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JD Vance outlined the administration's view on globalization here: https://youtu.be/U1bd-D1PIZg?si=8oECgV3qYYEbdXy3 https://youtu.be/U1bd-D1PIZg?si=8oECgV3qYYEb
by bitshiftfaced 1y ago
JD Vance outlined the administration's view on globalization here: https://youtu.be/U1bd-D1PIZg?si=8oECgV3qYYEbdXy3 https://youtu.be/U1bd-D1PIZg?si=8oECgV3qYYEbdXy3
In summary he claims that there are two issues:
1) People had thought that globalization would mean that high-income countries would remain at the top of the value chain and design products and low-income companies would produce the simple things and manufacture. But, he claims, there are network effects to manufacturing. Those countries low on the value chain, once they learn how how to build things, are better equipped to rise in the value chain and replace companies completely.
2) He claims that companies became addicted to cheap labor from overseas, and it's stifling productivity gains. He brings in the analogy of how higher minimum wage tends to motivate fast food restaurants to develop better kiosk technology.
- shiandow 1y agoHe's using arguments in favour of raising minimum wage?
- bozhark 1y agoThey think they can pretend that raising the minimum wage is anything but a good service for the entire economy. They do not pretend to make sense
- lliamander 1y agoMinimum wage is possibly the worst, most ham-fisted way of driving productivity gains. Minimum wage and similar regulations are why so many jobs have shifted overseas in the first place. The "productivity gains" have almost entirely consisted in improved logistics for mobilizing cheaper foreign labor, not actually making domestic workers any more productive.
- throw0101c 1y ago> But, he claims, there are network effects to manufacturing. Those countries low on the value chain, once they learn how how to build things, are better equipped to rise in the value chain and replace companies completely. So you place tariffs on specific goods that you wish to strategically produce domestically. * https://www.noahpinion.blog/p/when-are-tariffs-good https://www.noahpinion.blog/p/when-are-tariffs-good Doing a blanket tariff on (e.g.) Bangladesh and Sri Lanka—which hits clothing (see Nike, Adidas stock prices)—is not helpful. Why is the US interested in making sneakers and t-shirts? Doing specific tariffs for strategic / national security purposes is one thing, but that is obviously not what is happening here: and it is obvious because tariffs were put on the island of Diego Garcia, whose on inhabitants are US and UK military personnel, and Heard and McDonald Islands in the middle of nowhere whose only inhabitants are penguins.
- inetknght 1y ago> Doing a blanket tariff on (e.g.) Bangladesh and Sri Lanka—which hits clothing (see Nike, Adidas stock prices)—is not helpful. Why is the US interested in making sneakers and t-shirts? Why shouldn't the US be interested in being able to clothe its own people?
- ceejayoz 1y agoFor the same reasons most of us don't sew our own clothes. We have better things to do, and others will do it faster, cheaper, and better than we can.
- lliamander 1y ago> cheaper One major reason why it is cheaper to make these clothes overseas is because we have such a stringent regulatory regime for worker and environmental protections, and using foreign manufacturers is essentially a loophole through those regulations. Whether those regulations are useful or not is entirely beside the point: if they are good, then moving manufacturing over to lower regulation countries is bad and we should impose tariffs on all of those goods. If those regulations are bad, then we should just repeal them and let domestic manufacturers compete on an even playing field.
- ceejayoz 1y agoWe grow corn in Kansas and not NYC's Central Park. (Roughly) the same regulatory regime; very different costs of living and available workforces.
- lliamander 1y agoYes, there will still be specialization and trade in a balanced regulatory environment.
- ceejayoz 1y ago