Libertarian's Forum
Libertarian Forum to discuss politics and free market economics.
Libertarian's ForumLibertarian's ForumFreedom Forum › The Planet Money Presidential Platform
Page Index Toggle Pages: 1 ... 12 13 [14]  Send TopicPrint
Very Hot Topic (More than 25 Replies) The Planet Money Presidential Platform (Read 4524 times)
merkelstan
Libertarian Freedom Member
*****
Offline

Libertarian's Forum

Posts: 618
Joined: Jan 22nd, 2017
Re: The Planet Money Presidential Platform
Reply #130 - Feb 27th, 2017 at 8:47am
Print Post  
merkelstan wrote on Feb 27th, 2017 at 7:54am:
On the one hand you have the argument that a high wage country can't compete with low-wage countries.


I guess the real question is why are wages in one country higher?  Or to be more accurate, why is one country more prosperous than another?  It's not just just jobs we want - everybody in communist East Germany had a job... 

A company doesn't make its production decisions based on wages alone, but on total costs. So for example the company deciding between digging with one high-paid guy with a backhoe versus 10 low-paid guys with shovels, tends to go with the backhoe solution because the overall productivity per unit cost is higher. That's the whole reason why the industrial revolution under mostly free markets led to higher wages and standards of living in the the first place. The higher relative wages (compared to prices of goods) in USA did not emerge because American workers were more insistent on higher wages than their Asian counterparts. Instead they emerged because allowing businesses to keep and reinvest more of their profits led to higher worker productivity: We produced more of the things we need and want to consume per hour worked.

Now ironically, the prosperity that this generated in 1st world countries has funded the rise of a parasitic, bureaucratic state, which feeds upon those profits and adds layer upon layer of regulation every year, raising the cost of doing business and lowering net productivity.. (Some of those regulations can be argued to have positive macroeconomic effects - for e.g. reducing costly pollution or worker injuries - but in the whole libertarians consider the regulatory state to be vastly more expensive than the alternative of suing for damages in the courts).

In addition to this, the slow-motion collapse of public schooling in the US and the increase of people pursuing 'useless degrees' in higher education has reduced the US advantage in human capital (people trained with useful skills) versus poorer countries. I read somewhere a story about Apple looking-into producing LCD panels in California - they couldn't find enough qualified people to run the planned factory. If a business can find equally or better qualified workers in Asia, and the overhead of doing business is lower, then it makes sense to do the capital investment over there.

So is reducing bureaucracy and business costs a viable option for the Trump administration? Does a Republican majority in house and senate make that possible?  I think history shows the answer to be 'no'. There is a "ratchet effect" at work in the State which makes it very difficult to roll-back the regulatory/interventionist leviathan, and Republicans, despite making noises about small government, almost never follow-through.  So Trump advocates doing the only thing he has a chance of getting pushed-through: tariffs to increase the costs of producing in other countries.

Now while that plan probably will prevent some jobs from being exported overseas, it has the effect of making everything more expensive at home, thus negating (some of? all of?) the net benefits of keeping those jobs.

So I think the libertarian platform is the only long-term answer. Ultimately, for a nation to be prosperous, you HAVE to allow businesses to keep and reinvest their profits. You MUST cut-back those interventionist bureaucracies and laws which raise the transaction costs of doing business - because only voluntary transactions between parties tend to produce a win-win (both sides profit) outcome.

Bureaucratic edicts and government spending, by contrast, aren't constrained by the need to benefit both parties. Thus the majority of them end-up impoverishing society as a whole.  It doesn't take a rocket scientist to grasp this, but neither are people born with this knowledge. These basic economic truths need to be taught in order to become the consensus view in society.
« Last Edit: Feb 27th, 2017 at 10:55am by merkelstan »  
Back to top
 
IP Logged
 
SkyChief
Libertarian Freedom Member
*****
Offline

Libertarian's Forum

Posts: 4474
Joined: Aug 18th, 2014
Re: The Planet Money Presidential Platform
Reply #131 - Feb 27th, 2017 at 11:53am
Print Post  
merkelstan wrote on Feb 27th, 2017 at 7:54am:
I'm still struggling with the whole idea of 'protectionist' tariffs.

Again, leverage.  Its a civilized way of letting trade partners know that if they want to engage in predatory trade, (i.e., debasing a currency to gain a trade advantage) then the tariff card can/will be played.

merkelstan wrote on Feb 27th, 2017 at 7:54am:
The situation is further complicated by the US issuing the world reserve currency, which as Schiff puts it, enables the US to export printed paper notes and receive real goods and services in return.

Peter Schiff is a smart man.  He also said the dollars WRC days are numbered.   He predicted a non-fiat currency would assume the new WRC status.  He chose the Yuan, because at the time he made the prediction, China was buying up gold like crazy.

