A Forum for Grinches and Ho-Ho-Hoes

[Tyrone Slothrop]

[Mmmm, Burger (C.J.)]

Originally posted by Tyrone Slothrop
Some of those consumers who would otherwise benefit from prices depressed by the subsidization of Chinese manufacturers don't have money to spend because their employers can't compete with those Chinese manufacturers.

How odd that we tend to think of the average citizen as a consumer instead of a producer. Hello, trade deficits.

Why, if the employer is an inefficient american company, do we worry more if the more efficient competitor is Chinese instead of American?

Doesn't the caldor's employee deserve equal consideration as the US Steel employee?

[Sidd Finch]

Originally posted by Mmmm, Burger (C.J.)
What's teh mechanism to supress currency price? Selling a bunch of their currency, and printing more to fill its place? All that gets is rampant inflation, which has internal effects as well. Generally, it's pretty tough to affect currency prices other than by moral suasion, unless you have a really massive bankroll. Whatever you do ultimately reverses pretty quickly.

They keep the currency pegged to the dollar. It does not float on the free market. The kinds of mechanisms that you identify are relevant only to a currency that floats, not to one that is pegged.

In other words, you don't know what you are talking about.

Why are we worried about exports to China? If they don't want to buy our stuff, so be it (of course they steal it through IP, but that's a different issue). Plenty of other countries want to buy our stuff, and that's fine.

They might want to buy our stuff if it were 30% cheaper, which it might be if their currency were freely traded. And they might not take so many manufacturing jobs from the US.

And, yes, the US consumer would suffer. But why should we protect the "right" to buy a $30 DVD player from the effects of the free market (free market including a free currency market), any more than we should protect US jobs?

I disagree with Ty's view about the need to protect people from the effect of the free market. But I don't think cheap consumer prices have any greater standing.

[Sidd Finch]

Originally posted by Mmmm, Burger (C.J.)
Why, if the employer is an inefficient american company, do we worry more if the more efficient competitor is Chinese instead of American?

If efficiency is the issue, I agree with you.

If artificially low costs driven by government policies are the issue, I disagree.

Did every Repub on this board suddenly turn into a quasi-Communist? It's hard to understand why else you would all so admire Chinese monetary policy.

[Tyrone Slothrop]

Originally posted by Mmmm, Burger (C.J.)
Why, if the employer is an inefficient american company, do we worry more if the more efficient competitor is Chinese instead of American?

Doesn't the caldor's employee deserve equal consideration as the US Steel employee?

We seem to be starting from different hypotheses. I thought we were proposing that we should not be concerned that the Chinese government is protecting Chinese businesses in various ways, just so long as imports from China remain cheap.

I'm not particularly concerned with who owns which company, unless a company owned by the Chinese military is buying IBM or something like that, and I'm not particulary concerned with protecting inefficient American companies, unless you're talking about getting rid of the traditional licensing and consumer-protection functions of state bar associations.

[Spanky]

Originally posted by Tyrone Slothrop
Some of those consumers who would otherwise benefit from prices depressed by the subsidization of Chinese manufacturers don't have money to spend because their employers can't compete with those Chinese manufacturers.

How odd that we tend to think of the average citizen as a consumer instead of a producer. Hello, trade deficits.

Lets not forget the new service jobs created in the US because the US consumers have more discretionary spending from the money they saved on the cheap chinese products. Let us not also forget almost every citizen benefits from the cheap products were very few actually lose their jobs.

[Sidd Finch]

Originally posted by Tyrone Slothrop

I dragged my ass to Bratislava for this?

[Sidd Finch]

Originally posted by Spanky
Lets not forget the new service jobs created in the US because the US consumers have more discretionary spending from the money they saved on the cheap chinese products. Let us not also forget almost every citizen benefits from the cheap products were very few actually lose their jobs.

Socialism for the consumer, capitalism for the worker.

[Tyrone Slothrop]

Originally posted by Spanky
Lets not forget the new service jobs created in the US because the US consumers have more discretionary spending from the money they saved on the cheap chinese products. Let us not also forget almost every citizen benefits from the cheap products were very few actually lose their jobs, and who really gives a rat's ass about them -- they're don't have any money, and we might be able to get them to vote GOP by talking about abortion and gay marrirage, so fuck 'em.

I think I can read between the lines there.

[Spanky]

Originally posted by Tyrone Slothrop
I think I can read between the lines there.

Have you been listening in on our smoke filled backroom strategy meetings?

[Hank Chinaski]

Originally posted by Spanky
Lets not forget the new service jobs created in the US because the US consumers have more discretionary spending from the money they saved on the cheap chinese products. Let us not also forget almost every citizen benefits from the cheap products were very few actually lose their jobs.

People, even the poor people who lose their jobs to China, won't spend more for an equal quality more expensive US made product than they will spend on a cheaper foreign made product.

Once the US consumer madt this decision the "US worker wage premium" died. It was Joe Six Pack who killed Joe Sixpack- not Roger Smith. Ty- are you proposing tariffs on everything coming into the country so we can maintain the high wage jobs?

