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American businesses have the power to change China’s behavior

86 points by jger15 6y ago

deleted 6y ago
[deleted]
blackrock 6y ago
LOL. What a load of lies. American businesses had the power to change American behavior in the 1800s and 1900s. Did they do it? No. American businesses could have helped outlawed slavery in America. They could have forced the issue onto their politicians. Did they do it? No. Then in the 1900s, American businesses could have outlawed racism. They could have forced civil rights onto their politicians. Did they do it? No. And today. American businesses can force the end of police violence against minorities onto their politicians. Are they doing it? No. American businesses can ensure fair distribution of wages, and financial equality, and social equality to help their minority citizens. Are they doing it? No. Hence, give me some evidence that American businesses can actually do something useful at home first, before making them a pawn in this stupid game of geopolitics that the Washington elites are playing against a nation on the other side of the world, and forcing the rest of us to choose sides on. When, they themselves do nothing for us. My point is, the problems we have in America, has nothing to do with China. This is all home grown. We have within ourselves, the ability to make life better, fairer, and more equitable to all Americans. Instead, what does the politicians do? Nothing. Instead, they do everything to support the rich, and the elite. While the rest of us gets fleeced, are lied to, and gets hoodwinked. The biggest lie that they sold to us, is that Trickle Down Economics will work for everyone. That tax cuts for the wealthy will help drive business growth. Trickle Down Economics should instead be renamed to Trickle Up Economics. The problem is not China. The problem is our corrupt political and financial system.
- arcticbull 6y ago
  I guess the question this article asks is what, if anything has changed since the examples you cite.
- spoiledtechie 6y ago
  I sense your a pretty emotional person and are quite upset at your current economic decision. So lets start with your point. Trickle down economic does work in its truest form. It starts with a person who creates a business. This business makes money through the work it does. The owner gets paid more and decides they can create another business. A business larger with more employees. Overtime, the owner creates many more businesses and employs more. Providing its employees with cash, to spend at restaurants, on boats, on houses, on daycare and many other businesses that the employees like to spend money on. Therefore jump starting more business owners to spend more. This is trickle down economics and its working. I think the thing your upset about is the idea that these business owners, the wealthy are not creating and doing more. I disagree and the US economy would disagree. You simply might just be detached from the economy. So your quite upset about it.
  - Unesco88 6y ago
    Sigh, the fact that garbage like this appears on hackernews is why I can't take US politics seriously. How about some actual research? https://whorulesamerica.ucsc.edu/power/wealth.html https://whorulesamerica.ucsc.edu/power/wealth.html https://whorulesamerica.ucsc.edu/power/images/wealth/Net_worth_and_financial_wealth.png https://whorulesamerica.ucsc.edu/power/images/wealth/Net_wor... https://whorulesamerica.ucsc.edu/power/images/wealth/Actual_estimated_ideal_wealth_distribution.gif https://whorulesamerica.ucsc.edu/power/images/wealth/Actual_...
  - Renaud 6y ago
    It works as long as the value created in opening more businesses actually trickles down to creating more decently paid jobs. The fact that many people are forced to handle more than one job just to survive shows that part of this argument isn't working. These types of businesses are creating precarity, not wealth for the workers for them to pass on to others.
  - BoiledCabbage 6y ago
    Trickle down does not work period. First of all your usage above is not trickle down. Someone opening a business is not trickle down economics. Trickle down economics is specifically the idea that tax-cuts for the wealthier and highest income earners is more effective for stimulating the economy that tax cuts for poorer and low income earners. And when this concept is studied it is shown to be clearly false. [1] Being against trickle down economics is not "hating businesses", nor being against entrepreneurship, or anything else it's sometimes accused of. Being against trickle down economics is simply promoting the fact that it was a failed theory. The most effective way to stimulate the economy is by giving it to the people with the least income. Whether you want to enact is as your govt policy is a separate question - but here we're simply discussing what is the most effective way to make the economy productive and it's putting it in the hands of lowest income people. The secondary and tertiary effects simply make it the most effective method. Separate from the paper linked above showing the effect of the impact of tax-cuts at different levels of income, there is also a pretty readily available intuition (not in the paper). When people who have little to no money receive tax cuts they spend it. They spend it on food, they spend it on transportation, they spend it in businesses. By spending it in businesses they increase demand which drives opportunities to open new businesses and and increase the labor pool which also drives more demand. When people with high incomes and high wealth receive tax cuts they frequently spent it in inflating valuations of existing assets. Ex real estate goes up and there is more rent seeking (no effect on economic production), stock prices go up (again marginal effect on economic production). Frequently the wealthy already had the money to open a business so a tax cut doesn't actually create as much opportunity to open a business as people imagine. And the market is already at saturation as there has been no increase in available income, so no increase in consumption. An additional dollar available do the poorest eventually makes it to the wealthy after moving through the entire economy via consumption production cycles. A dollar provided to the wealthiest doesn't. It frequently ends up adding a zero to an account, which banks then have to loan out finding more places to invest and you get things like Housing Bubbles, or Softbank, or any other of the many credit bubbles. And finally, quoting the paper's conclusion. > [T]he stimulative effects of income tax cuts are largely driven by tax cuts for the bottom 90% and that the empirical link between employment growth and tax changes for the top 10% is weak to negligible over a business cycle frequency. 1. https://www.nber.org/papers/w21035.pdf https://www.nber.org/papers/w21035.pdf
