This is an interesting article that gives some much needed perspective to the debate about foreign trade as it currently exists:
https://www.washingtonpost.com/opinions/...story.html
"Expanded trade with China over the past 15 years has cost the United States at least 2 million jobs. Cracking down on trade with China, by taxing the cheap consumer goods it ships to our store shelves, could cost millions of additional jobs. That both of these things can be true is the conundrum of trade, the breakout issue of the 2016 presidential election. Democrats have long debated globalization and its consequences in their primary campaigns, particularly in the Rust Belt, a tradition Bernie Sanders and Hillary Clinton are continuing. But Republicans, led by Donald Trump, are suddenly bashing trade, too. On both sides, the issue has become a leading scapegoat for lost jobs and stagnating working-class wages, and rejiggering “bad” deals has become a common promise to restore middle-class prosperity. Many of the campaign promises, though, rest on myths. Here are the most egregious of them."
First, let me say that the conclusion and final recommendation of the article is asinine. "After failing to properly educate 80% of the population through the education system, we should pay for a massive centrally planned retraining program so that workers can perform new better paying jobs that will be freshly devalued based on infinite exposure to increased immigration of skilled workers through the k-1 Visa program that will drive down top level wages and the tax base that was supposedly going to pay for the massive tax and RETRAIN program to begin with."
But then it is the washington post. What are we really supposed to accept.
Truth about trade? Its just a trump hit piece but then again its the WP. The more I read the more it reaffirms that we need someone outside of the "Mainstream indoctrination" that goes on somewhere in the corridor around Maryland and Virginia that causes people to loose all semblances of common sense.
"We don't technically have a Trade agreement with China, so Trump is talking about something that doesn't exist. How silly is he?" 44 years of trade, millions of jobs, trillions of dollars in trade deficits that we then have to borrow back with interest that funds their national defense and we don't have a written agreement that says they won't bend us over a table? That says a lot about the last 11 terms of the executive and a lot less about the guy who wants to stop this nonsense. I also really appreciate how anyone interested in re balancing trade is an isolationist that will have us draw back from the global economy.
For all those playing at home, there are 4 major pillars in the protectionist playbook.
1.) Currency manipulation. China has historically been one of the worst abusers the dollar is constantly adjusted based on the market.
2.) Administrative barriers. China fights tooth and nail to keep our products out of the country, we allow them to dump their imports unfettered on our shores.
3.) Tariffs. China HAS a Tariff wall with our country designed to shield its domestic producers from real external competition, we don't.
4.) Subsidies. In China, most base line overhead for exporters is covered by the state including the cost of facilities, the power to run them etc. This makes it functionally impossible for American exporters to compete.
And those are just the economic strategies. Never-mind the fact that when you do get over the four policy hurdles to get into the country with your product that they just steel the intellectual property that cost you your life savings in R&D, slap a new label on it and flood the American market with it.
Call it a new bilateral trade agreement, call it executive pressure on an economy that is in the middle of recession (china's) call it winning a trade war i don't care, they are literally intentionally and blatantly ripping us off making it impossible for our companies to compete and we have to stop this cyle of loose and borrow.
Last but not least, They falsely characterized Trump's ideas as just a Tariff Buffet. He has also talked about the vast reduction in the tax on repatriating capital (We currently tax AMERICAN COMPANIES that bring money back to the US to invest at a rate of 38.8%). He's talked about lowering the regulatory burden that drives companies out of the country. He's talked about lowering the tax burden that drives companies out of the country. It's not just enough to tax imports. America has the most productive workforce in the world. We also have the most expansive consumer market in the world. Those are two gold gems for foreign investors that our BETTERS in the government hold hostage with taxes and regulation on anyone dumb enough to make things here. Right to work, lower taxes, lower regulation, repatriation of funds and you make America a desired market to make things instead of a skunk on the international manufacturing stage!
Quote:Pretty good read.
LOL, that was the laziest article I've ever read. No research, not in depth discussion about the pros and cons of actual trade policiy positions. It read like a high school paper that the student put off untill the night before.
But yeah, other than the fact that it was sloppy and had 5 points that real economists don't discuss. Yeah, it was a good read.
IMO, we do need to strike a good compromise.
On one hand we do have to stop expecting that we'll ever manufacture here again with the scope of what we did in the 50s. It's not sensible and it's not going to happen.
