One of the greatest tragedies of my lifetime has been watching as the idea of free trade, which has built the immense wealth we enjoy today in the west, come to be rejected by both major parties. What makes it even more painful, is that we literally won the fight! Clinton, Blair et al conceded free trade was good! Everyone was onboard! And yet a mere 30 years later and both parties have traded away free trade so we can’t they about the literal dumbest culture war BS.
Something that was so frustrating was seeing Hillary cynically oppose the TPP because she felt pressure from Bernie also opposing it. Unlike Bernie and Trump, she was smart enough to know better, but was too much of a political coward to stand up for what she actually believed.
I tend to think that *if* free trade was really that important and *if* it was necessary for Clinton to abandon TPP in order to defeat Sanders without taking excessive damage that would hurt her in the general election, then it would actually have been wrong and a betrayal of free trade for Clinton *not* to abandon TPP. But the ifs are debatable as a factual matter.
The thing that I legitimately wish that mainstream Democratic politicians would figure out is that the sort of people they think they need to appease are either not actually gettable voters -- they're always going to move the goalposts and end up staying home or voting Green -- or they're just going to cope and seethe and vote Dem no matter what they do.
Basically there's nothing to be gained by meeting their demands. The people who legitimately care about Gaza are either super-dialed-in partisans or they're the kind of people who wrote in Harambe, with no in between.
I'd say most Democrats still thought TPP was a good idea, just like most Democrats are still on balance pro-Israel (maybe not pro-this Israeli government but definitely not viewing Israel as a "settler colony" that needs to be wiped off the map), but Democratic politicians can't stop bending over backwards to accommodate a cranky minority of the party. To some degree we voted for Biden and got Warren anyway and it's annoying.
Arguably a much worse problem. On paper most elected Republicans want more border restrictions and funding for Ukraine, but they're refusing the half-loaf given to them by Democrats.
Notably, the death of the TPP and Biden’s unwillingness to commit to any of its successors has really stymied efforts to counter China and the Belt & Road initiative. The big carrot the US can offer is an FTA with the worlds largest economy. But Biden’s Build Back Better World has explicitly kept trade deals off the table.
Yeah, it doesn’t really need to be blocked and it’s probably not useful to do so since it’s a source of ongoing financial problems for China. Ongoing financial problems that are going to wreck their balance sheet as the population continues to age.
Free trade was never actually popular. There was an elite consensus that created a cordon sanitaire around an idea that a large section of the population (a plurality?) supported, which is an unstable situation in a democracy.
Then said elites immediately set about committing an own goal by giving China most favored nation status and wto membership. Acts that, at the least, very much over promised and under delivered in terms of reciprocal trade and political and economic reform in China.
Yes. Just going on my unreliable memory, the NAFTA debate included serious discussion of whether US manufacturers could compete with all 80 million Mexicans. Fortunately the pro-NAFTA group carried the day, with Al Gore in favor debating Ross Perot.
Sadly, the China in free trade/ WTO debate did not achieve the same intensity and focus. As many economists have noted, US manufacturers really struggled trying to compete with a billion Chinese. Ooops.
But most of the struggle would have been there w/o MFN. The important drivers were the fiscal deficit, CHINA's opening its economy and the container ship.
I don't want to say it's simple but I think it comes down to diffuse benefits and concentrated losers from the deal. The failure has been to find productive ways to pivot the latter. Instead grievances, real and imagined, have been allowed to boil over.
The sense I get is that America's relatively hole-ridden safety net is a big contributor to this. Protectionism qua protectionism seems a less potent force in other rich countries. I wonder if any political scientists have made a study of this.
I don't think it's really a question of the traditional welfare state. What we actually need is to do a better job a facilitating career changes. At the same time that global trade accelerated industry disruptions we've also had a bunch of stuff that makes it really hard to ditch locations/industries for greener prospects. Nimbyism/credentialism/DEI/regulatory capture/labor protectionism/etc etc, all make it much harder than it should be to go to where the work is.
Given your libertarian lean, do you think that defeating all the things in your list delineated by slashes would sufficiently facilitate the needed career changes?
It's hard to say how much of the problem would go away, but it would certainly be far more reasonable to administer a more value agnostic transfer/UBI-ish safety net system covering the remainder in the absence of the huge overhead imposed by our wildly overcomplicated regulatory/tax environment.
Sounds good to me. Government job training tends to cross some libertarian lines, and I know you think things through more than the doctrinaire libertarian does.
Credentialism needs to be unwound very slowly or it would destroy a lot of lives. How many people with families and house payments would suddenly find themselves several steps down on the marginal tax rate ladder?
Brexit is a pretty big data point against this theory unfortunately. Britain's safety net is not a strong as other countries in Europe but it is definitely stronger than ours. And the people who benefit most from the strong social safety net (pensioners) were the people most in support.
By the way, similar dynamics here. A huge part of the anti-immigrant/anti-free trade animus in this country comes from retirees or the very group of people who actually do benefit from something approaching a continental Europe welfare state.
Well, sure, unemployed people in most countries aren't "well off." There's plenty of right wing populism in many countries, but I think it's driven mostly by immigration and ethnic change. Americans seems particularly susceptible, though, to the siren call of protectionism. The Nordics run some of the most open economies in the world. Or, consider the example of the Trans Pacific Partnership: Australia, New Zealand, Japan and Mexico all managed to summon the political will to join. The US didn't because buying from foreigners here is more controversial than elsewhere.
"Americans seems particularly susceptible, though, to the siren call of protectionism"
Relative to where we were, yes. Relative to most other countries, no. We continue to be more open than most of the EU and way more open than almost anyone else.
>We continue to be more open than most of the EU and way more open than almost anyone else.<
Not so. It's just the opposite. EU external trade is higher (percentage of GDP) than the corresponding figure for the US, and individual EU states, of course, engage in much more trade than America does. Also, your "anyone else" seems questionable, as any number of countries outside Europe (Australia, Canada, South Korea etc) are more engaged in trade than the US is. Indeed, these last three all joined the TPP. Heck, look at the hue and cry over the US Steel sale to Japan: A) the firm is no longer a remotely important American company, and B) Japan is a highly valuable ally that has an excellent track record of investing in the overseas assets it buys. This transaction shouldn't be remotely controversial, and yet one would think it wasn't Japan and US Steel, but China and Lockheed Martin. I'm not saying the situation is remorselessly negative: the US still does a huge volume of trade with foreign countries in absolute terms, and it still attracts giant investment flows. But once upon a time the United States was THE primary champion in advancing the cause of trade liberalization (I mean, kinda makes sense given the high productivity of American workers). Those days, sadly, are gone (at least for the present).
"Protectionism qua protectionism seems a less potent force in other rich countries. I wonder if any political scientists have made a study of this."
Europeans were masters of industrial policy and national champions. You could argue that the Euro is just a big industrial win for Germany now that the over subsidizing and spliffing are banned by the EU rules.
Plus the Germans get the best industrial policy of all, a currency union with much weaker economies that keeps their exports significantly cheaper on the global market, without the sordid business of deliberately weakening their own currency.
Thanks for the clarification (and like City of Trees I just learned something!) Sadly I'm totally failing in Googling what EU trade policies relate to spiffing bans or why such bans are a good idea -- can you expand on that?
I've read more than one account that these retraining programs just aren't very good at what they claim to do. It's compensating the 'losers' with something worthless.
I’ve been saying for years that we need these coal miners to jack into the matrix and learn kung fu so they can defeat our machine overlords and rescue humanity from the flesh battery fields!!
For reasons I don't understand there is incredible nostalgia for boring, monotonous jobs that were essentially putting knobs on widgets, and the people who did those jobs don't want anything else.
I have a son who has a job putting knobs on widgets (well, sorting lottery tickets and putting them in boxes to ship out). It is a LOT less stressful than what many other people with a high school diploma do - front-facing jobs with the public where people put a lot of demands on you, but you have little power (retail, food service, front-line government jobs).
My father in law worked on a bunch of them and just take was-they didn’t work at scale for training 50 year olds. They worked really well for training 20 years olds for new careers in relevant industries. So you have this big demographic hold-over issue.
While I think this makes intuitive sense, do you know what precisely didn't work about them? Is it too difficult for older people to learn new skills? More set in their ways? Something else?
The hard part about scaling job training for 50-year-olds is that other obligations have a tendency to get in the way.
Finding a time when a group of 20-year-olds can all get together to attend a job training session is easy, because they basically have nothing but free time. Now try doing that for a group of 50-year-olds and you'll quickly find that finding a time when *all of them* are available is difficult.
I can speculate on root cause, but as a proximate cause, at least according my FIL, they just didn't get very good enrollment numbers.
Maybe that is due to marketing and awareness, or maybe other obligations as Thomas mentions, or maybe interested, stubbornness and not wanting to restart a career back on the bottom-rung even if that is better than unemployment.
Also, if it works well for, say, people in their 20s and 30s, maybe that's good enough to offset the decreased demand for those jobs? Wouldn't work if an industry suddenly collapses, but maybe for industries that are moderately contracting
Also you have the problem of geographic specialization. A set of a companies, even those in the same industry, failing in a vibrant metropolis is very different than in a one-factory company town.
That was specifically about coal miners in West Virginia, not so much about free trade. (I think I read that it was actually a very well-thought-out proposal, btw.) But job retraining has also generally been something that centrist Dems have strongly supported and emphasized since her husband was President.
The best one-sentence summary I've ever read on this subject is from a nearly 25 year-old Reason Magazine article:
"[I]t often seems as though free traders are trapped in a public policy version of Groundhog Day, forced to refute the same fallacious arguments over and over again, decade after decade."
And Reason videos are only scraping the surface. Penn and Teller have been Cato fellows for a long time, and above them, Trey Parker and Matt Stone have been favorable to a fair amount of common libertarian principles as part of their skewering of everybody that does dumb things.
When Trump was first elected, working class wages had been stagnant for a generation. At a minimum, free trade did not create enough benefits for the working class to offset the harms of other policies. It’s also possible that manufacturing workers in the only major economy left standing were a privileged class, whose rents gradually withered through free trade.
I for the most part agree. But I really do think the downsides to the 90s free trade consensus was way underexplored and underestimated in the late 90s and early 2000s. The "China shock" was a very real phenomenon and something clearly underestimated by economists. The idea that free trade would also lead more democracy and specifically more democracy in China has proven to be wildly incorrect as well.
Also, "learn to code" became a mocking joke for very good reason. The complete inability from our political system to confront the fact there are very real losers in a world of every increasing trade is a real failure.
So while yes I wish our world would turn back to embracing the benefits of free trade, I think we need to acknowledge the backlash is not entirely misplaced.
"Learn to code" became a mocking joke because it treated tech work as the only work of any real value, which is actually the opposite of the truth -- I'm not sure "code a bunch of games for people to play on their phone" produces any value.
yes, most people majoring in the humanities -- and *especially* people still majoring in the humanities after the STEMlords have been beating everybody over the head to go into STEM for two decades -- would not be good at STEM careers.
I can count on one hand the number of attorneys I know who are good at math.
I once worked for lawyers and many of them told me how they got into this profession due to their hatred toward math. It was fun telling one of them later how coding has a lot more in common with law than with professions with a ton of actual math in them.
Unfortunately, the commitment to global free trade wasn’t accompanied by any real effort to support communities who were built around industries that were devastated by international competition.
I think this is correct, but I'm not sure there is a model for the "real effort to support communities who were built around industries that were devastated" that works. But perhaps someone has more insight--were other countries, likely with more centralized governments (say, France or Japan), able to implement successful economic development models for former industrial towns? Or did any US states implement a successful model for this? (I know eventually we got to "eds & meds" in places like Pittsburgh...)
It's also worth asking how much of the economic problems caused by looser mergers & acquisitions regulations and anti-union policies caused middle/working class wage problems that were subsequently blamed on trade.
It's a little more complicated than that; I do think that there was a cost to inviting China into the freer trade orbit, which did hurt American manufacturing and hollowed out many American towns. America was better off in this scenario, but the transition was not painless.
Free trade makes the world richer. Additional wealth has diminishing marginal utility. America today is the wealthiest society that has ever existed; it is not surprising to me that there’s now less support for free trade.
Would you give up X for a little more economic growth? Every year that becomes a worse deal, for every X.
You aren't wrong about the economic bounty produced by free trade, but we made a pretty obviously bad application of it, induced mostly by campaign contributions, when we extended it to a billion person totalitarian Communist dictatorship in China without demanding that they moderate as a condition.
And I suspect that's the original sin here. People hate not only that the factories closed, but that the jobs were shipped to one of the worst regimes on the planet, and help make that country into a superpower and a very pernicious one.
The problem is you can't turn back the clock and re-run the 1990's with Bill Clinton not whoring his policy out for campaign contributions this time. What's done is done so outside of keeping some crucial supply lines and sectors within our control, we might as well just capture the benefits of free trade.
The China policy is fairly subject to criticism, but in my observation, the popular understanding of free trade among regular people who hate free trade is *much* more focused on Mexico than China.
There is certainly plenty of concern about Mexico. But I do think the China stuff carries a different level of vehemence, and it goes back to what I am calling the original sin. To be clear, it wasn't simply that we obviously sold out our China policy to campaign contributors, but that our elites so blatantly lied about it. They knew exactly what the Communists were trying to do but made transparently false claims about how trade would lead to the liberalizing of Chinese society.
So shipping the jobs + to Communist dictatorship + in response to campaign contributions/corruption + lying about how this would lead to reform in China + ultimately empowering China as geopolitical competitor makes the China issue far more toxic than Mexico. Indeed, Trump concluded a replacement deal for NAFTA with Mexico and nobody complained.
I think this is too uncharitable to Clinton-era thinking. The elites didn't lie about it -- they really believed economic liberalization and integration would lead to political liberalization. Being wrong doesn't mean they lied*.
*This applies to Bush-era thinking around Iraq also.
But if they really truly did believe that allowing all those businesses to come into China would somehow disempower the Communists, when the entire time China was carefully managing its trade so this wouldn't happen AND had engaged in brutal suppression of dissent already, then the Clinton people are some of the dumbest people to have ever served in government. This was not hidden or non-obvious.
Protests and uprisings really did happen all across China, culminating in the situation at Tiananmen Square. The belief that there was going to be a loosening of political repression wasn't crazy -- hundreds of thousands of Chinese people believed it too.
We didn't manage the distributional challenges. So voters who benefit, but not as much, want to kill free trade because they think it'll solve their problems.
That won't solve their problems, as we can see in brexit. But they'll still vote for it. Cool stuff.
I actually see Trump (and the new GOP) anti-market positions push a lot of the left into a new appreciation of the free market. If it sticks, I think it will be Trump's single greatest accomplishment.
I am as anti-Trump as they come but I would say Trump's biggest accomplishment was bringing to the forefront, the conversation about how big a problem China has become.
Operation warp speed was pretty incredible. His base didn’t appreciate it but it was probably the most amazing thing the government has done since the moon landing
Doesn’t that raise a question? If it’s so self evident and so successful why has the consensus been abandoned by *both* sides ? There is more to the story.
>All they see is Miller talking about how amazing it will be for South Carolina to tumble backward to a more primitive state of development.<
What the MAGA faithful really see is a return to an era when a high school education got you a decent factory job with which you could support a family and buy a house (They don't know the houses were small, drafty in winter and sweltering in summer—mostly because they weren't alive back then). I think they also tend to believe turning back the clock on the economy will somehow go hand in hand with restoring 1954's social conditions and cultural practices.
The reason people want to bring back steel manufacturing and coal mining is because they’re manly. Today’s paths to a good career are not manly, like being a nurse, and to some extent even studying and behaving well in school. I don’t have any evidence for these assertions, and don’t believe them myself, but it seems to explain Trump’s industrial policy pretty well.
I can’t find data on 1954 specifically. However, some Pew surveys include a question on whether life today is better or worse than 50 years ago.
Pew reports on these surveys haven’t included respondent gender, but, they do allow access to their raw data for surveys more than 2 years old.
I downloaded the data for 2021 American Trends Panel Wave 92. Both men and women in that survey said that life in 2021 was worse than life 50 years ago. There was not a substantial difference between rates of men and women finding 2021 worse than the past.
Also likely explains the subtle shift rightward of Hispanic and black voters. If I'm not mistaken, the shift is concentrated among men.
It's sort of an inconvenient truth for progressives (like me) that there are men of all backgrounds (not just white men) who have some pretty reactionary views about women and feminism.
So another version of "unemployment is too high because men are playing too many video games in their basement". Pretty well debunked when it turned out the real issue is that the Stimulus was too small and we pivoted to austerity way too soon in 2011.
Also, how does internet addiction only effect men and not women? I missed the part where only men are on their smartphones all the time. In fact, I'm pretty sure women are heavier users of social media than men.
Is pornography interfering with work more than social media? That would be surprising to me. (I’m open to the idea that one or the other is a bigger factor in declining social relationships, but not work.)
Is that in fact obvious? Feels like the causality on both fronts is pretty complicated and there is a strong possibility of other variables driving both observed outcomes (worse economic outcomes and higher addiction rates).
Maybe the modern economy selects more for contentiousness and agreeableness. Maybe being less risk adverse leads to poorer educational or service economy job performance. Maybe it’s all downstream of incarceration rates. Maybe it is the longer tales and squatter normal distribution of outcomes (more outliers) men experience. Maybe it’s a million things that lead to both bad outcomes.
