Trump readies to hit US allies with steel, aluminum tariffs

Any official document released by the White House is expected to include language saying that all decisions are subject to further negotiation.


By MEGAN CASSELLA AND BEN WHITE 5/31/18, 6:30 AM CET

President Donald Trump is preparing to impose steep tariffs on steel and aluminum imports from Canada, Mexico and the European Union as soon as Friday, but conversations with his top advisers are still ongoing, a senior administration official said late Wednesday.

The decision could be made final Thursday, and the official put the odds of the U.S. imposing tariffs on all three close trading partners at 75 percent. But the official added that a meeting Thursday morning could change that decision or slow it down.

Any official document released by the White House is expected to include language saying that all decisions are subject to further negotiation, the official said, which leaves open the possibility that the countries could have some wiggle room to avoid the duties.

The news comes just hours before a temporary exemption that Trump had previously granted to Canada, Mexico and the EU — which together supply more than half of the steel that the U.S. brings in from abroad each year — is set to expire at midnight Thursday.

A decision to impose tariffs would be a shock to Canada and Mexico, as both countries thought that they would be spared from the levies because of earnest negotiations that they have had with administration officials over NAFTA. One U.S. industry official who had been in contact with negotiators from both sides said neither country had been notified by the White House as of Wednesday evening and they were learning of the possibility of tariffs from news reports.

Canadian Foreign Minister Chrystia Freeland had traveled to Washington on Tuesday to discuss the issue, among other matters, with U.S. Trade Representative Robert Lighthizer. But she left having made little progress in discussions and having little idea of what the Trump administration’s plans were, two sources briefed on the meeting said.

“Canada considers it frankly absurd that we would in any way be considered to be a national security threat to the United States,” Freeland told reporters Wednesday. “I would like to absolutely assure Canadian participants, those who work in steel and aluminum industries, that the government is absolutely prepared to and will defend Canadian industries and Canadian jobs.”

For the European Union, however, the news is less surprising. Cecilia Malmström, the EU’s chief trade commissioner, had made it appear all but certain Wednesday that the bloc would face either a tariff or quota.

“Hopefully we will be able to have a positive agenda with the U.S. side, with no tariffs or quotas,” Malmström said after a meeting with Commerce Secretary Wilbur Ross on the sidelines of a conference in Paris. “Realistically, however, we do not think we can hope for that.”

The administration has so far shared little insight on its decision-making process with anyone, even the U.S. steel industry, as the deadline looms, three industry sources said. The lack of communication had led to speculation that the administration might choose to extend its deadline once again, as it had a month ago.

But even those who support the tariffs have begun to ask for certainty from the administration on the way forward, and they warn the repeated delays take away from the benefits that the duties would provide.

“In my conversations with firms, what they’d like more than anything is some certainty: What are the tariffs going to be? What are the quota levels going to be, if there are going to be quotas? What are the product exclusions going to be?” said Scott Paul, president of the Alliance for American Manufacturing, a group that generally supports the tariffs. “The faster we get to the other side of that, the better off I think we are.“

Should the president proceed with tariffs on all three parties, the action will leave U.S. export industries and consumers vulnerable to what the countries have promised would be “immediate” retaliation.

Tit-for-tat duties on U.S. exports from agricultural products to whiskey, yachts and lipstick — as the EU has promised — would aggressively strike back at U.S. industries at a time when rising trade tensions with China have already cast uncertainty over their future and hurt their bottom lines.

Mexico has also vowed to take action by targeting politically sensitive products with punitive duties, though its list of products has not been made public. Canada has pledged to “respond appropriately” and protect domestic industry and jobs.

Still, the senior administration official and others closely following the president’s deliberation emphasized that nothing has yet been made final. Others speculate that the news reports could simply be the result of a strategic leak by West Wing advisers who oppose the tariffs and who wanted to alarm stakeholders into lobbying the president to change his mind before the decision is formally announced.

“It’s decision-making over the airwaves,” said Dan Ujczo, an international trade attorney who focuses on U.S.-Canada trade issues.

“The smart money is that the president, who knows his base better than any political leader in recent history, will always return to what his voters in Ohio, Michigan, Wisconsin and the Great Lakes states want,” he continued. “It may be a circuitous route, but he always comes home. Count on tariffs.”

