Yup. Heavily protectionist. Thats exactly how an unbiased economist would characterize US trade policy. Stop watching msnbc dude.
The USA became the world's largest evonomy with massive tariffs on basically all imports. Smoot Hawley Act anyone? Those were removed gradualy starting in the 1970's and lo and behold the trade deficit sky rocketted while the manufacturing economy plummeted.
what they argue for: sure, looking at goods, there's a deficit for the US. But once you take services and primary and secondary income into account, then the US actually cuts the better deal with the EU.
imv, trump/the current US gov are twisting the numbers to get a better deal.
A trade deficit means that, on net, your trade partners end up with your currency and no goods to buy with it. So they start buying up assets in your country. Factories, companies, land, housing, bonds, etc. so by maintaining a trade deficit for so long, we have legally sold a large fraction of the assets in our country to foreign investors. (Foreign direct investment) How do you think Trump made his billions?
Having Saudi Oil Sheiks own all the Soccer teams in England is the result of the UK trade deficit.
Having chineese bussinessmen buy up all the valuable real estate in our biggest cities is a result of the trade deficit.
Massive underemployment (more baristas fewer mechanics) is a result of the trade deficit.
A trade deficit means that, on net, you've sent a bunch of pieces of paper to a country and they have given you actual stuff in return. So then they give that money back to you by investing in your country.
>Having Saudi Oil Sheiks own all the Soccer teams in England is the result of the UK trade deficit.
More English soccer teams are owned by Americans than all the russians oligarchs and arab sheiks combined.
That's because you still haven't answered the original question:
>>> Is a trade deficit important to not have?
E.g., consider your examples:
>sheiks owning the sports teams and chineese businessman owning all the prime housing
Given that I'm not the type of person who buys sports teams and prime housing (of the sort purchased by Chinese businessmen), why should I care about that style of FDI? I mean, I guess it must suck for the American ultra-rich that they now have to compete with the Chinese ultra-rich for access to ultra-veblen goods like owning sports teams, but... why the hell should the rest of us care which mega-rich person owns the local sports team!? What possible material impact could that ever have on us?
The only type of FDI that effects my life is FDI in productive assets, like factories, and those are strictly good for me (more and better-paying jobs).
"So we lost the Toyota factory but on the plus side the sports team isn't owned by a Sheik" seems like a really dumb trade-off. What am I missing here...?
There is no trade deficit with Canada. At all. Claiming there is one, in the face of all facts to the contrary, is not having a discussion in good faith.
So instead of enlightening me with these facts, you accuse me of acting in bad faith? I was under the impression that there was a trade deficit with Canada given the evidence I have found: https://www.census.gov/foreign-trade/balance/c1220.html .
jeromegv said there was no trade deficit with Canada, so I assumed good faith and responded to him/her under the pretense that they were referring to the "aggregate sales surplus" figure that has been in the news recently.
Can you please help me understand how I have ignored facts and acted in bad faith? I would like to fix this problem, but I do not understand where to begin.
Greece can't recover because its exports are too expensive. Devaluing the currency in which those exports are sold in order to spur exports doesn't solve the underlying problem, which is Greek productivity. Imagine that the German economy is a Prius and the Greek economy is a truck hauling a ton in a trailer behind it, and the Greek truck is complaining that it costs more in fuel than the German Prius to get from the same point A to the same point B. Devaluing the Greek currency is like making fuel cost less especially for the Greek truck with no change in cost for the German Prius; sure, if the fuel is cheap enough for the Greek truck then maybe the Greek truck will be price-competitive in getting you from A to B, but the real solution is "how do we get the Greek truck to first dump the ton it's hauling behind it and then how do we make it more fuel efficient".
In a single-currency market, it is the responsibility of strong players to shore up the economies of weak players, or risk popular discontent in the weaker economy and the democratic dissolution of the common currency. German politicians have paid lip service to this but have not really put German resources to use in building up the PIGS economies because such a policy is unpopular with the German voting public, which wants to see those resources stay in Germany and to the nearsighted benefit of German taxpayers. This is the real root of the Euro crisis. There were always going to be weaker players in the EU, and it doesn't matter if it's Greece, it could very easily have been some other country. The question is what do stronger players do.