Small, everyday items can be made more efficiently overseas.
However, I'm not entirely against protecting SOME American industries with tariffs. My feeling is that at this point, how much more innovation do we really NEED? Will the iphone 7 make you happier than the iphone 6? Will a 2017 sedan markedly improve your quality of life over a 2016 or 2015? Will a new pair of Jordans make you healthier and happier than a pair of Reeboks at half the price?
We're a little too carried away with consumerism.
Things like auto, steel, maybe some other things, perhaps it wouldn't hurt to emphasize here in America via tariffs and other measures in order to provide stable factory jobs for people, even if it's not quite as efficient as outsourcing everything so we can get the latest 52'' curved-screen TV at a lower cost.
We have to figure out a balance here some time. Not sure what the solution is myself, but I can understand both sides of the issue and do think there is some room for compromise.
I will say that at a certain point our education system should become job training. We need to assess student interest and begin preparing kids for the university or the job market/trade school at a certain point. Our one size fits all mentality when it comes to education is creating a welfare state little by little as more and more individuals flunk out and rely on government assistance to support themselves.
Instead, these people could be trained and allowed to support themselves. We keep spending more and more on education, but it isn't fixing anything. The poor community continues to be poor because the education system in its current state sets them up to fail.
Quote:I will say that at a certain point our education system should become job training. We need to assess student interest and begin preparing kids for the university or the job market/trade school at a certain point. Our one size fits all mentality when it comes to education is creating a welfare state little by little as more and more individuals flunk out and rely on government assistance to support themselves.
Instead, these people could be trained and allowed to support themselves. We keep spending more and more on education, but it isn't fixing anything. The poor community continues to be poor because the education system in its current state sets them up to fail.
They already do this with their privatized prisons via cronyism. To think that they want to change their gameplan is the root of the fallacy, you're just playing into their hands as once the political banter wears off it'll be back to business as usual. Omitting the career politicians from the recipe would be a good start but I'm afraid we're too far down the rabbit hole already to create any significant change that brings the imperialism movement to at least a stand still.
Jag4Lyfe, did you check out the thread about my business idea?
What do you think of it as a potential solution?
Quote:First, let me say that the conclusion and final recommendation of the article is asinine. "After failing to properly educate 80% of the population through the education system, we should pay for a massive centrally planned retraining program so that workers can perform new better paying jobs that will be freshly devalued based on infinite exposure to increased immigration of skilled workers through the k-1 Visa program that will drive down top level wages and the tax base that was supposedly going to pay for the massive tax and RETRAIN program to begin with."
Hehe, agreed, section 5 was a bit iffy. Still, they part about foreign workers for high skilled positions is interesting to me, in the sense that in many ways our current licensing seems to be an artificial restraint that does not serve the consumer well.
But then it is the washington post. What are we really supposed to accept.
Truth about trade? Its just a trump hit piece but then again its the WP. The more I read the more it reaffirms that we need someone outside of the "Mainstream indoctrination" that goes on somewhere in the corridor around Maryland and Virginia that causes people to loose all semblances of common sense.
"We don't technically have a Trade agreement with China, so Trump is talking about something that doesn't exist. How silly is he?" 44 years of trade, millions of jobs, trillions of dollars in trade deficits that we then have to borrow back with interest that funds their national defense and we don't have a written agreement that says they won't bend us over a table? That says a lot about the last 11 terms of the executive and a lot less about the guy who wants to stop this nonsense. I also really appreciate how anyone interested in re balancing trade is an isolationist that will have us draw back from the global economy.
I fail to see what your problem with the first part is. WTO handles issues with trade under general provisions. We don't have anything like NAFTA with China to the best of my understanding. So the author is correct. We have to use GTO standards, like in the Chinese steel dumping, to correct issues, not a different agreement.
For all those playing at home, there are 4 major pillars in the protectionist playbook.
1.) Currency manipulation. China has historically been one of the worst abusers the dollar is constantly adjusted based on the market.
This does seem to be a problem without a current framework for solution.
2.) Administrative barriers. China fights tooth and nail to keep our products out of the country, we allow them to dump their imports unfettered on our shores.
Examples? I mean other than the steel one I gave above.
3.) Tariffs. China HAS a Tariff wall with our country designed to shield its domestic producers from real external competition, we don't.