Adam Behsudi contributed to this report.

https://www.politico.eu/article/trump-steel-aluminum-tariffs-readies-to-hit-us-allies/

Trump’s Manchurian Trade Policy



Remember “The Manchurian Candidate”? The 1959 novel, made into a classic 1962 film (never mind the remake), involved a plot to install a Communist agent as president of the United States. One major irony was that the politician in question was modeled on Senator Joe McCarthy — that is, he posed as a superpatriot even while planning to betray America.

It all feels horribly relevant these days. But don’t worry: This isn’t going to be another piece on Donald Trump’s collusion with Russia, which is being ably covered by other people. What I want to talk about instead are Trump’s actions on international trade — which are starting to have a remarkably similar feel.

On one side, the “Make America Great Again” president is pursuing protectionist policies, supposedly in the name of national security, that will alienate many of our democratic allies. On the other side, he seems weirdly determined to prevent action against genuine national security threats posed by foreign dictatorships — in this case China. What’s going on?

Some background: International trade is governed by a system of multinational agreements that countries are not supposed to break unilaterally. But when that system was created (under U.S. leadership) in 1947, its framers realized that it had to have a bit of flexibility, a few escape valves to let off political pressure. So nations were allowed to impose tariffs and other trade barriers under certain limited conditions, like sudden import surges.

Meanwhile, the U.S. created a domestic system of trade policy designed to be consistent with these international rules. Under that system, the White House can initiate investigations into possible adverse effects of imports and, if it chooses, impose tariffs or other measures on the basis of these investigations.

As I said, the conditions under which such actions are allowable are limited — with one big exception. Both the international rules and domestic law — Article XXI and Section 232, respectively — let the U.S. government do pretty much whatever it wants in the name of national security.

Historically, however, this national security exemption has been invoked very rarely, precisely because it’s so open-ended. If the U.S. or any other major player began promiscuously using dubious national security arguments to abrogate trade agreements, everyone else would follow suit, and the whole trading system would fall apart. That’s why there have been only a handful of Section 232 investigations over the past half century — and most of them ended with a presidential determination that no action was warranted.

But Trump is different. He has already imposed tariffs on steel and aluminum in the name of national security, and he is now threatening to do the same for autos.

The idea that imported cars pose a national security threat is absurd. We’re not about to refight World War II, converting auto plants over to the production of Sherman tanks. And almost all the cars we import come from U.S. allies. Clearly, Trump’s invocation of national security is a pretext, a way to bypass the rules that are supposed to limit arbitrary executive action.

And their economic side effects aside, the proposed auto tariffs would further undermine our allies’ rapidly eroding faith in U.S. trustworthiness.

Which is not to say that national security should never be a consideration in international trade. On the contrary, there’s a very clear-cut case right now: the Chinese company ZTE, which makes cheap phones and other electronic goods.

ZTE products include many U.S.-made high-technology components, some of which are prohibited from being exported to sanctioned regimes. But the company systematically violated these export rules, leading the Commerce Department to ban sales of those components to the company. And the Pentagon has banned sales of ZTE phones on U.S. military bases, warning that the phones could be used to conduct espionage.

Yet Trump is pulling out all the stops in an effort to reverse actions against ZTE, in defiance of lawmakers from both parties.

What’s behind his bizarre determination to help an obvious bad actor? Is it about personal gain? China approved a huge loan to a Trump-related project in Indonesia just before rushing to ZTE’s defense; at the same time, China granted valuable trademarks to Ivanka Trump. And don’t say that it’s ridiculous to suggest that Trump can be bribed; everything we know about him says that yes, he can.

And if we do have a president who’s bribable, that’s going to give dictators a leg up over democracies, which can’t do that sort of thing because they operate under the rule of law.

Of course, there might be other explanations. Maybe President Xi Jinping told Trump that he needed to abase himself on this issue to get a trade deal he can call a “win.” Somehow this doesn’t sound much better.

Whatever the true explanation, what we’re getting is Manchurian trade policy: a president using obviously fake national security arguments to hurt democratic allies, while ignoring very real national security concerns to help a hostile dictatorship.

