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#1 Apropos nothing, it occurs to me that if we had an import tarriff equal to the US corporate tax rate it would put companies thatmake stuff here on a more equal footing with those who export their manufacturing capacity to certain particular east asian countries.
Posted by Thing from Snowy Mountain 2012-04-30 09:32||
#2 Ah American Juche is the answer to all problems...
Posted by Bright Pebbles 2012-04-30 11:04||
#3 We can try to be more self-sufficient now, or we can experience genuine Chinese-satellite-style juche after we've given up manufacturing to them.
Posted by Thing From Snowy Mountain 2012-04-30 14:19||
#4 Self suffiuciency is really helping North Korea...
Tarrifs help business owners, but make the general public poorer.
Why would making america poorer help?
Posted by Bright Pebbles 2012-04-30 16:08||
#5 Adam Smith wasn't a foreign policy expert.
Posted by Pappy 2012-04-30 16:46||
#6 Free trade doesn't work well when one party manipulates the currency exchange for their own interests and is allowed to continue the game for any extended period of time at the expense of others in the system.
Posted by Procopius2k 2012-04-30 17:59||
#7 P2K: It's more than "currency manipulation" per se; they basically increase their money supply enough to cause some 15% inflation per year and make that available as a subsidy to that part of their manufacturing sector (based in a narrow geographical region) that services the export market, at the direction of their central government.
Posted by Thing From Snowy Mountain 2012-04-30 22:00||
#8 The subsidy is provided in the form of "loans" that pay for the raw materials used as input for the manufacturing process that don't have to be repaid.
Posted by Thing From Snowy Mountain 2012-04-30 22:01||
#9 It's basically an enourmous money laundering scheme, that works because a) people aren't used to thinking of inflation as a tax levied by the banking system, and b) because it's laundered through the export system, which lets them spread blame around: the average person gets screwed over, but they can blame those darn Americans or Japanese for debasing _their_ currency and not paying their debts. I guess they're waiting for some sort of crisis that will affect their economy less than it affects ours, at which point they hope to be able to make everything good or good-ish.
Posted by Thing From Snowy Mountain 2012-04-30 22:08||
#10 Crude theories say inflation hurts everyone, but if you're using it to generate money that you're distributing unequally, some people still benefit.
Say you increase the money supply 10%, but you're giving that 10% to only 10% of the population, they're suddenly much richer even if everyone started out with the same amount of cash on hand.
Now if that wealthy 10% is using that money to run their business, able to use that extra money to go into tangibles or capital goods that they can use in their business and shield the value of that from the devaluation caused by the inflation... you have a feedback loop. There are still suckers in the taxed-by-inflation regions inland from the coast, but they can come work in the factories and live on the on-site dorms.
Posted by Thing From Snowy Mountain 2012-04-30 22:15||
#11 Meanwhile, the US has the most socialist economy I have seen in my lifetime, run by hardcore redistributionists with a determined grudge against extraction and manufacturing industries.
There is a huge body of literature about how free trade is good for everyone, that seems to use as starting axioms relatively well-capitalized free-market societies trading in spherical cows, neither one of which really exists at the moment.
Posted by Thing From Snowy Mountain 2012-04-30 22:24||
#12 One final comment before I leave for the night... if they set up a special tax for everyone living in an arc from roughly Chengdu down through Yunnan to Guangxi, to go to a "making certain select Shanghai tycoons richer," there'd be a civil war and a massive political purge. If they do that through inflation, they can hope that something happens to stop the game of musical chairs before the inflationary spiral gets too bad. (BTW, that's a big reason the nationalists collapsed; they eventually reached the hyperinflation point).
Hence their support of people like Pakistan and Iran, who they think can do what it takes to damage our economy more and theirs not at all.
Posted by Thing From Snowy Mountain 2012-04-30 22:37||
#13 Anyway, it might be interesting to consider the Bo Xilai scandal in light of the nascent regional conflict I just outlined.
Posted by Thing From Snowy Mountain 2012-04-30 22:39||