HN user
Not true, the study references both low skill and high skill jobs. Not to mention there's corporate taxes and other revenues that the government receives that they wouldn't otherwise from a foreign company.
In economics, "free trade creates additional wealth for all involved" is closer to consensus among economists than is "the Earth is warming" is among climatologists.
Except for, you know, the economists who penned the study that is the topic of this thread, along with plenty of others. On top of which, whenever someone spouts this falsehood, invariably it's economists who are looking at very narrow definitions of free trade, or very narrow definitions of "creating additional wealth". Is free trade good if the only gains in wealth go to a few people while most workers lose their jobs? Maybe the GDP increased, but for your average person it wasn't good.
The study does not say that the conclusion is peculiar to China, just that not all trade agreements are in aggregate harmful. Yes, China benefitted, but if it takes a population to be at starving level poverty to benefit from free trade, then I think your average American would say "no thanks".
Investment is not the same thing as employment. Mexicans may invest in American based companies, but those companies can outsource every last one of their employees if they so desire. Not to mention he says himself I realize that 5 of 21 years is too small a portion of time from which to draw any conclusions. Conservative estimates of job losses from NAFTA are in the realm of at least 700,000. It's pretty obvious that job losses are part of the deal when the government created the NAFTA-Transitional Adjustment Assistance Program to help people deal with losing their jobs as result of NAFTA!
There are many regulations in China. Sure there's more corruption there than here, but you seem to be advocating for America to become a more corrupt environment to improve America's "ability to pivot". Do you really think the brown paper bag economy is the way to go?
The legendary Bill Hicks: https://www.youtube.com/watch?v=aMN8REGJXaA
It doesn't, it's a misconception.
You see often enough companies hiring H1-B's, have their American equivalents train them, and then fire the American workers.
Ahh, you're going for that anti-advertising market, that's a good market! Very smart. A lot of people are anti-advertising right now - it's a huge market.
Many proponents of free trade argue that we should be pro free trade because it benefits the poor people in places like China. The OP is referring to that argument.
As for why this study didn't focus on the benefits - maybe because there weren't any? Or maybe it's because the benefits mostly went to the executives of large multinational corporations who are lobbying for these deals?
Because a Californian individual and a California based company pays federal taxes which leads directly to a more stable financial situation for the country you live in, not to mention a higher likelihood of tax cuts etc.
Also, what evidence do you have that trade with Chinese will improve the welfare of those around you?
Funny, there's other products like cars throughout the years that were manufactured entirely in America and amazingly most people could afford to buy them - not just the 1%.
The idea that without free trade with China only the 1% would be able to afford smartphones is total nonsense.
This paper shows how there's negative affects from free trade with China, and your conclusion is "oh it was negative with China, but all those other free trade deals were positive"? Sorry, but NAFTA was a massive job killer. Just ask anyone in Detroit.
Also, the idea that China has no regulation on business is ridiculous. Obviously you've never worked there!
Except that even the Fed now admits that HFT's only add liquidity precisely when it's least beneficial (when nobody needs it) and reduces it when it's needed.
Don't buy into the HFT "adding liquidity" myth.
You have to be very careful with laws like this where a human has to sit and evaluate the societal benefit of one business over another. Tons of unintended, and potentially very negative, consequences to this.
Simplifying the tax system and increasing the top marginal tax rates back to something closer to where they were 40 years ago is preferable in my opinion.
The vast majority of billionaires are people whose names and actions, entrepreneurial or not, none of us know. Just because you can name a handful of successful rich businessmen over the last century, doesn't even come close to proving that most billionaires are like Musk.
Remember that most of SpaceX's core technology was literally given to them by NASA, and on top of that they're getting guaranteed contracts by the government (i.e. the dreaded government funding - they don't know how to allocate capital, right?).
Even the landing of the first stage was mostly based on NASA research. Which by the way, NASA had achieved long ago.
SpaceX innovated with their cost cutting, and maybe now their manufacturing processes, and by being lucky by benefitting from a period of cost cutting by NASA whereby they could hire a bunch of NASA engineers/scientists.
The current consensus among economists is that increasing inequality will lead to disaster for the entire economy, while decreasing inequality actually increases growth.
Sure, you're right that nothing is set in stone, and you could have a country that has low inequality but it's still a terrible place to live by other metrics, but this is useless hypothesizing and speculation. What evidence do you have to support the statement that "An extreme progressive tax plus startups will STILL increase inequality. Not decrease." Seems to me, in the years when the top marginal tax rates were higher, those were some of the years with the least income inequality in American history.
