It’s a fallacy even if someone is an actual authority. Unless you consider the Pope to be infallible, no one else is defined that way, and therefore their expertise does not make them correct. If their arguments are correct, they are correct based on their arguments, not their authority.
Show me the record of those academic economists. Some of them had it right. Other’s did not. Some of them said nothing useful (‘Buy low, sell high’, I never would have figured that out on my own). Most of them IMHO, changed their minds a lot. And when they were cited by the people who directly caused the problems, I didn’t hear many objections from the sources. Although that is not their fault if they objected and weren’t heard. But show me a record of an academic economist who predicted the problems, and offered a solution. I’ll buy their overpriced books.
Wait, so Rhode Island is a cancer on the United States? There’s nothing nonsensical about a state isolationism analogy. Both state and nation borders are political fictions. Explain why isolationism only makes sense for one of them.
How would the government function? Since outside trade has been banned, how does it borrow money. Most government bond issues are bought overseas and now that’s stopped. Where’s it going to borrow money from now? Of course it could just default on all its overseas debt, but would anyone inside the US lend the government money knowing that their money is patently not safe?
Because there is nothing to say that all those jobs would come back here if we cut off all trade. I can think of several reasons for that. First, there would be a trade off…we’d lose a lot of jobs in sectors where we export high tech goods and services. After all, we wouldn’t be doing that anymore if we took an isolationist stance (or even if we took the protectionist stance many on this board advocate). Secondly, we wouldn’t be building manufacturing plants along the lines of low wage high number plants in China and India…we’d be building highly automated plants with few workers.
The biggest thing, however, would be the general economic downturn such a stance would take us in, even if we assume all this is going to happen over a long period of time (and further assume that it’s going to happen in some sort of blissful bubble, where no one is going to react as the US essentially divests itself of all trade over a period of many years).
I think this is pure fantasy. Why would the rich make less, but the poor make out? Why would products, goods and services cost the same or less than they do today? By what magical mechanism would this work, realistically?
Let’s take one industry…clothing manufacturing. Currently, most of the clothing manufacturing has moved away from the US. We simply can’t compete in this, since our loaded labor costs are so much higher. Ok…so, we have to move it back since we won’t be importing or exporting goods or services in this fantasy future. How would we do this? It would cost a ton of capital, and the folks with the capital would therefore have to charge a premium for their product, at least initially…yes? And they could go one of two ways…they could build highly automated plants (and thus, at some point, be able to produce clothing for maybe just a bit more than it currently costs, but the ROI would be fairly lengthy), or they could build less automated plants staffed by the good workers and peasants of the US…only, we don’t HAVE good workers and peasants anymore, right? So, they would be staffed by workers making a ‘good living wage’ in the US…IOW, they would be well paid. What do you suppose that would do to the costs? So…either we have highly automated plants that have to have their capital costs paid down, or we have less automated plants (that still have to have their costs paid down, just less) staffed by American workers making a decent wage. Or, I suppose, we import a bunch of low paid workers and peasants…in which case, it hasn’t really helped us that much.
Any way you slice it, it’s going to cost more. The folks who provide that capital are going to make their money either way, as far as I can see, and if we go the route where we provide a lot of good paying US jobs then that’s going to impact everyone who isn’t rich in that the price of goods and services will go up. And this is just one small sector. How about the coffee industry? Where will we get the coffee from in the quantities we currently use? Answer…we won’t. Instead, coffee will indeed be able to be grown in the US, but not as much, so the price is going to go up.
Or do you have an alternative scenario to how this would play out, one where the workers get more money and the capitalists get less? How would that work, given the scenario in the OP?
Because the US states are not nations. Even if they were, all nations are not equal. Isolation, or anything else, could work better for one nation than another. Pretty basic logic there.
And Rhode Island, along with other particular states could be figuratively likened to a cancer, because we consume more than we produce, there is no sign that will ever change, and we don’t produce anything* that the rest of the country would miss.
*Family Guy is not actually produced in Rhode Island.
Try making these same arguments, only substitute the word ‘automation’ for ‘offshoring’. For example:
“How can you simultaneously argue that tons of manufacturing was automated because it was cheaper while simultaneously arguing that abandoning automation wouldn’t create a large number of jobs?”
The answer is that when the jobs were freed by automation, the workers did something else. So we got the stuff that automation makes, AND we got new stuff.
Steven Landesburg once wrote an article called “The Iowa Car Crop” to illustrate the advantage of trade. It goes like this:
Let’s say we could invent a machine on an island somewhere. That machine eats grain, and spits out cars. Furthermore, we can make the grain for half the cost it would take us to make the cars ourselves. Would this magical machine be good for the economy? Of course. We could scrap our car industry, put half the resources to work making grain, and the other half would be free to make other things.