“It is obvious that addiction problems are the cause of economic underperformance” is a very strong claim, is all!
All for trying to solve that problem however you can.
Politicians can't simply say out loud that a lot of men's (and specifically white men's) failures are their own fault, but I can, as a white man who will not be running for office. When conservative politicians talk about how people don't want to do honest work any more, this is who they're talking about -- it's just bizarre that these are their base voters.
He has a whole book about it: Big White Ghetto: Dead Broke, Stone-Cold Stupid, and High on Rage in the Dank Woolly Wilds of the "Real America" https://a.co/d/0C48NSG
>Politicians can't simply say out loud that a lot of men's (and specifically white men's) failures are their own fault<
It's hard to argue with this.
On the other hand, Homo sapiens americanus hasn't evolved (or devolved) much in the last 50/60 years. So, it doesn't seem to be related to DNA. As a free will skeptical consequentialist, the apparently very large numbers of American working class men dealing with these problems—especially compared to their counterparts in Canada or Finland or Japan (all of them quite a bit poorer than the US)—makes me suspect public policy plays a large role. In short, we don't have an effective, comprehensive system or set of policies in place to help working class folks navigate the vicissitudes of economic change. But we ought to.
It's really sad that a lot of people just want to stay in their status quo jobs instead of striving for better, no matter how relatively poorer they become--indeed, they almost seem content with accepting that as well. How to address that politically is tricky--Matt's giving it his best shot on this site.
One thing that my mom's dad did for her was put just a few hundred bucks in a diverse portfolio and told her to do nothing with it, to learn how compound interest works. My mom did the same with me just a few years after Vanguard was founded. I'm obviously quite lucky to have family that knew how money works really well, I wish more other people had that knowledge.
The problem is that unemployment is at historically low levels. Plenty of people with high school educations already have good jobs! Like.. the majority of the contracting business, for instance, makes about 2x the salary that a factory worker would make.
On top of that, if we ever do build textile factories in south carolina... there won't be any human workers there. It will be machines all the way down, with a barebones staff for maintenance + engineering + security.
All throat clearing about how Trump is worse than Biden aside, Biden preferencing union contractors and made-in-America provisions is just different in degree rather than in kind, right?
I really wish there was a party that Believed the Science on free trade.
Union contractors is different from made-in-America.
Union contractors preferences adequately paid workers over inadequately paid workers (I'd prefer just raising the federal minimum wage, but one is possible and the other isn't). Given that contractors are necessarily working in the US (this is mostly construction workers, and you can't import things that have to be built on site), it's not something that interferes with trade.
Made in America is just bad; in several cases, American-made goods are worse, or even just don't exist. When it amounts to forcing foreign companies to create factories in the US to assemble parts that are overwhelmingly imported (the worst examples of this are probably the Acela Express trains, which contain no more US-made components than the TGVs they are derived from) it is just a wasteful cost burden on the US taxpayer. If there is a genuine domestic industry, then at least there is a case for choosing the domestic supplier over the foreign one, but there are way too many cases where projects spend vast amounts of time and money obtaining waivers for things that are clearly never going to be made in the US (e.g. tunnel-boring machines; there are only three factories for large TBMs in the world) or waste enormous amounts forcing the creation of a US assembly plant that immediately gets closed at the end of the project.
I think it depends on whether you think of union preference as preferring the pre-existing group of "union members", or whether you think of it as preferring a form of contract that offers better pay and conditions to workers, a form of contract that is available to anyone.
Considered the second way it only "[makes] things less efficient and more costly" by paying people more and giving them more generous working conditions. If you take the view that not maximally exploiting the workers is an inefficiency, then sure, you can see that as similar. But there's no "preferred group" in the sense that there are a bunch of other people who are being denied the work. Anyone could join the union and get the union job.
"Anyone could join the union" is just factually incorrect for some unions. Some examples you might want to look into: longshoremen, IATSE (e.g. my understanding is that in California to be eligible to join in practice you have to have worked a certain amount on the sort of jobs the union covers, which is obviously hard when you are not a member of the union, etc). And those two are just off the top of my head; I would be very surprised if there are not more like that.
One correction: the "worked a certain amount on the sort of jobs the union covers" is one of a small number of things that can _force_ the union to take you as a member under CA law. The union generally can and does reject applicants, so the only ways to get in are to know someone already in who will make it happen or to get lucky in one of a small number of possible ways.
Given that union preferences are typically (in my view correctly) viewed as attempts to sway the votes of current union members, I tend to favor the first view and I think that it likely both predominates and better characterizes the situation.
(Although in fact yes, not maximally exploiting workers clearly is an inefficiency essentially by definition.)
I can't remember if we've talked about this or it was Kenny E. But my experience in Light Rail for Siemens was the total opposite. The Sacramento production facility is now world class with many of the sub-sub-components produced. There's no way it becomes world class without the Buy America requirements and there's no way we have the degree of light rail adoption in the US without that facility either.
That’s good to know! Over the years, when I’ve heard of this Siemens light rail Sacramento thing, it always sounded like they opened it up when some American transit agency was required to buy American, and closed it down again between contracts. But if it has actually become a sustainable and good factory, that’s a great correction to hear!
Probably true but (to go all Reece Martin on you) Siemens light rail--and particularly Siemens low-floor light rail--was a bad choice, since low-floor light rail has become the de facto standard for new systems. By its nature, "light rail" designed for use in mixed traffic (the only reason you'd have a low-floor system) can't be automated and has lower capacity than pretty much any other rail system (mainly because the space for the wheels reduces the available space for standees). While that might be fine for smaller networks--like, I could see a case for it in Birmingham--it's been actually adopted by much larger metros like Portland, Seattle, Minneapolis-St Paul, and Houston (*Houston!*) which (1) have the higher capacity that high-floor systems demand and (2) could probably use automation as a way to maintain high levels of service while keeping labor costs low. The Sacramento plant does produce high-floor light rail for San Francisco (and Calgary) as well, which is better, but still inadequate for some of the larger cities/metros (like, Houston should have either heavy rail or a fully automated, grade-separated light metro).
Look. Starting points matter. If the option is / was low-floor, mixed traffic networks or nothing -- I'm still selecting low-floor if I'm the Transit Authority. You have to start building network density (i.e., ridership) somewhere. But separate from which vehicle the factory is producing ... the point is the US now has a legit, world-class production facility. That's an investment both the US and Siemens made. That talent now exists here and all the lobby $$$ for new rail networks are coming to the US. That's all good news if you're a rail fan.
NOTE: This is the same story for Alstom. Their Hornell facility is world-class.
MBTA orange line trains keep falling apart, because the factory in Springfield MA keeps screwing them up, because it’s a Chinese company running an American factory, and setting up a culture of quality in a multinational enterprise is a hard thing to do.
Genuinely curious on this point "(the worst examples of this are probably the Acela Express trains, which contain no more US-made components than the TGVs they are derived from)".
What am I missing? Amtrak and Alstom are both reporting 95% Buy America at the component level. I'd be - genuinely shocked - if the entire propulsion system isn't produced in the US. I didn't work for Alstom but my understanding was they had ~ fully integrated US production for the all NYCTA projects going back to the 80s (4,200 cars and now 11 projects).
OK, I am clearly remembering information completely wrong from the 2000-era original Acela Express - the new generation I knew was much better in terms of US-sourced components.
I'll need to have a completely new look at the Buy America rules, because you've convinced me that I had a complete misread on them.
With a little charity, he is rounding off a bunch of empirical things that he assumes you and most people think are good and arguing The Science says they are produced by free trade (lower prices, better products, surplus split by both parties, fewer starving peasants, etc).
It’s better for everyone when you specialize in something you’re really good at and trade that for something else somebody else is really good at. We want people to open kickass Mexican restaurants and Chinese restaurants instead of everyone opening a terrible Mexican-Chinese-Polish-Indian restaurant.
Lol, you reminded me when, in my Russian class, we looked at menus from, like, Georgia (the country). The "American" restaurant was the wildest range of dishes you ever heard of :-).
It's possible it's a different calculation for bucket trucks but for "rolling stock" contracts (e.g., light rail, heavy rail, buses) the threshold is 60% including final assembly and calculated at the sub-component level. But you can't get there just with final assembly. 50% of the sub-components must be produced in the US. The components and sub-components are defined in the contracts - so you can't just game the definition of the production hierarchy either. I'm sure there are countless examples of wasteful spending but critics of buy America within the rail community (looking at you Alon Levy) just ignore completely the success stories like this:
Again -- where's the waste? And what do you mean "protection"? The buy America(n) requirements don't "protect" anyone. They solve a prisoner's dilemma for the individual Transit Agencies and require investment by the OEMs. For the rolling stock contracts it's been a huge win for long-term US rail growth - which has been awesome these last 20 years. Anyone that tells you otherwise -- doesn't understand the US market.
Just to close the thought ... it's completely possible your Dad's company was faking it too. If the contract was small enough - there might not even be audits. But for the big transit projects (e.g., >$500M) - the sub-component production facilities must pass a First Article Inspection (FAI) and the full bill of materials is ripped apart.
Also -- this isn't just to help the workers. It's to create long-term stickiness to service and maintain these massive fleets. There were countless disasters in the 70s and 80s of fleets becoming obsolete early due to OEMs going bankrupt or pulling their US support.
Yeah. Of course. When a company wants to buy a project with a below-market bid -- it's a tough business case on the TA who are facing funding challenges. So they roll the dice. But just look below at the trouble MBTA is having with that disaster CRRC project. They can't even produce them. How are they going to service them? This was the ~ norm for in the 80s.
What is particularly striking is how many Americans say they pay too many Federal Income tax is the same share of the population that roughly paid any Federal Income tax for the 2022 tax year. I will say that most Americans reflexively oppose paying taxes even when their tax burdens are relatively modest. It's always someone else's civic responsibility that government services get provided. Sigh.
Everyone thinks that people at their income level and lower pay too much in taxes, and people making more pay too little in taxes. Just like everyone that drives slower than you is an idiot and everyone that drives faster than you is a maniac.
The problem is everyone has a different definition of a "properly functioning civil society." We resolve these differences through the democratic and legislative processes. You may think tax rates are too low, but other people think they are just right, and others think they are too high. The Congress we have elected has settled on the current tax rates for now.
That's fair but if I'd rather donate elsewhere(GiveWell/Directly) with that money to the extent I'm willing to donate.
Also, that's not quite the same because I'm then going to have to pay the higher house purchase prices etc. against people who aren't doing that - I'd rather everyone in my area (250k+ family income) paid a bit more (and not just the 400k+)
(Of course, the fact that the paperwork makes people hate the federal income tax is half the reason why we have it, thanks to the bootleggers-and-Baptists alliance between Intuit and Grover Norquist.)
It’s fun to blame Intuit’s lobbyists but the reason filing your taxes is complicated is that our tax code is complicated. Grover Norquist isn’t the one who made Ticketmaster send 1099s to people who sold half their football season tickets.
That affects a nontrivial number of people, but it doesn't affect the majority of Americans whose only income is W-2 wages, interest from investments at large financial institutions, and/or government transfer payments, and who take only the standard deduction plus some similarly-institutional above-the-line deductions. Those Americans' income taxes can be computed from information that the IRS already has.
I was super excited to try it this year, but turns out that the high interest rates made my savings/CDs perform well enough to put me just outside of the 1099-INT threshold :/
lol why the hell is there a 1099-INT threshold? Interest earnings are slightly more complicated than income earnings but this is absolutely not the main thing that makes taxes hard...
The rates were only part of the equation. As marginal rates fell, the number of deductions, exclusions and tax preferences fell also, plus a growing stock market led to more income being subject to tax. The result is that total taxes levied as % of GDP didn't change much at all.
If the federal government doesn't get the deficit under control by fixing the long-term trajectories of Social Security, Medicare, and interest payments, in 10-15 years Americans are going to end up paying Europe-level taxes without Europe-level benefits. Imagine the outcry in that situation.
The claims you are repeating about Medicare and Social Security are just a mirage created by peak boomer retirement and the “line goes up” fallacy. It’s wrong once you account for demographics and just creates a few bad years.
I have sat in on the SSA meetings covering this. Social Security and Medicare are fine.
SS is "fine" if you believe it is okay for SS to pay only 75% of future benefits defined by current law, because that is the limit of future tax revenue. Or we can fund 100% of future benefits defined by current law by borrowing money. Unless you are claiming the CBO and SSA are lying: https://www.cbo.gov/publication/59340
Yeah, that chart is at best incorrect and at worse lying
I guess it is correct if you think the number of people retiring will continue to climb and the number of people working will stay flat. How exactly that math is supposed to work is a bit mystifying to me.
I am not saying it will be great, because there are a lot of boomers. But, at some point the retirees has to start declining, because population is shrinking.
Unless, of course, you do like Matt suggests in 1b Amaericans and you start importing workers via immigration. At which point, tax revenues would go up.
So worst case we continue being stupid, and it sure will suck for 7 millenials to pay for 10 boomers for a while, but then as the boomers start to die, it sucks less, and we go back to equilibrium.
Best case we start importing workers, and problem solved.
Neither case leads to Europe-level taxes. And indeed, if you ever DID get to that point, I think if you present to the American public "Option A 20% more immigration, option B 20% more taxes" I think you'll discover that the public opinion on immigration will magically flip flop. And at some point, in the world you are predicting, the math really wouyld get obvious enough that one or both parties would put forth that choice, and it will probably the party in power, because while raising immigration *might* cost you a few house/senate seats, raising taxes like that would probably cost you the trifecta for a decade.
The Census Bureau projects that US population won't begin declining until the 2090s, way after all the Boomers and most Millennials are gone. The Census Bureau also projects that the age 65+ population will increase from ~60 million today to ~100 million in the 2090s.
Will Americans be paying then-current European level taxes, or 2010-era European level taxes? Presumably Europe will be feeling the same sort of demographic crunch and will have its own tax issues to deal with.
SS and Medicare will face ~5.5% of GDP yearly tax revenue shortfall by the 2040s if no changes are made before then. The CBO numbers suggest that raising all payroll tax rates or all income tax rates by 10% plus implementing a 20% VAT could close the SS and Medicare tax revenue gap (not pay for any new spending). Those tax rates are similar to current Europe-level tax rates, especially for the middle class.
I guess the question is whether current European tax rates are projected to support their equivalent programs, or if the shrinking of the workforce and growth of the retired population will result in further increases of the same size.
If taxes worked on the principle that we need to procure some fixed basket of services & we care about doing so cost-effectively, that would be one thing. The actual social function of taxes is to cut down to size those who are seen as being too comfortable. If the money taken from them fails to convert to services or the services are worth less than they cost, only an extremely tiny minority of nerds even notice.
My favorite line by a mainstream journalist was Matt pointing out that one of the overriding problems with Donald Trump was that “as a human being, he is a piece of shit”. I add this observation from today’s post: “ Unless it benefits him personally, Trump just pulls ideas out of his ass because he likes the vibe.” Two basic truisms that explain the descent of the GOP and this country more generally.
I actually think opposition to free trade is one of Trump's few deeply held beliefs. He's wrong but if you go back through his media appearances long before he got into politics he espoused it. Somewhere along the line he convinced himself that politicians are bad dealmakers (unlike himself and his counterparties in business who knew how to drive hard bargains) and that they routinely traded away American workers' jobs to foreign countries and got little in return.
There's probably also something to Trump's repeated behavior of stiffing contractors, daring them to sue, and settling for a reduced cost that he thinks the US should be doing on a global scale.
Along these lines, views on Trump acted as a bit of a shibboleth in the Northeast for a while. Well-off people who knew a variety of successful entrepreneurs and rich people saw him as a joke and a bad businessman. (The type of person who knew who Indra Nooyi or Jaime Dimon are off the top of their heads.) Less well-off people who viewed him through the lens of celebrity saw him as one of the most successful billionaires ever since they didn't know a lot of actually rich or successful people.
My cousin on Long Island married a man from a pretty wealthy family there and her father-in-law told a story (circa 2010) the weekend of the wedding about Trump cheating at golf at his own tournament. Definitely the type of stuff everyone of a certain class knew.
I thought this video was a deep fake the first time I saw it. It might be misguided (e.g., irrational fear of Japan becoming the world superpower) but it's somewhat coherent.
He's Archie Bunker in a $3,000 suit (except he's a lot meaner than Archie ever was, and, he's definitely not getting his money's worth for those suits).
I'd also like to see more people talking about Project 2025's proposal to eliminate the Fed's dual mandate, focusing only on price stability and eliminating the full employment mandate. They say it's to reduce inflation, but we know it's to lower wages for their corporate donors. I could see this gaining traction in right-wing media because it's a fun conspiracy that they like.
And what's going to happen to grocery prices when Trump throws half of our agricultural workforce into relocation camps?
There's a reason they prefer to talk about trans folks ...
Yep, I get frustrated when I see Democrats go hard on the niche culture war stuff. It's so easy to just keep it simple and say "I believe in treating others how I would want to be treated and in the American idea of individual liberty". So much of what gets called "woke" is just basic manners at this point because of how far the right has gone. Unfortunately, social media boosts the most insane left wing takes, which doesn't help anyone at all.
The Ohio thing is bad, but there are several places that have that policy for a long time, with Washington being the most famous in my region. I wonder how successful they can be by just pointing to those examples.
