend that all of international politics fits into a neat economics bubble and can be subsequently explained away. That doing exceedingly socialist things doesn't matter as long as it's profitable.

    I don't disagree that trade should be free or liberal, but the idea that international trade and world affairs isn't well described by zero-sum gamesmanship ignores the fact that every single fucking player in the game is playing that way. As ineffective and feckless as libertarianism is within our own borders you've got to be certifiably insane to think it would hold some kind of sway with regard to world markets and trade.

  • Leo Kovalensky II||

    As ineffective and feckless as libertarianism is within our own borders you've got to be certifiably insane to think it would hold some kind of sway with regard to world markets and trade.

    Especially with a socialist country like China.

  • Happy Chandler||

    There are a number of factors. At times, tariffs can be helpful. For instance, developing countries can use tariffs to protect infant industries. But, when too many places institute tariffs, everybody is poorer because the markets are less efficient. You can't choose the cheapest place to get your materials because the government makes it more expensive. So, you're inefficient, and the other guy loses a customer.

    That's why the WTO is set up. There are rules about when tariffs are okay, and you're supposed to follow those rules. Retaliatory tariffs are supposed to go through the WTO, if a country breaks the rules, they face retaliation until it stops. That way everybody ratchets their tariffs lower and lower, and has an incentive to not impose them.

    This has worked more or less for a few decades. Tariffs have continuously ratcheted lower, with occasional spats adjudicated by the WTO that have not spiraled into a trade war of the kind that led up to the Great Depression.

  • Old Mexican - Mostly Harmless||

    Re: Gracchus,

    --- Much of the U.S. trade deficit goes toward financing the purchase of U.S. securities, ---

    Perhaps but so what? If you think the Chinese are buying worthless paper, why is that a problem?

    You seem to miss the point: that tariffs were touted by the Ignorant-In-Chief as effective tools to reduce the trade deficit (or get better deals or pay down the debt or help bring back the jobs stolen by brown people... I losr track of the Trumpista excuse du jour) yet thw tariffs haven't done anything to reduce this 'deficit'.

    It may matter slightly that a trade deficit is big but only if you take it as evidence of a loose credit policy. To that, in actuality the Fed has not lowered rates. Inflation has been relatively low (until the tariffs that is). The worst one can say about it is that US consumers are exporting inflation and the Chinese are exporting flat screen TVs and tablets. So what?

  • Tony||

    Furriners. Trump prefers the See Spot Run level of political strategy.

  • loveconstitution1789||

    More like See Lefties Cry. Its the best Jerry, the best.

  • Gracchus||

    Perhaps but so what? If you think the Chinese are buying worthless paper, why is that a problem?

    I don't. But then again I'm not the one pulling my hair out over the $21 trillion national debt.

    I'm simply unsure why borrowing to finance current consumption is problematic for the government (and for individual firms and households) without being problematic for the economy as a whole.

    You seem to miss the point: that tariffs were touted by the Ignorant-In-Chief as effective tools to reduce the trade deficit (or get better deals or pay down the debt or help bring back the jobs stolen by brown people... I losr track of the Trumpista excuse du jour) yet thw tariffs haven't done anything to reduce this 'deficit'.

    I don't really care for whatever the "Ignorant-In-Chief" says. But economic history (and basic logic) tells us that tariffs will in the long run reduce overall trade deficits by either promoting exports, reducing imports, or some combination of the two. Overall trade volume will definitely decrease in the short run, although it may pick up later as the market adjusts to the new reality.

    So what?

    A basic tenet of fiscal conservatism is that spending beyond your means is a recipe for disaster. But we're doing that with the existing trade deficit. So either the current trade deficit is a problem (for who is debatable) or its an example of how there can be a free lunch in economics.

  • vek||

    "A basic tenet of fiscal conservatism is that spending beyond your means is a recipe for disaster. But we're doing that with the existing trade deficit. So either the current trade deficit is a problem (for who is debatable) or its an example of how there can be a free lunch in economics."

    This is the thing that many of the so called libertarians here seem to not be able to wrap their heads around.