Follow me on Twitter (@PaulKrugman).

https://www.nytimes.com/2018/05/28/opinion/trump-china-trade-policy.html

************

The man despite his depraved being is doing exactly what he promised the voters he was going to do.

2seaoat wrote:The man despite his depraved being is doing exactly what he promised the voters he was going to do.  

As near as I can tell, he is trying to cripple the US economy...first by using borrowed money for tax breaks, then compounding the problem with these stupid trade wars. I'm sorry people were stupid enough to vote him in. I just want him OUT. For God's sake, he had to designate Canada and the EU as national security threats. Every time someone opposes him, he lashes out at the nearest target. HE's the national security threat.

America has never had a President who was irrational and self serving. Most of the other nations in this world know nothing but the same. Trump is getting results because he speaks every petty tyrants language, and they understand that he is willing to hurt America to strike out at countries who have not adjusted their currencies or tariffs.........he will be reelected if something drastic does not intervene between now and Nov. 2020. The results are unorthodox and often repugnant, but he is causing some real positive change.....Korean war end, and no more status quo with trade.

It's as if you people have never negotiated a single thing in your lives.

Floridatexan wrote:
...first by using borrowed money for tax breaks...

Oh, God! Here we go with the National Debt bullshit again.

Public Debt is Private Savings:

The following accounting identity shows an aggregate relationship that must hold by definition for a closed economy, such as the global economy as a whole:

(G – T) = (S – I)

In this identity, G is government expenditure, T is tax revenue, S is private saving and I is gross private investment.

The left-hand side of the identity, G – T, is referred to as the budget deficit or government balance. The right-hand side, S – I, is referred to as net private saving or the private sector balance.

Net private saving is the amount by which disposable income (income, Y, minus tax revenue, T) exceeds private spending. This can be seen by noting that S = (Y – T) – C, where C is private consumption expenditure, which in turn implies S – I = (Y – T) – (C + I). When the private sector, in aggregate, spends less than its disposable income, it is said to be in surplus. When it spends more than its income, it is in deficit.

The identity can therefore be restated as:

Budget Deficit = Net Private Saving

or, equivalently,

Government Deficit = Private Sector Surplus

This shows that, in a closed economy, the net saving (or financial surplus) of the private sector matches the government’s budget deficit dollar for dollar. A larger budget deficit means higher net private saving. A reduction in the budget deficit implies lower net private saving.
http://heteconomist.com/budget-deficits-and-net-private-saving/


There's plenty of reasons to hate Trump but this isn't one of them.

A recession always follows whenever there is a significant reduction in the National Debt. Whenever it's increased, the economy expands.

Russia's getting their money's worth, for sure.

Trump's a guy who bankrupted casinos. That's damn near impossible.

Yeah, he's doing what his voters elected him to do... but unfortunately they're all complete idiots who are about the loss of one brain cell away from incontinence. They don't know how anything works... and neither does the headcase they elected.

So far we've been lucky that Obama left Trump such a strong economy that even all these screw-ups haven't done major damage yet, but, that won't last forever. it's strong, but it's not bulletproof. Even Republicans -- never a very strong economic party to begin with -- recognize that Trump's making idiotic mistakes. Whoever comes after this guy's going to have a hell of a lot of repairs to America's international standing to make, and a lot of economic time-bombs going off. Trump has created so many opportunities for other countries to move in and take over partnerships and deals that were once ours that it's not even funny. He's weakening us... and his supporters, all church-trained to believe bullshit on "faith" rather than facts, are still buying his preaching. But I do know a few soybean farmers in Mississippi who have been getting a little nervous now because they're starting to see what Trump says and the reality that's hitting 'em don't match up.

Trump's a guy who inherited enough wealth and contacts to be protected from his own failures, but he's never been a very good businessman -- just a talker-upper -- and he's lost what little skill he did have in his dotage. We'll survive him, especially if we get him out of there as quickly as possible, but the country will likely have a limp for a while when he's done.

It amazes me that anybody still believes in this guy. I'm starting to think I should have tried to kill off my conscience and become a con man, because there are so many people out there whose stupidity is so easily exploitable. Like sheep waiting to get fleeced.