- perl4ever 6y ago
  There are places where a "corrupt political and financial system" intersect with China. I was kind of startled to find out that Chinese companies listed in the US are not held to the same standards as those from the US and other countries,[1] because the Chinese government will not allow auditing in the same way. It seems this is a genuine issue and not about xenophobia, even if it gets muddled with it by people who just don't like China. And it is corruption. Threatening to move listings out of the US, while of course it is an option, does not seem (or should not be) relevant to the US changing policies which have been corrupted due to Chinese demands based on "national security". It's about the US fixing its problems, not China per se. It's easy for a casual observer to see the Trump administration saying something and dismiss it, especially as their credibility is so low many news articles are automatically slanted. However, the SEC and PCAOB have some credibility to me. [1]https://www.reuters.com/article/us-usa-congress-china-exchanges/u-s-must-have-access-to-u-s-listed-chinese-firms-audit-documents-lawmakers-say-idUSKCN1T7060 https://www.reuters.com/article/us-usa-congress-china-exchan...
  - redis_mlc 6y ago
    > It's easy for a casual observer to see the Trump administration saying something and dismiss it, especially as their credibility is so low Sure, if you don't know any better. But when you look at the actual facts, Trump often has a more rational and successful approach than his opponents: - stopping travel from China on Jan. 31 due to corona - stopping the absurd postal discount - tariffs on Chinese imports to counter Chinese dumping - stopping Huawei from undermining the world's communications networks Trump doesn't seem so crazy now, does he? Regarding corona, we have an agency that was supposed to be on top of that - the CDC. About all I hear from them is a press interview every 2 months. I hope the next one includes a firing squad for the top 10 CDC officials.
- thoughtstheseus 6y ago
  Also concerning is the amount of resource allocation / decisions being made by companies rather than individual people. It has changed dramatically since the 1800s.
- rayiner 6y ago
  > American businesses could have helped outlawed slavery in America. They could have forced the issue onto their politicians. Did they do it? They were instrumental in ending slavery! In the first half of the 19th century, politics was dominated by conflict over the status of slavery in the new territories that were being added to the US. The Missouri Compromise in 1820 held off the civil war for a bit, outlawing slavery in states above the 36th parallel. Over the next 40 years, after the federalists disappeared, business interests in the north mostly belonged to the Whig party. (They had little to no power in the south, which was an agrarian economy where political power rested with landowners, not people whose wealth was built on commerce, finance, or industry.) Whig Presidents compromised with Democrats to maintain the status quo. During that time, Northern industrialists resented the political power of the slave states. On policy issues like tariffs, federal investment in railroads, central banking, etc., northern commercial interests were fundamentally at odds with southern plantation interests. In 1854, Democrats, under President Franklin Pierce, pushed through the Kansas-Nebraska Act, which repealed the Missouri Compromise by leaving it to states to decide whether to have slavery. This led to the anti-Nebraska anti-slavery movement, and violence between pro-slavery and anti-slavery interests in Kansas. The Republican Party was created out of the anti-Nebraska movement. The Republican Party was built on two principles: anti-slavery, and economic modernization. In 1856, Republicans lost the election against James Buchanan. They ran Abraham Lincoln in 1860, on a platform of opposing the expansion of slavery, building a pacific railroad, tariffs, and improving the channels of commerce (harbors, rivers). See: https://www.presidency.ucsb.edu/documents/republican-party-platform-1860 https://www.presidency.ucsb.edu/documents/republican-party-p.... While Lincoln said he wasn’t going to ban slavery in the southern states—the south feared he would. (Rightfully so, given that the platform called the slave trade “a crime against humanity and a burning shame to our country and age.”) Lincoln’s election precipitated the southern states to secede. Then, of course, there was the civil war. During the civil war, Republicans worked closely with business and financial interests to modernize the economy: https://www.essentialcivilwarcurriculum.com/the-economics-of-the-civil-war.html https://www.essentialcivilwarcurriculum.com/the-economics-of.... That paid for the massive military superiority that crushed the south.
skybrian 6y ago
The article doesn't really support the headline. It concedes that we can't know if it will help and makes more of a yolo argument instead: > It’s possible, of course, that the Chinese might decide to give up U.S. markets rather than liberalize, as they gave up Hong Kong’s usefulness as a financial hub. But if we can make a difference, we should find out.
- DaiPlusPlus 6y ago
  > as they gave up Hong Kong’s usefulness as a financial hub Did they though? Many banks are still based there - but relative to the rest of the PRC, HK became less important because the rest of the country developed at lightning pace.
  - arcticbull 6y ago
    Up until a week ago, HK hadn't been abandoned as a financial hub. Things are moving fast, so let's keep a look out.
  - dan-robertson 6y ago
    It’s unclear. The usefulness of Hong Kong is supposed to stem from it being a bridge between China and the global financial system (allowing Chinese firms to raise foreign capital and Chinese citizens to get their money out of China), and secondarily as a place with stable legal institutions which are useful to businesses. It seems like the former advantage is being reduced through HK’s special treatment being reduced, and the latter may or may not go away for businesses but I think that remains to be seen.
  - gruez 6y ago
