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World trade moves on, without the US

But countries like China play the long game. They have 50-year visions of where they want to be, along with detailed long term strategic plans for how to get there. Do you think it hurts the US to not have any sort of coherent, long term vision towards which they are working? After World War II, of course, it did. This was a vision of global cooperation, trade, and peace among the free world, which was more or less pursued by every administration. Is it OK to just keep lurching now like a blind mole from administration to administration, with one administration completely destroying what the other has done?

Much of China's long term strategy involves corporate espionage and stealing our technological secrets, something we better get aggressive about stopping. It's easy for China when they have an authoritarian government which has embraced capitalism or semi-capitalism as its economic system. It's like they looked at the Soviet model and threw away the state run economy while keeping the one party government. They see what works elsewhere and adopt it. We see what fails elsewhere and long to adopt that.
 
If I have the choice of developing a market that is restricted to the US (20.4) or one that excludes the US but includes China (14), Japan (5.1), Germany (4.2), France (2.93), the UK (2.94), Brazil (2.14), and Canada (1.8) - I think that I'd be looking at the potential market that totalled 33.12 rather than the one that totalled 20.4. For one thing that market is bigger and for another the diversity of that market means that I'm not going to get caught in the "Wal*Mart Trap".

If I see that the "20.4 market" is expanding less rapidly than the "33.12 market" then my choice gets even easier.

If it looks suspiciously like the expansion rate for the "20.4 market" is actually going to be negative, then the decision is a slam-dunk.

In that case, I suggest you be VERY careful what deals you make with China. You may come to regret choosing them over the US.
 
Quite right.

The US can ship more cars, soybeans, pork, and oil on its aircraft carriers than the Chinese can.

You see, that's the fallacy of the OP's article. They equate trade agreements with foreign policy and security agreements.

For example, by the writer's mind set, if South Korea joins that Asian trade agreement, then the US and Korea would end their Asian security agreements.

I don't see that happening. That's why I said we would still have a presence in Asia for the Chinese to deal with.
 
Much of China's long term strategy involves corporate espionage and stealing our technological secrets, something we better get aggressive about stopping. It's easy for China when they have an authoritarian government which has embraced capitalism or semi-capitalism as its economic system. It's like they looked at the Soviet model and threw away the state run economy while keeping the one party government. They see what works elsewhere and adopt it. We see what fails elsewhere and long to adopt that.

I don’t see it quite that way. All developed economies in the world today are mixed economies. It’s not because they have been too ignorant to see that pure capitalism is the easy answer to everything and humanity’s only salvation. The US began abandoning pure capitalism by the end of the 19th/early 20th centuries, when it was faced with the ever- increasing exploitation of child labor, the rise of monopolies, and crushing and brutal natural market cycles that needed to be mitigated. That’s what makes economics hard: there are no easy simple answers, and in fact, if an answers seems too easy, it’s probably wrong and can have catastrophic consequences.

That is why communist economies are shifting more toward capitalism, and those with too much freedom in their markets are moving toward some more sensible regulations, safety nets, and guardrails. It’s like the gas pedal and brakes on your car. You can’t drive properly with only with just one or the other. You gotta have both, and have enough knowledge and judgment to know how and when to judiciously use both.

What’s strange to me is that the conservatives in this country, the supposed champions of the free market, are now the ones most eager to push for tariffs, isolationism, and restricted markets. What happened?
 
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I don’t see it quite that way. All developed economies in the world today are mixed economies. It’s not because they have been too ignorant to see that pure capitalism is humanity’s only salvation and the answer to everything. The US began abandoning pure capitalism by the end of the 19th/early 20th centuries, when it was faced with the ever- increasing exploitation of child labor, the rise of monopolies, and crushing and brutal natural market cycles that needed to be mitigated. That’s what makes economics hard: there are no easy simple answers, and in fact, if an answers seems to easy, it’s probably wrong and can have catastrophic consequences.

That is why communist economies are shifting more toward capitalism, and those with too much freedom in their markets are moving toward some more sensible regulations, safety nets, and guardrails. It’s like the gas pedal and brakes on your car. You can’t drive properly with only with just one or the other. You gotta have both, and have enough knowledge and judgment to know how and when to judiciously use both.

What’s strange to me is that the conservatives in this country, the supposed champions of the free market, are th ones now most eager to push for tariffs, isolationism, and restricted markets. What happened?

China isn't practicing laissez faire capitalism. Nobody is and nobody has for over 100 years. What they have done is graft capitalism onto their one party state. So, the people are still under the thumb of the government but it's less onerous when they can also get some prosperity for themselves, the lack of which otherwise dooms all state run economies. As for tariffs, they are a tool more than a long term policy. They are designed to come to a more equitable arrangement among trading partners. They cause short term pain in the pursuit of long term gain. All the alarmism over trade going elsewhere is overblown. When the dust clears, the world will still be trading with the US as much as ever. They have to.
 
When there is a free market and free trade, no one can just triple their price on a whim. That’s how free trade and free markets work. Artificially protect one part of the market, however, and they can. That can include domestic manufacturers.

Lack of competition always leads to higher prices and inferior quality.

