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China, for example, has experienced a massive trickle-down of Western capital This is not the effect that the term "trickle-down", or "supply-side" economics r

China, for example, has experienced a massive trickle-down of Western capital This is not the effect that the term "trickle-down", or "supply-side" economics refers to. Trickle-down economics is a fallacious concept that says if you make rich people or corporations even richer, they will in turn re-invest their riches in things that employ wage-earners. There is no empirical support for this concept, and much empirical evidence that the reverse is true - a vibrant economy requires most of the economic activity to be enriching the lower/middle class wage earners. The massive flow of capital to e.g. China is simply wage arbitrage combined with structural disadvantage, e.g., no worker safety protection, environmental protection, etc costs.

chibg10 8y ago
What empirical evidence are you referring to that says rich people aren't investing their money? And if it is the case that they are indeed investing, where do you suppose China's investment-centric economy is getting capital from? Who do you suppose is paying Chinese workers manufacturing goods for American corporations? If you leave out unskilled workers (whose share of capital went offshore), wage growth among skilled American laborers has been very high... which is also what you'd expect from trickle-down.
- jhayward 8y ago
  > where do you suppose China's investment-centric economy is getting capital from? From the Chinese central bank, which has massively expanded the economy through low interest rates and easy credit. Wealthy people are are investing their windfalls, but not in production, but rather in rent-seeking FIRE assets. Those assets do not create middle- and lower-class wage jobs, in fact they suck income out of those classes. > wage growth among skilled American laborers has been very high You will have to support this with more than just an assertion. The wages for skilled trades, for instance, have not nearly kept up with inflation. Skilled manufacturing, same. Some of the professional categories, like software development, have seen some growth - but the outliers in SF/NY are outliers, not the median nationwide. Doctors net less, lawyers are mostly destitute unless they are in the 10% who make it in biglaw, and so on and so on.
  - nwienert 8y ago
    Can you cite the Chinese low interest rates? The BLR is 4.3% according to this[0] is there something else going on? [0] https://tradingeconomics.com/china/bank-lending-rate https://tradingeconomics.com/china/bank-lending-rate
    - jhayward 8y ago
      China started to rein in the massive debt economy earlier this year. Current rates are not indicative of the past, and official rates don't reflect the enormous "shadow banking" industry that has been at the heart of the debt boom.[1] [1] https://www.ft.com/content/45bd8052-59dc-11e8-bdb7-f6677d2e1ce8 https://www.ft.com/content/45bd8052-59dc-11e8-bdb7-f6677d2e1...
nickthemagicman 8y ago
He's saying that the wage earners are in China instead of America and are recieving the 'trickle down' effects.
- jhayward 8y ago
  I'm saying they're not - they're receiving the benefit of wage arbitrage. US workers are on the losing end. That's not what supply-side economics is about.
  - nickthemagicman 8y ago
    So the jobs have to remain inside of the economy that created them to create the demand I think is what you're saying. Supply-side economics seems kind of flawed then. How does it account for automation taking jobs?

chibg10 8y ago

What empirical evidence are you referring to that says rich people aren't investing their money? And if it is the case that they are indeed investing, where do you suppose China's investment-centric economy is getting capital from? Who do you suppose is paying Chinese workers manufacturing goods for American corporations? If you leave out unskilled workers (whose share of capital went offshore), wage growth among skilled American laborers has been very high... which is also what you'd expect from trickle-down.

jhayward 8y ago
> where do you suppose China's investment-centric economy is getting capital from? From the Chinese central bank, which has massively expanded the economy through low interest rates and easy credit. Wealthy people are are investing their windfalls, but not in production, but rather in rent-seeking FIRE assets. Those assets do not create middle- and lower-class wage jobs, in fact they suck income out of those classes. > wage growth among skilled American laborers has been very high You will have to support this with more than just an assertion. The wages for skilled trades, for instance, have not nearly kept up with inflation. Skilled manufacturing, same. Some of the professional categories, like software development, have seen some growth - but the outliers in SF/NY are outliers, not the median nationwide. Doctors net less, lawyers are mostly destitute unless they are in the 10% who make it in biglaw, and so on and so on.
- nwienert 8y ago
  Can you cite the Chinese low interest rates? The BLR is 4.3% according to this[0] is there something else going on? [0] https://tradingeconomics.com/china/bank-lending-rate https://tradingeconomics.com/china/bank-lending-rate
  - jhayward 8y ago
    China started to rein in the massive debt economy earlier this year. Current rates are not indicative of the past, and official rates don't reflect the enormous "shadow banking" industry that has been at the heart of the debt boom.[1] [1] https://www.ft.com/content/45bd8052-59dc-11e8-bdb7-f6677d2e1ce8 https://www.ft.com/content/45bd8052-59dc-11e8-bdb7-f6677d2e1...

nickthemagicman 8y ago

He's saying that the wage earners are in China instead of America and are recieving the 'trickle down' effects.

jhayward 8y ago
I'm saying they're not - they're receiving the benefit of wage arbitrage. US workers are on the losing end. That's not what supply-side economics is about.
- nickthemagicman 8y ago
  So the jobs have to remain inside of the economy that created them to create the demand I think is what you're saying. Supply-side economics seems kind of flawed then. How does it account for automation taking jobs?