I posted this 4 or 5 times now- they don't answer because they can't.

[Spanky]

Originally posted by ltl/fb
Your understanding of most (if not all) of the topics you discuss is lacking. This is a slam, though it is also equally true of me and everyone else on the board for nearly every topic. I mean, fuck, your evidence on medmal insurance rates is what some guy told you at a local Republican Party meeting of some kind.

ETA, after reading Sidd's post, you were so bowled over by her facility with language and ability to remember and regurgitate bits of things that you didn't even notice the glaring issue with this statement:

I don't know crap about whether the yuan is overvalued or undervalued, but I know that the fact that the yuan is pegged to the dollar (and has been for a very long time), and the fact that the *dollar* is down, combined, can't tell you anything about whether, in reality, the yuan is undervalued w/r/t non-dollar currencies as to what its value would be if floated.

I am new here, but is this some sort of jealousy thing? Was I supposed to give you the compliment and not Sidd? Would that help with the insecurity issue?

[Bad_Rich_Chic]

Originally posted by Sidd Finch
It's a definitional issue, I suppose. But, if the yuan floated, and were worth $1.50, and China imposed a 33% tariff on all US goods -- would you call that "free trade"? Would you think it was beneficial? It might get you cheaper shirts at Wal-Mart, but it doesn't help us sell American-built computers in China. Instead, we end up making them there.

Agreed, we're having a definitional issue. I, for one, would say China does not practice free trade in your example - but I still might call the US's trade with china "free," depending on what its policy was, just because I don't think discussing "free trade" only as a bilateral (or multilateral) concept is adequate or accurate. Whether one calls it "free trade" or not is irrelevant for purposes of discussing whether our (or china's) policies are a good idea.

And there is plenty of dispute to the theory that there's a net benefit to the one party who is opening its markets. If your idea were true -- the party with liberal trade policies benefits, the one without them does not -- then we would never pressure other countries to open their markets.

If I thought macro economic actors were consistently rational any more than micro economic actors, I'd say that was a good argument.

Wow. That IS silly. I mean, suggesting that the value of the yuan is articifically suppressed, just because it is undervalued as a result of a government policy that pegs the currency to the dollar rather than letting it float? I don't know what came over me.

Well, you implied the Chinese G was somehow doing something to suppress it, when it is in fact the US G's fiscal policy that is having a secondary effect of suppressing it, given the existence of the peg. (If you didn't imply it, media coverage certainly has. The "common wisdom" of the thing is really what I was noting was silly.) The yuan is, of course, valued lower than it was when the dollar was strong (though it is not necessarily clear whether, or how much, it is currently undervalued vs. the $). Obviously, chinese policy has the effect of maintaining that lower value. That's different than saying the Chinese have a policy of undervaluing the currency, or are doing things (or not doing things) because they are trying to achieve or maintain that value.

Again, I can't imagine what came over me, thinking that the Chinese government might have something to do with the policy of keeping the yuan pegged to the dollar. Or that it might not be an accident that they did so. Or that it might be related to keeping export prices low so as to provide more manufacturing jobs.

Pegging, unpegging, floating, indexing, or otherwise fundamentally restructuring the valuation of a national currency isn't a simple matter of changing your mind based on the immediate market situation, however. Regardless of whether the yuan is now undervalued vis a vis the dollar or anything else, changing currency policy has serious reprecussions beyond the effects of revaluing the currency. "Keeping the yuan pegged to the dollar" can't properly be considered just a decision to undervalue the yuan.

Again, lots of disagreement on that. From Beijing, among other places.

Well, I think they're wrong. I'm not quick to trust the thinking of a centralized communist state on market issues.

[Sidd Finch]

Originally posted by Hank Chinaski
People, even the poor people who lose their jobs to China, won't spend more for an equal quality more expensive US made product than they will spend on a cheaper foreign made product.

Once the US consumer madt this decision the "US worker wage premium" died. It was Joe Six Pack who killed Joe Sixpack- not Roger Smith. Ty- are you proposing tariffs on everything coming into the country so we can maintain the high wage jobs?

I posted this 4 or 5 times now- they don't answer because they can't.

I am not proposing tariffs to make imports more expensive.

I am proposing not engaging in "free trade" with countries that use government policies to reduce prices on exports -- whether that be dumping, unfair subsidies, or refusal to float currency despite a reasonably developed economy.

I can answer, and did.

Now, can you answer my question: If, say, France gave a 30% subsidy to every French company on all products exported to the US, and imposed a 30% tariff on all products imported from the US, would you say "Great! That benefits the US consumer! It makes wine cheaper, and think of all the jobs that we'll create with all that extra disposable income!"?

[Tyrone Slothrop]

Originally posted by Hank Chinaski
Ty- are you proposing tariffs on everything coming into the country so we can maintain the high wage jobs?

There are many different sorts of things you can do to try to level the playing field. If this was so simple, Robert Zoellick wouldn't be a household name.

And if you're going to do things that benefit the country on the whole, but hurt certain populations, I think the government should be working to ameliorate the hit on those people.