    There's this: https://www.bloomberg.com/news/articles/2020-05-27/pompeo-finds-hong-kong-is-no-longer-autonomous-from-china https://www.bloomberg.com/news/articles/2020-05-27/pompeo-fi... from a month ago.
deleted 6y ago
[deleted]
creato 6y ago
> Despite Collison’s example, most CEOs probably won’t take that risk on their own; they will be too afraid of being undercut by less scrupulous competitors who retain their access to China’s markets and manufacturing prowess. So on this Fourth of July, it falls to the American public... This is the weakness of American individualism. Some form of organization is necessary to achieve anything meaningful here. This is a job for regulation/trade policy. Attempting to shame individual companies or "the public" is at best pointless, and at worst a distraction from a real solution. There's a pretty funny example here from the tech world: web search, google, and microsoft. What has been achieved by google abandoning the Chinese search market? It sure as hell isn't respect for that decision. Far more vitriol (even at the level of US congress) has been directed at google over this than microsoft, who operate bing in China! Don't get me wrong, google deserved the criticism over dragonfly. But where is the outrage over microsoft operating bing under China's censorship policies? This is why organization/regulation is required: people are really bad at maintaining a coherent position even in the absence of market pressures, which are massive in the case of trade with China.
- anon5774787557 6y ago
  “Out of our regard to them we gave them Bing, two Blankets and an Handkerchief out of the Small Pox Hospital. I hope it will have the desired effect.” — William Trent, William Trent's Journal at Fort Pitt
- systemvoltage 6y ago
  2017 - I remember when Trump had initiated the trade war, it was such a taboo to support it. I am not a fan of trump but the progressives in the Silicon Valley would abandon me in a mob mentality god forbid if I said something I like about Trump. I had pretty unpleasant pushbacks during lunch breaks and then I stopped discussing things all together. Living here in the valley, I wonder what’s the difference between aggressively progressive places and aggressively conservative places like a small town in Arkansas? To me, they are both intolerant of opposing views, don't think for themselves and subscribe to extremely strong stances. Being a centrist, I feel like I am exiled in this country by all sides. The stronger one's view, the more burden is on them to prove their view with data, successive chain of logic and reasoning. I am constantly wary of my own views because either circumstances change, my understanding improves or new data is available. This is the HN way.
saltedonion 6y ago
This article is incredibly ignorant, and is more of the same realities detached day dreaming that the left likes to partake. Why should American businesses voluntarily abandon an sizable overseas market and supply chain when China keeps getting access to our home market? In effect, placing a punitive tariff over our own heads and puts our American firms at a competitive disadvantage over our European and Chinese counterparts? Why should such a tax be born by the American corporation, workers and taxpayers? If America has decided to decouple from China, then the solution should be legislative as it creates a level playing field for all firms involved, such that no one in particular is punished by a voluntary withdraw. The saving grace is I believe world leaders are aware of this “you withdraw you loose” dilemma and are starting to cooperate to form a unified front against China. Donald Trump did well in waking the world up against the Chinese threat, but I’m afraid we now need a diplomat to finish the war.
- deleted 6y ago
  [deleted]
redis_mlc 6y ago
I've been watching economics and trade Youtube videos recently. The summary is: - even the idea of China "liberalizing" is nonsense, since that is not their system. What worked with Japan, SK, etc. is irrelevant for China They feel that their rightful place is the center of the world, as it was for 5,000 years (with the exception of the last 200 years "aberration") - the last 40 years of Westerners appeasing China at the WTO, postal, etc. was entirely a misunderstanding of the above - China captured almost the world's entire pharma market by dumping, which is their playbook. So their rare earths processing dominance is what the endgame looks like for every industry - China's goal is to build a navy as large as the US. You don't build such a navy without planning to use it. The US sent 3 carrier groups to Asia recently to "change their behavior." That's the reality.
tanilama 6y ago
Abandon money for virtue signaling? This is a capitalistic world, money will go where it can multiply itself. US can leave China as they want, will EU follow? How about Japan? My bet will be that they will be happy to take up the vacuum US left and make a huge fortune out of it. Corporate America, if they can act coordinately, they can fix so many things domestically in this country. Yet, they didn't and probably won't. It make zero sense that they can achieve that in China.
- deleted 6y ago
  [deleted]
bigpumpkin 6y ago
So rather than competing with the duopoly of AliPay and WeChat, Stripe decided to not enter the Chinese market because it will change China's behavior- Somehow letting the profits flow to two Chinese giants will help its society become more free.
- saltedonion 6y ago
  That’s not the real problem. The real problem is By leaving America is doing charity work. Another player from another country is just going to fill in the void. The idea of voluntary exit is as good as we should all be model citizens. Indeed an idea as good as communism. It’s beautiful on paper.
boznz 6y ago
American Consumers have even more power, look at the human rights records of the countries you are buying products from rather than just looking at the lowest sticker price.
- Tiktaalik 6y ago
  Can you even buy a smartphone that's not assembled in China?
  - axaxs 6y ago
    Sure. Nokia apparently is making some in India. Samsung does some in S Korea and some in Vietnam, unless that's changed recently.
    - jonny_eh 6y ago
      And how is a consumer supposed to know which models?
      - axaxs 6y ago