Floridatexan wrote:

So what? T-bills and bonds are the safest investments possible. No wonder other countries want them.

China buying T-bills is a GOOD thing. It's only the extreme, ultra-reactionary right that wants to imagine it's bad.

Treasury securities are sold at open auctions. We don't go to China and say lend us some money, they come to us and say we WANT to buy those securities because we know they're the safest investment there is--zero chance of default. The fact that other countries invest in them is an affirmation of their confidence in strength of the American economy.

Deus X wrote:

Floridatexan wrote:

So what? T-bills and bonds are the safest investments possible. No wonder other countries want them.

China buying T-bills is a GOOD thing. It's only the extreme, ultra-reactionary right that wants to imagine it's bad.

Treasury securities are sold at open auctions. We don't go to China and say lend us some money, they come to us and say we WANT to buy those securities because we know they're the safest investment there is--zero chance of default.  The fact that other countries invest in them is an affirmation of their confidence in strength of the American economy.

Your model relies on a closed economic system, which this is not.

Floridatexan wrote:Your model relies on a closed economic system, which this is not.

Sweetbleedin'jesus! Read the whole article! It goes on to say:

For open economies (i.e. individual trading nations), the analysis can be extended to include external sources of revenue and expenditure. There are now three major sectors: the government, domestic private and external sectors. The accounting identity becomes:

(G – T) = (S – I) – (X – M)

Here, X – M denotes net exports (exports minus imports). In words, we have:

Budget Deficit = Net Private Saving – Net Exports

If we rearrange this expression, it becomes clear that there are now two possible sources of net private saving:

Budget Deficit + Net Exports = Net Private Saving

If domestic businesses sell more goods and services to foreigners than domestic businesses and households buy from overseas, export revenue will exceed import spending and there will be a build up of private-domestic financial assets. So, in an open economy, private net saving can come either from government deficit expenditure or net exports.

In many countries, though, including the US, net exports are typically negative, which means the external sector subtracts from net private saving. This leaves the budget deficit as the only source of net private saving. For trade deficit countries such as the US, in other words, it is impossible for the private sector to net save unless the government runs a budget deficit.

Again, this is not a problem for a currency-issuing government. Public debt creates no financial difficulty for a currency issuer provided its debt is denominated in the issuer’s own currency. It is private debt that can be problematic. Households and businesses can go bankrupt. Currency-issuing governments cannot.

http://heteconomist.com/budget-deficits-and-net-private-saving/


Every time you post that National Debt nonsense, you do conservatives' work for them!

You're like JR Smith in that Cavs game. Good goin', JR!

I'm LeBron in that metaphor, by the way, and the game is Economics. Thanks for playing.

"This is the second in a short series of diaries recapping certain repeated, and thus oh-so-boring, themes of dispute that have characterized my dialogues with various ideological factions on dKos.

The first installment concerned the fallacy of American Exceptionalism. It attracted a handful of comments doubling down on the boosterism. Whatever. American Exceptionalism remains exactly, and always, Boring, Stupid, and Wrong; it remains, as it must, chauvinist, racist, pollyannaish, and generally wishful. Argument from nostalgia -- for example, "Lookit all the Nobels!" or "yabbut, we wuz the first to give power to the people!"-- is the opposite of rational forecasting. Past performance is not a predictor of future returns. Our university research programs will be outstripped by those in India, in China, and elsewhere. Our political institutions are less progressive than those in various other nations; and they are, as we've seen over the last 7 years of obstruction and demolition, rather less robust than we once imagined. Our traditions of liberty are in ashes. We are an Empire in decline, and, quite the opposite of being exceptional, we look rather like various other empires in their decline -- and not, I should say, empires that declined gracefully.

And that's my last word on that.

So now, it's on to a discussion of MMT, and its oddball cult of initiates. Not to keep anybody in suspense, I'll let you know up front what I think of MMT, and the dogmatic rhetoric of its dKos proponents: Boring, Stupid, Wrong.