I just pointed out the lack of them. Without tariffs the lower cost (subsidized or not) producers will win the 'competition' almost every time. A US worker makes much more than a Chinese or Mexican worker - to pretend that makes US based companies able to compete is a fantasy (add US environmental restrictions and the odds drop even further).

As a self-employed handyman I must compete with those willing to live two or three to a small room - the only that way I can 'win' (cost compete) is to lower my standard (and therefore cost) of living to match that of the "low-ball" competition.

I can stay in business only because I have an established customer base which know that the quality of my (higher cost) work is better than my lower cost (price?) competiton. If not for my established customers and their referrals I would waste far too much of my time placing bids against those using illegal immigrant labor and most often never get the job.
 
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I just pointed out the lack of them. Without tariffs the lower cost (subsidized or not) producers will win the 'competition' almost every time. A US worker makes much more than a Chinese or Mexican worker - to pretend that makes US based companies able to compete is a fantasy (add US environmental restrictions and the odds drop even further).

As a self-employed handyman I must compete with those willing to live two or three to a small room - the only that way I can 'win' (cost compete) is to lower my standard (and therefore cost) of living to match that of the "low-ball" competition.

I can stay in business only because I have an established customer base which know that the quality of my (higher cost) work is better than my lower cost (price?) competiton. If not for my established customers and their referrals I would waste far too much of my time placing bids against those using illegal immigrant labor and most often never get the job.

I see your point. The workers may get hurt. But the customers, and the corporations, win.

Which is better? Which benefits the economy the most? Could those workers be retrained in more skilled labor? I don’t have easy answers. Just wondering. Not easy questions.
 
I see your point. The workers may get hurt. But the customers, and the corporations, win.

Which is better? Which benefits the economy the most? Could those workers be retrained in more skilled labor? I don’t have easy answers. Just wondering. Not easy questions.

You have fewer customers if more (most?) are working for lower wages.
 
But does it help to have higher wages and higher prices?

Many say yes and I tend to agree with them. What does not make sense is expecting US wages to drop to third world levels and still have a consumer driven economy.
 
In that case, I suggest you be VERY careful what deals you make with China. You may come to regret choosing them over the US.

At present, the government of the PRC appears to be more likely to abide by any agreement that it makes with other countries than the government of the United States of America does.

Admittedly that could change, but it doesn't change the fact that - today - the word of the US government doesn't appear to be worth much more than a verbal contract with Mr. Trump.

Accepting bad deals now in the pious hope that you will get reasonable ones later doesn't appear to be quite as dumb as accepting reasonable deals now knowing that you might not get them in the future.

Your mileage may vary, of course.
 
You see, that's the fallacy of the OP's article. They equate trade agreements with foreign policy and security agreements.

For example, by the writer's mind set, if South Korea joins that Asian trade agreement, then the US and Korea would end their Asian security agreements.

I don't see that happening. That's why I said we would still have a presence in Asia for the Chinese to deal with.

And if the US economy goes downhill because other countries actually put the interests of their people ahead of the interests of corporate America then what happens?
 
At present, the government of the PRC appears to be more likely to abide by any agreement that it makes with other countries than the government of the United States of America does.

South China Sea. Come on. China is building islands in others' EEZs. It's totally nuts.
 
I don’t see it quite that way. All developed economies in the world today are mixed economies. It’s not because they have been too ignorant to see that pure capitalism is the easy answer to everything and humanity’s only salvation. The US began abandoning pure capitalism by the end of the 19th/early 20th centuries, when it was faced with the ever- increasing exploitation of child labor, the rise of monopolies, and crushing and brutal natural market cycles that needed to be mitigated. That’s what makes economics hard: there are no easy simple answers, and in fact, if an answers seems too easy, it’s probably wrong and can have catastrophic consequences.

That is why communist economies are shifting more toward capitalism, and those with too much freedom in their markets are moving toward some more sensible regulations, safety nets, and guardrails. It’s like the gas pedal and brakes on your car. You can’t drive properly with only with just one or the other. You gotta have both, and have enough knowledge and judgment to know how and when to judiciously use both.

What’s strange to me is that the conservatives in this country, the supposed champions of the free market, are now the ones most eager to push for tariffs, isolationism, and restricted markets. What happened?

When you can't compete as well as the other fellow, you just naturally call for the other fellow to be handicapped. When you can out compete the other fellow, you really don't care what the other fellow does.
 
China isn't practicing laissez faire capitalism. Nobody is and nobody has for over 100 years. What they have done is graft capitalism onto their one party state. So, the people are still under the thumb of the government but it's less onerous when they can also get some prosperity for themselves, the lack of which otherwise dooms all state run economies. As for tariffs, they are a tool more than a long term policy. They are designed to come to a more equitable arrangement among trading partners. They cause short term pain in the pursuit of long term gain. All the alarmism over trade going elsewhere is overblown. When the dust clears, the world will still be trading with the US as much as ever. They have to.

Your "They have to." could well be a bit of wishful thinking since the US represents only about 5% of the POTENTIAL world market.
 
South China Sea. Come on. China is building islands in others' EEZs. It's totally nuts.