Now call the machine “Japan”. We put grain in ships, send it to Japan, and it sends back shiploads of cars. What’s the difference?
Outsourcing only costs jobs in the industries that are outsourced. It creates new jobs elsewhere, because we become wealthier. In the same way, automating a factory costs jobs for the workers of that factory, but ultimately the increase in efficiency creates even more jobs elsewhere in the economy. If that wasn’t the case, ask yourself how we have stayed so near to full employment over the last century, while eliminating tens of millions of jobs in agriculture and industry through automation?
And then ask yourself what our standard of living would be like if we destroyed all that automation. Hey, we’d have to employ a lot of factory and farm workers, right? Does that sound like an economic boom to you?
I challenge you to convince me that evolution is the best way to understand the diversity of life without an “appeal to authority”. If we are not allowed to appeal to the consensus of authorities on a subject, especially when that consensus is overwhelming, we’ll never get further than 1 + 1 = 2.
Automation has to be built and maintained. It requires more educated workers to take care of it and set it up. You don’t plug it in and go away. It has to be powered. It needs someone to check readouts.
Some fairly simple robots have gripping mechanisms (end effectors) that break or wear out and have to be replaced. They have electrical and oil cabling that breaks after awhile.
The big three did kill thousands of jobs inside but many suppliers made out pretty well, until we outsourced that work to Mexico, then India and ,then China. We would be going back to creating a middle class if we got isolated…and survived it.
If you are appealing to authority to understand evolution, you don’t understand it. The authorities have produced their arguments, which have been tested and proven. Any theory of evolution which does not stand the test is worthless. It is not the authority, it is logic, reason, test and proof that makes something true. Not the person who said it. Darwin considered the Irish to be inferior people. Was he right? Don’t give me ridiculous challenges. Nobody can convince you of anything if you don’t want to be convinced.
Exactly…a few highly skilled workers. Not tons of jobs. I suppose there might be a boom initially in the construction trades (as well as the folks making robots, developing software and the like), but to me it’s akin to saying ‘well, if we break all the windows then there would be a boom in glass manufacturing!’.
How? And wouldn’t the higher costs basically devalue all these working class folks salaries? If we get back a million ‘good’ manufacturing jobs, but the costs go up across the board, how does that benefit anyone? Even if we got back 10 million such jobs, how does that benefit the majority of people in this country if the cost of getting back that 10 million jobs is to lower the living standards (because things cost more), and lower the amounts of goods and services (while raising those costs) for everyone? By what magic will this create a middle class (that already exists in the US)?
There is no difference. But the real Japan is not the name of a magical machine, and it sends us fewer cars for our grain than the magical machine did. Did you really not understand that?
Because there is no possible way to consume less oil, even when we know that the supply is limited and will be depleted without any change in consumption?
I think a certain amount of trade protectionism on tangible goods is reasonable and necessary. And no, it’s not about maximization of the efficiency of the market. It’s about market creation.
Because in this case we need to remember that the consumer needs to be a producer as well. And splitting up those roles seems to be distorting the picture.
Basically, for the entire market to tick over, it requires Americans to be paid enough to buy all this stuff. Well, American wages have been stagnant, when indexed for inflation, since 1973. Women got into the workforce, which increased household income when wages did not.
But Americans are now working full out and are generally up to their eyeballs in debt. It’s not sustainable on a human level. We’re all turning into a bunch of neurotic burnout cases, with giant debt loads, working overtime, and just scraping by(raises hand).
So we need some way to bring production of tangible goods home. Period. We have to stop competing against people who make ten cents an hour. Trade with people who have a fairly closely-matched standard of living is good for us, but I do not wish to share a third-world standard of living.
(I don’t want them to have to put up with it, but I don’t want them to drag us into it.)
Does this mean I think we need complete isolation? no. I just want a prosperous country and happy people-and I see some reasonable trade restrictions as a way to achieve that.
I also wonder why no conservative is flipping out over how dangerous it is that we have become so dependent on an import product to run our society. According to the wikipedia page on the oil reserves, we have 8 years at current demand (just under 7 billion barrels a year).
We let our manufacturing go overseas and we’ve got massive income inequality to show for it. Lifting trade restrictions seems to have caused a lot of misery, therefore it seems logical to try restoring some trade barriers.
Insanity is continuing to do the same thing and expecting different results, right?