I hear this, but really haven't seen the evidence, so some links would be appreciated. From what I have understood, general tariffs would violate WTO guidelines, as Trump's 45% thing would. I imagine that would be addressed in WTO.
4.) Subsidies. In China, most base line overhead for exporters is covered by the state including the cost of facilities, the power to run them etc. This makes it functionally impossible for American exporters to compete.
Just out of curiosity, where do we draw the line? If the US gives subsidies for domestic development of green technology is that taboo? What about our tax breaks for relocating businesses? I mean, I am curious how you would suggest we ever be able to deal with this.
And those are just the economic strategies. Never-mind the fact that when you do get over the four policy hurdles to get into the country with your product that they just steel the intellectual property that cost you your life savings in R&D, slap a new label on it and flood the American market with it.
Call it a new bilateral trade agreement, call it executive pressure on an economy that is in the middle of recession (china's) call it winning a trade war i don't care, they are literally intentionally and blatantly ripping us off making it impossible for our companies to compete and we have to stop this cyle of loose and borrow.
The devil is in the details. I would love to see what Trump (or Bernie, or any of them) really have out there as far as the details.
Last but not least, They falsely characterized Trump's ideas as just a Tariff Buffet. He has also talked about the vast reduction in the tax on repatriating capital (We currently tax AMERICAN COMPANIES that bring money back to the US to invest at a rate of 38.8%). He's talked about lowering the regulatory burden that drives companies out of the country. He's talked about lowering the tax burden that drives companies out of the country. It's not just enough to tax imports. America has the most productive workforce in the world. We also have the most expansive consumer market in the world. Those are two gold gems for foreign investors that our BETTERS in the government hold hostage with taxes and regulation on anyone dumb enough to make things here. Right to work, lower taxes, lower regulation, repatriation of funds and you make America a desired market to make things instead of a skunk on the international manufacturing stage!
When someone can set up a factory producing T-Shirts for 5% of the cost in Malaysia, why would they choose to come here? Seriously, I am not sure I get where you think the manufacturing base makes economic sense to relocate to the U.S..
Not trying to be strident, I just am not sure of where the economic sense comes from in many of the discussions on trade and jobs. I am in many ways pretty simple when it comes to a lot of that stuff. If the numbers don't add up, the jobs won't come back. And if we do have some sort of half-[BLEEP] system in place for restraint of trade, I am not sure that it benefits us either.
Let me say from the outset: no one is saying that there is a magic bullet solution that will bring 100% of manufacturing jobs to the us and destroy the world economy. In America our labor force is used to a higher standard of living than most in the world. That means that competing with international manufacturers is difficult to start with. If an American company is going to have a CHANCE of making things here then we have to at least have an even playing field on the rules conditions and tax treatment of that business with other countries. Right now there is not only a higher cost associated with labor, but cost of compliance with regulation, tax burden, repatriation of offshore profits etc.
To put it simply, if we are going to pay our workers as well as we should, then our regulatory policy and tax policy should be designed to make products as inexpensive to build as possible. It's asinine to have high wages draconian taxes and regulations and expect companies to come pouring in.
It also doesn't make sense to give countries that institute protectionist policies against our exports full unfettered access to the most desired consumer market in the world.
In the case of China my point is that right now the structure of the current arrangement is mostly irrelevant. They are notorious currency manipulators, they have make it very hard for us exporters to have access to their markets, they have several
tariff walls across different sectors of their economy, and their domestic producers are heavily subsidized. That says nothing of stolen intellectual property and cyber attacks.
We have to develop a strategy to curtail trade practices that are not in good faith and make sure that we don't allow our domestic workers to get ripped off. Specifically Donald Trump has advocated Lowering taxes, simplifying the tax code, freezing the regulatory structure to provide certainty, and most importantly greatly reducing the taxes that we charge companies to bring foreign profits back home (38.8%). Right now if a company makes a billion dollars in france and wants to bring some of that money back home to build a factory or do R&D they can't! The last time there was a significant decrease in the repatriation rate the economy saw something like a 360 billion dollar influx of money that the Treasury didn't have to PRINT!!!
Free trade is a good thing. It increases options for consumers globally and lower costs globally. There is a difference between free trade and allowing your entire country to get ripped off.