I suppose I'm obliged to "explain" MMT. That's a trap, because no matter how I describe its principles, its advocates will respond that I've got it wrong (rather like what happens should one ever make a categorial statement about buddhist philosophy). And indeed, this is my first complaint about MMT: most of its proponents don't seem to be able to articulate its principles in a consistent, coherent set of sentences that a well-educated, well-informed, highly-intelligent individual can make any fucking sense out of. They can't even seem to decide whether MMT stands for "Modern Money Theory" or "Modern Monetary Theory", a distinction that turns out to be more important than anybody outside the cult might think.

They do seem to agree that "Modern" refers to the Money, and not the Theory, which is good, because the Theory -- or at least, the parts of it that are neither stupid nor wrong -- is old hat. The most perplexing thing about MMT is not in its ideas, but in its devotees' excitement at believing they possess knowledge that is:

A. Arcane
B. Subtle
C. Paradigm-shifting

MMT is none of these things. Ultimately, the core of MMT is simply the observation that in a fiat-money system, the government can always create as much money as it wants, and subsequently control the money supply by taxation.

If you just take those two elements and run with them, you've proposed nothing that should surprise anyone with 6 credits' worth of undergraduate economics courses. When I get into arguments with MMTrs, I am usually at some point told that I don't understand economics -- that in fact, I don't know the first thing about economics or money. The only thing I don't understand is why MMTrs think there's something bold, exciting and new in their philosophy.

Ironically, it is the MMTrs who do not seem to understand what money is. They imbue money with an almost magical intrinsic value: We don't have enough circulating in the economy, so make more -- make as much as we want -- and all will be well. Most especially, no matter how much we make, we needn't worry about making too much. Ever.

At times they obsess about the mechanisms of creating money. Should one observe, "We can't just print an infinite supply of money," the initiated will tediously MMTsplain to you that -- again -- you don't understand, nothing is being printed, it's just electronic notations being made in government and banking computer systems.

So, okay, I'm sorry, but this is just stupid. And shallow. And boring. And wrong. It is the single clearest demonstration of the weakness of their own understanding. As any good computer scientist can tell you, a symbolic representation is a symbolic representation. Computers, contrary to popular opinion, do not store information as "1s and 0s". How could they? "1" is either an abstract concept of cardinal number, or a very concrete concept of orthography (i.e., a numeral -- a visual rendering intended to represent the abstract concept). Neither exists inside a computer. Modern digital computers represent information in many ways, always involving switching some physical phenomenon -- a voltage, or a magnetic field, etc. -- between one of two states. The engineers and the programmers choose to think of these things as "ones" and "zeroes", but for the rest of humanity the matter is moot -- what matters is not the mechanism of the representation, but the fact of it.

In other words, it doesn't matter whether the government "creates money" by setting voltages in a static RAM or putting ink on unusual papers or pouring great ponds of cement into which abstract symbols are carved. The money "exists" just as surely regardless of the representation, because money is an abstraction, not a physical object. And the essence of that abstraction is that it has a dual nature: It simultaneously:

A. Represents something "real", namely, indebtedness on the part of society at large to the "holder" of the money,

and

B. Functions as a technology for enabling economic exchange.

If you think those are two ways of saying the same thing, you are wrong. And you may be an MMTr.

The problem with the MMT scheme of simply flooding the economy with as much money as the government "requires" is that it fundamentally undermines Quality A of money. The government cannot create money without creating indebtedness -- an obligation on the part of somebody to return something of value to somebody else. At some point, all of that indebtedness must go somewhere. Regardless of any mumbo-jumbo the MMTrs might mutter, there are only two possibilities in this regard: Either the indebtedness must be abrogated by the government via confiscatory taxation, or the fair value of indebtedness represented by a given denomination of money must decline -- which is to say, there must be inflation.

I've seen MMTrs say some rather extraordinary things with respect to both of these possibilities. Personally, just so y'all understand, I'm okay with confiscatory taxation to stabilize the currency. More to the point, I'm a strong and cheerful advocate of confiscatory taxation to stabilize society. Unfortunately, MMTrs seem to have a What, Me Worry approach to the problem. They do recognize that the government can, and even should, employ taxation to vacuum back up all that surplus indebtedness that would be sloshing around in the economy if we ever did adopt a fiscal program based on their brilliant insight that "Hey, it's OUR MONEY, we can create AS MUCH OF IT AS WE WANT!" They just don't have any sort of proposal for persuading any American congress to implement those taxes. They also don't talk very much about it. One has to really, really push on an MMTr before getting them into the corner where they admit that, well, yeah, the government must be taking with the left hand at approximately the same rate as it spends with the right, with a little slack allowed for economic growth.