    What the whole thing ultimately amounts to is that the statistically average US citizen is in fact over spending, and under producing. We're having to literally sell off our assets to pay for current consumption. We're a very wealthy nation, but anybody that runs in the red for too long is hurting their long term financial health.

    If we as a nation consumed less, and instead saved and invested more, we would be wealthier long term. I don't suggest we all need to become misers, but there is a proper balance to be struck. The average US citizen is not even close to being prepared for retirement, they don't have the savings to support themselves. Yet we spend, spend, spend!

  • vek||

    We haven't sunk ourselves yet, but to point out a problem, even if it's not quite fatal yet, and then be lambasted for saying "Hey guys, maybe this isn't a great idea for the long haul?" is ridiculous.

    Maybe being fiscally responsible and passing on buying that new jacket, or boat, or whatever isn't the funnest in the short term... But it is surely the better decision to be living comfortably in retirement versus being on the government dole depending exclusively on your SSI payment!

    Yet people constantly make the argument that maximum current consumption, paying no mind to future consequences, is the only way to look at things. I have frequently pointed out on here that that is an incredibly poor/middle class way of thinking of things. Successful people understand deferred gratification, and keep their spending under control, so that they will be safe and secure in the long term.

  • KH||

    "Maybe being fiscally responsible and passing on buying that new jacket, or boat, or whatever isn't the funnest in the short term... But it is surely the better decision to be living comfortably in retirement versus being on the government dole depending exclusively on your SSI payment!"

    No kidding.

    Maybe some of the Reason writers need to be a little more liberated in their marriages. I know a lot of men in my area and professional circle who are terrified of balanced trade because they lack the gumption to say 'no' to their wives' bi-annual kitchen renovations or their "need" for new $1,000 cell phones every nine months.

    I honestly can't think of any other reason that libertarians would use appliances as an example of the benefits of trade. I mean, the industry is owned by four shady companies that have been producing complete garbage for the last decade or two. Wasn't international trade supposed to result in more choices and better quality?

  • KH||

    "I'm simply unsure why borrowing to finance current consumption is problematic for the government (and for individual firms and households) without being problematic for the economy as a whole."

    Bingo.

    I've been a Reason subscriber for over three years, and I haven't read the answer to that question yet.

  • Jerryskids||

    "People typically forget that the imports that make up the U.S. trade deficit are, like all American imports, goods and services that Americans voluntarily purchase—meaning, goods and services each of which is judged by its American buyer to be worth more than the money paid for it,"

    Unfortunately, I don't think it's that so many people forget, it's that they've never stopped to think about it. Ask 10 random people who gets the better end of the deal when you go to the store and buy something, I will bet you at least 9 of the 10 will tell you the store gets the better end of the deal. The store got the money and money is the most valuable thing on the planet. Nobody stops to think that it's not money itself they want, it's the things money can buy that they desire. You might try asking them then whether they're stupid or crazy for voluntarily allowing the stores to screw them over when they could just keep their money instead of spending it, but you ain't gonna like the answer. Their contention is going to be that they're "forced" to buy stuff from the stores and that stores charge too much, iow, that they are screwed by the stores because they would prefer free stuff to stuff they have to pay for. And you're going to think it strange that you managed to run into ten Bernie Sanders supporters in a row, but you didn't. Republican, Democrat, Socialist, it don't matter, everybody wants a free lunch and seriously believes it's possible to get it.

  • Mickey Rat||

    If they are looking for a common product they will often be annoyed if all they can find is foreign made, even if they do buy foreign good. It may be an entirely emotional reaction but it does happen a lot.

  • vek||

    I go out of my way to buy American, European, Japanese, etc made stuff. I'm not commie, but I like to buy quality products for one. I also like to support nations that treat their workers decent, and that aren't likely to be our number one geopolitical enemy in the coming century. If I can't find something locally, I order lots of made in USA stuff online. If it's in a category where it's literally impossible to find it made in one of the countries I like to buy from, I will choose India, Vietnam, etc over Chinese any day of the week.

    Nobody can know the future, but I would not be in the least bit surprised if in 40 years people look back at the US/Europe building up China and go "Damn they sure were stupid, it's as dumb as all the American industrialists that were investing in building up industry in Nazi Germany in the 1930s! How didn't they see that the Chinese were going to be a huge problem??? They should have invested in India or somebody that was actually friendly and non aggressive."

