Free trade is not to USA's competitive or comparative advantages. Comparative advantage refers to determination among choices. Our goal is the choice most advantageous to ourselves. If none of the alternatives are to our net advantage, the comparative advantageous goal is to choose the least disadvantageous; (i.e. Comparative advantage is a term that simply refers to the considerations of available alternative options). Under USAs policy of pure free trade, its certainly to individual enterprises and persons comparative advantage to purchase cheaper imported goods. What are to individuals advantages are not necessarily to their nations advantages. Competitive advantages are ones advantages over their competitors. Free trade does not grant enterprises any competitive advantages but if they fail to avail themselves of cheaper foreign products (within a purely free trade policy) it certainly puts them at disadvantages to their competitors. Aggregate wage and salary earning families benefit from cheaper foreign goods but that does not compensate them for USAs annual trade deficits of goods detrimental effect upon USAs annual GDP and median wage. Due to USAs annual trade deficits, USA had less jobs and our employees earned less wages than otherwise. (Otherwise being no annual trade deficit). Im among the proponents for a trade policy proposal based upon Import Certificates. It is not pure free trade but it is absolutely free competitive enterprise. It grants government no policy discretion. Assessing the value of goods in U.S. dollars within the USA is a technical rather than a policy determination. We can continue to benefit from cheaper foreign goods but not the absolutely cheapest priced goods. We cannot afford the absolute cheapest prices. Refer to http://www.4forums.com/political/po...e-trade-deficit-increase-gdp-median-wage.html or google wikipedia, import certificate .
Social studies have some similarities to the “hard physical sciences” such as physics and chemistry, but they generally do not lend themselves to experiments where we can reasonably retain the values and attributes of all or almost all significant factors and while modifying and evaluating the factor being studied and the consequences due to the studied factor. Economics as all social studies are much less objective than the true sciences and much more dependent upon very erratic creatures, they are dependent upon peoples’ behavior. My particular interest is our annual global trade deficits of goods and our policies’ effect upon USA’s economy. My sense is that excluding Libertarians, among the remainder of USA’s political spectrum there’s significant dissatisfaction with our seeking a “pure” global free trade policy. Within our present political polarized climate, global trade is one of the very few economic issues with any chance of obtaining a consensus to act. Refer to http://www.4forums.com/political/po...e-trade-deficit-increase-gdp-median-wage.html or google “ wikipedia, import certificate “ or refer to http://www.politicalforum.com/econo...ts-always-detrimental-their-nations-gdps.html Respectfully, Supposn
This is drivel. There is only one danger with the trade deficit: a dollar 'correction' which then induces greater economic instability. The impact of trade on wages is ambiguous. Whilst we can expect reductions in wages associated with labour intensive production, we can expect gains from more skilled labour. The median? In a developed country, given the increase in economic activity (plus the intra-industry gains associated with economies of scale), it will increase.
Trade gap gettin' smaller... Shrinking U.S. trade gap shows economy's underlying strength Thu Sep 3, 2015 - The U.S. trade deficit fell in July to its lowest level in five months as exports rose broadly, signaling underlying strength in the economy amid concerns about a global growth slowdown.
Miller is shutting down some operation in the US. I guess all those patriotic rednecks drinking foreign owned budweiser beer is taking its toll. Oh well. As long as I can get my pumpkin-blueberry-crabapple ale from the local microbrewery, my part of civilization will survive the impending Prohibition II being secretly imposed by Obama.
This line is the crux of your argument, but it is demonstrably false. Because of free trade, foreign companies have opened up shop in the U.S. (Toyota, Nestle, to name a few) and have created jobs on our soil. In fact, the number of jobs created by foreign companies in the U.S. is significantly greater than the estimated number of jobs lost overseas, and the jobs created by these companies provide higher wages than the the typical American job. Yes, there is a trade deficit, but that necessarily means there is a capital account surplus.