The sales tax _is_ regressive but everyone is used to it - status quo. There's a little support with a "sales tax holiday" near the end of summer for back-to-school stuff, but yeah, pretty regressive(but less distorting, as you say in another comment)
I think it's perfectly reasonable for Ohio to point to Texas as a state that makes this work, but it's _also_ reasonable for people to talk about how this will drive up costs for current Seniors who already don't pay (much) state income tax and now will pay this.
FWIW, the sales tax rate in Texas appears to be 6.25-8.25%, which is comparable to most places that have one in my experience (even a bit low). The property tax rate is high, although a handful of blue states are higher still (including the infamous NJ and Illinois).
I continue to think that taxes should be spread across a number of methods. Small to moderate sales tax, income tax, LVT, property tax, business tax, sin taxes, etc. Make it so that no single tax is big enough to cause distortions and people have an enormous reason to try to avoid them.
My dream is for taxes to be as boring as interest rates, where there's one base rate that we adjust upward or downward as appropriate to what the economic conditions merit, and what we want the government to provision. I've long accepted that this is just that, a dream that will never happen.
1) using such a complex series of maneuvers effectively requires such insider knowledge that I think it would massively advantage the wealthy over the normal person.
2) Contrary to point one, traditional IRAs are bad for people with very large amounts of money. Your turning investment returns from a capital gains tax rate to an income tax rate and that's a terrible trade off.
2) collapse the distinction between different types of retirement accounts and contribution amounts so that there is no 401k, ira, sep, etc.
3) cap the amount that can be in a retirement account and index that to something. Say 100x the median income (about 4 million right now).
4) after 3, remove the annual cap on what can be contributed. You want to contribute 4 million right now, sure. Anything over the cap though has to be withdrawn and taxes paid though.
I'd be more interested in discussing- should the US & Europe be tariffing this latest wave of Chinese exports in solar panels, electric cars, and batteries? Because (as much as this breaks libertarian brains) they're all the product of very very extensive state support/industrial policy, sometimes to the extent of enabling producers to sell abroad below their manufacturing cost. This is a deliberate industrial policy on the Chinese part to drive Western competitors in these 3 industries out of business so that they can dominate.
Isn't this just dumping? Should the West respond with tariffs? (I'm kinda leaning yeah, I have to say). More broadly, how should the West deal with a gigantic wealthy non-market competitor who spends billions on propping up state champions? More amusingly, will libertarians like Scott Linciome and the Cato Institute suffer a critical reactor meltdown when they realize successful cutting-edge industries can be fostered by competent industrial policy? (Just kidding, they'll never admit they're wrong). China is literally technologically ahead of the US & Europe in solar panels, electric cars, and batteries due to state investment
The answer seems complicated and depends on your goals and their goals.
1) They _could_ have a goal to support the industry until they drive us out of business in those, then jack up the price, and then if we start to recover, hit the price again. This is what kind of interfered with all of our shale oil development - OPEC dropped the price so it became uncompetitive and it made people less willing to invest in it. The Strategic Petroleum Reserve is a central planning way to kind of take care of this and provide producers here with some measure of minimum price to make it worth it. Of course, if you set it too high, you foster a bunch of uncompetitive industries here too.
2) They could just want to create their own manufacturing and trying to grow in which case... why not let them give us cheap batteries/panels etc?
Basically - if Europe was doing this to us I'd lean towards assuming number 2 and let it go.
Since I'm distrustful of China for multiple reasons, I might be inclined (despite my free trade libertarian support) to be worried about number 1, but it's because of unique features of China, not the general principle.
Does China break libertarian brains? The Chinese economy has a lot of public debt in quite unproductive state firm experiments. Crucially, one Chinese advantage in *early inputs* for solar, EVs, and batteries comes from deregulatory policy for mining and heavy industry, something the center-left in America has opposed for decades and regularly used the Clean Air Act and NEPA to stifle or make unprofitable here. I don't see how China's experiment in state subsidy is breaking libertarian brains, at least when you look at the other plausible reasons those industries are growing faster while Biden's EPA announces yet another mine they will not permit to open.
I think the OP I was responding to understood the industrial policy approach of China as utterly devastating to the libertarian worldview; libertarians assume it will be bad for the state to get involved in economic planning, yet China is very competitive in these sectors the US cares about. My response is, not so fast, I think other planning has clearly gone poorly and some of the ways China produces cheap and local intermediate goods for these sectors actually favor the libertarian argument.
Dominating the field of sophisticated electric automotives because deregulated mining doesn't quite track for me. Does this mean that a number of African countries will soon have an electric car or solar panel industry? Their mining laws are uh even laxer. (Also, why couldn't countries with stricter environmental laws just buy the raw inputs from Africa or so on? Lithium is lithium, regardless of where it was dug up)
It is certainly possible, and the US and other countries do use international inputs in manufacturing all the time. So does China in Indonesia and Africa. But at the same time, China allowed massive land use for rare earth minerals for batteries, solar, and EVs. It also allows laxer air regulations for the factories that produce those, driving costs down further.
By contrast, I don't see how the US handing billions of additional dollars to Elon Musk is going to easily reduce EV input costs, but the IRA is doing that as an industrial policy right now. So I wouldn't high-five yourself over libertarians; they still have a point that reducing industrial regulations (which for large products using metals and other big intermediate goods, also means travel of those inputs) can matter a lot for an industrial supply chain.
I noticed you didn't answer the question of why, say, the Democratic Republic of Congo doesn't have a successful electric car industry, as their mining regulations are even more relaxed than China's. I think we both know why- capital and technology-intensive industries require competent state capacity. There are no markets or capitalism without a state providing a military, police & judiciary to adjudicate disputes, issue patents, build critical infrastructure too expensive for the private sector like roads, bridges, schools. Regulate capital markets to keep out bad actors. Act as the insurer & banker of last resort. And so on.
The only reason Tesla exists is that the US gave them some very large subsidies during the Obama era, so I don't think that's a great example for you. Tesla joins other successful examples of American industrial policy, including nuclear energy, the entire aerospace sector, semiconductors, the ARPAnet, lasers, fracking, the Human Genome Project, every vaccine ever invented including the Covid ones, etc. etc.
I don't disagree it can sometimes work, I just think now we're not supposed to be putting lots of federal money into Tesla because they're now a profitable company with the technology we wanted invented. But we're pouring public money in the EV sector more than ever as if we don't know how to build electric cars. Worse yet, several states are now going to ban new ICE car sales in under a decade with the assumption this too will help induce EV sales today. This could have enormous negative consequences for working and middle class Americans if we haven't gotten the costs down. It's a potential political disaster with enormous costs involved, all under the goal of industrial policy.
But this is exactly the kind of thing libertarians warn us about! And I don't think that kind of warning is at odds with wanting a functioning electrical grid or due process courts. China has plenty of electricity, but it also has plenty of state debt in unprofitable companies due to its industrial policy attempts. As How Asia Work wisely concluded on China, it's a bit too early to say. I used to rule libertarians out instinctively on political economy. I don't anymore. That's in large part because I kept reading beyond my old copies of American Affairs, and they were patient with me. But it's also because COVID taught me that a lot of state interventions in the economy beyond vaccine R&D did not have as clear a benefit. Listen to anyone who tells you about public industry levers for a particular industry and problem. Run away from anyone who tells you this is how our entire understanding of the economy should be transformed.
Dumping is one of those things that is alleged a lot and not seen in the wild much—you need to build a hell of a moat to recoup some really amazing monopoly rents for it to be worth selling at a huge loss for years. It almost never works, and usually just means subsidizing other countries and/or industries.
Recent example is when OPEC tried to kill American oil. Lots of oilmen lost jobs for a while but mostly what happens is that they permanently lowered the price of oil by driving innovation and now USA produces more than anybody. Many such cases.
Before being worried or wanting to put in our own subsidies I would want to know why we wouldn’t just buy cheap Chinese solar and build our own factories (with subsidies if then needed) if the price gets jacked. What moat will they have on solar tech which is mostly materials science + manufacturing capacity, both of which the USA has in spades?
The argument is that China feels its in their national interest to climb the technological value chain and dominate key industries in the 21st century. I agree that the monopoly rents may not make sense for an individual, profit-maximizing corporation- but they're a totalitarian state practicing some 18th century mercantilism. It's a fusion of the private sector serving public sector goals.
>we wouldn’t just buy cheap Chinese solar and build our own factories (with subsidies if then needed) if the price gets jacked. What moat will they have on solar tech
No offense but this is the most naive 'tell me you've never worked in manufacturing without telling me you've never worked in manufacturing' thing on the Internet lol. You can't magically decide to start building things tomorrow, you need an enormous amount of very specific subject-matter expertise. You can't have generic 'manufacturing capacity', you have to have incredibly specific knowledge of certain machines, tooling, processes, factory automation, and so on. If you don't already have the expertise the moat is gigantic, it would take decades. And- as much as libertarians don't want to hear this- it would almost certainly involve a lot of state funding to get up and running
I I learned nothing from your comment; it is muddled, seems to assume I think car factories can instantly make solar panels with nanotechnology for argument to be sound (I don’t and it doesn’t), and doesn’t seemed at all informed by a rudimentary understanding of industrial policy or monopoly economics. Which is all fine, but it was also smug and condescending.
I think your confidence vastly outstrips your knowledge of this policy space, and this is thus a low value interaction for me. Uh, no offense.
The issue is that their dumping is going to lead to significant degradation of the impacted industries across the western world.
And once the competition has withered away, China will effectively have a monopoly for a while. Those Western industries may eventually start to recover, but then China can repeat the process as need to maintain their position.
That's obviously bad. Especially when you factor in the geopolitical and defense implications of the US have limited industrial capacity in these sectors, and China having massive capacity.
People said the same thing about Japan. We've left them in the dust. Also, the Chinese model's looking a tad shaky these days, have you noticed? I say if they're stupid enough to subsidize our consumption of solar panels, cars, and batteries, we outta let 'em. If there are particular military dimensions to certain product lines and these are sufficiently critical, I'm all ears: we can operate bespoke state-sponsored programs in these.
I'm aware China is neither an ally nor demilitarized. Nonetheless we bought, what, a half billion dollars worth of products from them last year? Not seeing the harm, TBH, that would accompany adding cars and solar panels to the mix (we already buy loads of batteries from them).
EDIT: I missed your point about Japan. Demilitarized, if by that you mean "world's third largest military budget" sure. Japan is also considered by some experts to be the world's tenth, unofficial nuclear power, given its possession of a full nuclear fuel cycle capability. But yes, it's an ally.
I follow the logic here, but I've also remember reading, maybe with respect to Amazon, that the dreaded second step, where the loss-leading entity screws consumers via higher prices bc competition has been wiped out, doesn't tend to materialize. I.e. the advantage gained is never quite solid enough for the gambit to work. I'm betraying my ignorance here, but do you have examples/links/books that draw out this process more fully? I ask bc I'm fuzzy on this stuff, and curious to know more if you've got a good link handy.
One of the David's (David R. ?) is a China Hawk and had a lot of arguments about this, some of which I found moderately convincing, unfortunately I think that's the David that got fed up with commenting here for non-China-related reasons.
Several of us here have certain issues that really rile us up in defending them, and if others want to engage them they have to know that's what they're getting.
I'm not sure I understand the question. It's self-evidently good to be a global leader in high-tech industries. Being a technological leader is kind of a zero-sum game- do you think the US would be better or worse off if we didn't have Silicon Valley or lead the world in manufacturing fighter jets and nuclear submarines?
China's regional provinces that do the bulk of the subsidies are pretty heavily indebted, so I don't think there's like a linear path here where every subsidy was necessarily matched with money paid by the Chinese taxpayer. The provinces just took on debt, that's it
If we fall behind on those industries, doesn't that theoretically let us spend the tech on _other_ industries then? They can't afford to beat us in every high-tech industry.
(China in particular we may have other reasons to be skeptical of, but this argument doesn't seem to work for me)
It’s pretty remarkable to me how basically none of this stuff is part of the general discourse. The fact that it’s all “border, border, border” is actually a sign to me that not only is to Trump going to win, but he really is going to win a pretty big landslide. Because this tariff stuff as far as I can tell is a pretty big centerpiece of Trump’s campaign and yet it is barely a whisper in the news.
And I say Trump is going to win because it’s pretty clear to me due to changes that have occurred in news media just in the last 4 years (see media layoffs), conservative media sets the agenda for what gets “front page” news coverage in a way that’s even strong than it was 5-10 years ago. This just really crystallized for me with the Claudine Gay stuff in December. Because the next 8 months is going to be front page after front page in the New York Post and story after story in Fox News about some crime a brown person committed. Or just video of some non white person doing something violent. Whether any of them are illegal immigrants or not is irrelevant. But the tragedy will be how much that will impact MSM of the campaign and THAT my friends is how Trump wins “bigly”. Because as Ezra Klein noted years ago, the actual details of policy don’t matter for elections. It’s what policies at all are highlighted. If an election is about greedy corporations and health care, it’s to the Dems benefit. If an election is about crime and immigration it’s to the the GOP’s benefit. If you don’t think Trump and GOP is going to tout how Biden did nothing on the border despite being the ones who are going to kill this border bill I have a bridge to sell you.
>It’s pretty remarkable to me how basically none of this stuff is part of the general discourse <
Matt wrote about this a week or two back. Right wing partisan media obviously isn't going to highlight the hit to American living standards flowing from import taxes. And the mainstream neutral media finds culture war coverage a lot more interesting than economics. And, while the number of policy-interested people who subscribe to this and similar newsletters—and who follow the Twitter discourse, and who religiously read major, wonky voices—probably numbers in the hundreds of thousands or perhaps even low millions—we're a country of a third of a billion. I keep banging on this drum pretty unsuccessfully, but elites matter. People, in the main, are ignorant.
The thing is, virtually any non-Trump would probably be a landslide. And not an unexpected one. I think Nikki Haley would win very easily, and someone like Romney certainly would.
Trump really is the Republicans best chance to lose. I am not predicting he WILL lose, but he gives the Republicans there damned best shot at it. The primary system is screwing them. The only problem is that the rest of us catching the strays from it.
This is where Trump's geographically well distributed coalition comes in. A 4-5 point popular vote victory is going to be a pretty huge landslide electoral college victory.
"Is", "is going to be"--my Bayesian prior was "this guy is way overconfident in his prediction of a huge win, to the extent that I should discredit his other views", and you are only strengthening that.
This is like reading a foreign outlet's analysis of our domestic politics. I don't really mean that as a complement.
Also the reason I think this is wrong is because in spite of the media narrative that Democrats think Biden is too old/are begging for someone else to run, Biden cleaned up in the New Hampshire primary where he wasn't even on the ballot and won Assad margins in the South Carolina primary -- not that primary results are indicative of all that much but it does show that a large portion of Americans aren't all that receptive to the media narrative.
Correct. "Dr. Y" i think deliberately is misstating my point. My point is not to adjudicate whether Gay should have lost her job or not (I honestly at think my answer at this point is "i don't care"). My point was about the extent of the coverage and how much coverage was insanely out of proportion to the actual issue at hand. And that disproportionate coverage is is hugely impacted by the right of center and right wing media speaking in one voice.
I mean -- let's be clear, a lot of the reason why the Claudine Gay stuff became a big deal is because relatively liberal people also thought her answers about antisemitism on campus were sort of insane and won't really tolerate plagiarism.
There are things that the right-wing media makes a big stink about that never manage to penetrate outside of their bubble. Things like the border, Claudine Gay, trans women in sports break out of the bubble because liberals often view the left as being stupid/insane on that stuff.
Wow aren't you a truly unpleasant piece of shit. "Testicle transplant"? Really?
Yeah I'll repeat, there's a difference between "what should the outcome of this situation be" vs "does this situation deserve the level of news coverage it deserves". May I remind you this story went on for a month with just the New York Times having weekly multiple columns and op-eds on this topic. I've noted this before but the number of people who attend Harvard just among university graduates is extremely small.
Honestly the amount of vitriol and anger you have on this topic really makes me question your own clearly questionable state of mind.
I agree that Dr. Y crossed the Slow Boring line around personal attacks. Not good.
The Ivies, and Harvard especially, exert significant influence over positions of power. Which they should -- they are filled with really smart people, often from rich and influential families. This is reflected in their prominence in the NYTimes. Their level of coverage of that story was neither surprising nor, in my view, reflective of a move to the right by the media.
“Never published a paper with a shred of original research” doesn’t sound anything like what I heard. What I heard is “published relatively few things” and “most publications included some sections that repeated some claims made by others”.
It would be interesting to note which presidents of Harvard have significant academic accomplishments. It looks like Conant and Summers are the only ones on this list that I was able to find significant academic accomplishments from: https://en.m.wikipedia.org/wiki/President_of_Harvard_University
I almost wonder if it would be to Trump's benefit to keep his profile lower in order to keep people sleepy on this. But this being Trump, keeping a lower profile just isn't in his blood.
We all agreed that those leftist weirdos were stupid when they talked about how awful it was that Americans can easily get bananas in January and for some reason it gets glossed over that this is basically Trump's trade policy.
(This may also, in an odd way, explain why the far left is seemingly willing to let Trump win to punish Biden for not following their stupid pro-Hamas agenda.)
