After US companies moved their factories overseas in pursuit of greater profits, the US has transformed itself into a financialized economy from a major industrialized one. One can criticize the outcome of the US-China trade deficit decades after the horse has left the barn, but the beer has been made, and there isn’t going to be any easy way to reverse it. The reasons why manufacturing in US remains uncompetitive worldwide , have remained. Domestic costs are still high. Trained skilled labor force is scarce.
worse, USA gave away all western know-how, soon even global brain draining won't save them becauae it's useless as whatever they create soon gets copied and replaced with chinese on global market which isn't US centric anymore
Exactly my sentiments. I worked in manufacturing industries. It started when they started consolidating smaller companies into a larger ones in the middle 80s and then shipped overseas.
This is interesting. It would be much nicer if you can provide some background for the topics you are discussing. Also putting structure for the topics would be helpful as well. There seem to be some valuable insights here, but it's too difficult to tease them apart.
If we look at export, we have to provide a product the Chinese customer wants which we don't. And if we talk about price then they produce stuff cheaper. And if you say their product have low quality then that can be said the same about us except ours is cutting edge crap that costs more than what most Chinese people can afford and neither can we in the US.
Trade deficit is neither good nor bad. It is just a natural outcome of free market forces reflecting the deficiency on one side's ability to produce things that the other need or want. It's like you complaining that you have a trade deficit with IKEA because you keep buying IKEA furniture but IKEA buys nothing from you.
An isolated currency for Chinese workers with a 49% savings rate lets enough national liquidity to grow them to great heights. But capturing industries like steel and cement, machinery and electronics, etc., leads to the Evergrande overbuild where collapse and liquidation would wipe out family wealth in China, Inc., system holdings. I doubt that officials would have qualms about hitting the reset button, as citizens weren’t using the yuan anyway, they were hoarding. Is spending foreign reserves the way out? If they can’t sell their capacity on the world market, quitting their forced domestic consumption of housing projects, a shift to agricultural labor won’t work. A population decline isn’t overnight, and the N. Korean warrior export model takes time, and gains are only made in Russian resources, not in Ukraine or Taiwan or NATO. More likely is a looting of dollars by a worried government and western strategic purchases made. China owns hog farms in Minnesota, exposed in the Covid outbreaks. Visiting owners bypassed restrictions and infected entire facilities manned by Mexican meat processors. Chemical and mineral processing can be supplied by western mines, but China dominates that too, and EU no-longer has energy to spare in replacing that. Who wants Chinese management practices in the West? Financial underpinnings rule a post-Russia and post-China world, and the common name dropped is Mexico. With cartels rendering businesses untenable there, an even taxation and revenue system in the US is called for. We have reverted to the American colonial schism between a planter class and an industrial class. Slavery made Southern climate economics work around the world, and totalitarian rule has facilitated and enforced that way of profit. Abandoned pollution and safety responsibility results in a cash balance. It won’t stop until all transactions and transfers are assessed their small share of national operating expenses. Overhead costs are decided by representatives and can’t be allowed to handicap only domestic businesses. The land-rush exodus to foreign production exposes that the front door had been left open since colonial days. I’m confident that Dr. Keen has grasped the subject, but has he the team and years necessary to produce another SD program that would map and move on such a vast scale to fairly forecast the various outcomes of public policy initiatives? We must get goods and services to market, and finance is the medium, but we’re in a precarious state where even Australian resources couldn’t make up the crippling shortfalls. If public spending policy and private debt need a handrail, maybe Steve’s team ought to step-up to the challenge?
China coming from almost zero GDP, of course they will have faster growth just based on reversion to the mean. US has the reserve currency status, of course it benefits from running a deficit. The fact that the US has the reserve currency status changes the formula completely.
This guy is wrong. From 2000 till now the United States and China grew by about the same amount. The difference is that the United States growth went to its 1%, while China's growth was more evenly distributed. If you have any doubts, look at the US stock market in 2000 and look at its value today. Look at the value of the largest companies in the US in 2000 and compare them with their value today. Then look at wages in 2000 and compare them in China and the US today.
Good listen. Thank you, chaps.
