And yet free trade can result in persistent trade imbalances, as has been discussed in the 'case for free trade' thread - of which Keynes was very aware in 1944. Now, LafayetteBis has reminded me (in the same thread) You are underestimating the difficulty of any "new trade" deals, most of which are done under the auspices of the World Trade Organization. They take years to implement because the process involves so many nations each with vested interests Doesn't sound like your vaunted maximisation of improvement in the standard of living for all., through free trade alone, is necessarily all that attractive to the participants in the trade. And now we have TPP and TTIP, both with some undoubtably good points, both tossed out by Trump, as well as being unloved by large sectors within all or some of the nations involved. More evidence of the contradictions in free trade, and for the necessity for Keynesian-style global oversight of trade (as per his 1944 Bretton Woods proposals)
What are you striving for? This is the real question. As long as the economy is growing at a rate at or above the population, we are gaining nominal economic value as a nation. Even Warren Buffet acknowledges that with the population growing at 1%, economic growth of 2% is a good net gain for America.
And yet free trade can result in persistent trade imbalances, as has been discussed in the 'case for free trade' thread - of which Keynes was very aware in 1944. Now, LafayetteBis has reminded me (in the same thread) You are underestimating the difficulty of any "new trade" deals, most of which are done under the auspices of the World Trade Organization. They take years to implement because the process involves so many nations each with vested interests Doesn't sound like your vaunted maximisation of improvement in the standard of living for all., through free trade alone, is necessarily all that attractive to the participants in the trade. And now we have TPP and TTIP, both with some undoubtably good points, both tossed out by Trump, as well as being unloved by certain sectors within all or some of the nations involved. More evidence of the contradictions in free trade, and of the necessity for Keynesian-style global oversight of trade (as per his 1944 Bretton Woods proposals), despite the difficulties in achieving the necessary cooperation to establish the institutions required for such global oversight. [It's interesting the world didn't quite attain this level of cooperation in the formation of the new UN itself, around the same time that Keynes proposals at the Bretton Woods conference were rejected through short-sighted US self-interest]. The poor new UNSC was crippled by the veto power, and failure of nations to establish management of international military force by the UNSC. 1. League of Nations - 2.UN - 3.maybe third time lucky? But hopefully we don't have to go through similar experiences that led to the formation of the first two, to finally settle on some sane management of global affairs. (Trump is talking about wasting resources upgrading the US nuclear arsenal, not my definition of sanity. There is a whole universe out there waiting to be explored, best done after we put our own house in order).
That ^^ is an economic fallacy. You've described a perpetual growth system with positive feedback. Positive feedbacks do not occur systematically in economics. Smoot Hawley and the 2001 steel tariff are a couple of many examples of this.
Then they wouldn't be the middle class would they? That is a rather relative term. The person standing between the richest and the poorest is the middle. What difference does it make if "the middle class" has more money? It will come from the lower class or the upper class so there is no inherent gain in giving it to them.
Reread your post and think it through. - - - Updated - - - The solution is a school choice and a growing economy which are basic to the Trump Presidency. Amazing word salad btw.
Trade imbalances are irrelevant in a free trade environment. They result from cumulative individual transactions in which each participant derives benefit.
The ultimate sanity is "Speak softly but carry a big stick.' The middle east chaos is an example of what happens when the US abdicates responsibility.
Think this through: *The economy has been "growing" without Donald Dork in the White House since the 1960s. Let's hope the economy will preserve that growth (all by itself) whilst he makes an ass of himself as he has been doing recently. *Tertiary schooling that would have prepared those who want to get a tertiary-level degree is no longer possible "free, gratis and for nothing" since Hillary lost her election in an outdated Electoral College. We shot ourselves in the foot, and that of our children. *We are fast becoming a brainless nation swayed by the media (and whoever pays enough) ...
I'm a little confused in the flow of this conversation so let's clear this up.... You said: So I throw out, "How about a strong middle class"? And you responded with... I'm not sure how that is a meaningful response to the answer I gave. Now, let's go back to your first response... What you're basically saying is that all growth is good growth. So if 1% earns 99% of all the income, as long as we're growing that's good? When looking at the nation's income distribution, it doesn't make any difference that the bottom 4/5th's of the economy have been in decline (with the 4th 5th breaking about even as of very recently) since about 1998 When we look at wealth, we see a precipitous drop in wealth in the bottom 80% and almost an equal rise in the top 20% Ok, so the point I think you were making.....I advocate for higher pay for those at the bottom and you respond by saying: Pretty sure I didn't make the claim that lower economic disparity would put those at the bottom in the middle class. They will still be at the bottom, as some have already pointed out. But, the flaw in this kind of thinking is that the bottom looks the same no matter what. The saying goes, it is better to be poor in a wealthy country than it is to be poor in a poor country. Now, the poorest wage earners in the US earn salaries that require them to get assistance from the government in order to supply them with the basics of food, shelter, clothing, education and healthcare. Where people are dependent on government help (something I would think most Conservatives would loath) just to provide the absolute basics. With little to nothing left to consume discretionary items. The kinds of items sold by many small businesses in the US. Or, we can promote a society that ensures that the poorest among us earns a wage such that they can provide themselves the minimum necessary with the absolute minimum of government assistence and assure that they can participate in the broader economy capable of consuming discretionary items and services. Assuring that the bottom 50% of the nation has enough money to drive demand, drives a strong middle class. A strong middle class with increasing amounts of discretionary spending is more likely to employ those at the bottom and be more likely to engage in civic charities and programs that help those at the bottom willing and capable of lifting themselves out of poverty and give them an opportunity to move into higher economic classes. Economic mobility is, IMO a lynchpin of a free democratic society, yet economic mobility in the US has declined. Historically, when disparity was lower, the lowest classes in the nation were better off, relitivly speaking.