"I think they are accumulating more and more gold quietly and maybe secretly, because I do think that ultimately that is their intention to have a gold backed Yuan become the predominant currency in the world…"

Since 2015 when Schiff said this, China has scaled back their gold acquistion. But his prediction that the Dollar's WRC days are numbered is still a good one, imo.  History tells us that all WRC fail when the government debases it's currency to the point when it becomes worthless.

The US is approaching that day.  Thanks very much Federal Reserve.
  
Back to top
 
IP Logged
 
merkelstan
Libertarian Freedom Member
*****
Offline

Libertarian's Forum

Posts: 618
Joined: Jan 22nd, 2017
Re: The Planet Money Presidential Platform
Reply #132 - Feb 27th, 2017 at 12:51pm
Print Post  
SkyChief wrote on Feb 27th, 2017 at 11:53am:
Again, leverage.  Its a civilized way of letting trade partners know that if they want to engage in predatory trade, (i.e., debasing a currency to gain a trade advantage) then the tariff card can/will be played.


I see how devaluing your currency makes your exports cheaper.  On the other hand it makes your imports of input factors and other goods more expensive.  It means that while government debt is less costly to maintain, the wealth accumulated in your country is worth less than before.

So although just about everybody calls a currency devaluation a 'predatory' move, they fail to consider the other side of the coin. Devaluation means those guys end up working harder, for less reward - selling me more of their stuff in exchange for less of my money, right?  So the first order effect is that I'm wealthier.

Now the second order effect is of course that some of the folks in my country who were competing with them lose their job.  Can they find other ways to generate value / create jobs?  Not sure. But now I do have more money left-over to buy stuff produced locally...

Now raising tariffs in response to cheaper imports is to add to the cost of the stuff I want to buy, taking that money out of my pocket and giving it to the government to basically waste on bogus crap.  I'm not sure how this helps my economy.

I'm not saying I'm giving a balanced or complete view here or that I even understand currency markets - just raising some of the points Austrian economists make.  The take-away lesson seems to be that on net, we'd be better off without any central bank currency manipulation, and reducing those unnecessary burdens that make our businesses uncompetitive.

This dude seems to be making some good points: https://qz.com/795918/is-china-unfairly-devaluing-its-currency-a-primer-on-how-i...
« Last Edit: Feb 27th, 2017 at 2:23pm by merkelstan »  
Back to top
 
IP Logged
 
SkyChief
Libertarian Freedom Member
*****
Offline

Libertarian's Forum

Posts: 4474
Joined: Aug 18th, 2014
Re: The Planet Money Presidential Platform
Reply #133 - Feb 27th, 2017 at 2:24pm
Print Post  
merkelstan wrote on Feb 27th, 2017 at 12:51pm:
Now raising tariffs in response to cheaper imports is to add to the cost of the stuff I want to buy, taking that money out of my pocket and giving it to the government to basically waste on bogus crap.  I'm not sure how this helps my economy.

Think of the tariff gambit as analogous to maintaining a nuclear arsenal. You hope and pray the day never comes when you have to use it. But by having it, it prevents adversaries from making foolish decisions and upsetting the delicate balance we enjoy in todays Trade climate.  With TPP, tariffs are off the table - China can (and very likely will) try to take advantage of the US.

We already are burdened with a tremendous Trade Deficit with China. And to a lesser extent, Mexico.  Trump means to make "corrections".  TPP would be a quagmire for the US.

merkelstan wrote on Feb 27th, 2017 at 12:51pm:
... we'd be better off without any central bank currency manipulation, and reducing those unnecessary burdens that make our businesses uncompetitive.


Amen to that.
  
Back to top
 
IP Logged
 
Jeff
Libertarian Freedom Member
*****
Offline

Libertarian's Forum

Posts: 22008
Location: USA
Joined: Feb 26th, 2014
Re: The Planet Money Presidential Platform
Reply #134 - Feb 27th, 2017 at 4:28pm
Print Post  
SkyChief wrote on Feb 27th, 2017 at 2:24pm:
Think of the tariff gambit as analogous to maintaining a nuclear arsenal. You hope and pray the day never comes when you have to use it. But by having it, it prevents adversaries from making foolish decisions and upsetting the delicate balance we enjoy in todays Trade climate.  With TPP, tariffs are off the table - China can (and very likely will) try to take advantage of the US.

We already are burdened with a tremendous Trade Deficit with China. And to a lesser extent, Mexico.  Trump means to make "corrections".  TPP would be a quagmire for the US.


Amen to that.

How much do I owe as my portion of this trade deficit burden? Zero.

What's my "fair share" of the U.S. debt, which is an actual obligation? Way more than I could ever pay...

Anyway, from what I've read, the TPP would create somewhat more free trade than exists without it, a step in the right direction.

When, historically speaking, has the threat of tariffs ever prevented a trade war?

China currently enforces a lot of policies that make it hard for Americans to sell things in China (other than things China needs desperately, like energy). China's economy is struggling (so is Mexico's)...

