Global Impending Economic Doom Thread.

Neat example of why, without any crisis theory, you're reliant on hyperbole. Starting with a deindistrialisation myth isn't a good starting point for the illusion of credibility mind you...

 

We have a minimum of manufacturing capacity left as most of it has been outsourced, what that leaves us largely is a consumer driven service economy built upon debt that is nowhere sustainable. When the economy crashes what little bit of manufacturing or factories we have left will not be enough to carry us forward at all in terms of economic growth. This is what happens when forty eight years you outsource a majority of your manufacturing capabilities overseas and deindustrialize your nation.

Money would have to be seized from these international corporations for taxation which is difficult because they have their money parked in banks all across the world. Part of the problem of course is that they skip out on paying any taxes to the United States government to begin with because they're under the presumption that they have no responsibilities or obligations to the country [The U.S.] that they started out of. I see a lot of attempts at trying to nationalize these international companies down the road but I'm unsure how successful that will be given again that they operate from all over the world.

We do produce a lot of agricultural and food products so at least we won't starve to death completely however I suspect it isn't just the dollar that will die as other foreign currencies will be obliterated also, what do you when many nations national currencies are obliterated over night? You have no medium of exchange domestically and not a lot of others who have their own currencies left intact to buy from you. Domestic civil unrest will explode in the United States and I suspect it will in other nations affected also. International global trade will be the furthest thing from people's minds initially probably for a small decade.


Russia was only on their feet because other nations including the United States pitched in to buy up their debt and open up trading avenues in the country. Russia was an isolated incident at the time. Here we're talking about the United States economically collapsing where the financial contagion will spread to a full host of other nations around the world. Who exactly is going to buy American debt or create trading avenues in this country under a scenario like that? I can't think of anybody.

You assume there will be a last nation standing, for me this is like nuclear mutual assured destruction globally only instead of nukes it is all finance, commerce, or capital investment that pulls the trigger. A sort of global economic mutual assured destruction.

 

Be quiet, the adults are speaking.

 

So the country with the second highest manufacturing sector has minimum manufacturing capacity? That might struggle in the credibility stakes.

Deindistrialisation typically merely refers to reductions in manufacturing's employment share. That can be a sign of economic collapse (see, for example, Britain's early 80s recession when it did try and construct policy around the stupidity of monetarism). However, it's generally a natural part of the evolution of the economy (reflecting structural consequences of the twin impact of productivity and income gains).

And the US? Outsourcing is not necessarily a problem at all. It can be see as a means to fine tune specialisation according to comparative advantage. The problem is that it can be undertook because of short sighted managerial decisions (given effects ranging from reduction in quality control to lost organisational knowledge). The truth is that, given Industry 4.0, the US will continue to be at the forefront of manufacturing.

 

they say some 90,000 factories have been closed and outsourced here recently and in large part thanks to idiotic liberal programs: taxes, unions, regulations, trade deals, budget deficits, expensive health care. Remove the liberal influence and many of those jobs could come back!


Country Manufacturing Output (USD in billions), Percent of National Output, Percent of Global Manufacturing
China $2,010, 27% 20%
United States 1,867, 12 % 18%
Japan 1,063, 19 % 10%
Germany 700, 23 % 7%
South Korea 372, 29 % 4%
India

 

You're making zero sense. The US has adopted neoliberalism. It's policies would be deemed market fundamentalist by an sane country. And you refer to liberal democratic nation in your list (and also country that use interventionism which you childishly call libcommie).

Think more?

 

They say many things, whether they're true or not is another matter entirely.

Part of the issue is that modern manufacturing requires far fewer people and those people need different skills than the manufacturing of 40 or 50 years ago. I have personal experience of being schooled in this when I claimed that Margaret Thatcher and the Conservatives destroyed British manufacturing in the 1980s. I was provided with objective statistics which showed that manufacturing activity in the UK is at about the same level as it was back then but:

• It represents a smaller proportion of national output due to the faster growth of the service sector
• Employment in manufacturing is a tiny fraction of what it was even though the actual level of output is comparable due to changes in the nature of that manufacturing and automation

Manufacturing used to provide vast numbers of decent paying jobs for unskilled and semiskilled people (mostly men). These days nothing like the same number of people are required to produce the same amount of product and many of those jobs are now skilled. Wages have been driven down by a number of factors but it's interesting to note that countries which still have strong labour unions (Northern Europe springs to mind) still have decent levels of pay in the manufacturing sector.

 

She did destroy mind you. Thatcherism was a rare occurrence of negative deindustrialisation, rather than positive (the former reflecting government stupidity, the latter reflecting productivity/income growth). We also shouldn't underestimate that destruction. First, the companies destroyed ironically tended to be more profitable and more productive. Second, the conditions engineered a long term problem reaped by Uncle Blair (with a low skilled equilibrium that led to another bout of deindistrialisation which was too quick for communities to recover, guaranteeing structural deficiency and making our economy prone to crisis).

 

We've debated this before and it's clear that we don't agree. I've asserted that the UK workforce has higher skills, is better trained and a greater proportion of jobs are skilled - You've countered that many of the qualifications are pointless health and safety qualifications, that people are overskilled for their jobs and the UK is a low-wage low-skill economy. We're likely not going to agree, not least because your views are views that I previously largely agreed with until I looked into it.

That said, I still think that the expectations that the Trump base have, that manufacturing output will increase massively in the US and that as a result, there will be millions of high-paying jobs for unskilled and semiskilled workers, are not going to come about. Even if the tariffs are successful, and industrial output is "onshored" back to the US, in order to compete domestically, let alone internationally, costs will have to be kept down. This means lots of automation and those jobs which are created will be cost-constrained and so low paying.

