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The tariffs have been highly destructive to local manufacturing because in the US we mostly build complex things made out of simpler parts which we import. The
by AbrahamParangi 3mo ago
The tariffs have been highly destructive to local manufacturing because in the US we mostly build complex things made out of simpler parts which we import. The cost of everything we build simply increased and as a result many businesses selling relatively higher margin, higher complexity products had to scale back or shut down.
More to the point, the notion that dollars leaving the country is a real problem is really a kind of primitive understanding of money. Dollars are something we control. If dollars leave the country, that means there is demand for dollars. We control the supply of dollars. We literally can’t lose, so long as people are still using the USD, which they’re less inclined to when we’re tariffing their exports.
- smallmancontrov 3mo ago> We literally can't lose Who is "we"? Trade deficit dollars are recycled into assets, which compete with exports in the balance of payments. If you have a big house and fat brokerage account, you win big. If you have a job building shit, you lose big. If you have a job building tradeable shit and a low net worth, may god have mercy on your soul. If you want the full economist version, "Trade Wars are Class Wars" by Klein and Pettis
- AbrahamParangi 3mo agoWe is the country. Yeah, not everyone gets to win the same amount at the same time. The alternative is just maga communism (pathetic).
- smallmancontrov 3mo ago"We" is 10% of the country at best. Asset ownership is concentrated. No, the alternative is Alexander Hamilton protectionism, which built the country into an industrial superpower that eclipsed the very shadow it was put in place to escape. What's done is done, though. We successfully sold the industrial base of the USA to the Communist Party of China in order to pump our brokerage accounts. Winning?
- nixon_why69 3mo agoAlso, by definition, if dollars left the country then stuff came in. We literally traded bit flips in a database for tangible stuff.
- smallmancontrov 3mo ago...and then whoever sold us the goods turns around and uses those dollars to bid up US assets. Next time you are bidding for a house, take some time to appreciate just how expensive those bit flips have made things. It did make it easy to raise capital, though, which is nice.
- selectodude 3mo agoDon’t blame imports for our sclerotic country banning construction nationwide. Plenty of countries have spent billions on new construction in the US and gotten smoked. The buildings still stand though.
- throwaway2037 3mo ago> Plenty of countries have spent billions on new construction in the US and gotten smoked. I don't follow here. Can you explain and provide an example?
- nixon_why69 3mo agoThe point is foreigners reinvesting those dollars into development in the US is... even more stuff in the US in exchange for bits. Yes, it's owned by foreigners and sends cash overseas but all of the economic activity is here and if push came to shove.. they're not exporting the building. It's not all gravy, there are issues with having global capital so deeply involved in the country, but it's better than the alternative, there's a reason Americans live so well and its not because they're all smarter or harder working.
- selectodude 3mo agoJapan in the 1990s, ME sovereign wealth funds in the late 2000s, China in the mid 2010s.
- deleted 3mo ago[deleted]