4 ms·

The down-swing in a business cycle is the time for everyone to resurrect their pet anti-trade theories.

cangrande 16y ago
Precisely, there has been a habit amongst commentators during period's of recession to trot out the need for protectionism. During the 1980s Japan was the biggest threat, leading to all sorts of political pronouncements and movements, and now it's China.
- jeremytliles 16y ago
  And the replacement of our manufacturing base by Japan and then China is not an issue?
  - jacoblyles 16y ago
    http://faculty.tamu-commerce.edu/dfunderburk/428/readings/The%20Iowa%20Car%20Crop.htm http://faculty.tamu-commerce.edu/dfunderburk/428/readings/Th...
  - cangrande 16y ago
    I don't think it is an issue, plus I'm not sure if it's accurate. Setting aside the automobile industry there are still some extremely successful manufacturing companies in the US. Eliyahu M. Goldratt wrote an interesting book on the subject in the 1980s.
SkyMarshal 16y ago
Defationary collapse of a massive debt bubble != down-swing of the business cycle. Also, a quick look at just about every economic empire in history shows their decline was always associated with a massive negative trade balance. The theorists seem to ignore this though. If it's not codified in a dazzling formula, it's irrelevant. Not that I'm for protectionism or anti-globalization, but it's certainly not beyond questioning, reconsidering, and/or re-engineering.
- hugh3 16y ago
  Defationary collapse of a massive debt bubble != down-swing of the business cycle They look pretty much the same from the perspective of July 2010. What's the big difference?
  - SkyMarshal 16y ago
    Routine business cycle downswings don't require over a trillion dollars to prevent the economy from tailspinning into another Great Depression. If you add up the TARP and all the alphabet soup lending support programs, the stimulus package/s, and Fed's quantitative easing intervention, you're talking well over a trillion dollars, and we're still not out of it yet. This was a speculative debt bubble followed by the inevitable financial crisis. See Rogoff & Reinhardt. Definitely not part of the business cycle.

Precisely, there has been a habit amongst commentators during period's of recession to trot out the need for protectionism. During the 1980s Japan was the biggest threat, leading to all sorts of political pronouncements and movements, and now it's China.

jeremytliles 16y ago
And the replacement of our manufacturing base by Japan and then China is not an issue?
- jacoblyles 16y ago
  http://faculty.tamu-commerce.edu/dfunderburk/428/readings/The%20Iowa%20Car%20Crop.htm http://faculty.tamu-commerce.edu/dfunderburk/428/readings/Th...
- cangrande 16y ago
  I don't think it is an issue, plus I'm not sure if it's accurate. Setting aside the automobile industry there are still some extremely successful manufacturing companies in the US. Eliyahu M. Goldratt wrote an interesting book on the subject in the 1980s.

SkyMarshal 16y ago

Defationary collapse of a massive debt bubble != down-swing of the business cycle. Also, a quick look at just about every economic empire in history shows their decline was always associated with a massive negative trade balance. The theorists seem to ignore this though. If it's not codified in a dazzling formula, it's irrelevant. Not that I'm for protectionism or anti-globalization, but it's certainly not beyond questioning, reconsidering, and/or re-engineering.

hugh3 16y ago
Defationary collapse of a massive debt bubble != down-swing of the business cycle They look pretty much the same from the perspective of July 2010. What's the big difference?
- SkyMarshal 16y ago
  Routine business cycle downswings don't require over a trillion dollars to prevent the economy from tailspinning into another Great Depression. If you add up the TARP and all the alphabet soup lending support programs, the stimulus package/s, and Fed's quantitative easing intervention, you're talking well over a trillion dollars, and we're still not out of it yet. This was a speculative debt bubble followed by the inevitable financial crisis. See Rogoff & Reinhardt. Definitely not part of the business cycle.