This underlying assumption in first paragraph keeps getting ignored in the face of reality of your second paragraph.

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The issue is, if you go back to the whole claim above, the laissez faire economic model has assumptions about peace, common rule of law, that absolute gains matter (vs relative), and your opponent is not trying to hurt you.

IF you have nation-agnostic multinational corporations who will act against the best interests of the US to make money, and IF you have states actively working against you, IF you don't have common market rules, then the free trade assumptions no longer hold.

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And at what point does outsourcing everything to the lowest offshore bidder just to save a buck for the consumer ultimately bite you in the ass?

Newsflash...it already has. We are dependent on China for pharma and raw material resources right now because we priced ourselves out of those markets. No holds barred, unconstrained globalist free markets have already put us in a hole for things we should always own or have the productive capability to spin up rapidly.

It's as if history started in 1945 with Bretton Woods. And I'm a free market, capitalist but operating under the assumption that the playing field is level is delusional and just being ok with critical industry being outsourced is suicide.

Free market is relative depending on the country you ask. If it wasn't, countries wouldn't have to do elaborate trade deals with individual countries and economics zones.

Operate accordingly.

MemphisAg1 said:

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BusterAg said:

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2) On net, our current trade deficits are not good for the American worker. The only American consumers that our current trade deficits are good for are the ones that don't work. And the American worker is pissed off enough about that to elect a guy like Trump.

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I don't agree with that blanket statement. That's a big part of his problem... over-arching simple approach to complex issues. Breaks a lot of glass unnecessarily. But hey, he was elected and can do as he pleases. The voters will also speak their mind here in November, and I suspect he's in for a surprise.

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Its exceedingly simple, American innovation is worthless when your competitors steal it and then give it away in exchange for cheap labor undercutting wages in the US. The steal is too expensive to police, so you just make the imports unaffordable.

BusterAg said:

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MemphisAg1 said:

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BusterAg said:

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2) On net, our current trade deficits are not good for the American worker. The only American consumers that our current trade deficits are good for are the ones that don't work. And the American worker is pissed off enough about that to elect a guy like Trump.

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I don't agree with that blanket statement. That's a big part of his problem... over-arching simple approach to complex issues. Breaks a lot of glass unnecessarily. But hey, he was elected and can do as he pleases. The voters will also speak their mind here in November, and I suspect he's in for a surprise.

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Its exceedingly simple, American innovation is worthless when your competitors steal it and then give it away in exchange for cheap labor undercutting wages in the US. The steel is too expensive to police, so you just make the imports unaffordable.

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You're conflating issues. Your American competitors can steal your innovation and undercut your pricing here in this country. Happens all the time. Some of it is legal; some is not. It should be prosecuted where it's illegal. Same thing with trade agreements with other countries.

None of that on face value makes trade deficits bad or good. Keep trying to make it exceedingly simple like Trump if you want, but he is failing badly in that regard as evidenced by his ridiculously dumb social media post.

It is prosecuted. With a giant tariff.

When the courts are owned by the bad guys, just cut them out of the picture.

Go ahead and make those computer chips and chainsaws in the US.

BusterAg said:

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It is prosecuted. With a giant tariff.

When the courts are owned by the bad guys, just cut them out of the picture.

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And his giant tariffs -- those that weren't ruled illegal by the United States Supreme Court -- are contributing to inflation which voters are rejecting.

Just watch the polls in November.

Hang on I thought we were all Chicago school monetarists here? "inflation is always and everywhere a monetary phenomenon." Tariffs can cause a one time price increase, but they can't cause inflation.

Windy City Ag said:

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Your last paragraph is a bit like pissing on my leg and telling me its raining. I'm an armchair economist and a professional in heavy industry. What you're saying is factually incorrect.

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Executives at GE Vernova or Eli Lilly (technically a manufacturer) or Defense Contractors like GD and Lockheed or Caterpillar and even the auto companies etc etc are not hurting right now.

I don't disagree that many other sectors that are not competitive may be losing ground but any stat anywhere shows you that US Manufacturing in aggregate, which , peaked in 2008, contracted greatly during the Global Financial Crisis, recovered to all time highs, got smacked by COVID, and is once again reaching its all time high.

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Have a very good friend who's an executive in missiles at Lockheed. You are correct - his description of the volumes they're being asked to increase production to is staggering.

Yeah. Now ask him how the supply chain is looking.

Zobel said:

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Hang on I thought we were all Chicago school monetarists here? "inflation is always and everywhere a monetary phenomenon." Tariffs can cause a one time price increase, but they can't cause inflation.

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True

They exacerbate other liberal fiscal policies, which then adds to the pain of said monetary idiocy causing inflation.

Zobel said:

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I don't think President Trump is economically illiterate, I think he has a good intuition but lacks a clear way to say it. If I could translate the OP to something more precise it would be something like

Interest rates in the United States should be very low because our credit rests on enormous productive power. Our country is booming with new investment. When we run persistent trade deficits, American demand is financing productive capacity abroad instead of at home. A trade deficit is not literally a "loss," but it can represent lost domestic factories, skills, capital formation, and industrial capability. We are using our market to strengthen the productive powers of other nations while weakening our own. That cannot continue indefinitely. LOWER THE COST OF CAPITAL AND BUILD AMERICAN PRODUCTIVE POWER , AND FAST!

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This.

I'm gonna start using "watch the polls in November" as a magic rebuttal to everything.

See guys, America really does love DEI, watch the polls in November.

America is desperate for Sharia Law, watch the polls in November.

Marxism is awesome, watch the polls in November.

MemphisAg1 said:

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BusterAg said:

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It is prosecuted. With a giant tariff.

When the courts are owned by the bad guys, just cut them out of the picture.

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And his giant tariffs -- those that weren't ruled illegal by the United States Supreme Court -- are contributing to inflation which voters are rejecting.

Just watch the polls in November.

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The court didn't rule any tariffs illegal.

They ruled that the way that Trump implemented the tariffs was illegal.

That is a different thing.

What do you want to bet that "Tariffs" is not mentioned in any of the exit polls in November?

BusterAg said:

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MemphisAg1 said:

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BusterAg said:

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It is prosecuted. With a giant tariff.

When the courts are owned by the bad guys, just cut them out of the picture.

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And his giant tariffs -- those that weren't ruled illegal by the United States Supreme Court -- are contributing to inflation which voters are rejecting.

Just watch the polls in November.

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The court didn't rule any tariffs illegal.

They ruled that the way that Trump implemented the tariffs was illegal.

That is a different thing.

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That is the same thing in practical terms. His tariffs were overturned by the Court and he had to issue refunds.

Some tariffs were overturned. HTH.