After US companies moved their factories overseas in pursuit of greater profits, the US has transformed itself into a financialized economy from a major industrialized one. One can criticize the outcome of the US-China trade deficit decades after the horse has left the barn, but the beer has been made, and there isn’t going to be any easy way to reverse it. The reasons why manufacturing in US remains uncompetitive worldwide , have remained. Domestic costs are still high. Trained skilled labor force is scarce.
worse, USA gave away all western know-how, soon even global brain draining won't save them becauae it's useless as whatever they create soon gets copied and replaced with chinese on global market which isn't US centric anymore
Exactly my sentiments. I worked in manufacturing industries. It started when they started consolidating smaller companies into a larger ones in the middle 80s and then shipped overseas.
When you play sports and get "stomped", you don't tell the winning team to become worse.
You identify your problems and work at correcting them.
This is interesting. It would be much nicer if you can provide some background for the topics you are discussing. Also putting structure for the topics would be helpful as well. There seem to be some valuable insights here, but it's too difficult to tease them apart.
If we look at export, we have to provide a product the Chinese customer wants which we don't. And if we talk about price then they produce stuff cheaper. And if you say their product have low quality then that can be said the same about us except ours is cutting edge crap that costs more than what most Chinese people can afford and neither can we in the US.
Chips related products but we banned most of them from selling to them
Trade deficit is neither good nor bad. It is just a natural outcome of free market forces reflecting the deficiency on one side's ability to produce things that the other need or want.
It's like you complaining that you have a trade deficit with IKEA because you keep buying IKEA furniture but IKEA buys nothing from you.
It’s also the same way how US accuses China of putting countries in debt trap when we do it here in America all the time with Repos.
An isolated currency for Chinese workers with a 49% savings rate lets enough national liquidity to grow them to great heights. But capturing industries like steel and cement, machinery and electronics, etc., leads to the Evergrande overbuild where collapse and liquidation would wipe out family wealth in China, Inc., system holdings. I doubt that officials would have qualms about hitting the reset button, as citizens weren’t using the yuan anyway, they were hoarding. Is spending foreign reserves the way out?
If they can’t sell their capacity on the world market, quitting their forced domestic consumption of housing projects, a shift to agricultural labor won’t work. A population decline isn’t overnight, and the N. Korean warrior export model takes time, and gains are only made in Russian resources, not in Ukraine or Taiwan or NATO.
More likely is a looting of dollars by a worried government and western strategic purchases made. China owns hog farms in Minnesota, exposed in the Covid outbreaks. Visiting owners bypassed restrictions and infected entire facilities manned by Mexican meat processors.
Chemical and mineral processing can be supplied by western mines, but China dominates that too, and EU no-longer has energy to spare in replacing that. Who wants Chinese management practices in the West?
Financial underpinnings rule a post-Russia and post-China world, and the common name dropped is Mexico. With cartels rendering businesses untenable there, an even taxation and revenue system in the US is called for. We have reverted to the American colonial schism between a planter class and an industrial class.
Slavery made Southern climate economics work around the world, and totalitarian rule has facilitated and enforced that way of profit. Abandoned pollution and safety responsibility results in a cash balance. It won’t stop until all transactions and transfers are assessed their small share of national operating expenses.
Overhead costs are decided by representatives and can’t be allowed to handicap only domestic businesses. The land-rush exodus to foreign production exposes that the front door had been left open since colonial days.
I’m confident that Dr. Keen has grasped the subject, but has he the team and years necessary to produce another SD program that would map and move on such a vast scale to fairly forecast the various outcomes of public policy initiatives?
We must get goods and services to market, and finance is the medium, but we’re in a precarious state where even Australian resources couldn’t make up the crippling shortfalls. If public spending policy and private debt need a handrail, maybe Steve’s team ought to step-up to the challenge?
China coming from almost zero GDP, of course they will have faster growth just based on reversion to the mean. US has the reserve currency status, of course it benefits from running a deficit. The fact that the US has the reserve currency status changes the formula completely.
This guy is wrong.
From 2000 till now the United States and China grew by about the same amount.
The difference is that the United States growth went to its 1%, while China's growth was more evenly distributed.
If you have any doubts, look at the US stock market in 2000 and look at its value today.
Look at the value of the largest companies in the US in 2000 and compare them with their value today.
Then look at wages in 2000 and compare them in China and the US today.
stock market is not an indicator of manufacturing or competitiveness. You have companies in the US that are worth billions of $ and produce nothing.