We have 95 Million people out of the labor force in this country, nearly 50 million on food stamps and we are absorbing millions and millions more into paid medicaid coverage through medicaid expansion. We can't continue to absorb millions of undocumented workers to put further strain on the social safety net and compete for unskilled labor.
In some respects licensing for certain sectors of the economy is an impediment. The solution is to make sure that licensing is common sense and decrease the administrative burdens put on businesses so that DOMESTIC workers and budding entrepreneurs have the ability for professional advancement and we need to redesign the over bloated education system that we already pay for to make that the goal. There's no need to have even more people competing for jobs and professions that can be filled by a labor force that is already largely out of work.
Quote:Let me say from the outset: no one is saying that there is a magic bullet solution that will bring 100% of manufacturing jobs to the us and destroy the world economy. In America our labor force is used to a higher standard of living than most in the world. That means that competing with international manufacturers is difficult to start with. If an American company is going to have a CHANCE of making things here then we have to at least have an even playing field on the rules conditions and tax treatment of that business with other countries. Right now there is not only a higher cost associated with labor, but cost of compliance with regulation, tax burden, repatriation of offshore profits etc.
To put it simply, if we are going to pay our workers as well as we should, then our regulatory policy and tax policy should be designed to make products as inexpensive to build as possible. It's asinine to have high wages draconian taxes and regulations and expect companies to come pouring in.
Wage comparison – Note, U.S. and FL are minimum, others are average hourly wages paid to textile workers. U.S. 7.25 , Florida 8.05 , Bangladesh .21 , Indonesia .35 , Vietnam .52 , Mexico .50 . How do you compete against this?
Taxes - you are suggesting we change our corporate tax structure for businesses that manufacture things here? To what?
Regulations – So, no more OSHA? A lot of times the regulations we have are good ideas to insure worker safety. Maybe the correct thing is not to gut them, but to require an overseas production facility to meet the same standards.
It also doesn't make sense to give countries that institute protectionist policies against our exports full unfettered access to the most desired consumer market in the world.
In the case of China my point is that right now the structure of the current arrangement is mostly irrelevant. They are notorious currency manipulators, they have make it very hard for us exporters to have access to their markets, they have several tariff walls
across different sectors of their economy, and their domestic producers are heavily subsidized. That says nothing of stolen intellectual property and cyber attacks.
What is it about the WTO sanctions and regulations that is ineffective? From what I see here
, they generally worked. We have the previous example of the steel dumping sanctions. Please explain what works better?
We have to develop a strategy to curtail trade practices that are not in good faith and make sure that we don't allow our domestic workers to get ripped off. Specifically Donald Trump has advocated Lowering taxes, simplifying the tax code, freezing the regulatory structure to provide certainty, and most importantly greatly reducing the taxes that we charge companies to bring foreign profits back home (38.8%). Right now if a company makes a billion dollars in france and wants to bring some of that money back home to build a factory or do R&D they can't! The last time there was a significant decrease in the repatriation rate the economy saw something like a 360 billion dollar influx of money that the Treasury didn't have to PRINT!!!
So reward companies that shift businesses offshore by allowing them to bring back the profits tax-free? Sorry, how does that make sense? I find this
more persuasive.
Free trade is a good thing. It increases options for consumers globally and lower costs globally. There is a difference between free trade and allowing your entire country to get ripped off.
We have 95 Million people out of the labor force in this country, nearly 50 million on food stamps and we are absorbing millions and millions more into paid medicaid coverage through medicaid expansion. We can't continue to absorb millions of undocumented workers to put further strain on the social safety net and compete for unskilled labor.
Seems to me the main beneficiaries of undocumented workers are the businesses that hire them, not the workers themselves. Crack down on the problem at the hiring side, problem solved.
In some respects licensing for certain sectors of the economy is an impediment. The solution is to make sure that licensing is common sense and decrease the administrative burdens put on businesses so that DOMESTIC workers and budding entrepreneurs have the ability for professional advancement and we need to redesign the over bloated education system that we already pay for to make that the goal. There's no need to have even more people competing for jobs and professions that can be filled by a labor force that is already largely out of work.
Common sense licensing is good, but why limit foreign workers? If they can provide similar service, why bar them from coming here? From your perspective, should we also limit software workers from getting green cards?