Still, one only gets there if one is conversing with a particularly well-informed MMTr. Many of them don't seem to comprehend this point. If they did, they would comprehend how utterly bankrupt is their mantra, "The government can never go broke, because the government creates the money!" Sigh. Look, there's broke, and there's broke. Yes, the government can always create more money, but as I've noted, unless the government is simultaneously destroying money, the value of money will decline. There will be inflation. That is to say, it will cease to possess Quality A, above. This doesn't seem to bother MMTrs. I don't know why. Maybe none of them have ever been owed money, or had any money in the bank.

Actually, the question of government both creating and destroying money is the basis for another of MMt's arcane mysteries. The initiated love to MMtsplain to the dim and deluded that the government does not use your taxes to pay for ... well, for anything, I guess. This particular mystery is Boring, Stupid, and mostly wrong.

It's Wrong because the truth is that the federal government has bank accounts, and when you write a check to the federal government it arranges to have your account debited and the federal government's account credited; and the federal government only cuts checks when there is a balance denoted in its account sufficient to cover the resulting transaction. I don't know why MMTrs think this doesn't happen. It does. It's the same system of accounting that is used to track all currency-based transactions in our society. Again, there's a fascination amongst MMTrs over the use of computer systems to represent money, rather than slips of paper or discs of metal. From a macroeconomic perspective, there is no practical difference. If the government only ever accepted payment in the form of its own banknotes, which it then handed back out again to pay for its operations, the concept would be exactly the same as the digital operations that instead take place. The only difference is that the MMTrs might find it more difficult to believe that Our Taxes Do Not Pay For Govt Spending if the same physical piece of paper went back out as was collected as a tax, rather than each piece of paper being shredded on receipt, and a brand new one issued for expenditure. But then, they might not find it any more difficult at all -- they might insist that it was exactly the fact of the piece of paper being the same piece of paper that rendered all of us benighted non-initiates so blind to the obvious truth. I don't know.

In any case, it's Boring and Stupid because it doesn't fucking matter. What matters is that at any given moment, the federal government has promised, by the issuance of debt, to provide a certain value to somebody; and that if the federal government overpromises, to the extent that the American economy can't make good on that debt, then somebody is going to get burned. If you want a mystery, here's one for you: Why do MMTrs seem to believe that it's okay to simply fuck over the people who have accepted US currency in good faith that those dollars possess Quality A? How can that possibly be construed as moral or ethical?..."

https://www.dailykos.com/stories/2015/10/29/1429170/-Boring-Stupid-Wrong-MMT

************

Exactly how many courses in Economics have you taken?

Exactly how many courses in Economics have you taken?


I wrote my thesis on Latin American economic integration and in 1976 was going to teach economics and international relations at a small college in the midwest. I did a career change, but am amused at how many people can both be right when debating the other on this forum. Cutting and pasting economic concepts is good for clarity and definitions, but understanding the dynamic nature of the "science" of economics is far more complex than the simplistic discussions we often have.

First, the National debt can be both good and bad. So both of you can be correct. Second, the Chinese buying T bills is important on two conceptual levels. One is simply an investment, but the second is the fact that the world looks at American T bills as a safe harbor for their capital. A couple in Chile in the 70s would rather buy real estate in America, T bills, or stash dollars, than invest in a machine shop in Chile which made brake pads. This is a huge advantage to America and historically a real detriment to third world countries who were trying to scale that machine shop to export brake pads, but could never capitalize because of their own citizen's belief that their country was not a secure place to put their money. Debt is relative. However, never discount the irrational and perception because as you see America has created the perception that we are a safe harbor, and too much debt and poor fiscal policy will certainly reverse that perception......but in the end.....nobody is better than America and our dollar.