I'll just take it then that you'd rather rest on your argument from authority, one you don't fully understand yourself, thus are unable to argue in your own terms. That's cool, I know it's difficult, especially when you are promoting an ideology rather than trying to understand economics. -Cheers
One more time for other readers who might be curious.... Just like the earth is a closed system that receives energy external to itself (from the sun), and thereby not violating the second law of thermodynamics, the private sector is the earth what the government spending is to the sun. The government provides the money that makes positive feedback possible, the fallacy is in believing that government uses the money it taxes from the private sector in order to grow. That is the fallacy and that's why the evidence you posted is false.
I am not advocating for anything. I am being Socratic. FOr some the 1% getting even more would be the best solution. For some it would be the bottom. For others it is the middle. I simply want to know why you think it should be the middle class over those who employ the most or those who are most left behind.
We live in a capitalistic society and capitalism runs on sales. The lower classes lack the resources to drive consumption, the upper class lacks the numbers of people needed. It is the middle class that drives consumption. It is the middle and upper-class that responds to demand and supplies things of real value to the economy. In the past 30 years the upper-class, using it's excess wealth stopped consuming, investing in business, trainng and reaseach and development began using it's money in finace, to make purchses to rent, speculate and grow wealth through non-productive uses. The result has been increased private sector borrowing (much of it from the middle class), much of which (as I have already shown) is being captured by the upper class. Now, just so this doesn't sound like sour grapes, I'm in the upper class. It's just that I know that demand for my services depends on people in the middle class having money to purchase the skills that I can provide. Sure I can advocate for lower taxes or lower restrictions on the kinds of business I do and serve, but that won't increase consumption and that is the problem. I need people to have more money to spend, so I can compete for their busienss. I think this video covers it pretty well. [video=youtube;q2gO4DKVpa8]https://www.youtube.com/watch?v=q2gO4DKVpa8[/video]
The lower classes don't drive consumption because they have less with which to consume. If we focused on them, then the money would all end up in consumption. With the middle and upper brackets get the money, they would not consume as much of it wouldn't you think? I mean how many 401K's are there in the projects as opposed to the suburbs? Wouldn't we be better off doubling food stamps or welfare checks or earned income tax credits then giving it to people who live in cul de sacs? If consumption is your goal, making it rain Benjamins in the ghetto would be the best policy. BTW, I absolutely oppose increased consumption of goods except to the extent that it lifts poor people into a more secure state. I think about the eco of economics first.
Did you watch the video? Thoughts? Not real sure how to take this except to say, we're not "focusing" on them, just making sure that have the means to secure their needs without an inflated government bureaucracy on which their substance hinges. I think what you've discovered is the paradox of savings, however, there are pretty good statistics on this stuff, those in the bottom 3 quintiles save about 12% of their income combined. Consumption is a means to an end, which is full employment. Giving people money is inherently inflationary and encourages capable people not to work. The problem is that it's the work that people do that are the basis for the value of money the government spends. Sure there are some people that you could give money, like the retired, the mentally ill, the severely handicapped and perhaps students (to name just a few), but for the rest, everyone should be encouraged to work. Why can't you increase consumption solving the problems of the environment? Alternative energies, better public transportation, subsidies for insulation, cleaning lakes rivers and the ocean, there are plenty of opportunities for consumption solving problems of the environment, something I support 100%
It's been growing at ~ 1% per capita in the Obama Presidency. Trump will go back to the supply side economic policies of Reagan and Clinton and the Bushes (41 & 43) which grew the economy at ~ 3% per capita in non recessionary years. Think that through. - - - Updated - - - It's Econ 101. Raise the price of something and less will be consumed. If you can't understand that then I (nor anyone else) can help.
Where does this money come from and how much does the gov charge to process the transfers ?? Does the gov create wealth ?? No it does not. Positive feedback in economics is a fallacy just as it is in the real physical world. - - - Updated - - - Capitalism works on wealth creation. Period.
I haven't as of yet as I was sneaking home while doing work errands and cooking lunch. Will look at it in a bit and get back to you on it and the other.
YOU ARE ABSOLUTELY CORRECT, AFM. If these stupid, lazy American workers would only work for 65 cents an hour...we would get back all those jobs we've lost to the third world...and American capitalists would become ever so much richer...and be able to trickle down much more to the peasants. How to get those lazy bums to see things as clearly as you do, though...that's the problem. What can be done to get them to see the error of their ways?
Trump will reduce the gov imposed costs on production. That will indeed result in price reductions and greater US exports creating wealth and jobs in the US. Why are you against giving low productivity US citizens an opportunity to enter the labor force and begin increasing their human capital so that they can get on a career path to economic prosperity by increasing the minimum wage ?? I'm all for that but the policy to increase the minimum wage will do the opposite.