    If I'm wrong then my actions aren't hurting anything, but if it goes that way at least I did my small bit to screw the Chi-Coms.

  • Old Mexican - Mostly Harmless||

    Trumpistas showcasing their economic illiteracy. Ah.

    I brought popcorn.

  • DarrenM||

    The trade deficit doesn't matter in and of itself. What matters is *why* we have a trade deficit. If we are binging on borrowed money to finance current consumption, which would have the effect of increasing the trade deficit, that is not good.

  • Nardz||

    ^this

  • Happy Chandler||

    The trade deficit basically means that we are trading treasury bills for material goods. I think that's a good deal for us!

    The biggest problem is that we took the proceeds by selling the T-bills to reduce the taxes on the corporations that have been getting a larger share of the economy in profits and on the highest income, who has seen their incomes grow the most. The people who have benefited from the trade are getting rewarded, and the people who have been hurt the most see their cost of goods go up. Need a washing machine? You're paying 16% more. Enjoy that tax cut of a couple dollars a paycheck!

  • Tony||

    The popularity data on Trump's tax cut is astonishing to me. He might actually make tax cuts poll poorly in this country for the first time in my life.

  • loveconstitution1789||

    'Might' being translated from lefty into American meaning 'not'.

  • Happy Chandler||

    Paul Ryan celebrated a woman who was surprised her paycheck went up $1.50 a week.

    At least Bush was smart enough to include a lump sum check in his tax scam.

  • Happy Chandler||

    Paul Ryan celebrated a woman who was surprised her paycheck went up $1.50 a week.

    At least Bush was smart enough to include a lump sum check in his tax scam.

  • loveconstitution1789||

    Lefties make fun of someone getting extra money in their paycheck and they wonder why they are losing so badly in elections around the USA.

  • David Nolan||

    Faux conservatives LOVE exploding the federal debt.
    Like proggies, they think debt is free money.

    Trump had already caused more debt in 8 years, than Obama's ENTIRE time in office!! ($10T vs 9.3T)

    MADGA!
    Make American Debt Great Again

  • buybuydandavis||

    "investment surplus"

    Look at how much less of America Americans own every day! Yay!
    Nothing better than being a vassal state of Emperor For Life Xi!

  • David Nolan||

    But ... but ... but ... he had the largest inauguration crowd ever.
    Obama gave him the longest recovery ever, for an incoming President, so he'll screw that up, too.

  • markuzick||

    In this sad world there are no leaders - only tyrants. A true leader does so through setting a good example to be emulated by those who hope for self improvement. Self righteous bullying is only a political pretext for various forms of conflicts or wars, the purpose of which is to bolster entrenched political powers on both sides of the brawl at the expense, in terms of the wealth and liberty of the nations in conflict. To maintain control of the dominant military power; and to make sure it remains dominant, the political elite of the US will gladly cripple their own nation's economy - they will, figuratively, break their own leg in order to break China's toe - anything to keep the Chinese poor as there is far more ruin in the highly developed US economy before it crashes than in the highly leveraged Chinese economy. If the Chinese elite were not also corrupt socialists, they would refuse to play this cynical game of one-upmanship; they could win the role of world leadership by giving Trump what he pretends to want (Except IP, which is nothing more than legal monopoly plunder for entrenched interests at the expense of people.) and leave the corrupt and agressive US floundering in China's wake.

  • vek||

    So, I have a question for people. If the USA could add 1 million jobs and saaay 100 billion dollars in domestic production to our economy, and it cost US citizens saaay 1% more for that product versus importing... Would that be a good thing, or a bad thing, for our economy?

    That is to say we spend 100 billion on widgets, instead of 99 billion on imported ones, which means 99 billion more dollars stays in the USA versus becoming the property of foreign nationals who would theoretically turn around and use it to buy US based assets, thus increasing their future US denominated income still further.

    See, cuz according to basic math there is a point at which one can theoretically have a net negative financial result from trade. This happens when the amount saved by importing is very small, but you of course lose all the jobs and ancillary spending, taxes paid, etc from those jobs.