        Currently, it's not easy. I'm a bit of a phone/tiny computer geek, so I read a lot. When I was younger, where a product was made was something everyone wanted to know. China was seen as junk, and rightly so. Now, nobody cares, so it's rarely advertised. I'd love for us to hold companies to the standards they hold us to. Say something unpopular, and you'll get fired, or have advertising pulled away. By the same companies using sweatshops in countries that abuse people. Consider this example: Nike pulled it's Redskins gear, because it's possibly offensive to Native Americans. Yet Nike exploits the system to have that gear made by women and children, by force or necessity, in countries that are truly horrible to their people.
  - dathinab 6y ago
    Fairphone 3 is pretty open about where parts come from, where it's assembled and which (moral) standards are applied for there selection of suppliers. It's also supper repairable (iFixit score 10 of 10). Problems: - It has not so good spec, for people which need a high-end (or higher middle-end) smartphone not a option. - For the spec it has it's expensive. - It's somewhat clunky. (But hey even a non tech person can repair it.) - The speakers are at a strange position. - The microphone is so-so. For usage in normal handy mode it's ok, but audio quality in speaker/video conference mode is bad (but then hey, for that you probably should use a headset anyway). Good thinks include repairability, close to stock android, large battery, dual sim, micro sd card (yes 2 sims + 1 sd card can be used), NFC, known to get updates for as long as they can afford it, I think it's unlocked. So if don't use your phone for things it bad at and you are not tight on money it's a totally reasonable option.
Tiktaalik 6y ago
In the 1980s the West used boycotts and divestment to criticize apartheid South Africa. It's time the West does the same to China to criticize its treatment of the Uyghurs. The problem though as an individual consumer is that electronics products made in China are so ubiquitous that it's difficult to impossible navigate a boycott. Please HNers at big corps, if you are in any sort of position to influence where your hardware products are made, please push to have your products made elsewhere.
- wonnage 6y ago
  This is a curious comment in that the West set up apartheid in the first place. Millions of Africans suffered under it and thousands died in the struggle to overthrow it. The role that external condemnation from western countries played, if any, pales in comparison to what actual Africans sacrificed and accomplished. Western sanctions generally produce misery and discontent as their main outcomes. North Korea has been sanctioned for decades and shows no signs of responding positively. Iraq was sanctioned for decades until the US invaded and further ruined the lives of everyone there.
  - novok 6y ago
    The reason why north korea is still around is because China enables it's existence, and as a result, that little hell, which wasn't that much different from china 35 years ago, still persists.
    - wonnage 6y ago
      South Korea was similarly ravaged after the war, and was ruled by a series of various dictators until the 90s. Luckily they were authoritarian capitalists instead of authoritarian communists, and were propped up by US aid (much better than Chinese aid, since the Chinese could barely feed themselves).
  - Tiktaalik 6y ago
    I'm not calling for sanctions I'm calling for boycotts. Sanctions means that a country can't buy the raw materials it needs for its citizens. Boycotts mean that foreign consumers don't buy the products the country produces. Massive difference.
dathinab 6y ago
Honestly it's unlikely. At most they will delay China, maybe make it pretend for a bit it changed. China is clearly pursing US Tech independence since a long time. They are not there yet, but they constantly get closer. If Tech companies in US/EU would have been more careful with cooperation and IT-espionage maybe then it would be true. But by now it's pretty much to late. They already have a solid enough foundation to become US Tech independent. The question is just how long it will take. And how it currently looks not too long.
- echelon 6y ago
  Do you want to live in a world where the CCP is the dominant superpower? They have a perfect Orwellian state, destroy ethnic minorities, purge ideas that don't fit the narrative, steal land and resources, harvest organs from prisoners, ... I think we should do anything under our power to prevent that fate. Bolster every other nation in the region, give Japan a powerful navy, replace their one belt with our own. Build out Vietnam's and India's industrial capability, and get started on Africa. Unite with all other Democratic nations in a trade agreement that shuns the China/Russia sphere. Maybe we can make their system rupture from the inside.
  - alfiedotwtf 6y ago
    > They have a perfect Orwellian state Snowden > destroy ethnic minorities Native Americans > purge ideas that don't fit the narrative “Fake news” > steal land and resources Native Americans > harvest organs from prisoners Nothing yet, but who knows under Trump
    - echelon 6y ago
      The ideals of equality and justice in America are sacred, but we have to work hard to attain and protect them. It's a struggle, and not everyone plays fair. People are greedy by default. We are barely evolved animals that only happened to master the atom. Despite the difficulty of our task, we know and are constantly reminded of the degree of perfect that we're aiming for. The voices of protest you see are a manifestation of that. It's beautiful and is one of our best qualities. The CCP has no such agenda. They want to destroy us and our way of life. They're the biggest threat to freedom and a future of liberty and equality in the world. They want to export their model to other states. Please change your perspective. We need champions of democracy. I'm not asking you to stop criticizing America - that's something required of us. I'm asking you to fight for a world where all people are free and have a voice.
jasonlingx 6y ago
Let’s take a step back and look at the quote in the article’s opening paragraph: “As a US business (and tech) community I think we should be significantly clearer about our horror at, and opposition to, the atrocities being committed by the Chinese government against its own people.” Now let’s swap the words “US” and “Chinese” around. Maybe it’s not so absurd after all.
- philliphaydon 6y ago
  Doesn’t seem to work.
arkis22 6y ago
The entire point of China pushing HK is that China thinks they don't need HK anymore.
- dathinab 6y ago
  And that China sees HK to some degree as a symbol of shame. Else they might just have keep it for some more years because it doesn't hurt them I thing, well more like guess.
tengbretson 6y ago
American businesses are Chinese businesses.