This analogy is nonsensical, and you haven’t really addressed the issue of why interstate trade barriers aren’t precisely the same as international trade barriers.
Why would the USA be better off without Rhode Island? Of course it wouldn’t.
Why on earth does your second claim follow from your first? You’re proposing something that will jack up the price of consumer goods, and you think that will cause people to carry less debt?
It would cause prices to go up, agreed. It would cause manufacturing jobs to return though-and since manufacturing in America has become mechanized-you’re talking about employing middle-class skilled labor. People with an associate’s degree or better.
This would raise employment, which would raise demand for all labor, not just skilled positions. Also, middle class manufacturing laborers actually spend the bulk of their money(unlike the rich) creating jobs that depend upon that spending.
Those, in turn, would become better-paid jobs. It would be an economy-wide, positive ripple effect.
Things will cost more, yes, but people will have more to spend-and my strong suspicion is that the ‘more to spend’ will far outweigh the ‘cost more’.
What we’ve got now is a bunch of dirt-poor service industry people trying to sell stuff from China to each other.This doesn’t work.
[My emphasis] Either your beliefs contradict each other, or there is some fundamental difference between two types of imaginary lines that you have yet to explain. Your two earlier posts state that the US is running a trade deficit, and this deficit is bad for the US. Your more recent post states that Rhode Island is running a trade deficit (with the other US States), but that this deficit is bad for the other states. So, what are the properties of national and state borders that make trade deficits bad across international borders, but good across state borders?
Very clever that you deduced that the analogy I called nonsensical was nonsensical.
You’re right. My later post (#36) which explicitly explained why interstate trade barriers aren’t precisely the same as international trade barriers was a figment of my imagination, and everybody else’s who read the post. You were so clever before, why did you think that interstate trade barriers aren’t called international trade barriers? That should have been a clue.
I guess that was in the imaginary post as well. And in addition, you obviously know nothing about Rhode Island. I mean your fallacious economic arguments might have fooled some people, but you couldn’t even fool people in Rhode Island with that statement. We all know the rest of the country are fools for letting us have senators and giving us tax money just like the real states.
I was going to write about something else, but this simply demands a response. Below is the entirety of your argument about state vs national borders:
You probably won’t die if your appendix is separated from your body, but you will die if your brain is removed. Your analogy of the nonsensicalness of RickJay’s analogy of state isolationism is similarly nonsensical.
Seriously, in your analogy, is Rhode Island the body, the heart or the tumor? Is the United States the body? Then what is the heart? And how is this in any way like the difference between state and national borders?
I’m sorry I didn’t respond to you sooner. Your post was so polite and rational it didn’t fully register.
It has definitely been bleeding us out. That’s the symptom no doubt. The disease, I’m sure is more complex.
We gave them money to buy their goods, not promises. The fact that they were stupid enough to lend us that money doesn’t change that. And we get mostly disposable goods from overseas, not ‘material wealth’. The debt remains, we have nothing to show for it. But you are right about the debt situation in many respects. Debt is not that bad when you can print money. And the debt looks huge only because people don’t really understand the numbers they are looking at. Compared to the value of this country, the debt is tiny. I don’t think countries were only taking refuge in this country though, they were also concerned about the foolish investments they had already made. I can’t cite figures there, so I’ll continue based on your interpretation being better. It doesn’t really change the situation anyway.
No argument there at all.
The fact that we have a money problem doesn’t mean we don’t have a trade problem. If our trade deficit was not continually growing, with no realistic end in sight, I would agree with you. And it’d be best if you looked up profit and loss. We can’t lose money on every trade, and make it up in volume.
But you have the point that a complete analysis of our economic situation, relative to other country’s, is very important. And we have thrown away enormous amounts of money on follies that benefit other countries, and not just our allies either. Making trade profitable will solve the economic problems, but no one is offering a realistic means for that to work. Discredited economic theories (discredited by massive economic failure) aren’t cutting it. Remember that we are building up a domestic debt in socio-economic problems that won’t go away by burying our heads in the sand.
I’m looking for the solution, which I don’t believe is isolationism. But this thread is convincing me that we need definitely need protectionism. We export the most valuable resource we have, our know-how. We ship our technology overseas, other countries copy it, and then sell it back to us. We ship our manfacturing overseas, and we support an increasing standard of living overseas, while our’s declines. Increasingly we are selling our own on-shore resources to overseas interests. And we get cheap T-shirts in return. A few Americans make a lot of money from the deal while everybody else gets the shaft. I’m a benificiary of the economic policies I deride. I’m not saying these things for short term selfish reasons. I am concerned about the America my children will live in after I am gone.