I personally think that our politics (even to some extent on a global scale) is being reoriented away from the socialism-capitalism spectrum towards a wierdo-normie spectrum. The wierdos wanting of course strong-man authoritarianism, anti-science/anti-progress policies, economic regression, religious fundamentalism, conspiracy theory mania, and so on, which ends up being this wierd blend of the worst ideas of marxism and fascism blended together.
And the cement for this blob of wierdo nonsense would be hatred of America, and any nation built and sustained under liberal ideas.
I’m old enough to remember when popular culture depicted low-value factory work as soul-crushing and something people went to great lengths to escape. “Officer and a Gentleman” was just one of many popular culture pieces that carried this theme. It resonated with people because it was fundamentally true. Now the plan is to return the citizenry to that awful time and place?
People working in a factory in the 1950s would have killed to get the kind of well-paid boring email job that Gen Z complains so much about commuting to every day.
I worked at a factory for a sort of "gap" semester when I was in college, and let me tell you: It sucked. And it was a high end aircraft avionics system factory - though I had one of the more crappy jobs there.
I promise you that no Zoomers are dreaming of such a job.
Reminds me of what Tyler Cowhen called the great forgetting. I’m not quite sure why so many people can’t imagine themselves evolving into the kinds of people the economy rewards and so I feel somewhat adrift on this topic.
It makes politics clearer for me in a way that seems bad.
The economy rewards capitalists and the PMC, I’m not sure either of those are great targets for “evolving into.” Even if you can nominally start your own business and magic up the capital from somewhere, the overwhelming number of new startups fail.
How is it like changing careers and becoming something else has become a shameful ask? I worked in just about any job you can think of in a restaurant realized that environment was killing me and went to school and became a teacher after having had a reasonably productive career that was paying my bills and keeping me independent.
I'd never say it's like easy like tying your shoes or something but it's also not climbing Mount Everest or something.
I interpreted your comment to refer to people becoming those who obtained maximal monetary return and status[1] rather than to switching careers to become gainfully employed. Sounds like that wasn't what you meant.
[1] purely for the sake of punchiness and illustration, and without casting any aspersions on your first comment, as something that could be uncharitably TL;DRed as "Why doesn't everyone just follow the same career path as Elon Musk or Jamie Dimon? Are they stupid?"
The claim that lifetime earnings don't matter when it comes to evaluating the relative attractiveness of economic opportunities is certainly a belief one can have, I guess.
I'm not sure I would describe owners as at liberty in the sense of not being beholden to anyone, their own bosses are just called "clients," and/or "shareholders." There's a qualitative distinction, but it's not like people found automotive parts suppliers because they're intrinsically passionate about intake manifolds, which is at least a little less true for, e.g., people going into medicine.
Things are getting harder for risk-averse, degreed-but-not-educated soft-handers because there are more of them than ever before. You don't stand out as much in the job market by having a degree from Directional State U as you would have 30 years ago.
People say that failure is all around them, but if we grade on a curve, lots of smart people vastly underperform given their latent potential. Sometimes we just suck!
The mention of Hawaiian coffee planters also makes me think of a long term threat of this policy: entrenching more rent seekers via government policy. As we know so well with existing rent seekers, they will fight tooth and nail to keep their rent seeking codified so they can continue to rent seek. It could be a hell of a fight to undo these tariffs once they're in place.
Rebuttal: the Underpants Gnomes episode of South Park, which while most famous for its three step meme, had its entire plot centered around the overrating of hyperlocal coffee.
It's all just so out of date. It brings back old memories of 'Cletus Safaris' from 2016 when journalists would go around interviewing some old guys complaining about the local factory getting shut down. These days, who isn't being employed because of foreign competition? It's as if Americans want some dreary socialist economy producing low added value crap, as long as they get some guaranteed job they can pretend to work at.
I confess I felt a fear that it would step into the trap of saying, "I believe this is important and would be a winning issue for the Democrats if only they put it front and center and clearly explained it to the American people." It tiptoed around that but didn't go all in, for which I'm grateful.
There are a million things the Democrats can go after Trump and the Republicans about. Most of them are vital and, if the voters truly understood them, would build support for the Democrats. But they won't understand them because that's not the way politics works.
There are two key elements in communications during a political campaign: salience and breaking through the noise. You have to make an issue truly salient to voters somehow -- it has to grab their attention; they have to care about it. And you have to break through the noise of a million things going on in the political environment. You do it through brain-breaking repetition; you do it by simplifying it enough for people to get it instantly.
And ultimately, there's the "rule of three" (which I coined just now): you have to be prepared to highlight three, and only three, major arguments against your opponents, and have the discipline to hit those constantly and to downplay, if not ignore, everything else.
If we were to decide that tariffs is one of the Big Three, which one would we drop? Abortion? Threat to democracy? A booming economy? The spectacular narcissism of Trump?
I like the rule of three rule. But I think the tariffs can be rolled into one argument with the economy. So it'd be: abortion, threat to democracy, and economy is booming while Trump wants to raise the price of everything by 10%.
The problem with hitting Trump on inflation (via tariffs) is, beyond the fact that no one knows what a tariff is and why it's like a tax, people associate Biden and not Trump with inflation. Inflation and prices were low under Trump. How do you convince people that it would be different during a second Trump term?
You really want to take inflation as an issue off the table. I wouldn't talk about Trump's hypothetical plan on tariffs at all. Too much risk it can boomerang on you: "oh yeah? what about the price of eggs under Biden?"
Talking about the economy at all is going to invite rebuttals revolving inflation, the Trump 10% tax is just another tool in the box that can help Biden combat that attack and then pivot to how much better the economy is now.
I fear that threat to democracy, while good on the merits, may struggle on the politics for the marginal voters needed to retain in/bring into the Biden camp. Maybe something to do with health care if we insist on locking this on three? (Two or four should also be cromulent numbers here.)
Explain to me again just why the Clinton budget surplus high growth neo liberal economy was so terrible that we had to replace it with deficits and trade restrictions?
Reminds me of the Ezra Klein interview with Ruy Teixeira last week. Ruy's thesis was that neoliberalism was bad policy and bad politics. Klein's thesis was it's bad policy but good politics. I wish someone had the courage to say, actually, it was great policy.
Wall Street Journal, Fox News, still most Republican politicians, etc believe 1990s US political economy was generally great policy. There are plenty of people saying this, they just don't often call it neoliberalism!
Why would Republicans raise taxes or spending beyond what they were in the Clinton years? They think the rate of taxing and spending in the Clinton years was good!
To which the Republican replies, raise taxes back to what? The share the government taxes from the market is basically the same as it was under our 42nd president.
Now if government just spends like it did under Bill Clinton, we're good to go. Maybe the spending and taxing rate was a bad equilibrium, but many Republicans and right-leaning voters think it was good, as I've explained. This worldview is pretty mainstream!
Ezra, who I generally do enjoy, is not immune to being captured by the political moment.
I think he's a smart guy and asks interesting questions of his guests, but when he says that his "thoughts on thing [x]" have changed, it's almost never at odds with whatever popular opinion on the mainstream left is at the moment.
Ezra after he left Vox became a lot more doomer and a lot more sympathetic to the Bernie movement's nonsense.
Less disturbing than the conservative media is the fact that seemingly all "liberal" or "progressive" media has been captured by people sympathetic to either Bernie Sanders or Elizabeth Warren, and I have to think this is a big part of the reason for Biden's approval ratings (unfriendly media that should by any objective measure be in his corner.)
I think Ezra also tends to let his emotions sway him more than Matt. That can be a good thing at times, but it's something I've always long observed as a difference between their writings even when there's a lot of overlap otherwise between the two.
I didn't know that, I thought the only thing she was pushing hard was a UBI. I'll have to go look at her article archive.
EDIT: I just looked at the archive quickly over the past two years, and the only things I immediately find are some anti-meat articles (that's been a common theme for Ezra for a while), with most of the work dominated by advocating UBI and YIMBYism.
On one of his mailbag pods, someone asked him why he's had kids if he's so worried about climate change, and I thought his answer was well-considered and insightful, and betrayed that he's perhaps not quite as doomer as he sometimes seems to be.
He is kind of a Ben Shapiro of the center-left, you can see him synthesizing where the party is right now and respectfully consider what different major factions aspire for it to be. That's fine, party men have a role to play in US political journalism.
It depend a bit one what you mean by "inherently." My position is based on the guess that a dollar borrowed comes mainly at the expense of private investment whereas a dollar taxed comes out of both consumption and investment. And this would be more the case if we reformed the personal income tax to be (more like) a progressive consumption tax and replaced the wage tax used to finance SS and Medicare transfers with a VAT.
Now if you mean given taxes and looking only at the spend + deficit v not spend decision, then the answer is does the spending have an NPV > 0. During recessions when the borrowing rate is low and many inputs into the cost side of the NPV calculation have marginal costs less than their market prices (that is what "unemployed" resources mean) the NPV test will pass pretty easily so in that case the deficit is not inherently bad.
Not necessarily you, but I think Progressive are insuffinet concerned by deficits because "deficits" have been used strategically by Republicans to argue against spending for good things at good times. Reduce deficits by cutting spending (that passes the NPV test), bad; reduce deficits by raising revenue, good.
There's probably a devil's advocate argument in there somewhere about how NAFTA caused labor dislocations and created massive surplus, but had none of the political problems of trading with the PRC nor the risks of genuinely losing hold of strategic industries and supply chains to an adversarial nation.
I'm not claiming anything exotic, just the bog standard narrative that free trade results on broadly increased prosperity (i.e. consumer / producer surplus) but tends to result in labor-intensive industries relocating to places that have lower costs of living and hence significant comparative advantage in labor supply because you can pay Mexican laborers far fewer dollars than you pay American ones.
But NAFTA was way too marginal to do much of either. US trade policy had little to do with the decline in manufacturing employment. The big drives were the federal deficits, technological change -- the container ship/international communications -- and China's opening itself to the world. Marginally our negotiators pushed partners to reduce their restrictions on US IP services than US goods, and that, I think, was a mistake.
I don't know that deficits are always a problem per say, but you're correct in that they're becoming more of a problem. This piece by Brian Riedl on an alternative to the debt ceiling fights might be of interest: https://www.city-journal.org/article/replace-the-debt-limit
The are not "always" a problem in that deficits incurred during recessions are innocuous. But Taxing to spend beats borrowing to spend because borrowing transfers resources mainly away from private investment, whereas taxes bites more into consumption.
Just so I understand your argument, is your specific claim that it hurts private investment by creating a vehicle for investors seeking return (e.g., T-Bills or bonds) in addition to the vehicles available on the private market?
Not exactly. The Fed (if it is targeting inflation) has to have interest rate high enough for USG instruments to be purchased. The marginal increase in interest rates that enables the marginal additional borrowing of the deficit, marginally crowds out some private investment (more than taxes would reduce private investment)
ARRRRG! The "debt ceiling fights" are part of the problem. We will never be able, nor SHOULD we try, balancing the budget by reducing transfers (not that here and there some might be trimmed). We need more revenue collected from taxing consumption some with a VAT and some by making the personal income tax into (or more like) a progressive personal consumption tax.
The overwhelming projected cause of future growth in deficits is Medicare, which is not an anti-poverty program. We collect roughly the same % GDP of tax revenue that we collected 20 years ago. [1]
The current flat income tax rate for it is at least somewhat more progressive than that. The deck is already stacked against young and middle class workers in favor of old middle class people as is! Such as single family zoning.
I wonder. A VAT catches spending out of non-wage income. But I'm also trying to get the personal income tax to be a progressive consumption tax. However if it were a matter of pay for Medicare with a higher wage tax or a higher deficit, I'll take the wage tax.
One of the greatest tragedies of my lifetime has been watching as the idea of free trade, which has built the immense wealth we enjoy today in the west, come to be rejected by both major parties. What makes it even more painful, is that we literally won the fight! Clinton, Blair et al conceded free trade was good! Everyone was onboard! And yet a mere 30 years later and both parties have traded away free trade so we can’t they about the literal dumbest culture war BS.
RIP TPP
Something that was so frustrating was seeing Hillary cynically oppose the TPP because she felt pressure from Bernie also opposing it. Unlike Bernie and Trump, she was smart enough to know better, but was too much of a political coward to stand up for what she actually believed.
I tend to think that *if* free trade was really that important and *if* it was necessary for Clinton to abandon TPP in order to defeat Sanders without taking excessive damage that would hurt her in the general election, then it would actually have been wrong and a betrayal of free trade for Clinton *not* to abandon TPP. But the ifs are debatable as a factual matter.
At the time, I remember the TPP being unpopular and that's what forced Hilary to abandon her line calling it the "gold standard' of trade agreements.
But I just found some polling here that shows it as relatively popular, not nearly as much as in some of the countries that were in the agreement, but a margin that is fairly decisive for US politics: https://www.pewresearch.org/short-reads/2015/06/23/americans-favor-tpp-but-less-than-other-countries-do/
The thing that I legitimately wish that mainstream Democratic politicians would figure out is that the sort of people they think they need to appease are either not actually gettable voters -- they're always going to move the goalposts and end up staying home or voting Green -- or they're just going to cope and seethe and vote Dem no matter what they do.
Basically there's nothing to be gained by meeting their demands. The people who legitimately care about Gaza are either super-dialed-in partisans or they're the kind of people who wrote in Harambe, with no in between.
I'd say most Democrats still thought TPP was a good idea, just like most Democrats are still on balance pro-Israel (maybe not pro-this Israeli government but definitely not viewing Israel as a "settler colony" that needs to be wiped off the map), but Democratic politicians can't stop bending over backwards to accommodate a cranky minority of the party. To some degree we voted for Biden and got Warren anyway and it's annoying.
The Republicans have the same problem.
Arguably a much worse problem. On paper most elected Republicans want more border restrictions and funding for Ukraine, but they're refusing the half-loaf given to them by Democrats.
Notably, the death of the TPP and Biden’s unwillingness to commit to any of its successors has really stymied efforts to counter China and the Belt & Road initiative. The big carrot the US can offer is an FTA with the worlds largest economy. But Biden’s Build Back Better World has explicitly kept trade deals off the table.
Then again, China's Belt & Road Initiative has basically imploded on itself.
Yeah, it doesn’t really need to be blocked and it’s probably not useful to do so since it’s a source of ongoing financial problems for China. Ongoing financial problems that are going to wreck their balance sheet as the population continues to age.
TPP is why I will never get over the Bernie movement. They forced Hillary Clinton into abandoning it as a policy goal.
Free trade was never actually popular. There was an elite consensus that created a cordon sanitaire around an idea that a large section of the population (a plurality?) supported, which is an unstable situation in a democracy.
Then said elites immediately set about committing an own goal by giving China most favored nation status and wto membership. Acts that, at the least, very much over promised and under delivered in terms of reciprocal trade and political and economic reform in China.
Yes. Just going on my unreliable memory, the NAFTA debate included serious discussion of whether US manufacturers could compete with all 80 million Mexicans. Fortunately the pro-NAFTA group carried the day, with Al Gore in favor debating Ross Perot.
Sadly, the China in free trade/ WTO debate did not achieve the same intensity and focus. As many economists have noted, US manufacturers really struggled trying to compete with a billion Chinese. Ooops.
https://www.wto.org/english/res_e/reser_e/gtdw_e/wkshop13_e/peter_schott_e.pdf
A big difference between the two is that Mexico is an honest-ish country and China... isn't.
But most of the struggle would have been there w/o MFN. The important drivers were the fiscal deficit, CHINA's opening its economy and the container ship.
Yup, that was definitely the other option on the table...
I don't want to say it's simple but I think it comes down to diffuse benefits and concentrated losers from the deal. The failure has been to find productive ways to pivot the latter. Instead grievances, real and imagined, have been allowed to boil over.
The sense I get is that America's relatively hole-ridden safety net is a big contributor to this. Protectionism qua protectionism seems a less potent force in other rich countries. I wonder if any political scientists have made a study of this.
I don't think it's really a question of the traditional welfare state. What we actually need is to do a better job a facilitating career changes. At the same time that global trade accelerated industry disruptions we've also had a bunch of stuff that makes it really hard to ditch locations/industries for greener prospects. Nimbyism/credentialism/DEI/regulatory capture/labor protectionism/etc etc, all make it much harder than it should be to go to where the work is.
Given your libertarian lean, do you think that defeating all the things in your list delineated by slashes would sufficiently facilitate the needed career changes?
It's hard to say how much of the problem would go away, but it would certainly be far more reasonable to administer a more value agnostic transfer/UBI-ish safety net system covering the remainder in the absence of the huge overhead imposed by our wildly overcomplicated regulatory/tax environment.
Sounds good to me. Government job training tends to cross some libertarian lines, and I know you think things through more than the doctrinaire libertarian does.
Credentialism needs to be unwound very slowly or it would destroy a lot of lives. How many people with families and house payments would suddenly find themselves several steps down on the marginal tax rate ladder?
Brexit is a pretty big data point against this theory unfortunately. Britain's safety net is not a strong as other countries in Europe but it is definitely stronger than ours. And the people who benefit most from the strong social safety net (pensioners) were the people most in support.
By the way, similar dynamics here. A huge part of the anti-immigrant/anti-free trade animus in this country comes from retirees or the very group of people who actually do benefit from something approaching a continental Europe welfare state.
I don't think that's true. Immigration, not exposure to imports, was what drove Brexit.
The French welfare state does not make unemployed workers particularly well off, nor do any of the Nordic models.
