News for the elites: We're already in a trade war and we're losing our ass!

[apoliticalone]

Good post.

[Darth Reardon]

Robbing them blind was a poor choice of words, as trade is a voluntary exchange.

As a country emerges, its people move from subsistence farming to manufacturing and other jobs. At first, they are willing to work very cheaply. As time passes, they start to demand higher wages and increase consumption until their wage and general conditions approach that of the first world nations. During this window, somebody is going to “exploit” that cheap labor for a profit.

Sending a USD overseas for cheap labor/stuff, is really just sending a promise that they can send it back later and we’ll give you some of our stuff. So if we send them our USD now when stuff is really cheap, but when they eventually return that USD and we give them stuff at fair market value, we make a big profit (hence “robbing them blind”).

I don’t know of any evidence that any substantial portion of our record number of people not in the workforce can be accurately attributed to buy things from emerging markets at a discount. Lots of other things are also happening, like a massive number of illegals taking jobs away from Americans who want them, the baby boomers (who can afford to) beginning to retire, a massive recession many of us believe is ongoing, and excessive government regulation.

A lot of people point at how our manufacturing is disappearing as evidence, though our manufacturing output and jobs are actually increasing (in absolute terms, as a percentage of world output we are decreasing — as one would expect as new productivity comes online internationally).

We see plenty of national news stories about people losing their jobs when they are sent overseas, but when a business expands (possibly from increased exports, but also possibly from increased domestic demand due to people having more discretionary spending available because they were able to buy stuff cheap) it might not even make the local news.

When consumers (not government) purchase things overseas, it doesn’t add to the national debt. If we were actually losing jobs (net) to global trade with emerging markets (and I’m not saying we aren’t, as I don’t see hard evidence), that would probably add to the debt as more people went on benefits.

The national debt scares the heck out of me. My grandfathers came home from WWII about a year before my parents were born. Dad once told me about when he was 10 years old and delivering papers, the family with the first TV in town would invite him in to watch the Lone Ranger. The other thing I know about that year is that was either the last year the government didn’t go farther into debt or the year after it (fiscal vs calendar year and all that). Dad retired a couple years ago. Not one time in his entire working life did the federal government not have to borrow money to meet its bills. That may be scarier than the magnitude of the debt, generations who have never known anything else.

[Jim Robinson]

Again, if domestic manufacturing and business is expanding, why do we have an increasing number of workers being pushed out of the workforce? Illegals accounts for some of it, but aren’t they mostly used in agriculture and other menial labor jobs?

Is the decline of U.S. manufacturing capacity a myth? Are the Detroit ghost towns an illusion?

[Darth Reardon]

If an illegal comes in and knocks a citizen out of the workforce, that raises the population which then reduces the workforce partition percentage. No jobs were added or removed, but there's now less jobs/seekers per person.

Participation is based on number of jobs, regardless of what they are, along with people looking for jobs, so it doesn't matter if they are ag/menial.

If we went back about 20 years and predicted the future, we would expect to see the participation rate start to drop around 2008, when the Baby Boomers started to retire, and our lagging birth rate meant a decreasing number of workers to replace them. As it turns out, the effect of Boomer retirement on the participation rate is less than we would have expected as Boomers are retiring later, but it's still going to be an effect.

One thing I hadn't thought about is the other end. I found out that a lot of Millennials are delaying entry into the workforce, whether by staying in school, or just living at home. From what I'm reading, this is probably bigger than the Boomers retiring.

Decline of manufacturing capacity is definitely a myth. Other than a slight dip around 2006-2008 (followed by a rebound), we're in a long term pattern of capacity growth. Manufacturing jobs are in a long term pattern of decline, with a bit of recent slow growth (not shown on chart). Maybe some of those (net) jobs reductions were from jobs that went overseas and maybe they weren't, we just can't tell. But there's certainly a long term pattern of higher productivity (including automation).

As far as Detroit, yes, it's gone to heck. But look how many jobs we hear about moving to Texas, for example. A few years ago, instead of buying another Chevy from Detroit, my last truck was a Toyota from Texas (after I waited a year while the production moved from a UAW plant in CA).

[Jim Robinson]

Do you have charts of the numbers of American workers not working vs illegal immigrants who are?

[Darth Reardon]

Do you have charts of the numbers of American workers not working vs illegal immigrants who are?

I don't, but I wouldn't believe them if I did. I don't have much confidence in illegals honestly answering a poll that they are illegal (or even answering in the first place).

[Jim Robinson]

Do we have any accurate or trustworthy numbers or even estimates on either?

[Jim Robinson]

I remember someone posting a chart sometime back showing that most new(?) jobs created during obama’s term have gone to immigrants. Don’t remember the source or who posted it.

[Darth Reardon]

I’ve seen that at least a couple of times on Zero Hedge (though I don’t think they break out legal vs illegal). Here’s one:

http://www.zerohedge.com/news/2015-06-06/illegal-immigrant-recovery-presenting-most-stunning-number-may-jobs-report

[Alas Babylon!]

I remember someone posting a chart sometime back showing that most new(?) jobs created during obama’s term have gone to immigrants. Don’t remember the source or who posted it.

Kabar, was that you?

[GOPJ]

You're right on this Jim... if Democrats and the GOPe had their way we'd all be flipping hamburgers for each other...