86 points by jger15 6y ago

deleted 6y ago

[deleted]

LOL. What a load of lies. American businesses had the power to change American behavior in the 1800s and 1900s. Did they do it? No. American businesses could have helped outlawed slavery in America. They could have forced the issue onto their politicians. Did they do it? No. Then in the 1900s, American businesses could have outlawed racism. They could have forced civil rights onto their politicians. Did they do it? No. And today. American businesses can force the end of police violence against minorities onto their politicians. Are they doing it? No. American businesses can ensure fair distribution of wages, and financial equality, and social equality to help their minority citizens. Are they doing it? No. Hence, give me some evidence that American businesses can actually do something useful at home first, before making them a pawn in this stupid game of geopolitics that the Washington elites are playing against a nation on the other side of the world, and forcing the rest of us to choose sides on. When, they themselves do nothing for us. My point is, the problems we have in America, has nothing to do with China. This is all home grown. We have within ourselves, the ability to make life better, fairer, and more equitable to all Americans. Instead, what does the politicians do? Nothing. Instead, they do everything to support the rich, and the elite. While the rest of us gets fleeced, are lied to, and gets hoodwinked. The biggest lie that they sold to us, is that Trickle Down Economics will work for everyone. That tax cuts for the wealthy will help drive business growth. Trickle Down Economics should instead be renamed to Trickle Up Economics. The problem is not China. The problem is our corrupt political and financial system.

