Refugee fleeing the shittiness of reddit

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Joined 2 years ago
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Cake day: June 9th, 2023

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  • The root problem they are trying to fix is real (systemic trade imbalances) but the way they are trying to fix it is terrible and won’t work.

    1. Only a universally applied tariff would work in theory but would require other countries not to retaliate (there will 100% be retaliation).

    2. It doesn’t really solve the root cause, capital inflows into the USA rather than purchasing US goods and services.

    3. Trump wants to maintain being the reserve currency which is a big part of the problem (the strength of currency may not align with domestic conditions, i.e. high when it needs to be low).


















  • Countries like China, Germany, Taiwan, etc. have competitive exports because they have direct and indirect subsidies to their manufacturing sectors at the expense of their household sector.

    Some of these subsidies include a weak currency relative to their economy, weakened labour laws, preferential interest rates, capital controls, labour movement restrictions, etc.

    China uses all of these. Germany primarily used the Hartz “reforms” which basically decoupled wage growth from productivity and GDP growth.

    The reduces the household share of national income and they cannot afford to consume the production of their manufacturing sector and therefore the excess production must be exported.