    So does it make sense that saving 1% is a net negative for the US economy as a whole, even if widget buyers are spending 1% more to buy their widgets? If it does make things worse for the US economy overall, at what point does that cease to be the case by your estimation? If we save 10%? 20%? 40%?

    I'd like some purists opinions on this.

  • markuzick||

    Your "if" is based on a false assumption: for each job a protectionist measure creates, many more jobs and businesses are lost. If restricting trade between nations could create prosperity, then why couldn't protection from trade with other US states create prosperity for a state? Why not protectionist counties; cities; neighborhoods; or families? Without trade, you will end up scratching in the dirt; naked; homeless; and starving. There can be no such thing as too much trade as both sides of any trade only do so if they can profit and any laws that restrict or prevent honest profit can only strangle an economy.

  • vek||

    Your "if" is based purely on theory.

    The fact is that many nations did not trade extensively historically, and were very well off for what technology allowed at the time.

    The USA and all of Europe was protectionist, and in fact were the wealthiest nations on earth. Some nations must trade for basic goods, others that have the ability to be self reliant can do equally well with less, but not zero, trade. It's grey, not black and white.

    My point is that there is grey between "All trade is good" and "All trade is bad." The trick is that central management will not likely be able to pick out the good trades from the bad, because government is awful at everything. But to concede that there is a possibility that not ever single trade ever is actually beneficial FOR A NATION STATE overall is simply a mathematical fact.

    My example above in fact has real world examples. There are in fact many goods which are only 10-20% cheaper to produce abroad versus here, or even less. You cannot possibly replace all the capital sent abroad, and the jobs lost with mere 10% savings. So those particular items are in fact not good for the economy. The savings do not do enough good to offset the loses, even though any given individual is theoretically 10% better off. Math.

    This is why I personally would not mind a broad based, revenue only tariff that replaced part/all of the income tax. But I don't like pick and choose tariffs because of their cronyism.

  • markuzick||

    The standard of living in what you call the wealthiest countries of that time was far below what we would consider a 3rd world hell hole, but of course there are many other factors that add or subtract from the wealth of nations. Yes, there could be prosperity within a nation cut off from the world, but trade with the rest of the world can only increase that prosperity because it will only take place if parties from both sides receive an advantage. To restrict honest trade in any way can only come with a net reduction of liberty; peace; profit; business; and jobs. The facts speak for themselves: as trade has expanded, so has prosperity - even in the face of depredations by the state. As the US has become more socialist, at least trade has made it possible for American companies to survive attacks by the state on their ability to manufacture goods, otherwise the US would be the pestilent socialist backwater that its arrogant, self entitled, indoctrinated people richly deserve. Fear mongering that trade destroys industry and jobs is very much like the same nonsense about technology: the exact opposite is true.

  • vek||

    "To restrict honest trade in any way can only come with a net reduction of liberty; peace; profit; business; and jobs. "

    You're right about one of those, the liberty part. The others could be yes or no. I have always said that the one sound argument is that people have a right to trade, whether it is good for the nation or not.

    It is a mathematical FACT that many goods that are currently being imported in fact produce a net loss for the US economy. When somebody imports a widget that only shaves 10% off by getting it from China/Mexico/Wherever, that is in fact a net loss for the US economy. PERIOD. It's basic math. Couple that with the fact that the replacement jobs have been LOWER income than the ones we outsourced, and you have an air tight case for it being a net negative in MANY, but not all, instances.

    The argument is that in the chaos of all the horrible trades like that one, there are also good ones where we shave 75% off the price, which IS a net positive for the country, hence the overall situation is positive. That is a legit argument to make. I would say that would be true with real bilateral free trade, BUT I question whether it has been factually accurate in the world as it exists.

    Being blind to the real world problems with a theory does not make one smart. I more or less accept the concept of free trade as a great thing, but it has some pimples too, and denying them doesn't make them go away.

