DanTown8587 wrote:coldfish wrote:
You are either not reading what I am writing or you are intentionally straw manning me. Like you said, just don't have a discussion with me. Its easier for us both.
Here is what you said that I orignally quoted
coldfish wrote:If you look around, median household income has stagnated for decades after almost continuously going up for over a century. That's in spite of the fact that productivity has skyrocketed over that period. Globalization is the primary culprit for that. It affects everyone from inner city african americans to midwestern whites or southern textile workers.
I cannot tell you how much I disagree with
globalization as the reason for stagnating median income.
You followed that with
You are talking about well over half of the working population being screwed over by our trade treaties.
And no, I'm not Donald Trump. I'll give specifics. Our trade treaties allow any country with a VAT to give an export credit and charge VAT on all imports. That's pretty much every country in the world except for us and it puts our workers at a 10-20% disadvantage globally. That's **** asinine. Whomever agreed to that should be skinned alive. Congress even tried to fix this but was shot down by the WTO.
I cannot tell you how much I disagree that our trade treaties are "screwing us over".
Do I think our trade treaties have hurt some of the work force? Sure, there is no perfect agreement for trade. You do have to give up something to get something.
Do I think that the COUNTRY is worse because we use trade treaties? No. This is a laughable position that you've taken that literally no one in the economics field agrees with you.
http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_0dfr9yjnDcLh17mI'm not sure what your plan is to "fix" the problem of trade so I won't speak for you but I think you highly overrate "globalization" as a problem on the US economy. I think you highly underestimate how much capital investment has impacted manufacturing as an example instead of globalization. Globalization is an easy thing to attack for politicians (i.e you'd have jobs if not for China/Mexico stealing them) but I do not believe that to be the case. If a job is being done in those areas, the wages are so drastically different than American wages that if that job was ever forced to be done in the US, it would be automated. I think we've only touched the surface of job displacement due to technology; a vastly larger threat to future jobs than globalization is.
I can also buy an argument that automation is going to be a problem for how we act because a ton of jobs (transport, minimum wage, etc) with high participation rates can be automated and we simply do not have the demand in other areas to put those workers. IMO, it will take a New Deal 2.0 with infrastructure development to solve the problem of full automation. But if manufacturing is any example, automation will make us vastly more efficient but less people have jobs. That's a direct fight between what's ideal for business and what's ideal for a country/voters .
With regards to trades and treaties, I can buy an argument that trade helps the companies who utilize it more than the people who buy those goods but I still think the US is better off with trade than they are not trading. And if you're going to trade, agreements are better than not having agreements on trade.
I guess I'm more interested in what you think the solution is than what you think the problem is.
Why does globalization screw over the working middle class? The skill levels there are not unique. As such, they are susceptible to market pressures. By being willing to buy from the rest of the world, we have created an issue where there is a significant supply of labor which depresses its price. Everyone in this thread is talking about that, including yourself.
At the same time, globalization has allowed high skilled workers and investors (read corporations) access to global markets. This has allowed them to increase their income and profit. Hence, globalization drives income inequality.
What to do about fixing trade?Allow some type of VAT patch where the US can tack on an equivalent tax to the exporting/importing country. I would also have no issue if some portion of our income tax/social security tax was replace with a national sales tax. Would this bring back all jobs? Of course not. However, only a small percentage change in our import/export balance would have a significant impact on our labor situation.
I would love to get rid of content legislation or at a minimum, punish the countries that employ it.
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The automation discussion in this thread is driving me nuts. I'll use another analogy. Farming.
A long time ago, 90%+ of all people were farmers in the US. Improvements in technology drastically changed that to the point where only 1% is now farming and we produce more than enough food for everyone. End result is that food prices came down and labor was freed up to do other things. Standard of living went way up.
The same thing is happening with manufacturing with two huge caveats:
- We no longer manufacture everything we need.
- Prices are not coming down outside of select electronics sectors
Automation is a huge factor. If we can't come up with new demand to replace the old demand, people will be out of work. With that said, there are other issues here that are policy related which can be fixed and if they were, american standard of living would improve.
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As a side note, I work in heavy manufacturing. One of the parts of my job is putting in ABB (read, not american) six axis robots to replace humans so I can make parts that will be shipped from Brazil to Saudi Arabia. I also deal with customers and have been involved with Fortune 10 companies making global purchasing decisions where hundreds of millions of dollars worth of contracts are moved around the world for small percentage price differences. I know you won't accept my anecdotal stories but when I hear economists trying to tell me how the world works I reflexively roll my eyes.