Why not look at what people who study our current economies are saying instead of speculating?
From the IMF:
"We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down."
https://www.imf.org/external/pubs/cat/longres.aspx?sk=42986....
Here are four - Era Dabla-Norris ; Kalpana Kochhar ; Nujin Suphaphiphat ; Frantisek Ricka ; Evridiki Tsounta.
They work at a little organization called the International Monetary Fund, and they conclude:
"We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down."
https://www.imf.org/external/pubs/cat/longres.aspx?sk=42986....
You mean tea-bagging your passed out co-worker at the Christmas party is not appropriate?
It does, but how much of that comes down to lobbying. I wonder who was pressuring Obama to not approve Keystone, and who also happens to own a ton of railways that transport oil?
Well, here's the NY Fed explaining why they think it's bad:
http://libertystreeteconomics.newyorkfed.org/2015/10/the-liq...
The SEC has been very recently and selectively cracking down on excessive order cancelling though, so it's not clear that it's not illegal and is "just being smart with their orders".
For what? LOL
Even Ben Bernanke says we should have jailed banking executives after 2008.
In case you're not being purposefully obtuse, you can watch about how the reams of evidence of criminal behavior (you know, of actual written-down crimes) was ignored by the justice department (you know, the same agency that is pursuing this case), via PBS Frontline: http://www.pbs.org/wgbh/pages/frontline/untouchables/
Frontline, was able to find direct evidence of executive criminality with just a cursory investigation (with no power of subpoena). The excuses coming out of the justice department's mouthpiece were so laughable, that he resigned the day after the piece went to air.
There's a two-tier system in place here, and crimes like defacing a website causing a paltry amount of damage, although real, should be the crimes the justice department ignores if they're not able to apply justice to all crimes fairly and evenly.
When one compares it to other crimes that not only go unpunished, but rewarded, this particular crime is comparatively insignificant - thus the "more or less".
I trust in the aftermath of the 2008 meltdown, you were speaking out equally vigourosly in favor of jailing bank executives.
Unless you're a banker, in which case you don't spend any time in jail, and you're given trillions in bailouts funded by the taxpayer.
You're 100% right. There are some costs to the company to clean up after what happened.
However, I think people are correctly wondering why we live in a society where a more or less victimless crime will result in years in prison, while bankers loot and destroy the entire economy, ruining countless peoples lives, and not even one exective spends a minute in jail.
There exists a two-tiered system, and this is yet another illustration of what happens when you're in the lower tier. If bankers aren't going to jail, this guy definitely shouldn't be.
Sure, he's responsible.
But he deserves a month in jail, at most.
The Economist will be following up this exposé with another one next month showing how people use seat belts in cars so they avoid injuries.
No, I'm not saying there's no way to achieve social mobility. I'm saying that it's just very unlikely. There's always exceptions you can hold up as examples. Also, the idea that everyone living in the "third world" is penniless is ignorant. In every developing country, there is an elite whose children will have the same benefits during their upbringing as in any other country. The idea that because an inventor came from a developing country means that everyone has the same chance at social mobility is laughable.
Lazy people, indeed people in general, are experts at rationalizing away their problems. They don't need the help of my rationale. Of course, everyone should believe that they are capable of achieving anything they set their minds to - research shows that those who believe they are in control of their own destiny tend to be more successful in life. But from a statistical standpoint, there's no denying that people from a tough upbringing have a much harder time than otherwise.
For what it's worth, you're in roughly the top 30% of earners globally. Whether that constitutes "a lot of money" depends on your definition, but we often forget just how little most people on this planet live on so I wanted to throw it out there.
Yeah, agreed - the main point of income inequality is missed.
Beyond the employee who makes 100x less than the CEO, it's also the people who have little to no hope of even getting a job at such a company, because they weren't lucky enough to be born into an environment that allowed them to develop to a certain degree of their potential.
Yeah, there's a very fine line between the two, and very little attention was given to that in the article. Is "being defensive" the new "bad culture fit"?
QE1 worked, in that it saved us from a depression. But the jury's still out on whether that was just a can kicking exercise to be reckoned with at a future date. The other QE's by any measure, have been a failures, at least when compared to QE1.
And when almost all major global economic indicators are looking negative, it's hard to talk about QE in terms of it being successful policy.