Toyota and Nestle are particularly poor examples of free trade allowing them to invest in the US. Toyota was basically forced into it by import quotas on Japan made cars and a 25% tariff on imported light trucks that is still in force. Nestle moved into the US because of high tariffs on its European made products. Toyota pays lower wages than US auto manufacturers. Nestle moved into the US by buying up US companies. Trade deficit figures paint an incomplete picture. World trade is far less about goods and services and far more about financial flows these days and the US has maintained a large surplus in financial flows for a very long time because on any given day more foreign money flows into the US than flows out to pay for imports. This is not because of the capital account surplus. Because the $US is the global reserve currency and the currency of choice in international trade the $US does not necessarily need to be repatriated to the US to be redeemed and balance the account like other currencies. There is global demand for $US and that drives a lot of the goods and services trade with the US but also turns the US into the hub of international finance, attracting foreign money. OPEC can only be paid in $US. There is $USTrillions that will never return to the US. The US capital account is in permanent negative imbalance.
Obama's own party offers resistance to TPP... Historic Pacific trade deal faces skeptics in U.S. Congress Tue Oct 6, 2015 - Twelve Pacific Rim countries on Monday reached the most ambitious trade pact in a generation, aiming to liberalize commerce in 40 percent of the world's economy in a deal that faces skepticism from U.S. lawmakers.
'Business' can take place anywhere in which it's viable for the company. Kellogg can produce cereal in the US or in Scotland and sell it into every nation on Earth. If the markets are significant in size, then it's advantageous for Kellogg to open facilities inside those markets. Other smaller markets will be satisfied using best logistical practices. At all times, no matter the location of the markets, Kellogg must compete with other cereal companies. If the US was to block outside competition and/or apply equalizing tariffs to imports, all this does is increase the prices of goods and services based on the cost of doing business inside the USA. It will also greatly reduce consumer choices. If US industry desires to do business outside of the USA then the US must allow foreigners to do business inside the USA. Americans continue to demand the lowest prices so any ideas which will inflate consumer prices are not going to be well received. Some believe more jobs will be created but I don't buy this idea because higher prices and less choices will reduce demand which reduces jobs...
The problem with the theory of comparative advantage is what happens when your country's only "comparative advantage" is all its capital, land, real estate, and nonrenewable natural resources? Then once these are all depleted the country is left in a worse place than it was in the beginning. All the rents and profits from this capital are no longer accruing to the people within the country, but to foreign owners outside it. The country's wealth, even the new wealth which the country produces, gets drained out to a foreign country. That's the ultimate end result of a trade imbalance over many years, it will not necessarily automatically correct itself. This is one of the main reasons so many countries were resentful of colonialism and wanted to gain their independence, it was economic. Ironically what's really happening in the U.S. right now is not so much that the country is losing its own capital, if you want to look at it that way, but all this prolonged trade deficit was resulted in the American economy gradually losing its capital overseas. It was much in part all these stakeholdings in foreign interests that made the U.S. so wealthy in the Twentieth Century. So for instance, now instead of the U.S. owning the Panama canal, it is Chinese companies. The Chinese have plenty of money to spend, and they are buying stakes in foreign companies, not so much products and services. One Chinese whom I met summed it up like this: "Chinese very thrifty and saving money, American lazy and spend all his money"
Pure free trade, what a joke. Half of their "free trade" agreements are rife with protectionism, patents, and IP. That the US operates under free trade (or even pretends to), is a ridiculous notion.
Regardless of the economic effects (which I believe are positive) the more important things in my view is to solidify the dominance of western trade practices in the world, and to strengthen the west's position against China and other antagonistic countries. I.e. there are global political aspects to consider. I had TPP and TTIP in mind.
I suppose you are referring to the western dominance in finance, which is not in the best interest of any nation if its interest is in creating an economic environment where all citizens can prosper.
Although craft beers are growing market share, their share today remains at about 10-11%...this cannot be a 'killing' but it's a solid trend...
It doesn't help but some people are just buying less. My area is not a big craft beer area. It is a big Bud area. Someone I know is married to a manager for the regional Bud distributor. Their sales have been in the toilet too since 2008 compared to pre-Great Recession. Sadly, I have heard of people doing sketchy bad things to bolster their drunks on the cheap like loading up on OTC's while drinking, giving blood so they will get drunk on less, etc.