Ya so let's just keep doing what we've been doing, which is exactly what will happen when Hillary or Cruz/?? gets elected.
The highest repatriation of foreign profits in the last 10 years happened in 2015, under Obama's administration... he's also offered to lower the tax rate on the foreign profits down to 19 percent. 300 billion was repatriated in 2014..
I agree with a bit of what jj's position. However, the idea that the US's tax system is burdensome or draconian is hyperbolic at best. As someone that works with 1120's quite a bit, it's my experience that multinationals and even very large national corporations get tons of opportunity to lower their effective tax amounts. I mean, let's remember here, the tax they pay is based on net profits. And, you're gonna have to trust me on this one, what these huge companies day they make on their annual reports to the SEC and their shareholders is significantly less than what they report to the irs... and it's all legit and legal.
To back to jj on another point, nobody is saying we're gonna have a manufacturing renaissance. There are obvious industries where developing nations have a competitive advantage. And that's fine. But the trade policies of out nation should be created to protect those other industries in which we can compete.
Lastly, free trade is a good thing. But there is a qualifier to that statement. Free trade is a good thing for shareholders and corporations that can take their capital where ever it's more advantageous. Free trade is bad workers because it drives down wages...
Quote:Ya so let's just keep doing what we've been doing, which is exactly what will happen when Hillary or Cruz/?? gets elected.
Maybe we should discuss what we ought to be doing? To me it is more important to develop good positions on trade than to focus on candidates. You are a member of a representative democracy. Represent. What do you think we should do?
Quote:Maybe we should discuss what we ought to be doing? To me it is more important to develop good positions on trade than to focus on candidates. You are a member of a representative democracy. Represent. What do you think we should do?
Not vote for the same type of politicians who vote for trade deals like TPA and TPP. That's pretty much the ONLY thing we can do.
Quote:The highest repatriation of foreign profits in the last 10 years happened in 2015, under Obama's administration... he's also offered to lower the tax rate on the foreign profits down to 19 percent. 300 billion was repatriated in 2014..
I agree with a bit of what jj's position. However, the idea that the US's tax system is burdensome or draconian is hyperbolic at best. As someone that works with 1120's quite a bit, it's my experience that multinationals and even very large national corporations get tons of opportunity to lower their effective tax amounts. I mean, let's remember here, the tax they pay is based on net profits. And, you're gonna have to trust me on this one, what these huge companies day they make on their annual reports to the SEC and their shareholders is significantly less than what they report to the irs
... and it's all legit and legal.
To back to jj on another point, nobody is saying we're gonna have a manufacturing renaissance. There are obvious industries where developing nations have a competitive advantage. And that's fine. But the trade policies of out nation should be created to protect those other industries in which we can compete.
Lastly, free trade is a good thing. But there is a qualifier to that statement. Free trade is a good thing for shareholders and corporations that can take their capital where ever it's more advantageous. Free trade is bad workers because it drives down wages...
I think you have that backwards. What's reported to the IRS is usually less due to tax breaks like MACRS and Sec 179 depreciation.
Quote:Lastly, free trade is a good thing. But there is a qualifier to that statement. Free trade is a good thing for shareholders and corporations that can take their capital where ever it's more advantageous. Free trade is bad workers because it drives down wages...
Free trade is also good for consumers.
Quote:I think you have that backwards. What's reported to the IRS is usually less due to tax breaks like MACRS and Sec 179 depreciation.
Yes, you are correct. Thank you for catching that! The annual reports show higher profits while irs returns are usually significantly lower.
Besides what you mentioned, there are nol deductions, loss on capital gains can offset income of subsequent gains, even charitable contributions can reduce a company's taxable income.
Quote:Free trade is also good for consumers.
I think that's also a qualifier... consumers in certain markets benefit. Consumers that are being exploited by capital flight aren't really seeing the benefit of these cheaper goods because their wages are so deflated.
Quote:I think that's also a qualifier... consumers in certain markets benefit. Consumers that are being exploited by capital flight aren't really seeing the benefit of these cheaper goods because their wages are so deflated.
And you can only be a true consumer if you have a job, which many wont if Company A ships production to Mexico to take advantage of slave labor wages and X trade agreement.
At which point in the future the solution will be, let's just combine Mexico, USA and Canada... one more step toward globalism. Create the problem, provide the solution. That's how these politicians work.