  • markuzick||

    You are looking at one dimensional, static details and are blind to the big picture: when people trade, they not only do so to save on cost, but they are selling something for more than it cost them, giving them additional employment and profits. They give up working at something at which they're less efficient in order to concentrate their efforts where they can produce greater value for their time. If lower prices lead to lower wage rates for those who continue to make things that can be made less expensive elsewhere - that's only fair, but demand for workers will shift to more productive activities, where they'll receive higher income while paying less for their wants and needs, giving them a much higher standard of living. You probably already understand why voluntary trade is essential to Man's welfare and civilized order; and that while not all trades turn out profitable - there's always an element of risk and a process of learning from one's mistakes in any venture undertaken - that trade, overall, is always a driver of prosperity; but it seems that your judgment may be clouded when it comes to applying the same market principles to doing business with people outside of your national "tribe".

  • vek||

    " They give up working at something at which they're less efficient in order to concentrate their efforts where they can produce greater value for their time."

    This is one of the MUST HAVES for free trade theory to pan out in the real world. The problem is that according to statistics this HAS NOT actually happened. Wages have in fact gone down for the people who used to produce things in the US. They're making $10 an hour turning out lattes, instead of $15-20 turning out say t-shirts or TVs. You quote theory, but theory has been refuted by objective reality. Hence the theory needs adjusting. Without this component, the rising wages/productivity, the entire free trade argument falls apart.

    Not to mention outright unemployment, which is also a large issue as per our labor force participation rate. Outsourcing a job and replacing it with an unemployed person doesn't benefit the nation overall either, and national health ultimately trickles down to individuals good fortune as well. Traditional free trade theory doesn't even address the CONCEPT of unemployment because it didn't exist at the time. You either did something more productive, or you went back to farming. But it IS a real issue in the modern world. The theory needs to address this reality too.

  • vek||

    "but it seems that your judgment may be clouded when it comes to applying the same market principles to doing business with people outside of your national "tribe"."

    That is because in the real world, IT MATTERS. A guy losing his $50K a year job in Kansas and not only no longer paying taxes in, but in fact going on welfare, DIRECTLY hurts me. Like it or not we're tied together economically in a very real way. Through taxes, through the fact that money swirls around the domestic economy so a single dollar of new productivity here equals multiple dollars of spending by the time it's all said and done, etc.

    That some Chinese guy now has a better income doesn't really help me much at all, especially since they buy very little from our nation. If our lower middle class and middle middle class was as strong as 40 years ago, we would be trillions less in debt at the federal level, and spending domestically for goods/services would be higher. Not to mention social tension and the general health of our society would be a lot better, which is hard to put a price on.

    It may be naked self interest on my part, but I would rather a black guy in Detroit, or some honky in Kansas make more money than some Chinese guy. They can pull themselves up by their own bootstraps like we did, I don't feel the need to subsidize the rising standard of living in foreign countries against my own self interests.

  • markuzick||

    So it's alright with you if some guy in your county loses his job due to competition from the next county over, but it's bad if it's the next state over? or must it be another nation? or maybe it's alright if it's Canada or Great Britain, but bad if it's "those dirty Chinese or Mexicans" who don't look like us or speak our language?
    You have ignored my answers to your fallacious arguments and keep harping on the same "points". Whether your motivations are nationalistic or based on antipathy to free markets, it's clear that you have no understanding of, or possibly willful blindness to, basic economics that explains the value of competition; comparative advantage; and why any attempts to strangle free markets and trade are always for a temporary protection of politically influential corrupt special interests at the far greater detriment of the rest of society. When you protect that guy's job from competition, you destroy countless other people's jobs and also opportunities not even yet known - and that's just looking at it from a national interest perspective, let alone from the peaceful and prosperous world standpoint. You have great faith in the superiority of top down economic regulation over the invisible hand of free markets - a true Socialist at heart.
    CONTINUED...

  • markuzick||

    For some reason you waste your time trying to convert the tiny number of free market people on this forum into Socialists or protectionists, when there are billions of ignorant and xenophobic people out there who might buy into your simplistic, nonsensical arguments.

  • vek||

    I'm not going to try to convince you of anything. You've simply bought into believing a particular theory, no matter the evidence for or against. And there is a lot of hard evidence that the theory doesn't fully work the way it is supposed to in the real world. When this happens you're supposed to adjust the theory, not just pretend it works exactly as proposed despite the facts. This is what idiots do with climate science, which is clearly somewhere in between what the alarmists say and what the deniers say.