Floridatexan wrote:Exactly how many courses in Economics have you taken?  

Several, both University level and continuing education, but, alas, none from Daily Kos, which is where you seem to get your "information", JR.

2seaoat wrote:[ the "science" of economics

That cracks me up everytime. You may as well call astrology "science" too... lol.

PkrBum wrote:

2seaoat wrote:[ the "science" of economics

That cracks me up everytime. You may as well call astrology "science" too... lol.

Somebody help me out here: Is PkrBoy really so dumb he doesn't understand Seaoat's use of quotation marks around the word "science" in that quote?

PkrBum wrote:

2seaoat wrote:[ the "science" of economics

That cracks me up everytime. You may as well call astrology "science" too... lol.

Economics is applied science.

Deus X wrote:

Floridatexan wrote:Exactly how many courses in Economics have you taken?  

Several, both University level and continuing education, but, alas, none from Daily Kos, which is where you seem to get your "information", JR.

Then why do you fall for this hokum?

Deus X wrote:

PkrBum wrote:

2seaoat wrote:[ the "science" of economics

That cracks me up everytime. You may as well call astrology "science" too... lol.

Somebody help me out here: Is PkrBoy really so dumb he doesn't understand Seaoat's use of quotation marks around the word "science" in that quote?

Yes he is, but in Pkr's defense, English isn't his first language.

Unless it is, but, my god, that would make his poor usage of it too sad to even bear.  Surely it can't be.

2seaoat wrote:I wrote my thesis on Latin American economic integration and in 1976 was going to teach economics and international relations at a small college in the midwest.  I did a career change, but am amused at how many people can both be right when debating the other on this forum.  Cutting and pasting economic concepts is good for clarity and definitions, but understanding the dynamic nature of the "science" of economics is far more complex than the simplistic discussions we often have.

First, the National debt can be both good and bad.  So both of you can be correct.  Second, the Chinese buying T bills is important on two conceptual levels.  One is simply an investment, but the second is the fact that the world looks at American T bills as a safe harbor for their capital.  A couple in Chile in the 70s would rather buy real estate in America, T bills, or stash dollars, than invest in a machine shop in Chile which made brake pads.  This is a huge advantage to America and historically a real detriment to third world countries who were trying to scale that machine shop to export brake pads, but could never capitalize because of their own citizen's belief that their country was not a secure place to put their money.  Debt is relative. However, never discount the irrational and perception because as you see America has created the perception that we are a safe harbor, and too much debt and poor fiscal policy will certainly reverse that perception......but in the end.....nobody is better than America and our dollar.

You might consider reading ALL the posts in a thread before posting. My argument with JR SMITH FT is about Modern Monetary Theory (MMT) not Antediluvian Economics in South America in the Seventies. The key word is MODERN.

My contention is that MMT is an accurate description of the nature of fiat money in monetarily sovereign states. The theory has some heavy-weight economists behind it, including these guys:

L. Randall Wray, who has a PhD in Economics from Washington University in St. Louis and is a Professor of Economics at the University of Missouri-Kansas City (UMKC)

William Francis "Bill" Mitchell, who has PhD in Economics from the University of Newcastle, New South Wales, where he has been a Professor of Economics since 1990.

Pavlina R. Tcherneva, who has a PhD from UMKC and is an Associate Professor as well as Director of the Economics Program at Bard.

Warren Mosler, who has a BA from the University of Connecticut as well as an Honorary Doctorate from Franklin University in Switzerland. He's a Visiting Professor of Economics at Bergamo University in Italy.  

And Stephanie Kelton, Bernie's Economic advisor with both a BA and a BS from Cal State, Sacramento, a Masters from the University of Cambridge where she also served a Fellowship at Christ College, as well as a PhD in Economics from the New School.



In this thread I posted an article by Peter Cooper, another PhD and a Professor of Economics at Sydney University, Australia.

Then JR, oops, FT posted in rebuttal an article from that illustrious academic journal, Daily Kos, with the juvenile title of Boring, Stupid, Wrong: MMT--sounds like something a nine-year old would say about broccoli, no?--by someone who calls himself UntimelyRippd, and is obviously a serious thinker in the field of Macro Economics. Unfortunately, I was unable to find his academic credentials or locate any articles in economic journals or any books on Economics by him.

