Trade Wars versus Trade Deficits

First, generally speaking, labor is going to be 10-30% of expenses, and much less in automated businesses.

YOU can guess the other 70-90% of costs other than labor effect the price of goods and services.

US business can pick and choose who they wish to compete with and what they wish to produce. Do you actually believe a US business can produce pencils in the US and compete with pencils produced offshore? IF you don't know the answer is no. There is a greater chance that a US business can produce pencils using offshore facilities and this is precisely why US business seeks lower cost labor and materials from around the world.

I don't think it is me who is having difficulty understanding manufacturing/business operations...

 

Inflation is basically your cost of living from year to year usually calculated on the same goods and services.
All imports are not cheap!

Consumers decide which goods and services are sustainable...

 

It's called TRADE! People and businesses buy and sell stuff and unless there is some unique duress involved, both parties are satisfied with the trade! Buyers and sellers, left to their own, will find economic equilibrium...

 

Actually, capitalism is the absence of govt planing. govt planning killed 120 million so we oppose it.

 

Government only needs to be involved in egregious situations...

 

I can't really consider having an enlightening discussion with a poster who thinks capitalism is built on government planning.

 

You struggle with economic history? Read Chang's Kicking Away the Ladder for an intro.

It annoys me that right wingers are so poorly read when it comes to economics!

 

What part of I do not consider a discussion with you worth a thing confused you?

 

Its up to you if you want to ignore economic history and good sense. That's freedom!

 

Every government controlled economy has failed, most capitalism driven ones are still here. How's that for economic history?

 

The problem is that you are ranting, rather than bothering with the economics. What, for example, does a government controlled economy mean? Does it refer to state capitalism? Does it refer to Keynesian demand management? You've ignored basic economics.

Let's go back to what I said. I referred to Chang's Kicking Away the Ladder analysis. This reflects the crucial importance of interventionism as a means to protect infant industries. Government policy creates comparative advantage. That isn't my opinion. That's mere reflection of economics supported by empirical evidence. Perhaps be less ideologically huff-puff and more economic analysis orientated? Just for the crack!

 

Totally ignored my analysis I see.

Infant industries succeed because they have a product consumers demand. The auto industry didn't need protection in the beginning. Cell phone industry get a lot of protection? LED TV's? Pizza joints? Seriously, you bring nothing to the table.

 

Analysis? When did the dictionary get reinvented?

You don't understand the point do you? The infant industry analysis is based on the distinction between static and dynamic comparative advantage. Its government that effectively ensures the creation of the latter.

Clearly I'm talking to someone that doesn't understand any economics and therefore huffs and puffs. Apologies! Look at the tiger economies. Refer me to one that didn't have an industrial policy. Then refer to 'first mover advantages' and how, without government intervention, the economy is stuck in an efficient outcome.

 

Your display of deflection and name calling pretty much shows us what we need to know about you.

 

No we don't. That's something that economists in different schools of thought disagree about. However, what nearly all can agree on is there are arguments both ways.

What I find ironic is you are the last thing from a free market economist, yet here you are making free market arguments against protectionist interventionalism. What are you, just a Globalist?

 

So you can't refer to one country that developed without government policy? You can't critique Chang's Kicking Away the Ladder evidence? You can't deny the distinction between static and dynamic comparative advantage?

I'm sure you can do something mind you. I look forward to the effort.

 

Name me an economic school of thought that says protectionism is not inefficient. Please then develop the theory accordingly.

You can't go for the infant industry argument. I've already referred to it. You're left with the optimal tariff. Crap stuff based on no WTO and market power failures.

 

What I meant is the currency has already been devalued but people just didn't see it because of all the low price trinkets flooding in from China.

 

My argument is based on the balance of capital equity (for lack of better terminology). When one nation maintains a chronic trade deficit with another, the second nation owns the first.

It's analogous to the concept of debt slavery.

You're selling out the future of the next generation in your country. You sold off all your wealth and that wealth's not going to create jobs for your own children.

 

You're already been told that this is drivel. A trade imbalance is solved either by currency correction or by shift in consumption/saving rates. You simply ignore the economics.

 

In other words our children will have less to consume. = poverty

 

You think saving more is bad? Is that a standard far right argument nowadays?

 

You're making the logical fallacy of composition.

If nations only consisted of a single individual person then you'd be correct.

 

Saving more is good. Running trade deficits does not encourage positive national savings rates.

 

You're showing your ignorance. A trading imbalance reflects consumption rates. Higher savings will necessarily eliminate it (and moaning about reduced well-being was also cretinous, given savings and investment go hand in hand).

Do extreme right wingers have any economics to refer to?