 

You pretend it's a matter of opinion. It isn't. Negative deindistrialisation from Thatcherism (including Uncle Blair's regime) is a matter of fact. There's an extensive literature on the consequences: e.g. low skill equilibrium analysis and It a importance in destroying supply side economics; macroeconomic analysis into trade deficit trends and the importance of specialisation towards product with low income elasticity of demand; lack of upskilling and increased use of cheap foreign labour etc.

I can't sugarcoat it. You're just wrong. The only opinion is over the origins of your erroneous thinking. It is my opinion that it rests with the consequences of being a New Labour supporter. Given they continued Thatcherism and therefore deindustrialisation, there's a dissonance to avoid!

I found this comment, despite the good intentions, awkward. You state "even if the tariffs are successful". That implies that such tariffs can be successful and have an economic rationale. No such rationale exists. Economic analysis cannot be applied to it. It has naff all to do with any possible justification for tariffs. It isn't related to the optimal tariff analysis. It isn't relevant to the infant industry hypothesis. It isn't about any notion of dynamic comparative advantage. It isn't about dispute settlement.

Start by acknowledging the base reality. It's merely pandering to nationalist knuckle dragging.

 

I apologise for my clumsy wording. I meant to say that "If tariffs are successful" solely from the perspective of bringing manufacturing activity back to the United States - ignoring the wide-ranging economic damage that they would cause.

I'm not so sure that it is just pandering to nationalist knuckle-dragging. I think that Donald Trump genuinely thinks that any trade deficit the US has with another country is "losing" and any trade surplus is "winning". I think he believes the imposition of tariffs will make imported goods more expensive and that this will encourage manufacturers to set up (or relocate back to) the United States. He would see that as winning and would likely consider it well worth any economic disruption.

If it was just a matter of nationalist pandering, he has many more less disruptive and less costly ways of doing this - like demonising an immigrant caravan.

 

That's mercantilism and, by definition, economic nationalism. It's knuckle dragging as it ignores all trade analysis since (which destroyed that rhetoric)

Just the sneaky business of economic sense and empirical reality missed then. We know that this type of nationalist claptrap fails because of the importance of intra industry trade (ironically fully advertised by a liberal like Krugman)

As mentioned, there's a long history of nationalism in trade. It continues to be a highly effective manipulative tool for two reasons. First, folk dont understand comparative advantage. Second, costs from trade are typically visible and benefits often hidden.

 

obviously if you could recognize sense you would not be a libcommie

 

so Obamacare is market fundamentalist? Subsidizing the below energy companies is market fundamentalism. See why we say liberalism is based in pure ignorance?
Evergreen Solar ($25 million)*

Evergreen Solar ($25 million)*
SpectraWatt ($500,000)*
Solyndra ($535 million)*
Beacon Power ($43 million)*
Nevada Geothermal ($98.5 million)
SunPower ($1.2 billion)
First Solar ($1.46 billion)
Babcock and Brown ($178 million)
EnerDel’s subsidiary Ener1 ($118.5 million)*
Amonix ($5.9 million)
Fisker Automotive ($529 million)
Abound Solar ($400 million)*
A123 Systems ($279 million)*
Willard and Kelsey Solar Group ($700,981)*
Johnson Controls ($299 million)
Brightsource ($1.6 billion)
ECOtality ($126.2 million)
Raser Technologies ($33 million)*
Energy Conversion Devices ($13.3 million)*
Mountain Plaza, Inc. ($2 million)*
Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)*
Range Fuels ($80 million)*
Thompson River Power ($6.5 million)*
Stirling Energy Systems ($7 million)*
Azure Dynamics ($5.4 million)*
GreenVolts ($500,000)
Vestas ($50 million)
LG Chem’s subsidiary Compact Power ($151 million)
Nordic Windpower ($16 million)*
Navistar ($39 million)
Satcon ($3 million)*
Konarka Technologies Inc. ($20 million)*
Mascoma Corp. ($100 million)
*Denotes companies that have filed for bankruptcy=

 

totally wrong as always. Trump is a free trader and he is trying to get other nations to be the same:
Why do you beg to be humiliated each time? You make me look like an oger. It's just not right!!

E.U. and U.S. Have Agreed to Work Toward 'Zero Tariffs' | Time

time.com › Politics › Foreign Policy
Jul 25, 2018 - President Donald Trump announced Wednesday that the U.S. and European Union have agreed to work toward 'zero tariffs.'

 

Can you refer to one economist that uses the term libcommie? Calling people nonsensical names is just childish

 

Hillary is a liberal, Bernie is a commie, they are both in same party and both endorse each other so libcommie is a very accurate way to describe their ilk.

 

Bernie isn't a commie. I'm neither liberal or communist. The term libcommie is cretinous, by definition.

 

"Go ahead, blame Powell. Don't tell anyone that foreign buying of Treasury debt has been cut in half this year and keep it a secret that the dollar share of world FX reserves has shrunk to a 5-year low of 62.5%. The USD role as the reserve currency is on its last legs." - David Rosenberg

 

Then why did he put Cornell West on policy committee? And say we didn't need 23 deodorant companies?

 

Liberal statism, communist statism, and anti-free market socialism are identical to us and quite illegal. Our genius Founders saw statism as the source of evil in human history and thus made your idiotic, deadly ideology illegal here. Do you understand?

 

yes libcommieism just killed 120 million!

 

I'll repeat the feckin obvious: Bernie isn't a commie. Do all Trump fanatics blindly following a reality star and make cretinous stuff up to hide from that dissonance?