arcticbull 6y ago
I guess the question this article asks is what, if anything has changed since the examples you cite.
spoiledtechie 6y ago
I sense your a pretty emotional person and are quite upset at your current economic decision. So lets start with your point. Trickle down economic does work in its truest form. It starts with a person who creates a business. This business makes money through the work it does. The owner gets paid more and decides they can create another business. A business larger with more employees. Overtime, the owner creates many more businesses and employs more. Providing its employees with cash, to spend at restaurants, on boats, on houses, on daycare and many other businesses that the employees like to spend money on. Therefore jump starting more business owners to spend more. This is trickle down economics and its working. I think the thing your upset about is the idea that these business owners, the wealthy are not creating and doing more. I disagree and the US economy would disagree. You simply might just be detached from the economy. So your quite upset about it.
- Unesco88 6y ago
  Sigh, the fact that garbage like this appears on hackernews is why I can't take US politics seriously. How about some actual research? https://whorulesamerica.ucsc.edu/power/wealth.html https://whorulesamerica.ucsc.edu/power/wealth.html https://whorulesamerica.ucsc.edu/power/images/wealth/Net_worth_and_financial_wealth.png https://whorulesamerica.ucsc.edu/power/images/wealth/Net_wor... https://whorulesamerica.ucsc.edu/power/images/wealth/Actual_estimated_ideal_wealth_distribution.gif https://whorulesamerica.ucsc.edu/power/images/wealth/Actual_...
- Renaud 6y ago
  It works as long as the value created in opening more businesses actually trickles down to creating more decently paid jobs. The fact that many people are forced to handle more than one job just to survive shows that part of this argument isn't working. These types of businesses are creating precarity, not wealth for the workers for them to pass on to others.
- BoiledCabbage 6y ago
  Trickle down does not work period. First of all your usage above is not trickle down. Someone opening a business is not trickle down economics. Trickle down economics is specifically the idea that tax-cuts for the wealthier and highest income earners is more effective for stimulating the economy that tax cuts for poorer and low income earners. And when this concept is studied it is shown to be clearly false. [1] Being against trickle down economics is not "hating businesses", nor being against entrepreneurship, or anything else it's sometimes accused of. Being against trickle down economics is simply promoting the fact that it was a failed theory. The most effective way to stimulate the economy is by giving it to the people with the least income. Whether you want to enact is as your govt policy is a separate question - but here we're simply discussing what is the most effective way to make the economy productive and it's putting it in the hands of lowest income people. The secondary and tertiary effects simply make it the most effective method. Separate from the paper linked above showing the effect of the impact of tax-cuts at different levels of income, there is also a pretty readily available intuition (not in the paper). When people who have little to no money receive tax cuts they spend it. They spend it on food, they spend it on transportation, they spend it in businesses. By spending it in businesses they increase demand which drives opportunities to open new businesses and and increase the labor pool which also drives more demand. When people with high incomes and high wealth receive tax cuts they frequently spent it in inflating valuations of existing assets. Ex real estate goes up and there is more rent seeking (no effect on economic production), stock prices go up (again marginal effect on economic production). Frequently the wealthy already had the money to open a business so a tax cut doesn't actually create as much opportunity to open a business as people imagine. And the market is already at saturation as there has been no increase in available income, so no increase in consumption. An additional dollar available do the poorest eventually makes it to the wealthy after moving through the entire economy via consumption production cycles. A dollar provided to the wealthiest doesn't. It frequently ends up adding a zero to an account, which banks then have to loan out finding more places to invest and you get things like Housing Bubbles, or Softbank, or any other of the many credit bubbles. And finally, quoting the paper's conclusion. > [T]he stimulative effects of income tax cuts are largely driven by tax cuts for the bottom 90% and that the empirical link between employment growth and tax changes for the top 10% is weak to negligible over a business cycle frequency. 1. https://www.nber.org/papers/w21035.pdf https://www.nber.org/papers/w21035.pdf
perl4ever 6y ago
There are places where a "corrupt political and financial system" intersect with China. I was kind of startled to find out that Chinese companies listed in the US are not held to the same standards as those from the US and other countries,[1] because the Chinese government will not allow auditing in the same way. It seems this is a genuine issue and not about xenophobia, even if it gets muddled with it by people who just don't like China. And it is corruption. Threatening to move listings out of the US, while of course it is an option, does not seem (or should not be) relevant to the US changing policies which have been corrupted due to Chinese demands based on "national security". It's about the US fixing its problems, not China per se. It's easy for a casual observer to see the Trump administration saying something and dismiss it, especially as their credibility is so low many news articles are automatically slanted. However, the SEC and PCAOB have some credibility to me. [1]https://www.reuters.com/article/us-usa-congress-china-exchanges/u-s-must-have-access-to-u-s-listed-chinese-firms-audit-documents-lawmakers-say-idUSKCN1T7060 https://www.reuters.com/article/us-usa-congress-china-exchan...
- redis_mlc 6y ago
  > It's easy for a casual observer to see the Trump administration saying something and dismiss it, especially as their credibility is so low Sure, if you don't know any better. But when you look at the actual facts, Trump often has a more rational and successful approach than his opponents: - stopping travel from China on Jan. 31 due to corona - stopping the absurd postal discount - tariffs on Chinese imports to counter Chinese dumping - stopping Huawei from undermining the world's communications networks Trump doesn't seem so crazy now, does he? Regarding corona, we have an agency that was supposed to be on top of that - the CDC. About all I hear from them is a press interview every 2 months. I hope the next one includes a firing squad for the top 10 CDC officials.
thoughtstheseus 6y ago
Also concerning is the amount of resource allocation / decisions being made by companies rather than individual people. It has changed dramatically since the 1800s.
rayiner 6y ago
> American businesses could have helped outlawed slavery in America. They could have forced the issue onto their politicians. Did they do it? They were instrumental in ending slavery! In the first half of the 19th century, politics was dominated by conflict over the status of slavery in the new territories that were being added to the US. The Missouri Compromise in 1820 held off the civil war for a bit, outlawing slavery in states above the 36th parallel. Over the next 40 years, after the federalists disappeared, business interests in the north mostly belonged to the Whig party. (They had little to no power in the south, which was an agrarian economy where political power rested with landowners, not people whose wealth was built on commerce, finance, or industry.) Whig Presidents compromised with Democrats to maintain the status quo. During that time, Northern industrialists resented the political power of the slave states. On policy issues like tariffs, federal investment in railroads, central banking, etc., northern commercial interests were fundamentally at odds with southern plantation interests. In 1854, Democrats, under President Franklin Pierce, pushed through the Kansas-Nebraska Act, which repealed the Missouri Compromise by leaving it to states to decide whether to have slavery. This led to the anti-Nebraska anti-slavery movement, and violence between pro-slavery and anti-slavery interests in Kansas. The Republican Party was created out of the anti-Nebraska movement. The Republican Party was built on two principles: anti-slavery, and economic modernization. In 1856, Republicans lost the election against James Buchanan. They ran Abraham Lincoln in 1860, on a platform of opposing the expansion of slavery, building a pacific railroad, tariffs, and improving the channels of commerce (harbors, rivers). See: https://www.presidency.ucsb.edu/documents/republican-party-platform-1860 https://www.presidency.ucsb.edu/documents/republican-party-p.... While Lincoln said he wasn’t going to ban slavery in the southern states—the south feared he would. (Rightfully so, given that the platform called the slave trade “a crime against humanity and a burning shame to our country and age.”) Lincoln’s election precipitated the southern states to secede. Then, of course, there was the civil war. During the civil war, Republicans worked closely with business and financial interests to modernize the economy: https://www.essentialcivilwarcurriculum.com/the-economics-of-the-civil-war.html https://www.essentialcivilwarcurriculum.com/the-economics-of.... That paid for the massive military superiority that crushed the south.

skybrian 6y ago

The article doesn't really support the headline. It concedes that we can't know if it will help and makes more of a yolo argument instead: > It’s possible, of course, that the Chinese might decide to give up U.S. markets rather than liberalize, as they gave up Hong Kong’s usefulness as a financial hub. But if we can make a difference, we should find out.

DaiPlusPlus 6y ago
> as they gave up Hong Kong’s usefulness as a financial hub Did they though? Many banks are still based there - but relative to the rest of the PRC, HK became less important because the rest of the country developed at lightning pace.
- arcticbull 6y ago
  Up until a week ago, HK hadn't been abandoned as a financial hub. Things are moving fast, so let's keep a look out.
- dan-robertson 6y ago
  It’s unclear. The usefulness of Hong Kong is supposed to stem from it being a bridge between China and the global financial system (allowing Chinese firms to raise foreign capital and Chinese citizens to get their money out of China), and secondarily as a place with stable legal institutions which are useful to businesses. It seems like the former advantage is being reduced through HK’s special treatment being reduced, and the latter may or may not go away for businesses but I think that remains to be seen.
- gruez 6y ago
  There's this: https://www.bloomberg.com/news/articles/2020-05-27/pompeo-finds-hong-kong-is-no-longer-autonomous-from-china https://www.bloomberg.com/news/articles/2020-05-27/pompeo-fi... from a month ago.

