Posted on 12/06/2016 2:20:13 AM PST by expat_panama
Landing on the moon is peanuts compared to calculating how something effects the economy.
We have plenty of production in this country, contrary to what you often hear in the media and right here on FreeRepublic. In fact, many of our factories produce even more than we can consume here in the U.S.
You can’t always calculate economic impacts based on real-world applications, either. Economic impacts tend to be overly simplified because there are too many variables to account for. It’s like preparing a weather forecast for this date in 2026 based on weather trends for the last ten years.
Hmm, then what’s the problem? What are they producing, why are 100 million without jobs?
Seriously, I don’t get it. 70000 factories were offshored. How is this helping?
Are you saying there are no problems with business existing in this country?
I drive around and see plazas with lease signs in 1/3 of their windows. They’ve been like that for years. Were are the businesses moving in to those locations.
Sounds like we kind of agree here.
That’s fine. Then build in India or China. Just know that if you want Americans to buy your products, you have to pay a tariff to get them off your boats. It’s that simple.
That incentivizes American manufacturers to make those same products domestically. It’s free-market economics.
Sure.
35% is basically the fee we charge on companies that move to countries that don’t require companies to toe the same regulatory line ours do.
Trump’s approach is to make toeing that line less expensive, while at the same time making sure that companies toe that line regardless of where they are manufacturing.
Not hard to understand. Right now, moving makes sense because the tax and regulatory burden on companies is at nightmare proportions.
China, for example, spends zero on R&D - they steal everything they’ve got. The US innovates, and spends big to do so. Why should the Chinese benefit from that?
Trump’s position is, ‘go ahead and steal it - we’re going to levy an R&D tax on all your technical products’.
That makes sense. Certainly cheaper than trying to get the Chinese to enforce a contract, or appear in court.
The U.S. is one of the largest manufacturers in the world -- even bigger than the combined European Union. We produce aircraft, machinery, construction equipment, cars, and lots of other things that you rarely hear about because you can't buy them in your local Wal-Mart. Automation has had a far bigger impact on those job losses than "offshoring."
Seriously, I don’t get it. 70000 factories were offshored. How is this helping?
That is simply incorrect. In many cases they were just closed because they were functionally obsolete. We just had a major manufacturer of specialized plastics announce that's closing down its plant in a town not far from me. It's a devastating loss for the local economy of that town.
They're not leaving to go to China. They're consolidating five different plants around the country into one massive new plant down in Texas or Louisiana that they just constructed at a cost of about $1.8 billion. So you have one manufacturing facility replacing five facilities, and the new one alone will produce more plastic products than the five other ones combined.
Are you saying there are no problems with business existing in this country?
Not at all. I agree with you 100% that businesses in this country face a lot of challenges. I just recognize that tariffs aren't going to solve them.
I drive around and see plazas with lease signs in 1/3 of their windows. They’ve been like that for years. Were are the businesses moving in to those locations.
I've seen some very interesting figures about commercial real estate in this country over the last 60-70 years. One real estate consultant I occasionally work with produced a report for one of my clients in which he documented this problem over time. Basically, the U.S. had a pretty consistent ratio of commercial floor area relative to population from the 1940s up until the 1980s. There was something like 8-10 feet of retail space in the U.S. for every person who lived here.
In the 1980s this number began to escalate rapidly, and by the mid 2000s it was somewhere around 23 square feet. In other words, this country went on a retail construction binge that flooded the market with more commercial space than we ever really needed. When you see all those vacancies in those shopping centers, you're seeing signs of a real estate market that is simply returning to normal.
We don't know how much "a bit" is and we don't know much "more" is. In this example the only number we have is the 35% tax hike, and from experience we know that the last time tariff rates went up big time, employment collapsed.
Thanks for that. Food for thought.
“OK, get ready to be flamed on this issue by the CodeToad.”
Why? I completely agree that the corporate income tax, and personal income taxes, MUST be abolished.
Our government spending is completely out of control and confiscatory income taxes are the enabling mechanism for it.
They are killing our economy and always have.
100 million without jobs... ...70000 factories were offshored...Whoa, this sounds like a job for----------->
OK, back to work.
If we're talking about U.S. industrial output, we got hard numbers that say that the value of U.S. manufactured goods is at an all time high.
We can change the subject to employment or factory locations if you want but only after we first settle this industrial output thing.
You get less of what you tax.
I would strongly recommend Thomas Sowell's books Basic Economics: A Citizen's Guide to the Economy and Applied Economics: Thinking Beyond Stage One for anyone who is really interested in getting a broad understanding of economics and the complexities involved in issues that simply don't get enough in-depth analysis on TV news shows.
That shows 500 billion of sales value. How does that relate to 16 trillion GDP. Does the chart factor inflation?
I’m asking because I don’t know.
Sorry, not graph, spreadsheet.
Whoa, fabulous questions --learned a lot!
<--- Here's the GDP numbers on goods production using inflation adjusted 2009 dollars.
When I saw how it came out ten times the sales numbers I had to dig a bit and as far as I can tell the production numbers double count all the costs along the way (from raw matls, to refining, parts manufacturing, assembly, etc.) but the sales is the dollar amount of the final transaction.
That's my guess, it's hard to beat the info out of these clowns.
Anyway, fwiw all this stuff comes from the Fed data site; for the gdp I wandered a bit w/ the BEA site which is where the fed gets their GDP numbers but for me the Fed's site is easier to use for making a graph.
The only thing to clarify from my previous observation about empty plazas; the empty stores had tenants at one time. It wasn’t like too many stores were built and not enough business to occupy them.
Thanks again for the book recommendation. I enjoy Thomas Sowell’s essays very much.
The panicked left is thinking of threatening to shut his twitter account down. And I supposed they could do the same to his Facebook account.
But they better be careful or he’d end up building a cant-miss WH web site, “tweeting” to Drudge, etc.
Such intellectual property theft is one of the circumstances where retaliation makes sense.
But if we try to go the whole environmental/labor costs route, we will end up in a trade war that impoverishes all.
At this point I think he is negotiating with Congress more than particular national governments.
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