Your claim is that threatening to enact punitive import tariffs will make things better? That China will hear the threat and start making it easy for Americans to sell things in China? How would making American goods cheaper in China help the Communist Party? Wouldn't it in fact drive inefficient and poorly run Chinese enterprises out of business? Why would the Chinese Communist Party want to do that to itself?

Historically, trade wars escalate into shooting wars. It's almost inevitable, because trade wars are detrimental to the creation of wealth, and poor hungry people often start thinking about revolution. Governments don't like their people rising up against them, so they blame someone else for all their failures and start a war with them.
  
Back to top
 
IP Logged
 
SkyChief
Libertarian Freedom Member
*****
Offline

Libertarian's Forum

Posts: 4474
Joined: Aug 18th, 2014
Re: The Planet Money Presidential Platform
Reply #135 - Feb 27th, 2017 at 10:52pm
Print Post  
Jeff wrote on Feb 27th, 2017 at 4:28pm:
How much do I owe as my portion of this trade deficit burden? Zero.

What's my "fair share" of the U.S. debt, which is an actual obligation? Way more than I could ever pay...

Anyway, from what I've read, the TPP would create somewhat more free trade than exists without it, a step in the right direction.


Distrubuted equally, each person's tax/debt liability is around $142k.  If your home is worth that, then you are good.

Sign over your house to the US government.  And vacate the premises.  You're good to go!   Unfortunately, the majority of Americans don't have this much equity in their property.

They must be dealt with. 

Severely.
  
Back to top
 
IP Logged
 
Jeff
Libertarian Freedom Member
*****
Offline

Libertarian's Forum

Posts: 22008
Location: USA
Joined: Feb 26th, 2014
Re: The Planet Money Presidential Platform
Reply #136 - Feb 28th, 2017 at 8:28am
Print Post  
SkyChief wrote on Feb 27th, 2017 at 10:52pm:
Distrubuted equally, each person's tax/debt liability is around $142k.  If your home is worth that, then you are good.

Sign over your house to the US government.  And vacate the premises.  You're good to go!   Unfortunately, the majority of Americans don't have this much equity in their property.

They must be dealt with. 

Severely.

Yes ha ha. Did you include unfunded future liabilities?

You purport that a serious action on the part of our government, a threat of high import tariffs, will be a good thing, and I asked if you know of any time and place where a threat of high tariffs had had a good/desired  effect. Do you?

From the reading I've done in the field of historical political economy, it seems axiomatic that government managed trade leads to trade wars leads to shooting wars.

merkelstan has just taken the time to outline some of the realities of "protectionism", to identify some of the very real deleterious effects on the people living in the "protected" nation as well as elsewhere in the world.

You should take the time to study what he wrote.

As you do, keep asking yourself, "Who is really benefiting from this?" I believe you will find the answer is cronies both in and out of government.
  
Back to top
 
IP Logged
 
AlayneLeung
Libertarian Senior Member
****
Offline

Libertarian's Forum

Posts: 356
Joined: Mar 20th, 2015
Re: The Planet Money Presidential Platform
Reply #137 - Nov 5th, 2017 at 3:39pm
Print Post  
A follow up to what I said on page 2 about socialism, those in charge of socialism become deranged also and eventually succomb to evil (like Stalin).
  
Back to top
 
IP Logged
 
AlayneLeung
Libertarian Senior Member
****
Offline

Libertarian's Forum

Posts: 356
Joined: Mar 20th, 2015
Re: The Planet Money Presidential Platform
Reply #138 - Nov 11th, 2017 at 12:18pm
Print Post  
How about Federal Communications Commission personnel cooperate with Internal Revenue Service personnel to impose a $2.40 tax per minute (1 penny per 0.25 seconds) on every minute of every televised episode that depicts and talks about cheaters and paternity maternity tests because children, of such irresponsible parents, are likely being harassed and bullied at their schools, and that tax shall go to the Department of Education?
  
Back to top
 
IP Logged
 
SkyChief
Libertarian Freedom Member
*****
Offline

Libertarian's Forum

Posts: 4474
Joined: Aug 18th, 2014
Re: The Planet Money Presidential Platform
Reply #139 - Nov 12th, 2017 at 1:17pm
Print Post  
AlayneLeung wrote on Nov 11th, 2017 at 12:18pm:
How about Federal Communications Commission personnel cooperate with Internal Revenue Service personnel to impose a $2.40 tax per minute (1 penny per 0.25 seconds) on every minute of every televised episode...

Yes.   More taxes..  We need more taxes.  Write your congressman, Alayne, and tell him you want more taxes. And you want the FCC to team up with the IRS.   Cheesy  They enjoy a good laugh every now and then.   Grin
  
Back to top
 
IP Logged
 
Page Index Toggle Pages: 1 ... 12 13 [14] 
Send TopicPrint
 
Libertarian's ForumLibertarian's ForumFreedom Forum › The Planet Money Presidential Platform
Libertarian's Forum

Libertarian's Forum Information Rules, Agreement and Privacy Policy