Well, sure, unemployed people in most countries aren't "well off." There's plenty of right wing populism in many countries, but I think it's driven mostly by immigration and ethnic change. Americans seems particularly susceptible, though, to the siren call of protectionism. The Nordics run some of the most open economies in the world. Or, consider the example of the Trans Pacific Partnership: Australia, New Zealand, Japan and Mexico all managed to summon the political will to join. The US didn't because buying from foreigners here is more controversial than elsewhere.
"Americans seems particularly susceptible, though, to the siren call of protectionism"
Relative to where we were, yes. Relative to most other countries, no. We continue to be more open than most of the EU and way more open than almost anyone else.
>We continue to be more open than most of the EU and way more open than almost anyone else.<
Not so. It's just the opposite. EU external trade is higher (percentage of GDP) than the corresponding figure for the US, and individual EU states, of course, engage in much more trade than America does. Also, your "anyone else" seems questionable, as any number of countries outside Europe (Australia, Canada, South Korea etc) are more engaged in trade than the US is. Indeed, these last three all joined the TPP. Heck, look at the hue and cry over the US Steel sale to Japan: A) the firm is no longer a remotely important American company, and B) Japan is a highly valuable ally that has an excellent track record of investing in the overseas assets it buys. This transaction shouldn't be remotely controversial, and yet one would think it wasn't Japan and US Steel, but China and Lockheed Martin. I'm not saying the situation is remorselessly negative: the US still does a huge volume of trade with foreign countries in absolute terms, and it still attracts giant investment flows. But once upon a time the United States was THE primary champion in advancing the cause of trade liberalization (I mean, kinda makes sense given the high productivity of American workers). Those days, sadly, are gone (at least for the present).
"Protectionism qua protectionism seems a less potent force in other rich countries. I wonder if any political scientists have made a study of this."
Europeans were masters of industrial policy and national champions. You could argue that the Euro is just a big industrial win for Germany now that the over subsidizing and spliffing are banned by the EU rules.
Plus the Germans get the best industrial policy of all, a currency union with much weaker economies that keeps their exports significantly cheaper on the global market, without the sordid business of deliberately weakening their own currency.
Spliffing? The smoking of cigarettes comprising both marijuana and tobacco?
Whoops, I guess it’s a spiff, not a spliff.
Thanks for the clarification (and like City of Trees I just learned something!) Sadly I'm totally failing in Googling what EU trade policies relate to spiffing bans or why such bans are a good idea -- can you expand on that?
I thought you just typoed splitting, so today I learn a new word. (Not spliff, of course, I learned that one in college, like many others.)
Didn't Hillary Clinton have some kind of skills training for people whose jobs got outsourced? People didn't want to hear it, though
I've read more than one account that these retraining programs just aren't very good at what they claim to do. It's compensating the 'losers' with something worthless.
I’ve been saying for years that we need these coal miners to jack into the matrix and learn kung fu so they can defeat our machine overlords and rescue humanity from the flesh battery fields!!
For reasons I don't understand there is incredible nostalgia for boring, monotonous jobs that were essentially putting knobs on widgets, and the people who did those jobs don't want anything else.
I have a son who has a job putting knobs on widgets (well, sorting lottery tickets and putting them in boxes to ship out). It is a LOT less stressful than what many other people with a high school diploma do - front-facing jobs with the public where people put a lot of demands on you, but you have little power (retail, food service, front-line government jobs).
She did, but the sound bite was "coal is going away and people will lose their jobs" without including the part about mitigation.
Wouldn't surprise me if the programs didn't work as well as theorized, but I'm skeptical that they're actually "worthless"
My father in law worked on a bunch of them and just take was-they didn’t work at scale for training 50 year olds. They worked really well for training 20 years olds for new careers in relevant industries. So you have this big demographic hold-over issue.
While I think this makes intuitive sense, do you know what precisely didn't work about them? Is it too difficult for older people to learn new skills? More set in their ways? Something else?
The hard part about scaling job training for 50-year-olds is that other obligations have a tendency to get in the way.
Finding a time when a group of 20-year-olds can all get together to attend a job training session is easy, because they basically have nothing but free time. Now try doing that for a group of 50-year-olds and you'll quickly find that finding a time when *all of them* are available is difficult.
I can speculate on root cause, but as a proximate cause, at least according my FIL, they just didn't get very good enrollment numbers.
Maybe that is due to marketing and awareness, or maybe other obligations as Thomas mentions, or maybe interested, stubbornness and not wanting to restart a career back on the bottom-rung even if that is better than unemployment.
Also, if it works well for, say, people in their 20s and 30s, maybe that's good enough to offset the decreased demand for those jobs? Wouldn't work if an industry suddenly collapses, but maybe for industries that are moderately contracting
Also you have the problem of geographic specialization. A set of a companies, even those in the same industry, failing in a vibrant metropolis is very different than in a one-factory company town.
That was specifically about coal miners in West Virginia, not so much about free trade. (I think I read that it was actually a very well-thought-out proposal, btw.) But job retraining has also generally been something that centrist Dems have strongly supported and emphasized since her husband was President.
The best one-sentence summary I've ever read on this subject is from a nearly 25 year-old Reason Magazine article:
"[I]t often seems as though free traders are trapped in a public policy version of Groundhog Day, forced to refute the same fallacious arguments over and over again, decade after decade."
https://reason.com/2003/10/30/lous-blues-2/
Funny! This was my first thought: https://youtu.be/rw7PUrgU3N0?si=Ez90IN38-xQy_FA2
He also makes fun songs for Magic: The Gathering which I've inflicted on my husband who doesn't play.
I was wondering if that was the same guy. Weird crossover.
Ha ha! 😀 I had somehow missed that one.
Libertarians really punch well when it comes to comedy.
Indeed. "Desperate Mayors Compete for Amazon HQ2" is possibly the most brutal piece of satiric comedy since Jonathan Swift: https://www.youtube.com/watch?v=H_eG7leM6ew
And Reason videos are only scraping the surface. Penn and Teller have been Cato fellows for a long time, and above them, Trey Parker and Matt Stone have been favorable to a fair amount of common libertarian principles as part of their skewering of everybody that does dumb things.
When Trump was first elected, working class wages had been stagnant for a generation. At a minimum, free trade did not create enough benefits for the working class to offset the harms of other policies. It’s also possible that manufacturing workers in the only major economy left standing were a privileged class, whose rents gradually withered through free trade.
I for the most part agree. But I really do think the downsides to the 90s free trade consensus was way underexplored and underestimated in the late 90s and early 2000s. The "China shock" was a very real phenomenon and something clearly underestimated by economists. The idea that free trade would also lead more democracy and specifically more democracy in China has proven to be wildly incorrect as well.
Also, "learn to code" became a mocking joke for very good reason. The complete inability from our political system to confront the fact there are very real losers in a world of every increasing trade is a real failure.
So while yes I wish our world would turn back to embracing the benefits of free trade, I think we need to acknowledge the backlash is not entirely misplaced.
"Learn to code" became a mocking joke because it treated tech work as the only work of any real value, which is actually the opposite of the truth -- I'm not sure "code a bunch of games for people to play on their phone" produces any value.
Also, as a coder, I have high confidence that the people who used this phrase mockingly would be woeful coders themselves.
I mean, sure, but doesn't that only reinforce their point that it's kind of vapid advice as a catchphrase?
yes, most people majoring in the humanities -- and *especially* people still majoring in the humanities after the STEMlords have been beating everybody over the head to go into STEM for two decades -- would not be good at STEM careers.
I can count on one hand the number of attorneys I know who are good at math.
I once worked for lawyers and many of them told me how they got into this profession due to their hatred toward math. It was fun telling one of them later how coding has a lot more in common with law than with professions with a ton of actual math in them.
Unfortunately, the commitment to global free trade wasn’t accompanied by any real effort to support communities who were built around industries that were devastated by international competition.
I think this is correct, but I'm not sure there is a model for the "real effort to support communities who were built around industries that were devastated" that works. But perhaps someone has more insight--were other countries, likely with more centralized governments (say, France or Japan), able to implement successful economic development models for former industrial towns? Or did any US states implement a successful model for this? (I know eventually we got to "eds & meds" in places like Pittsburgh...)
It's also worth asking how much of the economic problems caused by looser mergers & acquisitions regulations and anti-union policies caused middle/working class wage problems that were subsequently blamed on trade.
It's a little more complicated than that; I do think that there was a cost to inviting China into the freer trade orbit, which did hurt American manufacturing and hollowed out many American towns. America was better off in this scenario, but the transition was not painless.
Free trade makes the world richer. Additional wealth has diminishing marginal utility. America today is the wealthiest society that has ever existed; it is not surprising to me that there’s now less support for free trade.
Would you give up X for a little more economic growth? Every year that becomes a worse deal, for every X.
You aren't wrong about the economic bounty produced by free trade, but we made a pretty obviously bad application of it, induced mostly by campaign contributions, when we extended it to a billion person totalitarian Communist dictatorship in China without demanding that they moderate as a condition.
And I suspect that's the original sin here. People hate not only that the factories closed, but that the jobs were shipped to one of the worst regimes on the planet, and help make that country into a superpower and a very pernicious one.
The problem is you can't turn back the clock and re-run the 1990's with Bill Clinton not whoring his policy out for campaign contributions this time. What's done is done so outside of keeping some crucial supply lines and sectors within our control, we might as well just capture the benefits of free trade.
The China policy is fairly subject to criticism, but in my observation, the popular understanding of free trade among regular people who hate free trade is *much* more focused on Mexico than China.
There is certainly plenty of concern about Mexico. But I do think the China stuff carries a different level of vehemence, and it goes back to what I am calling the original sin. To be clear, it wasn't simply that we obviously sold out our China policy to campaign contributors, but that our elites so blatantly lied about it. They knew exactly what the Communists were trying to do but made transparently false claims about how trade would lead to the liberalizing of Chinese society.
So shipping the jobs + to Communist dictatorship + in response to campaign contributions/corruption + lying about how this would lead to reform in China + ultimately empowering China as geopolitical competitor makes the China issue far more toxic than Mexico. Indeed, Trump concluded a replacement deal for NAFTA with Mexico and nobody complained.
I think this is too uncharitable to Clinton-era thinking. The elites didn't lie about it -- they really believed economic liberalization and integration would lead to political liberalization. Being wrong doesn't mean they lied*.
*This applies to Bush-era thinking around Iraq also.
I choose to believe they were not that stupid.
But if they really truly did believe that allowing all those businesses to come into China would somehow disempower the Communists, when the entire time China was carefully managing its trade so this wouldn't happen AND had engaged in brutal suppression of dissent already, then the Clinton people are some of the dumbest people to have ever served in government. This was not hidden or non-obvious.
Protests and uprisings really did happen all across China, culminating in the situation at Tiananmen Square. The belief that there was going to be a loosening of political repression wasn't crazy -- hundreds of thousands of Chinese people believed it too.
We didn't manage the distributional challenges. So voters who benefit, but not as much, want to kill free trade because they think it'll solve their problems.
That won't solve their problems, as we can see in brexit. But they'll still vote for it. Cool stuff.
I actually see Trump (and the new GOP) anti-market positions push a lot of the left into a new appreciation of the free market. If it sticks, I think it will be Trump's single greatest accomplishment.
I am as anti-Trump as they come but I would say Trump's biggest accomplishment was bringing to the forefront, the conversation about how big a problem China has become.
He just immediately took it to a really stupid place.
Operation warp speed was pretty incredible. His base didn’t appreciate it but it was probably the most amazing thing the government has done since the moon landing
If free trade was the magic elixir of "the west," how do you explain the situation in South America?
A combination of Peronism, overregulation and autocracy explains a lot of Latin America’s lacklustre performance.
Also unstable governments.
Doesn’t that raise a question? If it’s so self evident and so successful why has the consensus been abandoned by *both* sides ? There is more to the story.
>All they see is Miller talking about how amazing it will be for South Carolina to tumble backward to a more primitive state of development.<
What the MAGA faithful really see is a return to an era when a high school education got you a decent factory job with which you could support a family and buy a house (They don't know the houses were small, drafty in winter and sweltering in summer—mostly because they weren't alive back then). I think they also tend to believe turning back the clock on the economy will somehow go hand in hand with restoring 1954's social conditions and cultural practices.
> 1954’s cultural practices
The reason people want to bring back steel manufacturing and coal mining is because they’re manly. Today’s paths to a good career are not manly, like being a nurse, and to some extent even studying and behaving well in school. I don’t have any evidence for these assertions, and don’t believe them myself, but it seems to explain Trump’s industrial policy pretty well.
Good point. I'd love to see a crosstabs by gender on nostalgia for the world of 1954. I bet men are far more nostalgic than women.
I can’t find data on 1954 specifically. However, some Pew surveys include a question on whether life today is better or worse than 50 years ago.
Pew reports on these surveys haven’t included respondent gender, but, they do allow access to their raw data for surveys more than 2 years old.
I downloaded the data for 2021 American Trends Panel Wave 92. Both men and women in that survey said that life in 2021 was worse than life 50 years ago. There was not a substantial difference between rates of men and women finding 2021 worse than the past.
Since that contradicts my claim, I dispute this and think you're totally wrong.
Just kidding. Data >> uninformed opinion. Thanks for diving into this!
Also likely explains the subtle shift rightward of Hispanic and black voters. If I'm not mistaken, the shift is concentrated among men.
It's sort of an inconvenient truth for progressives (like me) that there are men of all backgrounds (not just white men) who have some pretty reactionary views about women and feminism.
So another version of "unemployment is too high because men are playing too many video games in their basement". Pretty well debunked when it turned out the real issue is that the Stimulus was too small and we pivoted to austerity way too soon in 2011.
Also, how does internet addiction only effect men and not women? I missed the part where only men are on their smartphones all the time. In fact, I'm pretty sure women are heavier users of social media than men.
Is pornography interfering with work more than social media? That would be surprising to me. (I’m open to the idea that one or the other is a bigger factor in declining social relationships, but not work.)
Is that in fact obvious? Feels like the causality on both fronts is pretty complicated and there is a strong possibility of other variables driving both observed outcomes (worse economic outcomes and higher addiction rates).
Maybe the modern economy selects more for contentiousness and agreeableness. Maybe being less risk adverse leads to poorer educational or service economy job performance. Maybe it’s all downstream of incarceration rates. Maybe it is the longer tales and squatter normal distribution of outcomes (more outliers) men experience. Maybe it’s a million things that lead to both bad outcomes.
“It is obvious that addiction problems are the cause of economic underperformance” is a very strong claim, is all!
All for trying to solve that problem however you can.
This. So much this.
Politicians can't simply say out loud that a lot of men's (and specifically white men's) failures are their own fault, but I can, as a white man who will not be running for office. When conservative politicians talk about how people don't want to do honest work any more, this is who they're talking about -- it's just bizarre that these are their base voters.
Kevin Williamson says that out loud.
https://www.nationalreview.com/2016/03/donald-trump-white-working-class-dysfunction-real-opportunity-needed-not-trump/
https://www.nationalreview.com/2020/11/the-white-ghetto/
He has a whole book about it: Big White Ghetto: Dead Broke, Stone-Cold Stupid, and High on Rage in the Dank Woolly Wilds of the "Real America" https://a.co/d/0C48NSG
>Politicians can't simply say out loud that a lot of men's (and specifically white men's) failures are their own fault<
It's hard to argue with this.
On the other hand, Homo sapiens americanus hasn't evolved (or devolved) much in the last 50/60 years. So, it doesn't seem to be related to DNA. As a free will skeptical consequentialist, the apparently very large numbers of American working class men dealing with these problems—especially compared to their counterparts in Canada or Finland or Japan (all of them quite a bit poorer than the US)—makes me suspect public policy plays a large role. In short, we don't have an effective, comprehensive system or set of policies in place to help working class folks navigate the vicissitudes of economic change. But we ought to.
It's really sad that a lot of people just want to stay in their status quo jobs instead of striving for better, no matter how relatively poorer they become--indeed, they almost seem content with accepting that as well. How to address that politically is tricky--Matt's giving it his best shot on this site.
In fairness, striving is hard (not being sarcastic). I live for my career, but a lot of people don't want to do that.
One thing that my mom's dad did for her was put just a few hundred bucks in a diverse portfolio and told her to do nothing with it, to learn how compound interest works. My mom did the same with me just a few years after Vanguard was founded. I'm obviously quite lucky to have family that knew how money works really well, I wish more other people had that knowledge.
The problem is that unemployment is at historically low levels. Plenty of people with high school educations already have good jobs! Like.. the majority of the contracting business, for instance, makes about 2x the salary that a factory worker would make.
On top of that, if we ever do build textile factories in south carolina... there won't be any human workers there. It will be machines all the way down, with a barebones staff for maintenance + engineering + security.
All throat clearing about how Trump is worse than Biden aside, Biden preferencing union contractors and made-in-America provisions is just different in degree rather than in kind, right?
I really wish there was a party that Believed the Science on free trade.
Union contractors is different from made-in-America.
Union contractors preferences adequately paid workers over inadequately paid workers (I'd prefer just raising the federal minimum wage, but one is possible and the other isn't). Given that contractors are necessarily working in the US (this is mostly construction workers, and you can't import things that have to be built on site), it's not something that interferes with trade.