The US doesn't suffer from this issue because, to use an oversimplified example, California voters aren't discontent with FEMA funds used in hurricane disaster recovery areas. Californians are Americans before they're Californians, by and large.
> There were always going to be weaker players in the EU
This is true, however there were quite strict criteria (the Maastricht criteria) put in place to try and prevent this from being too bigger problem. In hindsight, those criteria weren't sufficient, in one way or another.
I believe it's correct to say those weaker economies benefited from adopting the Euro the short term, and that they wanted to join the Euro.
As a twist, the Euro was somewhat unpopular in Germany when it was introduced, because it made things more expensive. So there is a feeling that Germany "paid" the price of adopting the Euro - whether this is true or not is irrelevant for the sake of policy-making.
Even worse: Germany, an already very strong nation, gets to free ride the Euro for its export machine at the cost of its Eurozone rivals (and other competitors in Europe broadly). If Germany had its own currency, it would be considerably more expensive than the Euro is today, which would make German exports more expensive. As you note, countries like Greece, Spain, Italy, Portugal would do better because their exports would be cheaper under less expensive national currencies (unique to their individual economic circumstances), enabling them to compete better against Germany's exports. This artificial prop can be seen in the fact that Germany has the world's largest trade surplus as a percentage of its economic output.
But that is exactly the point right? If you devalue the common currency then the amount you pay Greek farmers goes "up" effectively, and the price you pay German farmers also goes "up" so the relative costs of things stay the same and nothing changes. Whereas with a translation layer (currency exchange) you can "adjust" what it costs Greece and what it costs Germany to the advantage of one or the other.
A tariff is a way to adjust this economic cost externally which takes it out of the market's hands and put it into a political realm and one step removed from the actual economy that should be adjusting.
>In a cross-country analysis of over 125 countries, this study finds that corruption is lower in countries where a greater share of parliamentarians are women.
Can people please use their critical thinking skills here? Why would countries like Saudi Arabia have more corruption than countries like Sweeden? If you seriously think it's because Sweeden allows women in government you need your head checked.
I agree with you, but only because you seem to have missed the crux (no irony intended) of Ayn Rand's ideology. She hated how even the style of the buildings around her embodied a people and culture she saw as a threat to her vision of the world and wanted to tear down. She would have no "homage" to it at all.
I agree, it is beautiful. But Ayn Rand would have hated it. That design is steeped in European and Christian traditions and symbolism. Those things are all anathema to her ideology.
But honestly who gives a shit about what Ayn Rand would have thought about it. She was a nut and her ideology should be aggressively dismissed as simplistic and quite frankly stupid.
There are 5 billion impoverished people who would move to a first world country and depress natives' wages to nil if given a chance. Those who haven't done so yet shouldn't be discounted either.
This is the only comment that gets at the heart of the matter. I would add that culpability is not zero sum. The shooter was 100% responsible, and the others were also partially responsible.
Great point about the complexity of the real world. I would add that people who favor simple explanations are more likely to be centrist (supports status quo) because they are less likely to question the simple explanations handed to them.
George W Bush in so many words said "We must invade Iraq or they will nuke us." Compared to that, any arguement against the war would have seemed like a lot of logical jumps, but the simple argument was a lie.
Great example, that's along the lines of the kind of weird rhetoric politics is known for. Iraq is an entire country! Thousands of villages, micro and macroeconomic activity, relationships with several dozen other countries! It's got everything every other country has: complexity.
Simple minded "let's get em" shit didn't work then and won't work now.
The USA became the world's largest evonomy with massive tariffs on basically all imports. Smoot Hawley Act anyone? Those were removed gradualy starting in the 1970's and lo and behold the trade deficit sky rocketted while the manufacturing economy plummeted.