The PRC is NOT building islands where the ownership of the EEZ is not disputed - is it?

For decades the US did not dispute the Canadian claim to the Arctic. Now that it appears that there might be economic benefits to be gained there, the US is disputing those claims.

Difference?

Not much.
 
Potential isn't actual as you know.

True, but not very many ever got rich by only going after the (current) actual market and those who did didn't stay that way if they didn't go after the (expanded) potential market eventually.
 
At present, the government of the PRC appears to be more likely to abide by any agreement that it makes with other countries than the government of the United States of America does.

Admittedly that could change, but it doesn't change the fact that - today - the word of the US government doesn't appear to be worth much more than a verbal contract with Mr. Trump.

Accepting bad deals now in the pious hope that you will get reasonable ones later doesn't appear to be quite as dumb as accepting reasonable deals now knowing that you might not get them in the future.

Your mileage may vary, of course.

Your problem won't be China not abiding by your agreement. It'll be China taking control of the agreement.

Whatever motivation you have, I don't think it's ever a good idea to accept a bad deal. Of course, with Canada's small market, perhaps that's all you can expect.
 
And if the US economy goes downhill because other countries actually put the interests of their people ahead of the interests of corporate America then what happens?

We can deal with hypothetical situations when/if they come about.
 
But countries like China play the long game. They have 50-year visions of where they want to be, along with detailed long term strategic plans for how to get there. Do you think it hurts the US to not have any sort of coherent, long term vision towards which they are working? After World War II, of course, it did. This was a vision of global cooperation, trade, and peace among the free world, which was more or less pursued by every administration. Is it OK to just keep lurching now like a blind mole from administration to administration, with one administration completely destroying what the other has done?

So we are to be nearsighted and worry about day by day fluctuations and coward? Are we to shrink in fear of what our dependency on China might hold in store fore us in the next day, week, month? The world can change a lot in 50 years. How much has it changed in the last 10?
This goes far beyond this administration or our hatred of anything Trump. We have a choice. We can continue kneeling before China, or we can remember who we are and can be. Trusting in peace among the free world, which China doesn't seem to fit, as are others, is relying on one's independence, not bowing down to dependence on someone else.
 
Many say yes and I tend to agree with them. What does not make sense is expecting US wages to drop to third world levels and still have a consumer driven economy.

But that may not happen if the workforce is re-trained for a new 21st-century economy. If the US continues to cling to low skilled labor and increasingly obsolete technology to power its economy, do you really think it will stand a chance in the future world economy? Because other countries are not so shy about investing in their workforce and in infrastructure to get ready for an ever-changing economy. They don’t have this neurotic paranoia of government investing in it’s country’s workforce and infrastructure. The US cannot continue to cling to what made it great in the 1950s to continue to keep it great in the 21st-century. And sometimes the free market, left completely alone, is not enough to make these fundamental changes happen on their own.
 
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So we are to be nearsighted and worry about day by day fluctuations and coward?

Yes, sometimes we can be nearsighted to do so. Strategic planning as hell most people, corporations, families, etc. get anywhere in the long term. Even if it is that the price of short term pain sometimes. Strategic planning and long-term thinking are critical. Even for nations... especially for nations.


Are we to shrink in fear of what our dependency on China might hold in store fore us in the next day, week, month? The world can change a lot in 50 years. How much has it changed in the last 10?

You are making the case for how important long-term planning is. You are absolutely correct that the future is unpredictable, and many unforeseen things can happen. There are many moving parts. But you know what they say: those who fail to plan, plan to fail.


This goes far beyond this administration or our hatred of anything Trump. We have a choice. We can continue kneeling before China, or we can remember who we are and can be. Trusting in peace among the free world, which China doesn't seem to fit, as are others, is relying on one's independence, not bowing down to dependence on someone else.

I understand the sentiment. But one thing that makes this difficult as that countries that take the plunge and engage in trade do better in the long run and those who, out of fear of becoming dependent on others, stay isolated and want to do everything themselves.

Both Japan and China, in their history, have pursued very aggressive isolationist policies. They, rightfully, mistrusted foreigners. They were backwater economies when they did that. Their economies exploded only when they finally opened up to International trade.

(Of course, the US forced Japan to open up to the world and start trading back in the 19th century- by putting warships in Tokyo Bay and telling them they would level Tokyo if they didn’t! Others, like the Russians or the Portuguese, had tried to get the Japanese to open up to international trade before, but without success. But none of them had to threatened them with artillery before. But still, they did better only after they started trading).
 
But that may not happen if the workforce is re-trained for a new 21st-century economy. If the US continues to cling to low skilled labor and increasingly obsolete technology to power its economy, do you really think it will stand a chance in the future world economy? Because other countries are not so shy about investing in their workforce and in infrastructure to get ready for an ever-changing economy. They don’t have this neurotic paranoia of government investing in it’s country’s workforce and infrastructure. The US cannot continue to cling to what made it great in the 1950s to continue to keep it great in the 21st-century. And sometimes the free market, left completely alone, is not enough to make these fundamental changes happen on their own.

What, exactly, does that (bolded above) mean?
 
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