Made in America is just bad; in several cases, American-made goods are worse, or even just don't exist. When it amounts to forcing foreign companies to create factories in the US to assemble parts that are overwhelmingly imported (the worst examples of this are probably the Acela Express trains, which contain no more US-made components than the TGVs they are derived from) it is just a wasteful cost burden on the US taxpayer. If there is a genuine domestic industry, then at least there is a case for choosing the domestic supplier over the foreign one, but there are way too many cases where projects spend vast amounts of time and money obtaining waivers for things that are clearly never going to be made in the US (e.g. tunnel-boring machines; there are only three factories for large TBMs in the world) or waste enormous amounts forcing the creation of a US assembly plant that immediately gets closed at the end of the project.
I mean, both things involve making things less efficient and more costly in order to favor a preferred group. Feels kinda similar imo
I think it depends on whether you think of union preference as preferring the pre-existing group of "union members", or whether you think of it as preferring a form of contract that offers better pay and conditions to workers, a form of contract that is available to anyone.
Considered the second way it only "[makes] things less efficient and more costly" by paying people more and giving them more generous working conditions. If you take the view that not maximally exploiting the workers is an inefficiency, then sure, you can see that as similar. But there's no "preferred group" in the sense that there are a bunch of other people who are being denied the work. Anyone could join the union and get the union job.
"Anyone could join the union" is just factually incorrect for some unions. Some examples you might want to look into: longshoremen, IATSE (e.g. my understanding is that in California to be eligible to join in practice you have to have worked a certain amount on the sort of jobs the union covers, which is obviously hard when you are not a member of the union, etc). And those two are just off the top of my head; I would be very surprised if there are not more like that.
One correction: the "worked a certain amount on the sort of jobs the union covers" is one of a small number of things that can _force_ the union to take you as a member under CA law. The union generally can and does reject applicants, so the only ways to get in are to know someone already in who will make it happen or to get lucky in one of a small number of possible ways.
Given that union preferences are typically (in my view correctly) viewed as attempts to sway the votes of current union members, I tend to favor the first view and I think that it likely both predominates and better characterizes the situation.
(Although in fact yes, not maximally exploiting workers clearly is an inefficiency essentially by definition.)
"maximally exploiting workers" = paying market rate for labor
just as:
"giving a taxpayer-funded handout to politically favored groups" = awarding contracts to union shops
I can't remember if we've talked about this or it was Kenny E. But my experience in Light Rail for Siemens was the total opposite. The Sacramento production facility is now world class with many of the sub-sub-components produced. There's no way it becomes world class without the Buy America requirements and there's no way we have the degree of light rail adoption in the US without that facility either.
Ooh, thanks! New information is useful.
That’s good to know! Over the years, when I’ve heard of this Siemens light rail Sacramento thing, it always sounded like they opened it up when some American transit agency was required to buy American, and closed it down again between contracts. But if it has actually become a sustainable and good factory, that’s a great correction to hear!
Probably true but (to go all Reece Martin on you) Siemens light rail--and particularly Siemens low-floor light rail--was a bad choice, since low-floor light rail has become the de facto standard for new systems. By its nature, "light rail" designed for use in mixed traffic (the only reason you'd have a low-floor system) can't be automated and has lower capacity than pretty much any other rail system (mainly because the space for the wheels reduces the available space for standees). While that might be fine for smaller networks--like, I could see a case for it in Birmingham--it's been actually adopted by much larger metros like Portland, Seattle, Minneapolis-St Paul, and Houston (*Houston!*) which (1) have the higher capacity that high-floor systems demand and (2) could probably use automation as a way to maintain high levels of service while keeping labor costs low. The Sacramento plant does produce high-floor light rail for San Francisco (and Calgary) as well, which is better, but still inadequate for some of the larger cities/metros (like, Houston should have either heavy rail or a fully automated, grade-separated light metro).
Look. Starting points matter. If the option is / was low-floor, mixed traffic networks or nothing -- I'm still selecting low-floor if I'm the Transit Authority. You have to start building network density (i.e., ridership) somewhere. But separate from which vehicle the factory is producing ... the point is the US now has a legit, world-class production facility. That's an investment both the US and Siemens made. That talent now exists here and all the lobby $$$ for new rail networks are coming to the US. That's all good news if you're a rail fan.
NOTE: This is the same story for Alstom. Their Hornell facility is world-class.
MBTA orange line trains keep falling apart, because the factory in Springfield MA keeps screwing them up, because it’s a Chinese company running an American factory, and setting up a culture of quality in a multinational enterprise is a hard thing to do.
https://mass.streetsblog.org/2023/02/03/the-ts-new-train-factory-has-gone-off-the-rails
I'm still shocked they awarded the contract to CRRC. Just note ... it's not just a factory issue. The design is complete shit too.
Genuinely curious on this point "(the worst examples of this are probably the Acela Express trains, which contain no more US-made components than the TGVs they are derived from)".
What am I missing? Amtrak and Alstom are both reporting 95% Buy America at the component level. I'd be - genuinely shocked - if the entire propulsion system isn't produced in the US. I didn't work for Alstom but my understanding was they had ~ fully integrated US production for the all NYCTA projects going back to the 80s (4,200 cars and now 11 projects).
https://www.alstom.com/high-speed-rail-america-already-here-alstom
https://www.amtrak.com/next-generation-high-speed-trains
OK, I am clearly remembering information completely wrong from the 2000-era original Acela Express - the new generation I knew was much better in terms of US-sourced components.
I'll need to have a completely new look at the Buy America rules, because you've convinced me that I had a complete misread on them.
It’s worse actually. A tax is less disruptive than a ban. The made in America stuff means things don’t get built at all or get built poorly.
What's "The Science" on free trade?
It's that free trade is good.
Sounds like a moral judgement, not science.
Weird how that works.
With a little charity, he is rounding off a bunch of empirical things that he assumes you and most people think are good and arguing The Science says they are produced by free trade (lower prices, better products, surplus split by both parties, fewer starving peasants, etc).
"Believing the science" of vaccines but not GMOs is also a moral judgement.
What's your preferred policy in this regard?
It’s better for everyone when you specialize in something you’re really good at and trade that for something else somebody else is really good at. We want people to open kickass Mexican restaurants and Chinese restaurants instead of everyone opening a terrible Mexican-Chinese-Polish-Indian restaurant.
"a terrible Mexican-Chinese-Polish-Indian restaurant"
I'm trying to picture the menu. A pierogi-samosa hybrid with salsa and soy sauce for dipping?
Lol, you reminded me when, in my Russian class, we looked at menus from, like, Georgia (the country). The "American" restaurant was the wildest range of dishes you ever heard of :-).
While I agree, I do think the Biden administration has softening in stance on “Buy American” by possibly expanding the countries that can get waivers
reminds me of this tweet
https://twitter.com/ahardtospell/status/1752820697301164384
It's possible it's a different calculation for bucket trucks but for "rolling stock" contracts (e.g., light rail, heavy rail, buses) the threshold is 60% including final assembly and calculated at the sub-component level. But you can't get there just with final assembly. 50% of the sub-components must be produced in the US. The components and sub-components are defined in the contracts - so you can't just game the definition of the production hierarchy either. I'm sure there are countless examples of wasteful spending but critics of buy America within the rail community (looking at you Alon Levy) just ignore completely the success stories like this:
https://www.mobility.siemens.com/us/en/portfolio/rolling-stock.html
This isn’t a success story — it is precisely the waste against which we must fight.
Find me the waste. The projects are bid at marginal cost.
EDIT: OR BELOW!! Look at all the trouble Bombardier got in bidding projects below cost with the expectation of scale curve benefits.
If they were providing it best, then no protection would be needed.
Again -- where's the waste? And what do you mean "protection"? The buy America(n) requirements don't "protect" anyone. They solve a prisoner's dilemma for the individual Transit Agencies and require investment by the OEMs. For the rolling stock contracts it's been a huge win for long-term US rail growth - which has been awesome these last 20 years. Anyone that tells you otherwise -- doesn't understand the US market.
Just to close the thought ... it's completely possible your Dad's company was faking it too. If the contract was small enough - there might not even be audits. But for the big transit projects (e.g., >$500M) - the sub-component production facilities must pass a First Article Inspection (FAI) and the full bill of materials is ripped apart.
Also -- this isn't just to help the workers. It's to create long-term stickiness to service and maintain these massive fleets. There were countless disasters in the 70s and 80s of fleets becoming obsolete early due to OEMs going bankrupt or pulling their US support.
Yeah. Of course. When a company wants to buy a project with a below-market bid -- it's a tough business case on the TA who are facing funding challenges. So they roll the dice. But just look below at the trouble MBTA is having with that disaster CRRC project. They can't even produce them. How are they going to service them? This was the ~ norm for in the 80s.
https://mass.streetsblog.org/2023/02/03/the-ts-new-train-factory-has-gone-off-the-rails
What is particularly striking is how many Americans say they pay too many Federal Income tax is the same share of the population that roughly paid any Federal Income tax for the 2022 tax year. I will say that most Americans reflexively oppose paying taxes even when their tax burdens are relatively modest. It's always someone else's civic responsibility that government services get provided. Sigh.
Everyone thinks that people at their income level and lower pay too much in taxes, and people making more pay too little in taxes. Just like everyone that drives slower than you is an idiot and everyone that drives faster than you is a maniac.
I pay too little in taxes, but too much doing my taxes.
You can donate money to the IRS if you believe you are not paying enough: https://www.fiscal.treasury.gov/public/gifts-to-government.html
That doesn’t solve the collective action problem necessary for a properly functioning civil society.
The problem is everyone has a different definition of a "properly functioning civil society." We resolve these differences through the democratic and legislative processes. You may think tax rates are too low, but other people think they are just right, and others think they are too high. The Congress we have elected has settled on the current tax rates for now.
That's fair but if I'd rather donate elsewhere(GiveWell/Directly) with that money to the extent I'm willing to donate.
Also, that's not quite the same because I'm then going to have to pay the higher house purchase prices etc. against people who aren't doing that - I'd rather everyone in my area (250k+ family income) paid a bit more (and not just the 400k+)
I have to wonder whether this is at all because the federal income tax involves so much unpleasant paperwork. Other taxes are less unpopular, though admittedly there are other confounding factors. https://apnews.com/article/taxes-poll-high-mistrust-local-government-bad406b062041ea2d0626058cab5491b
(Of course, the fact that the paperwork makes people hate the federal income tax is half the reason why we have it, thanks to the bootleggers-and-Baptists alliance between Intuit and Grover Norquist.)
It’s fun to blame Intuit’s lobbyists but the reason filing your taxes is complicated is that our tax code is complicated. Grover Norquist isn’t the one who made Ticketmaster send 1099s to people who sold half their football season tickets.
That affects a nontrivial number of people, but it doesn't affect the majority of Americans whose only income is W-2 wages, interest from investments at large financial institutions, and/or government transfer payments, and who take only the standard deduction plus some similarly-institutional above-the-line deductions. Those Americans' income taxes can be computed from information that the IRS already has.
Good thing the IRS is doing a pilot program to streamline filing.
I was super excited to try it this year, but turns out that the high interest rates made my savings/CDs perform well enough to put me just outside of the 1099-INT threshold :/
lol why the hell is there a 1099-INT threshold? Interest earnings are slightly more complicated than income earnings but this is absolutely not the main thing that makes taxes hard...
I am sure it will go great.
You'll notice that the taxes more likely to be perceived as 'fair' as flatter/less progressive taxes. (SS, sales tax)
It was a fascinating graph as tolerance of taxes did not seem to correlate at all to the tax rates themselves?
The rates were only part of the equation. As marginal rates fell, the number of deductions, exclusions and tax preferences fell also, plus a growing stock market led to more income being subject to tax. The result is that total taxes levied as % of GDP didn't change much at all.
Very good to know !
I have been saying for a while that beliefs have become decoupled from material reality.
The only taxes people actually like are lottery tickets, because they don't understand that it's a tax...
If the federal government doesn't get the deficit under control by fixing the long-term trajectories of Social Security, Medicare, and interest payments, in 10-15 years Americans are going to end up paying Europe-level taxes without Europe-level benefits. Imagine the outcry in that situation.
The claims you are repeating about Medicare and Social Security are just a mirage created by peak boomer retirement and the “line goes up” fallacy. It’s wrong once you account for demographics and just creates a few bad years.
I have sat in on the SSA meetings covering this. Social Security and Medicare are fine.
SS is "fine" if you believe it is okay for SS to pay only 75% of future benefits defined by current law, because that is the limit of future tax revenue. Or we can fund 100% of future benefits defined by current law by borrowing money. Unless you are claiming the CBO and SSA are lying: https://www.cbo.gov/publication/59340
Yeah, that chart is at best incorrect and at worse lying
I guess it is correct if you think the number of people retiring will continue to climb and the number of people working will stay flat. How exactly that math is supposed to work is a bit mystifying to me.
I am not saying it will be great, because there are a lot of boomers. But, at some point the retirees has to start declining, because population is shrinking.
Unless, of course, you do like Matt suggests in 1b Amaericans and you start importing workers via immigration. At which point, tax revenues would go up.
So worst case we continue being stupid, and it sure will suck for 7 millenials to pay for 10 boomers for a while, but then as the boomers start to die, it sucks less, and we go back to equilibrium.
Best case we start importing workers, and problem solved.
Neither case leads to Europe-level taxes. And indeed, if you ever DID get to that point, I think if you present to the American public "Option A 20% more immigration, option B 20% more taxes" I think you'll discover that the public opinion on immigration will magically flip flop. And at some point, in the world you are predicting, the math really wouyld get obvious enough that one or both parties would put forth that choice, and it will probably the party in power, because while raising immigration *might* cost you a few house/senate seats, raising taxes like that would probably cost you the trifecta for a decade.
>"But, at some point the retirees has to start declining, because population is shrinking." That is incorrect according to the Census Bureau: https://www.census.gov/data/tables/2023/demo/popproj/2023-summary-tables.html.
The Census Bureau projects that US population won't begin declining until the 2090s, way after all the Boomers and most Millennials are gone. The Census Bureau also projects that the age 65+ population will increase from ~60 million today to ~100 million in the 2090s.
The census bureau predicts that the.... currently declining population... won't decline until 2090? Oh, well then.
Will Americans be paying then-current European level taxes, or 2010-era European level taxes? Presumably Europe will be feeling the same sort of demographic crunch and will have its own tax issues to deal with.
The CBO publishes a report every two years or so on ways to reduce the federal deficit: https://www.cbo.gov/system/files/2022-12/58164-budget-options-large-effects.pdf
The Manhattan Institute has summarized the revenue-raising options from that report (slide 75): https://media4.manhattan-institute.org/wp-content/uploads/BudgetChartBook-2023.pdf#page=41
SS and Medicare will face ~5.5% of GDP yearly tax revenue shortfall by the 2040s if no changes are made before then. The CBO numbers suggest that raising all payroll tax rates or all income tax rates by 10% plus implementing a 20% VAT could close the SS and Medicare tax revenue gap (not pay for any new spending). Those tax rates are similar to current Europe-level tax rates, especially for the middle class.
I guess the question is whether current European tax rates are projected to support their equivalent programs, or if the shrinking of the workforce and growth of the retired population will result in further increases of the same size.
I don't know how much room European countries have on the left side of the peak of the Laffer curve. They certainly have less than America does.
If taxes worked on the principle that we need to procure some fixed basket of services & we care about doing so cost-effectively, that would be one thing. The actual social function of taxes is to cut down to size those who are seen as being too comfortable. If the money taken from them fails to convert to services or the services are worth less than they cost, only an extremely tiny minority of nerds even notice.
My favorite line by a mainstream journalist was Matt pointing out that one of the overriding problems with Donald Trump was that “as a human being, he is a piece of shit”. I add this observation from today’s post: “ Unless it benefits him personally, Trump just pulls ideas out of his ass because he likes the vibe.” Two basic truisms that explain the descent of the GOP and this country more generally.
I actually think opposition to free trade is one of Trump's few deeply held beliefs. He's wrong but if you go back through his media appearances long before he got into politics he espoused it. Somewhere along the line he convinced himself that politicians are bad dealmakers (unlike himself and his counterparties in business who knew how to drive hard bargains) and that they routinely traded away American workers' jobs to foreign countries and got little in return.
There's probably also something to Trump's repeated behavior of stiffing contractors, daring them to sue, and settling for a reduced cost that he thinks the US should be doing on a global scale.
Along these lines, views on Trump acted as a bit of a shibboleth in the Northeast for a while. Well-off people who knew a variety of successful entrepreneurs and rich people saw him as a joke and a bad businessman. (The type of person who knew who Indra Nooyi or Jaime Dimon are off the top of their heads.) Less well-off people who viewed him through the lens of celebrity saw him as one of the most successful billionaires ever since they didn't know a lot of actually rich or successful people.
My cousin on Long Island married a man from a pretty wealthy family there and her father-in-law told a story (circa 2010) the weekend of the wedding about Trump cheating at golf at his own tournament. Definitely the type of stuff everyone of a certain class knew.
I thought this video was a deep fake the first time I saw it. It might be misguided (e.g., irrational fear of Japan becoming the world superpower) but it's somewhat coherent.
https://www.oprah.com/own-oprahshow/what-donald-trump-told-oprah-about-his-presidential-hopes-video
Trump has always given off Ross Perot vibes, more on less, on trade.
