Economics Thread

mqt said:
I still think there’s some question on the causal relationships and some over-generalizing happening here. Free trade does not need to be about Wall Street or income inequality, and manufacturing jobs aren’t necessarily what drives higher wages. I don’t doubt that there’s a lot of connective tissue between global trade and the change in American workplaces, but I would challenge how much of the degradation of the one-income household is due to the shift in employment type rather than the shift in employment practices.
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Do you think something other than offshoring has been a larger force in the shift in employment type?
 
Jaw said:
Do you think something other than offshoring has been a larger force in the shift in employment type?
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I don’t, but I don’t know that I agree with the premise that the shift in employment type is the primary force driving the rest of the ills you’re describing. The push to claw back profits and bust unions may have been aided by the new employment types, but the push would still be there regardless. I think the current environment is being driven most by a lack of anti-trust enforcement by both sides and the rise of corporate private equity and the financial tools they use to drive profit regardless of what it means for the companies they’re acquiring, and that would be present with our without offshoring.
 
mqt said:
I don’t, but I don’t know that I agree with the premise that the shift in employment type is the primary force driving the rest of the ills you’re describing. The push to claw back profits and bust unions may have been aided by the new employment types, but the push would still be there regardless. I think the current environment is being driven most by a lack of anti-trust enforcement by both sides and the rise of corporate private equity and the financial tools they use to drive profit regardless of what it means for the companies they’re acquiring, and that would be present with our without offshoring.
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Thomas Philippon lays out what you are talking about in magisterial detail in his book: The Great Reversal: How America Gave Up on Free Markets
 
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And I would add that no one here has doubted that protectionist policies such as tariffs are effective in preserving jobs making toasters or sneakers. We could have saved those jobs and factories. We can make them return to American shores. No one disputes that. The question is whether that is a wise or desirable thang.
 
https://twitter.com/x/status/1952780127936340468

https://www.nationalreview.com/corner/chart-crime-alert/

I’d like to nominate this post from Secretary of the Treasury Scott Bessent for Chart Crime of the Year

Like all great chart crimes, it starts with a goofy y-axis. The numbers decrease from bottom to top, and the origin is at –60 billion. The numbers also don’t match the title: The U.S. balance of trade is negative, which means the trade deficit is positive.

Next, let’s appreciate the x-axis. The chart begins most of the way through 2021, likely because if it actually began at the beginning of Biden’s term as president, it would show the trade deficit at basically the same level as it is today. (In the first quarter of 2021, the trade deficit was $64,705,000,000; the second quarter numbers that just came out show $64,033,000,000.)

The really funny parts of this chart, though, are the red and green lines. The “Biden” line begins in the summer of 2023, when Biden had already been president for more than two years. It ignores that the trade deficit was declining from 2022 to 2023, after having increased significantly in 2020 during the pandemic. The actual “trend seen under Biden” was U-shaped, and it had nothing to do with anything Biden did or didn’t do.

The “Trump” line is also hilarious because the spike in the trade deficit was caused by Trump. Businesses were stocking up on imported goods in the first quarter of this year because they knew Trump’s tariffs were coming. Then, once some of the tariffs began to take effect, they bought less — the expected effect of a tax increase.

Now, the trade deficit is . . . right back where it was in 2023. You can’t take credit for a “significant turnaround” when you were responsible for the turn in the first place.

This might be the greatest chart crime on Twitter since the DCCC thanked Joe Biden for a two-penny reduction in gas prices in 2021.
 
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