    I used to believe 100% in free trade theory with no caveats too. Then I looked at statistics, looked at the math, looked at a lot of things. I still think TRUE free trade would be infinitely better than what we have now. I would be fine with that as a principled thing too, come hell or high water... But to defend the cronyist managed trade scheme we have now, which has CLEARLY proven to be against the best interests of 1st world nations... Sorry not on board with that.

    As I explained earlier, as citizens of the same country we're tied together, like it or not. The truth is that it IS better for me, and my city/county/state if more business happens in my city/county/state. That again is an objective fact, it helps my bottom line by having prosperous neighbors. However for practical reasons I don't care if Texas wins over Washington for a new factory. They're still in my nation-state, which helps me infinitely more than being in China, OR Canada for that matter.

  • vek||

    Between China and Canada who would I want something to go to? Canada of course! OR Japan. OR India. Why? Because they're not a ruthless dictatorship which publicly states they want to expand their geopolitical control in the future, and eventually become the most powerful country on earth. China may end up being an awful lot like building up industry in Nazi Germany in the 1930s. Maybe not, but it's a hell of a lot more likely than Canada or India deciding to go all militant anti-western world.

    I'm sorry that I'm a realist, and you live in a fantasy land. I want a prosperous and free world too... But I realize there are people who don't, like China's government. I have zero problem with the Chinese people as individuals. Hell I actually like Chinese culture (pre communism), same with Japan, Korea, etc.

    As I have said elsewhere, if we can't get free trade across the board, I wouldn't be opposed to an across the board (no picking winners/losers) tariff of 10% or whatever. It would simply be a tax that happens to encourage domestic production of items that are only marginally cheaper to produce abroad. We could cut the income tax with said revenue. It's how the FedGov was founded for over 100 years, and it didn't stop us from becoming the wealthiest nation on earth, with a faster growing GDP than we've had in decades.

    Pretending a small nudge like that is the end of the world just makes you look like an idiot. It's no more a distortion than any other nominal tax.

  • Fred G. Sanford||

    Will Trump enact more tariffs in response to news that the trade deficit has increased?

  • Mark22||

    Judging by President Donald Trump's favorite metric—America's trade deficit—he is losing his trade war.

    The "trade war" is supposed to force other countries to negotiate better trade deals with us. It should be obvious to anybody even casually familiar with US trade that this hasn't happened yet.

    Luckily, trade deficits don't matter too much.

    They may not matter much to you or to your narrow economic interests, they matter a great deal to the long term political future of this country. I mean, what do you think foreign nations do with all the excess dollars they accumulate?

  • KH||

    Ignoring the scaling of the chart (which is arbitrary in this case), it shows that between 1985 and the present, a 700% increase in the trade deficit has coincided with a 55% increase in employment. During the same period the US population grew by 50%, consumer spending increased by more than three fold, and the national debt increased by an order of magnitude. I would certainly hope that we would be able to squeeze a half-again increase in employment from a population half-again as large that's spending at a higher rate and borrowing like there's no tomorrow.

    Note that the trade deficit started to grow immediately after Nixon abandoned Bretton Woods and started printing more money. If it's funded by private individuals taking out personal loans against thair own collateral and using the money to buy foreign goods, then I'm OK with that. If it's funded by public debt taken out in my name or deliberate deflation of my hard currency holdings, then I'm not OK with it.

  • vek||

    That's one of the major points autistic libertarians will never admit. In an environment with sound money, where the government can't just print/manipulate it at will, no nation could ever sustain a trade deficit like this for long. It's being funded through devaluing the US dollar, creating debt future citizens will have to pay off, and selling off assets to foreigners that were previously owned by US citizens. In a free market we would have started running out of cash to pay for things, which would cause our wages to go down, and we would have reached a sustainable equilibrium. All the market distortions merely mask the unsustainability of the current problem.

  • KH||

    :cringe:

    I meant to type devaluation, not deflation.

  • alfachemistry22||

    The US Government sets the trade policy.

    The Chinese Communist Party sets the trade policy.

    The EU Committees set the trade policy.

    Trump at least wants free trade where the TOP MEN dont decide every facet of trade.

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