I remember him going on Bill O'Reilly's show way back in the aughts and he was going off on how foreign oil suppliers were gouging American consumers.
exactly
He's Archie Bunker in a $3,000 suit (except he's a lot meaner than Archie ever was, and, he's definitely not getting his money's worth for those suits).
The vibes smell like ketchup and body odor.
Matt's right, and Dems should not concede this issue.
Here in Ohio, the Republicans are talking about eliminating the income tax (presumably) in favor of hiking the sales tax. That's a straightforward tax cut for the rich and tax hike on the poor and middle class. I can't wait until seniors with fixed incomes hear about it. https://www.dispatch.com/story/news/politics/2024/01/23/ohio-republicans-propose-eliminating-state-income-tax-business-tax/72285903007/
I'd also like to see more people talking about Project 2025's proposal to eliminate the Fed's dual mandate, focusing only on price stability and eliminating the full employment mandate. They say it's to reduce inflation, but we know it's to lower wages for their corporate donors. I could see this gaining traction in right-wing media because it's a fun conspiracy that they like.
And what's going to happen to grocery prices when Trump throws half of our agricultural workforce into relocation camps?
There's a reason they prefer to talk about trans folks ...
Yep, I get frustrated when I see Democrats go hard on the niche culture war stuff. It's so easy to just keep it simple and say "I believe in treating others how I would want to be treated and in the American idea of individual liberty". So much of what gets called "woke" is just basic manners at this point because of how far the right has gone. Unfortunately, social media boosts the most insane left wing takes, which doesn't help anyone at all.
A price only mandate would also lower the wages of customers so that doesn’t make sense. I think it’s just goldbuggery and nothing more than that.
Republicans don't want full employment because you can't have full employment and an industrial reserve army.
The Ohio thing is bad, but there are several places that have that policy for a long time, with Washington being the most famous in my region. I wonder how successful they can be by just pointing to those examples.
Texas has sales & property tax and no income tax.
The sales tax _is_ regressive but everyone is used to it - status quo. There's a little support with a "sales tax holiday" near the end of summer for back-to-school stuff, but yeah, pretty regressive(but less distorting, as you say in another comment)
I think it's perfectly reasonable for Ohio to point to Texas as a state that makes this work, but it's _also_ reasonable for people to talk about how this will drive up costs for current Seniors who already don't pay (much) state income tax and now will pay this.
FWIW, the sales tax rate in Texas appears to be 6.25-8.25%, which is comparable to most places that have one in my experience (even a bit low). The property tax rate is high, although a handful of blue states are higher still (including the infamous NJ and Illinois).
They give an exception for all agricultural usage, not just big ranches. I'm of several minds about this:
1) It actually directly benefits me via lower property taxes on some land I own that is leased agricultural. So I'm biased in favor.
2) It theoretically protects doing more agriculture here - if you think that is valuable, then it can be worth it.
3) Sometimes it seems too easy to get the exemption even for not really doing all that much agricultural.
4) The land value is partly higher _because_ of this exemption, so just turning it off would seem to equalize things nicely.
I would probably support removing it because I try to support good tax policy, but I'm very much open to reasons not to since it helps me.
And your city in particular is perfectly located to leverage all the tax favorability.
I continue to think that taxes should be spread across a number of methods. Small to moderate sales tax, income tax, LVT, property tax, business tax, sin taxes, etc. Make it so that no single tax is big enough to cause distortions and people have an enormous reason to try to avoid them.
Heh, I'm the complete opposite on this, and I know I'm in the minority on this among Slow Borers.
I know that you don't like pigouvian taxes, but is there a distaste for otherwise spreading out taxation across different forms?
My dream is for taxes to be as boring as interest rates, where there's one base rate that we adjust upward or downward as appropriate to what the economic conditions merit, and what we want the government to provision. I've long accepted that this is just that, a dream that will never happen.
A VAT could work this way, maybe.
Two things with this
1) using such a complex series of maneuvers effectively requires such insider knowledge that I think it would massively advantage the wealthy over the normal person.
2) Contrary to point one, traditional IRAs are bad for people with very large amounts of money. Your turning investment returns from a capital gains tax rate to an income tax rate and that's a terrible trade off.
I think we should incentivize investment. Maybe just a 5% cut on the equivalent amount of tax on income, but think it should be lower.
There is a completely opposite idea now floating around right-wing circles to tax 401k and IRA contributions as a way to shore-up future Social Security tax revenue: https://www.aei.org/research-products/report/the-case-for-using-subsidies-for-retirement-plans-to-fix-social-security/
They should
1) do away with Roths
2) collapse the distinction between different types of retirement accounts and contribution amounts so that there is no 401k, ira, sep, etc.
3) cap the amount that can be in a retirement account and index that to something. Say 100x the median income (about 4 million right now).
4) after 3, remove the annual cap on what can be contributed. You want to contribute 4 million right now, sure. Anything over the cap though has to be withdrawn and taxes paid though.
A) Isn't that why the yearly contribution limit to Roth IRAs is so low?
B) If we are going to tax Roth IRA withdrawals then why have them separate from regular IRAs?
I'd be more interested in discussing- should the US & Europe be tariffing this latest wave of Chinese exports in solar panels, electric cars, and batteries? Because (as much as this breaks libertarian brains) they're all the product of very very extensive state support/industrial policy, sometimes to the extent of enabling producers to sell abroad below their manufacturing cost. This is a deliberate industrial policy on the Chinese part to drive Western competitors in these 3 industries out of business so that they can dominate.
Isn't this just dumping? Should the West respond with tariffs? (I'm kinda leaning yeah, I have to say). More broadly, how should the West deal with a gigantic wealthy non-market competitor who spends billions on propping up state champions? More amusingly, will libertarians like Scott Linciome and the Cato Institute suffer a critical reactor meltdown when they realize successful cutting-edge industries can be fostered by competent industrial policy? (Just kidding, they'll never admit they're wrong). China is literally technologically ahead of the US & Europe in solar panels, electric cars, and batteries due to state investment
The answer seems complicated and depends on your goals and their goals.
1) They _could_ have a goal to support the industry until they drive us out of business in those, then jack up the price, and then if we start to recover, hit the price again. This is what kind of interfered with all of our shale oil development - OPEC dropped the price so it became uncompetitive and it made people less willing to invest in it. The Strategic Petroleum Reserve is a central planning way to kind of take care of this and provide producers here with some measure of minimum price to make it worth it. Of course, if you set it too high, you foster a bunch of uncompetitive industries here too.
2) They could just want to create their own manufacturing and trying to grow in which case... why not let them give us cheap batteries/panels etc?
Basically - if Europe was doing this to us I'd lean towards assuming number 2 and let it go.
Since I'm distrustful of China for multiple reasons, I might be inclined (despite my free trade libertarian support) to be worried about number 1, but it's because of unique features of China, not the general principle.
Does China break libertarian brains? The Chinese economy has a lot of public debt in quite unproductive state firm experiments. Crucially, one Chinese advantage in *early inputs* for solar, EVs, and batteries comes from deregulatory policy for mining and heavy industry, something the center-left in America has opposed for decades and regularly used the Clean Air Act and NEPA to stifle or make unprofitable here. I don't see how China's experiment in state subsidy is breaking libertarian brains, at least when you look at the other plausible reasons those industries are growing faster while Biden's EPA announces yet another mine they will not permit to open.
What do you mean "does it break libertarian brains"?
1) Libertarians who are normally pro free trade are taking a harder stance on China?
2) Libertarians think that China is doing this in a regular free trade way so they oppose tariffs because they're not retaliatory?
3) Something else?
I think the OP I was responding to understood the industrial policy approach of China as utterly devastating to the libertarian worldview; libertarians assume it will be bad for the state to get involved in economic planning, yet China is very competitive in these sectors the US cares about. My response is, not so fast, I think other planning has clearly gone poorly and some of the ways China produces cheap and local intermediate goods for these sectors actually favor the libertarian argument.
Dominating the field of sophisticated electric automotives because deregulated mining doesn't quite track for me. Does this mean that a number of African countries will soon have an electric car or solar panel industry? Their mining laws are uh even laxer. (Also, why couldn't countries with stricter environmental laws just buy the raw inputs from Africa or so on? Lithium is lithium, regardless of where it was dug up)
It is certainly possible, and the US and other countries do use international inputs in manufacturing all the time. So does China in Indonesia and Africa. But at the same time, China allowed massive land use for rare earth minerals for batteries, solar, and EVs. It also allows laxer air regulations for the factories that produce those, driving costs down further.
By contrast, I don't see how the US handing billions of additional dollars to Elon Musk is going to easily reduce EV input costs, but the IRA is doing that as an industrial policy right now. So I wouldn't high-five yourself over libertarians; they still have a point that reducing industrial regulations (which for large products using metals and other big intermediate goods, also means travel of those inputs) can matter a lot for an industrial supply chain.
I noticed you didn't answer the question of why, say, the Democratic Republic of Congo doesn't have a successful electric car industry, as their mining regulations are even more relaxed than China's. I think we both know why- capital and technology-intensive industries require competent state capacity. There are no markets or capitalism without a state providing a military, police & judiciary to adjudicate disputes, issue patents, build critical infrastructure too expensive for the private sector like roads, bridges, schools. Regulate capital markets to keep out bad actors. Act as the insurer & banker of last resort. And so on.
The only reason Tesla exists is that the US gave them some very large subsidies during the Obama era, so I don't think that's a great example for you. Tesla joins other successful examples of American industrial policy, including nuclear energy, the entire aerospace sector, semiconductors, the ARPAnet, lasers, fracking, the Human Genome Project, every vaccine ever invented including the Covid ones, etc. etc.
I don't disagree it can sometimes work, I just think now we're not supposed to be putting lots of federal money into Tesla because they're now a profitable company with the technology we wanted invented. But we're pouring public money in the EV sector more than ever as if we don't know how to build electric cars. Worse yet, several states are now going to ban new ICE car sales in under a decade with the assumption this too will help induce EV sales today. This could have enormous negative consequences for working and middle class Americans if we haven't gotten the costs down. It's a potential political disaster with enormous costs involved, all under the goal of industrial policy.
But this is exactly the kind of thing libertarians warn us about! And I don't think that kind of warning is at odds with wanting a functioning electrical grid or due process courts. China has plenty of electricity, but it also has plenty of state debt in unprofitable companies due to its industrial policy attempts. As How Asia Work wisely concluded on China, it's a bit too early to say. I used to rule libertarians out instinctively on political economy. I don't anymore. That's in large part because I kept reading beyond my old copies of American Affairs, and they were patient with me. But it's also because COVID taught me that a lot of state interventions in the economy beyond vaccine R&D did not have as clear a benefit. Listen to anyone who tells you about public industry levers for a particular industry and problem. Run away from anyone who tells you this is how our entire understanding of the economy should be transformed.
Dumping is one of those things that is alleged a lot and not seen in the wild much—you need to build a hell of a moat to recoup some really amazing monopoly rents for it to be worth selling at a huge loss for years. It almost never works, and usually just means subsidizing other countries and/or industries.
Recent example is when OPEC tried to kill American oil. Lots of oilmen lost jobs for a while but mostly what happens is that they permanently lowered the price of oil by driving innovation and now USA produces more than anybody. Many such cases.
Before being worried or wanting to put in our own subsidies I would want to know why we wouldn’t just buy cheap Chinese solar and build our own factories (with subsidies if then needed) if the price gets jacked. What moat will they have on solar tech which is mostly materials science + manufacturing capacity, both of which the USA has in spades?
The argument is that China feels its in their national interest to climb the technological value chain and dominate key industries in the 21st century. I agree that the monopoly rents may not make sense for an individual, profit-maximizing corporation- but they're a totalitarian state practicing some 18th century mercantilism. It's a fusion of the private sector serving public sector goals.
>we wouldn’t just buy cheap Chinese solar and build our own factories (with subsidies if then needed) if the price gets jacked. What moat will they have on solar tech
No offense but this is the most naive 'tell me you've never worked in manufacturing without telling me you've never worked in manufacturing' thing on the Internet lol. You can't magically decide to start building things tomorrow, you need an enormous amount of very specific subject-matter expertise. You can't have generic 'manufacturing capacity', you have to have incredibly specific knowledge of certain machines, tooling, processes, factory automation, and so on. If you don't already have the expertise the moat is gigantic, it would take decades. And- as much as libertarians don't want to hear this- it would almost certainly involve a lot of state funding to get up and running
I I learned nothing from your comment; it is muddled, seems to assume I think car factories can instantly make solar panels with nanotechnology for argument to be sound (I don’t and it doesn’t), and doesn’t seemed at all informed by a rudimentary understanding of industrial policy or monopoly economics. Which is all fine, but it was also smug and condescending.
I think your confidence vastly outstrips your knowledge of this policy space, and this is thus a low value interaction for me. Uh, no offense.
The issue is that their dumping is going to lead to significant degradation of the impacted industries across the western world.
And once the competition has withered away, China will effectively have a monopoly for a while. Those Western industries may eventually start to recover, but then China can repeat the process as need to maintain their position.
That's obviously bad. Especially when you factor in the geopolitical and defense implications of the US have limited industrial capacity in these sectors, and China having massive capacity.
People said the same thing about Japan. We've left them in the dust. Also, the Chinese model's looking a tad shaky these days, have you noticed? I say if they're stupid enough to subsidize our consumption of solar panels, cars, and batteries, we outta let 'em. If there are particular military dimensions to certain product lines and these are sufficiently critical, I'm all ears: we can operate bespoke state-sponsored programs in these.
Japan is effectively a demilitarized ally.
China is definitely not.
And native private industries competing in a fair market are far superior to inevitably inefficient and moribund state-subsidized industries.
I'm aware China is neither an ally nor demilitarized. Nonetheless we bought, what, a half billion dollars worth of products from them last year? Not seeing the harm, TBH, that would accompany adding cars and solar panels to the mix (we already buy loads of batteries from them).
EDIT: I missed your point about Japan. Demilitarized, if by that you mean "world's third largest military budget" sure. Japan is also considered by some experts to be the world's tenth, unofficial nuclear power, given its possession of a full nuclear fuel cycle capability. But yes, it's an ally.
I thought about mentioning that it has been becoming less and less demilitarized for a while now. But in the 80s it held true(er).
Also, the military they do have has no force projection capability. Though that too is changing given Chinese aggression
I follow the logic here, but I've also remember reading, maybe with respect to Amazon, that the dreaded second step, where the loss-leading entity screws consumers via higher prices bc competition has been wiped out, doesn't tend to materialize. I.e. the advantage gained is never quite solid enough for the gambit to work. I'm betraying my ignorance here, but do you have examples/links/books that draw out this process more fully? I ask bc I'm fuzzy on this stuff, and curious to know more if you've got a good link handy.
One of the David's (David R. ?) is a China Hawk and had a lot of arguments about this, some of which I found moderately convincing, unfortunately I think that's the David that got fed up with commenting here for non-China-related reasons.
Several of us here have certain issues that really rile us up in defending them, and if others want to engage them they have to know that's what they're getting.
I'm not sure I understand the question. It's self-evidently good to be a global leader in high-tech industries. Being a technological leader is kind of a zero-sum game- do you think the US would be better or worse off if we didn't have Silicon Valley or lead the world in manufacturing fighter jets and nuclear submarines?
China's regional provinces that do the bulk of the subsidies are pretty heavily indebted, so I don't think there's like a linear path here where every subsidy was necessarily matched with money paid by the Chinese taxpayer. The provinces just took on debt, that's it
If we fall behind on those industries, doesn't that theoretically let us spend the tech on _other_ industries then? They can't afford to beat us in every high-tech industry.
(China in particular we may have other reasons to be skeptical of, but this argument doesn't seem to work for me)
It’s pretty remarkable to me how basically none of this stuff is part of the general discourse. The fact that it’s all “border, border, border” is actually a sign to me that not only is to Trump going to win, but he really is going to win a pretty big landslide. Because this tariff stuff as far as I can tell is a pretty big centerpiece of Trump’s campaign and yet it is barely a whisper in the news.
And I say Trump is going to win because it’s pretty clear to me due to changes that have occurred in news media just in the last 4 years (see media layoffs), conservative media sets the agenda for what gets “front page” news coverage in a way that’s even strong than it was 5-10 years ago. This just really crystallized for me with the Claudine Gay stuff in December. Because the next 8 months is going to be front page after front page in the New York Post and story after story in Fox News about some crime a brown person committed. Or just video of some non white person doing something violent. Whether any of them are illegal immigrants or not is irrelevant. But the tragedy will be how much that will impact MSM of the campaign and THAT my friends is how Trump wins “bigly”. Because as Ezra Klein noted years ago, the actual details of policy don’t matter for elections. It’s what policies at all are highlighted. If an election is about greedy corporations and health care, it’s to the Dems benefit. If an election is about crime and immigration it’s to the the GOP’s benefit. If you don’t think Trump and GOP is going to tout how Biden did nothing on the border despite being the ones who are going to kill this border bill I have a bridge to sell you.
>It’s pretty remarkable to me how basically none of this stuff is part of the general discourse <
Matt wrote about this a week or two back. Right wing partisan media obviously isn't going to highlight the hit to American living standards flowing from import taxes. And the mainstream neutral media finds culture war coverage a lot more interesting than economics. And, while the number of policy-interested people who subscribe to this and similar newsletters—and who follow the Twitter discourse, and who religiously read major, wonky voices—probably numbers in the hundreds of thousands or perhaps even low millions—we're a country of a third of a billion. I keep banging on this drum pretty unsuccessfully, but elites matter. People, in the main, are ignorant.
