> "if you don't want it to be done to you don't do it to others"
Doesn't work. We opened trade to China in the '70s. They took advantage of us, stealing IP, manipulating currency, paying their people terrible wages, crapping all over the environment. We let their companies freely in the US, they very severely restricted US business ventures in China.
Detroit, a former shining city in the industrial heartland, is now a bandit infested ruin.
In the US, a person used to be able to graduate high school and get a job that could support owning a house with a yard, a non-working spouse, a car, and multiple children.
For me, coming from the Rust Belt, it's incredibly, painfully obvious that globalization's basically destroyed the US economy. I'm constantly amazed to meet well-meaning, intelligent people who don't seem to understand this fact.
The Rust Belt's just one part of the story, not the whole US economy. Globalization actually created tons of wealth for the USA, but that money hasn't been spread around fairly. It's all piled up in coastal cities and with rich folks while factory towns got left behind.
Cutting off global trade wouldn't fix anything - it would tank the overall economy while only helping a few powerful players pulling the strings. The real problem isn't trade deals; it's that the USA never properly invested the profits back into the communities that got hit hardest.
The US economy is the largest in the world, disposable income, both average and median, are highest and second highest respectively. Median income is 30-40% higher than comparable developed economies, and significant higher than China.
And supporting a whole family on a single income well was a very narrow window of time, and it required the US to have no real economic competitors. Where US workers had no competition on the world stage, but their output was sold on the world stage. So even if the US go isolationist that's still never coming back.
A lot of this is just social change from the womens liberation movement. Women went to work and the market adapted. Now, in the main, you need 2 incomes to run a home.
It's worse in a lot of countries where tax policy disadvantages the pre-1960 norm like the UK.
Some places relied on other ways to make money (here in Australia it was comodoties). A lot is just social change to two income households, and it's main contributor to living costs was housings. Two people bringing in money ,means that households can pay more for a mortgage or rent, driving up costs.
That's what drove up housing costs after we switched from single to double income households. But before that, but before that, people in lots of countries could afford a house and a family on a single income, despite competition from other countries.
It's not that this situation was unsustainable or only attainable for the US; this situation should have been the norm, with the additional income just providing extra luxury or time off, but instead we got screwed through artificial scarcity and more money going to the very rich instead of the working and middle class.
>In the US, a person used to be able to graduate high school and get a job that could support owning a house with a yard, a non-working spouse, a car, and multiple children
A lot of the change there is not down to China but limiting the ability to build a cheap house through nimbyism and regulation and then competition from other dual income / high earners bidding everything up. You could fix it by allocating everyone a bit of land and letting them build whatever on it even if it was just a shack. It's not really trade that's the main problem.
What? No; the problem is vastly more attributable to the tremendous transfer of wealth from the working classes to the wealthy that has occurred over the past 50 years.
Look at any graph of earnings by quintile over time, or of income or wealth inequality today, and you'll see that the fact that builders can't cut corners and sell us crappy houses and apartments that will fall down around our ears is far from the primary reason we have trouble affording things today.
Wealth is not zero sum though. LeBron James being great at basketball doesn't make you any worse at basketball. Jeff Bezos starting a company in his garage selling books online that became one of the biggest in the world worth many billions doesn't make me any poorer. Financial transactions are win-win. That is why there is a mutual thank you when making a purchase. The cafe owner would rather have my 2$ instead of coffee in their pot. I would rather have coffee in my cup instead of 2$. If neither of us thought we would not be better off the transaction would not happen
For the people who want ^this guy to shut up but haven't engaged.. which part of the above is wrong? I can see hyperbole of "bandit infested ruin" pushing some buttons but otoh it's seems likely that crime is connected to general economic health.
Rust Belt isn't the entire US economy. Blaming where the US is today on globalization is probably 30 years too late.
The US economy has created enormous wealth. Domestic policies on how to spread around the prosperity to all citizens is where the US failed. Think more of what Sanders and AOC talk about, not bringing back factories that will be 99% automated anyway. For one example, how can the most prosperous country in the world have a majority of its bankruptcies tied to medical debt? And somehow people want to blame China or globalization or some other boogie man?
It’s right and wrong. Globalisation has hurt the rust belt, but it’s also allowed for much cheaper goods, which many people have enjoyed. It’s also made other economies much richer, which has allowed them to purchase U.S. goods (China being an immense iPhone market, for example). It’s not zero sum. If the world economy grows, and the USA holds onto a massive slice of that growing pie, then the USA wins - as it has been doing.
And the part about life just being totally unaffordable now isn’t really to do with China stealing from the US - housing is catastrophically expensive in many countries, and is more to do with how it has evolved as an asset class than trade relationships.
Doesn't that balance out in the end though?