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creato 6y ago

> Despite Collison’s example, most CEOs probably won’t take that risk on their own; they will be too afraid of being undercut by less scrupulous competitors who retain their access to China’s markets and manufacturing prowess. So on this Fourth of July, it falls to the American public... This is the weakness of American individualism. Some form of organization is necessary to achieve anything meaningful here. This is a job for regulation/trade policy. Attempting to shame individual companies or "the public" is at best pointless, and at worst a distraction from a real solution. There's a pretty funny example here from the tech world: web search, google, and microsoft. What has been achieved by google abandoning the Chinese search market? It sure as hell isn't respect for that decision. Far more vitriol (even at the level of US congress) has been directed at google over this than microsoft, who operate bing in China! Don't get me wrong, google deserved the criticism over dragonfly. But where is the outrage over microsoft operating bing under China's censorship policies? This is why organization/regulation is required: people are really bad at maintaining a coherent position even in the absence of market pressures, which are massive in the case of trade with China.

anon5774787557 6y ago
“Out of our regard to them we gave them Bing, two Blankets and an Handkerchief out of the Small Pox Hospital. I hope it will have the desired effect.” — William Trent, William Trent's Journal at Fort Pitt
systemvoltage 6y ago
2017 - I remember when Trump had initiated the trade war, it was such a taboo to support it. I am not a fan of trump but the progressives in the Silicon Valley would abandon me in a mob mentality god forbid if I said something I like about Trump. I had pretty unpleasant pushbacks during lunch breaks and then I stopped discussing things all together. Living here in the valley, I wonder what’s the difference between aggressively progressive places and aggressively conservative places like a small town in Arkansas? To me, they are both intolerant of opposing views, don't think for themselves and subscribe to extremely strong stances. Being a centrist, I feel like I am exiled in this country by all sides. The stronger one's view, the more burden is on them to prove their view with data, successive chain of logic and reasoning. I am constantly wary of my own views because either circumstances change, my understanding improves or new data is available. This is the HN way.

saltedonion 6y ago

This article is incredibly ignorant, and is more of the same realities detached day dreaming that the left likes to partake. Why should American businesses voluntarily abandon an sizable overseas market and supply chain when China keeps getting access to our home market? In effect, placing a punitive tariff over our own heads and puts our American firms at a competitive disadvantage over our European and Chinese counterparts? Why should such a tax be born by the American corporation, workers and taxpayers? If America has decided to decouple from China, then the solution should be legislative as it creates a level playing field for all firms involved, such that no one in particular is punished by a voluntary withdraw. The saving grace is I believe world leaders are aware of this “you withdraw you loose” dilemma and are starting to cooperate to form a unified front against China. Donald Trump did well in waking the world up against the Chinese threat, but I’m afraid we now need a diplomat to finish the war.

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redis_mlc 6y ago

I've been watching economics and trade Youtube videos recently. The summary is: - even the idea of China "liberalizing" is nonsense, since that is not their system. What worked with Japan, SK, etc. is irrelevant for China They feel that their rightful place is the center of the world, as it was for 5,000 years (with the exception of the last 200 years "aberration") - the last 40 years of Westerners appeasing China at the WTO, postal, etc. was entirely a misunderstanding of the above - China captured almost the world's entire pharma market by dumping, which is their playbook. So their rare earths processing dominance is what the endgame looks like for every industry - China's goal is to build a navy as large as the US. You don't build such a navy without planning to use it. The US sent 3 carrier groups to Asia recently to "change their behavior." That's the reality.

tanilama 6y ago

Abandon money for virtue signaling? This is a capitalistic world, money will go where it can multiply itself. US can leave China as they want, will EU follow? How about Japan? My bet will be that they will be happy to take up the vacuum US left and make a huge fortune out of it. Corporate America, if they can act coordinately, they can fix so many things domestically in this country. Yet, they didn't and probably won't. It make zero sense that they can achieve that in China.

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bigpumpkin 6y ago

So rather than competing with the duopoly of AliPay and WeChat, Stripe decided to not enter the Chinese market because it will change China's behavior- Somehow letting the profits flow to two Chinese giants will help its society become more free.

saltedonion 6y ago
That’s not the real problem. The real problem is By leaving America is doing charity work. Another player from another country is just going to fill in the void. The idea of voluntary exit is as good as we should all be model citizens. Indeed an idea as good as communism. It’s beautiful on paper.

boznz 6y ago

American Consumers have even more power, look at the human rights records of the countries you are buying products from rather than just looking at the lowest sticker price.