The idea that a landslide victory is even possible in the current climate is, frankly, kind of ridiculous.
The thing is, virtually any non-Trump would probably be a landslide. And not an unexpected one. I think Nikki Haley would win very easily, and someone like Romney certainly would.
Trump really is the Republicans best chance to lose. I am not predicting he WILL lose, but he gives the Republicans there damned best shot at it. The primary system is screwing them. The only problem is that the rest of us catching the strays from it.
This is where Trump's geographically well distributed coalition comes in. A 4-5 point popular vote victory is going to be a pretty huge landslide electoral college victory.
"Is", "is going to be"--my Bayesian prior was "this guy is way overconfident in his prediction of a huge win, to the extent that I should discredit his other views", and you are only strengthening that.
This is like reading a foreign outlet's analysis of our domestic politics. I don't really mean that as a complement.
Also the reason I think this is wrong is because in spite of the media narrative that Democrats think Biden is too old/are begging for someone else to run, Biden cleaned up in the New Hampshire primary where he wasn't even on the ballot and won Assad margins in the South Carolina primary -- not that primary results are indicative of all that much but it does show that a large portion of Americans aren't all that receptive to the media narrative.
lol@"Assad margins"
Gene Phillipe got 2000 votes, though! It's something!
A lot of people view "the border" as a problem and for good reason?
FWIW, I believe Colin was expressing two separate thoughts in mentioning Gay and Fox covering crime.
Correct. "Dr. Y" i think deliberately is misstating my point. My point is not to adjudicate whether Gay should have lost her job or not (I honestly at think my answer at this point is "i don't care"). My point was about the extent of the coverage and how much coverage was insanely out of proportion to the actual issue at hand. And that disproportionate coverage is is hugely impacted by the right of center and right wing media speaking in one voice.
I mean -- let's be clear, a lot of the reason why the Claudine Gay stuff became a big deal is because relatively liberal people also thought her answers about antisemitism on campus were sort of insane and won't really tolerate plagiarism.
There are things that the right-wing media makes a big stink about that never manage to penetrate outside of their bubble. Things like the border, Claudine Gay, trans women in sports break out of the bubble because liberals often view the left as being stupid/insane on that stuff.
Wow aren't you a truly unpleasant piece of shit. "Testicle transplant"? Really?
Yeah I'll repeat, there's a difference between "what should the outcome of this situation be" vs "does this situation deserve the level of news coverage it deserves". May I remind you this story went on for a month with just the New York Times having weekly multiple columns and op-eds on this topic. I've noted this before but the number of people who attend Harvard just among university graduates is extremely small.
Honestly the amount of vitriol and anger you have on this topic really makes me question your own clearly questionable state of mind.
I agree that Dr. Y crossed the Slow Boring line around personal attacks. Not good.
The Ivies, and Harvard especially, exert significant influence over positions of power. Which they should -- they are filled with really smart people, often from rich and influential families. This is reflected in their prominence in the NYTimes. Their level of coverage of that story was neither surprising nor, in my view, reflective of a move to the right by the media.
This is tasteless.
“Never published a paper with a shred of original research” doesn’t sound anything like what I heard. What I heard is “published relatively few things” and “most publications included some sections that repeated some claims made by others”.
The phrase "damning with faint praise" comes to mind.
It would be interesting to note which presidents of Harvard have significant academic accomplishments. It looks like Conant and Summers are the only ones on this list that I was able to find significant academic accomplishments from: https://en.m.wikipedia.org/wiki/President_of_Harvard_University
I agree. But a close one between Biden and Trump terrifies me.
I almost wonder if it would be to Trump's benefit to keep his profile lower in order to keep people sleepy on this. But this being Trump, keeping a lower profile just isn't in his blood.
We still have 10 months to go, though...
Mercifully just nine...but it will feel like more.
That's what I get for being on vacation during the January/February transition.
We all agreed that those leftist weirdos were stupid when they talked about how awful it was that Americans can easily get bananas in January and for some reason it gets glossed over that this is basically Trump's trade policy.
(This may also, in an odd way, explain why the far left is seemingly willing to let Trump win to punish Biden for not following their stupid pro-Hamas agenda.)
I personally think that our politics (even to some extent on a global scale) is being reoriented away from the socialism-capitalism spectrum towards a wierdo-normie spectrum. The wierdos wanting of course strong-man authoritarianism, anti-science/anti-progress policies, economic regression, religious fundamentalism, conspiracy theory mania, and so on, which ends up being this wierd blend of the worst ideas of marxism and fascism blended together.
And the cement for this blob of wierdo nonsense would be hatred of America, and any nation built and sustained under liberal ideas.
So basically Peronism?
this too.
I’m old enough to remember when popular culture depicted low-value factory work as soul-crushing and something people went to great lengths to escape. “Officer and a Gentleman” was just one of many popular culture pieces that carried this theme. It resonated with people because it was fundamentally true. Now the plan is to return the citizenry to that awful time and place?
People working in a factory in the 1950s would have killed to get the kind of well-paid boring email job that Gen Z complains so much about commuting to every day.
I worked at a factory for a sort of "gap" semester when I was in college, and let me tell you: It sucked. And it was a high end aircraft avionics system factory - though I had one of the more crappy jobs there.
I promise you that no Zoomers are dreaming of such a job.
Reminds me of what Tyler Cowhen called the great forgetting. I’m not quite sure why so many people can’t imagine themselves evolving into the kinds of people the economy rewards and so I feel somewhat adrift on this topic.
It makes politics clearer for me in a way that seems bad.
The economy rewards capitalists and the PMC, I’m not sure either of those are great targets for “evolving into.” Even if you can nominally start your own business and magic up the capital from somewhere, the overwhelming number of new startups fail.
How is it like changing careers and becoming something else has become a shameful ask? I worked in just about any job you can think of in a restaurant realized that environment was killing me and went to school and became a teacher after having had a reasonably productive career that was paying my bills and keeping me independent.
I'd never say it's like easy like tying your shoes or something but it's also not climbing Mount Everest or something.
I interpreted your comment to refer to people becoming those who obtained maximal monetary return and status[1] rather than to switching careers to become gainfully employed. Sounds like that wasn't what you meant.
[1] purely for the sake of punchiness and illustration, and without casting any aspersions on your first comment, as something that could be uncharitably TL;DRed as "Why doesn't everyone just follow the same career path as Elon Musk or Jamie Dimon? Are they stupid?"
The claim that lifetime earnings don't matter when it comes to evaluating the relative attractiveness of economic opportunities is certainly a belief one can have, I guess.
lol
I'm not sure I would describe owners as at liberty in the sense of not being beholden to anyone, their own bosses are just called "clients," and/or "shareholders." There's a qualitative distinction, but it's not like people found automotive parts suppliers because they're intrinsically passionate about intake manifolds, which is at least a little less true for, e.g., people going into medicine.
Things are getting harder for risk-averse, degreed-but-not-educated soft-handers because there are more of them than ever before. You don't stand out as much in the job market by having a degree from Directional State U as you would have 30 years ago.
People say that failure is all around them, but if we grade on a curve, lots of smart people vastly underperform given their latent potential. Sometimes we just suck!
The mention of Hawaiian coffee planters also makes me think of a long term threat of this policy: entrenching more rent seekers via government policy. As we know so well with existing rent seekers, they will fight tooth and nail to keep their rent seeking codified so they can continue to rent seek. It could be a hell of a fight to undo these tariffs once they're in place.
My opponent wants to say goodbye to good-old American Coffee, I want to say "HI".
Rebuttal: the Underpants Gnomes episode of South Park, which while most famous for its three step meme, had its entire plot centered around the overrating of hyperlocal coffee.
It's all just so out of date. It brings back old memories of 'Cletus Safaris' from 2016 when journalists would go around interviewing some old guys complaining about the local factory getting shut down. These days, who isn't being employed because of foreign competition? It's as if Americans want some dreary socialist economy producing low added value crap, as long as they get some guaranteed job they can pretend to work at.
Good post; expertly written and well laid out.
I confess I felt a fear that it would step into the trap of saying, "I believe this is important and would be a winning issue for the Democrats if only they put it front and center and clearly explained it to the American people." It tiptoed around that but didn't go all in, for which I'm grateful.
There are a million things the Democrats can go after Trump and the Republicans about. Most of them are vital and, if the voters truly understood them, would build support for the Democrats. But they won't understand them because that's not the way politics works.
There are two key elements in communications during a political campaign: salience and breaking through the noise. You have to make an issue truly salient to voters somehow -- it has to grab their attention; they have to care about it. And you have to break through the noise of a million things going on in the political environment. You do it through brain-breaking repetition; you do it by simplifying it enough for people to get it instantly.
And ultimately, there's the "rule of three" (which I coined just now): you have to be prepared to highlight three, and only three, major arguments against your opponents, and have the discipline to hit those constantly and to downplay, if not ignore, everything else.
If we were to decide that tariffs is one of the Big Three, which one would we drop? Abortion? Threat to democracy? A booming economy? The spectacular narcissism of Trump?
I like the rule of three rule. But I think the tariffs can be rolled into one argument with the economy. So it'd be: abortion, threat to democracy, and economy is booming while Trump wants to raise the price of everything by 10%.
The problem with hitting Trump on inflation (via tariffs) is, beyond the fact that no one knows what a tariff is and why it's like a tax, people associate Biden and not Trump with inflation. Inflation and prices were low under Trump. How do you convince people that it would be different during a second Trump term?
You really want to take inflation as an issue off the table. I wouldn't talk about Trump's hypothetical plan on tariffs at all. Too much risk it can boomerang on you: "oh yeah? what about the price of eggs under Biden?"
Talking about the economy at all is going to invite rebuttals revolving inflation, the Trump 10% tax is just another tool in the box that can help Biden combat that attack and then pivot to how much better the economy is now.
I fear that threat to democracy, while good on the merits, may struggle on the politics for the marginal voters needed to retain in/bring into the Biden camp. Maybe something to do with health care if we insist on locking this on three? (Two or four should also be cromulent numbers here.)
I think tying the democracy issue to general Trump chaos and narcissism (puts self over constitution) is the general strategy there.
I could see that, something like saying that his ego makes him think he wants to be a king instead of a servant to the people.
My three:
-- Abortion
-- The economy is heading in the right direction; let's finish the job!
-- Trump is a narcissist who's only in it for himself and not for the American people.
Over and over over and over. Don't get distracted by other things.
Explain to me again just why the Clinton budget surplus high growth neo liberal economy was so terrible that we had to replace it with deficits and trade restrictions?
Reminds me of the Ezra Klein interview with Ruy Teixeira last week. Ruy's thesis was that neoliberalism was bad policy and bad politics. Klein's thesis was it's bad policy but good politics. I wish someone had the courage to say, actually, it was great policy.
Wall Street Journal, Fox News, still most Republican politicians, etc believe 1990s US political economy was generally great policy. There are plenty of people saying this, they just don't often call it neoliberalism!
The same Republicans that want to raise taxes enough to recreate the Clinton surplus and who decried Trump's and Biden's trade restrictions? :)
Why would Republicans raise taxes or spending beyond what they were in the Clinton years? They think the rate of taxing and spending in the Clinton years was good!
Raise taxes back too, including paying for the Medicare drug expansion.
To which the Republican replies, raise taxes back to what? The share the government taxes from the market is basically the same as it was under our 42nd president.
Now if government just spends like it did under Bill Clinton, we're good to go. Maybe the spending and taxing rate was a bad equilibrium, but many Republicans and right-leaning voters think it was good, as I've explained. This worldview is pretty mainstream!
Or at least explain why they think it is bad. Apparently it was bad politics, since it was abandoned.
Ezra, who I generally do enjoy, is not immune to being captured by the political moment.
I think he's a smart guy and asks interesting questions of his guests, but when he says that his "thoughts on thing [x]" have changed, it's almost never at odds with whatever popular opinion on the mainstream left is at the moment.
the "men on campus should live in fear just like women have to" position he took years back is the apex example of this
Ezra after he left Vox became a lot more doomer and a lot more sympathetic to the Bernie movement's nonsense.
Less disturbing than the conservative media is the fact that seemingly all "liberal" or "progressive" media has been captured by people sympathetic to either Bernie Sanders or Elizabeth Warren, and I have to think this is a big part of the reason for Biden's approval ratings (unfriendly media that should by any objective measure be in his corner.)
I think Ezra also tends to let his emotions sway him more than Matt. That can be a good thing at times, but it's something I've always long observed as a difference between their writings even when there's a lot of overlap otherwise between the two.
Ezra seemed *incredibly* frustrated during that Ruy interview. In a way I can't remember him being with a prior guest.
IIRC, it coincided with his move to the Bay Area and his wife's focus on climate change / radical environmentalism.
I didn't know that, I thought the only thing she was pushing hard was a UBI. I'll have to go look at her article archive.
EDIT: I just looked at the archive quickly over the past two years, and the only things I immediately find are some anti-meat articles (that's been a common theme for Ezra for a while), with most of the work dominated by advocating UBI and YIMBYism.
On one of his mailbag pods, someone asked him why he's had kids if he's so worried about climate change, and I thought his answer was well-considered and insightful, and betrayed that he's perhaps not quite as doomer as he sometimes seems to be.
If we're being fair here, Matt Y. did make the case FOR Sanders while still at Vox.
He is kind of a Ben Shapiro of the center-left, you can see him synthesizing where the party is right now and respectfully consider what different major factions aspire for it to be. That's fine, party men have a role to play in US political journalism.
I still don’t get why you think deficits are inherently bad
It depend a bit one what you mean by "inherently." My position is based on the guess that a dollar borrowed comes mainly at the expense of private investment whereas a dollar taxed comes out of both consumption and investment. And this would be more the case if we reformed the personal income tax to be (more like) a progressive consumption tax and replaced the wage tax used to finance SS and Medicare transfers with a VAT.
Now if you mean given taxes and looking only at the spend + deficit v not spend decision, then the answer is does the spending have an NPV > 0. During recessions when the borrowing rate is low and many inputs into the cost side of the NPV calculation have marginal costs less than their market prices (that is what "unemployed" resources mean) the NPV test will pass pretty easily so in that case the deficit is not inherently bad.
Not necessarily you, but I think Progressive are insuffinet concerned by deficits because "deficits" have been used strategically by Republicans to argue against spending for good things at good times. Reduce deficits by cutting spending (that passes the NPV test), bad; reduce deficits by raising revenue, good.
I agree, but I think that’s because people are still a bit stuck on the last war.
Probably, but we are losing THIS war!
There's probably a devil's advocate argument in there somewhere about how NAFTA caused labor dislocations and created massive surplus, but had none of the political problems of trading with the PRC nor the risks of genuinely losing hold of strategic industries and supply chains to an adversarial nation.
?? Could you spell that out. NAFTA labor disruption/surpluses?
I'm not claiming anything exotic, just the bog standard narrative that free trade results on broadly increased prosperity (i.e. consumer / producer surplus) but tends to result in labor-intensive industries relocating to places that have lower costs of living and hence significant comparative advantage in labor supply because you can pay Mexican laborers far fewer dollars than you pay American ones.
But NAFTA was way too marginal to do much of either. US trade policy had little to do with the decline in manufacturing employment. The big drives were the federal deficits, technological change -- the container ship/international communications -- and China's opening itself to the world. Marginally our negotiators pushed partners to reduce their restrictions on US IP services than US goods, and that, I think, was a mistake.
*Cough* 2008 *cough*?
I don't know that deficits are always a problem per say, but you're correct in that they're becoming more of a problem. This piece by Brian Riedl on an alternative to the debt ceiling fights might be of interest: https://www.city-journal.org/article/replace-the-debt-limit
The are not "always" a problem in that deficits incurred during recessions are innocuous. But Taxing to spend beats borrowing to spend because borrowing transfers resources mainly away from private investment, whereas taxes bites more into consumption.
Just so I understand your argument, is your specific claim that it hurts private investment by creating a vehicle for investors seeking return (e.g., T-Bills or bonds) in addition to the vehicles available on the private market?
Not exactly. The Fed (if it is targeting inflation) has to have interest rate high enough for USG instruments to be purchased. The marginal increase in interest rates that enables the marginal additional borrowing of the deficit, marginally crowds out some private investment (more than taxes would reduce private investment)
ARRRRG! The "debt ceiling fights" are part of the problem. We will never be able, nor SHOULD we try, balancing the budget by reducing transfers (not that here and there some might be trimmed). We need more revenue collected from taxing consumption some with a VAT and some by making the personal income tax into (or more like) a progressive personal consumption tax.
The overwhelming projected cause of future growth in deficits is Medicare, which is not an anti-poverty program. We collect roughly the same % GDP of tax revenue that we collected 20 years ago. [1]
[1] https://twitter.com/CPopeHC/status/1729944887296950503/photo/1
?? No disagreement there. I would just like to fully pay for Medicare with a VAT.
The current flat income tax rate for it is at least somewhat more progressive than that. The deck is already stacked against young and middle class workers in favor of old middle class people as is! Such as single family zoning.
I wonder. A VAT catches spending out of non-wage income. But I'm also trying to get the personal income tax to be a progressive consumption tax. However if it were a matter of pay for Medicare with a higher wage tax or a higher deficit, I'll take the wage tax.
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