People in Detroit go from working at an automobile factory to working as a service worker at a local restaurant or retail store and their incomes go down massively, meaning all they can afford to buy is cheap crap from China sold at their local dollar store or discount retailer. They would rather have the old purchasing power and old retail options, especially since inflation has eroded a lot of those low prices.
For me the idea of "stealing IP" in a society like China seems to miss the entire point of what they're doing and seems to fall short of having respect for cultural differences. What we think of as "respecting intellectual property rights" can also be seen as "hoarding property" which is antithetical to communist ideals.
> In the US, a person used to be able to graduate high school and get a job that could support owning a house with a yard, a non-working spouse, a car, and multiple children.
That was never sustainable in the long run and no one can bring that back.
Well, we can't count on the entire rest of the world having all their factories bombed and being the only nation with reasonable manufacturing capability all the time.
The US was not an export-focused economy in the 50s and 60s. In fact trade as a percent of GDP bottomed out in those decades. Arguing that the prosperity for the average person was only "sustainable" in an environment where there wasn't foreign competition is an argument for tariffs.
In what way would the citizens of the US have been worse off had the rest of the world had reasonable manufacturing capability? I'd have thought that either it'd be the same, or better, because same production + trade.
It was the US benefiting from its position on the world stage as to why that was possible. The US was never and is not going to retain it's position on the world stage, and indeed under Trump it is radically declining.
The US is going to normalize with other western nations as we enter a multi-polar world.
The problem is Republicans don't accept that and think they can return to the 1950s.
I agree that the Rust Belt has had it rough, but it is not the entire US economy. I won't argue that people saw the future in the 70s, but those jobs were/are going away to automation regardless (and they are certainly not coming back). It's better to not be reliant on them now. In hindsight globalization was right move. And even if it wasn't, trying to blame the current US issues on globalization is 30 years too late.
Statistically the US manufactures more than it ever has on a $ amount, and is the #2 manufacturer in the world. Until recently, the US economy was the envy of the world. The trade situation the US setup did and does work, and along with other policies, led to enormous prosperity that was just unevenly distributed.
Where the US failed, and mostly around GOP and now Trump policies, is not spreading the growing prosperity to more of its citizens. Given this enormous prosperity where is universal healthcare, free/low cost college, UBI, etc...?
Unfortunately, the people who really need these policies have mostly voted against them for decades. Their anger is legitimate, but it's misplaced. Being angry at "globalization" or "illegals" or pick a group is a misdirection fed by years of AM radio and Fox News. Now we are seeing the cycle continue, but this time the US economy may really be destroyed.
Since your comment is comparing the US with China, maybe a bit of "whataboutism" is warranted here.
> stealing IP
Edward Snowden's leaks reveal that the US engages in wide-scale economic espionage. Additionally, the US also uses extra-territorial means of coercion to acquire cutting-edge technology -- see e.g. the Alstom case.
> manipulating currency
For many decades the US has been able to print money like a madman while the rest of the world absorbs the costs by virtue of the USD being the primary reserve currency globally. The US is also not above strong-arming its allies into appreciating their own currencies to boost American exports -- see the Plaza Accord, which partly contributed to Japan's subsequent Lost Decades.
> paying their people terrible wages
China has lifted hundreds of millions of people out of abject poverty in the last 20 years. In the US wages have remained stagnant for the working class over the same period, if not longer. Frustration among the working class -- which is entirely justified and understandable, by the way -- is probably one of the reasons why Trump was re-elected.
> crapping all over the environment
Chinese cities today are mostly clean and quiet, increasingly powered by renewable energy with more and more electric vehicles driven on the roads. The Chinese are also undertaking massive greening projects, such as the Great Green Wall: https://en.wikipedia.org/wiki/Great_Green_Wall_(China) On a per-capita basis the Chinese emit far less carbon dioxide than Americans do.
The US, especially when compared to almost any other developed country, is in no moral position to be sanctimonious about environmental issues.
Don't blame other countries -- China or not -- for America's own catastrophic, chronic failure in leadership and subpar policymaking, especially when America has enjoyed so many entrenched advantages for so many decades (and still does).
Doesn't work. We opened trade to China in the '70s. They took advantage of us, stealing IP, manipulating currency, paying their people terrible wages, crapping all over the environment. We let their companies freely in the US, they very severely restricted US business ventures in China.
Detroit, a former shining city in the industrial heartland, is now a bandit infested ruin.
In the US, a person used to be able to graduate high school and get a job that could support owning a house with a yard, a non-working spouse, a car, and multiple children.
For me, coming from the Rust Belt, it's incredibly, painfully obvious that globalization's basically destroyed the US economy. I'm constantly amazed to meet well-meaning, intelligent people who don't seem to understand this fact.