Tiktaalik 6y ago
Can you even buy a smartphone that's not assembled in China?
- axaxs 6y ago
  Sure. Nokia apparently is making some in India. Samsung does some in S Korea and some in Vietnam, unless that's changed recently.
  - jonny_eh 6y ago
    And how is a consumer supposed to know which models?
    - axaxs 6y ago
      Currently, it's not easy. I'm a bit of a phone/tiny computer geek, so I read a lot. When I was younger, where a product was made was something everyone wanted to know. China was seen as junk, and rightly so. Now, nobody cares, so it's rarely advertised. I'd love for us to hold companies to the standards they hold us to. Say something unpopular, and you'll get fired, or have advertising pulled away. By the same companies using sweatshops in countries that abuse people. Consider this example: Nike pulled it's Redskins gear, because it's possibly offensive to Native Americans. Yet Nike exploits the system to have that gear made by women and children, by force or necessity, in countries that are truly horrible to their people.
- dathinab 6y ago
  Fairphone 3 is pretty open about where parts come from, where it's assembled and which (moral) standards are applied for there selection of suppliers. It's also supper repairable (iFixit score 10 of 10). Problems: - It has not so good spec, for people which need a high-end (or higher middle-end) smartphone not a option. - For the spec it has it's expensive. - It's somewhat clunky. (But hey even a non tech person can repair it.) - The speakers are at a strange position. - The microphone is so-so. For usage in normal handy mode it's ok, but audio quality in speaker/video conference mode is bad (but then hey, for that you probably should use a headset anyway). Good thinks include repairability, close to stock android, large battery, dual sim, micro sd card (yes 2 sims + 1 sd card can be used), NFC, known to get updates for as long as they can afford it, I think it's unlocked. So if don't use your phone for things it bad at and you are not tight on money it's a totally reasonable option.

Tiktaalik 6y ago

In the 1980s the West used boycotts and divestment to criticize apartheid South Africa. It's time the West does the same to China to criticize its treatment of the Uyghurs. The problem though as an individual consumer is that electronics products made in China are so ubiquitous that it's difficult to impossible navigate a boycott. Please HNers at big corps, if you are in any sort of position to influence where your hardware products are made, please push to have your products made elsewhere.

wonnage 6y ago
This is a curious comment in that the West set up apartheid in the first place. Millions of Africans suffered under it and thousands died in the struggle to overthrow it. The role that external condemnation from western countries played, if any, pales in comparison to what actual Africans sacrificed and accomplished. Western sanctions generally produce misery and discontent as their main outcomes. North Korea has been sanctioned for decades and shows no signs of responding positively. Iraq was sanctioned for decades until the US invaded and further ruined the lives of everyone there.
- novok 6y ago
  The reason why north korea is still around is because China enables it's existence, and as a result, that little hell, which wasn't that much different from china 35 years ago, still persists.
  - wonnage 6y ago
    South Korea was similarly ravaged after the war, and was ruled by a series of various dictators until the 90s. Luckily they were authoritarian capitalists instead of authoritarian communists, and were propped up by US aid (much better than Chinese aid, since the Chinese could barely feed themselves).
- Tiktaalik 6y ago
  I'm not calling for sanctions I'm calling for boycotts. Sanctions means that a country can't buy the raw materials it needs for its citizens. Boycotts mean that foreign consumers don't buy the products the country produces. Massive difference.

dathinab 6y ago

Honestly it's unlikely. At most they will delay China, maybe make it pretend for a bit it changed. China is clearly pursing US Tech independence since a long time. They are not there yet, but they constantly get closer. If Tech companies in US/EU would have been more careful with cooperation and IT-espionage maybe then it would be true. But by now it's pretty much to late. They already have a solid enough foundation to become US Tech independent. The question is just how long it will take. And how it currently looks not too long.

echelon 6y ago
Do you want to live in a world where the CCP is the dominant superpower? They have a perfect Orwellian state, destroy ethnic minorities, purge ideas that don't fit the narrative, steal land and resources, harvest organs from prisoners, ... I think we should do anything under our power to prevent that fate. Bolster every other nation in the region, give Japan a powerful navy, replace their one belt with our own. Build out Vietnam's and India's industrial capability, and get started on Africa. Unite with all other Democratic nations in a trade agreement that shuns the China/Russia sphere. Maybe we can make their system rupture from the inside.
- alfiedotwtf 6y ago
  > They have a perfect Orwellian state Snowden > destroy ethnic minorities Native Americans > purge ideas that don't fit the narrative “Fake news” > steal land and resources Native Americans > harvest organs from prisoners Nothing yet, but who knows under Trump
  - echelon 6y ago
    The ideals of equality and justice in America are sacred, but we have to work hard to attain and protect them. It's a struggle, and not everyone plays fair. People are greedy by default. We are barely evolved animals that only happened to master the atom. Despite the difficulty of our task, we know and are constantly reminded of the degree of perfect that we're aiming for. The voices of protest you see are a manifestation of that. It's beautiful and is one of our best qualities. The CCP has no such agenda. They want to destroy us and our way of life. They're the biggest threat to freedom and a future of liberty and equality in the world. They want to export their model to other states. Please change your perspective. We need champions of democracy. I'm not asking you to stop criticizing America - that's something required of us. I'm asking you to fight for a world where all people are free and have a voice.

jasonlingx 6y ago

Let’s take a step back and look at the quote in the article’s opening paragraph: “As a US business (and tech) community I think we should be significantly clearer about our horror at, and opposition to, the atrocities being committed by the Chinese government against its own people.” Now let’s swap the words “US” and “Chinese” around. Maybe it’s not so absurd after all.

philliphaydon 6y ago
Doesn’t seem to work.

arkis22 6y ago

The entire point of China pushing HK is that China thinks they don't need HK anymore.

dathinab 6y ago
And that China sees HK to some degree as a symbol of shame. Else they might just have keep it for some more years because it doesn't hurt them I thing, well more like guess.

tengbretson 6y ago

American businesses are Chinese businesses.