MMT, in the field of Macro Economics is to conventional Monetary theory as Copernicus' theory of Heliocentrism was to the Ptolemaic theory of Geocentrism in the field of Astronomy.

Just google MMT and do some reading if you want to find out about it.

My contention is that anyone who considers him- or herself a progressive is doing serious harm to the movement by repeating dangerous, fear-mongering lies and manifestly false nonsense about the National Debt.

Deus X wrote:

2seaoat wrote:I wrote my thesis on Latin American economic integration and in 1976 was going to teach economics and international relations at a small college in the midwest.  I did a career change, but am amused at how many people can both be right when debating the other on this forum.  Cutting and pasting economic concepts is good for clarity and definitions, but understanding the dynamic nature of the "science" of economics is far more complex than the simplistic discussions we often have.

First, the National debt can be both good and bad.  So both of you can be correct.  Second, the Chinese buying T bills is important on two conceptual levels.  One is simply an investment, but the second is the fact that the world looks at American T bills as a safe harbor for their capital.  A couple in Chile in the 70s would rather buy real estate in America, T bills, or stash dollars, than invest in a machine shop in Chile which made brake pads.  This is a huge advantage to America and historically a real detriment to third world countries who were trying to scale that machine shop to export brake pads, but could never capitalize because of their own citizen's belief that their country was not a secure place to put their money.  Debt is relative. However, never discount the irrational and perception because as you see America has created the perception that we are a safe harbor, and too much debt and poor fiscal policy will certainly reverse that perception......but in the end.....nobody is better than America and our dollar.

You might consider reading ALL the posts in a thread before posting. My argument with JR SMITH FT is about Modern Monetary Theory (MMT) not Antediluvian Economics in South America in the Seventies. The key word is MODERN.

My contention is that MMT is an accurate description of the nature of fiat money in monetarily sovereign states. The theory has some heavy-weight economists behind it, including these guys:

L. Randall Wray, who has a PhD in Economics from Washington University in St. Louis and is a Professor of Economics at the University of Missouri-Kansas City (UMKC)

William Francis "Bill" Mitchell, who has PhD in Economics from the University of Newcastle, New South Wales, where he has been a Professor of Economics since 1990.

Pavlina R. Tcherneva, who has a PhD from UMKC and is an Associate Professor as well as Director of the Economics Program at Bard.

Warren Mosler, who has a BA from the University of Connecticut as well as an Honorary Doctorate from Franklin University in Switzerland. He's a Visiting Professor of Economics at Bergamo University in Italy.  

And Stephanie Kelton, Bernie's Economic advisor with both a BA and a BS from Cal State, Sacramento, a Masters from the University of Cambridge where she also served a Fellowship at Christ College, as well as a PhD in Economics from the New School.



In this thread I posted an article by Peter Cooper, another PhD and a Professor of Economics at Sydney University, Australia.

Then JR, oops, FT posted in rebuttal an article from that illustrious academic journal, Daily Kos, with the juvenile title of Boring, Stupid, Wrong: MMT--sounds like something a nine-year old would say about broccoli, no?--by someone who calls himself UntimelyRippd, and is obviously a serious thinker in the field of Macro Economics. Unfortunately, I was unable to find his academic credentials or locate any articles in economic journals or any books on Economics by him.

MMT, in the field of Macro Economics is to conventional Monetary theory as Copernicus' theory of Heliocentrism was to the Ptolemaic theory of Geocentrism in the field of Astronomy.

Just google MMT and do some reading if you want to find out about it.

My contention is that anyone who considers him- or herself a progressive is doing serious harm to the movement by repeating dangerous, fear-mongering lies and manifestly false nonsense about the National Debt.

Stop accusing me of fearmongering and FOCUS on the real issues: income disparity, a tax bill that further increases the divide, the return of loopholes and write-offs for the wealthy, the almost complete abandonment of the estate tax, Drumpf's embrace of dictatorships and designation of our allies as threats to national security, the GOP's attempt to remove every safety net for the average citizen, including SS, which was paid (for the most part) by said citizens, and the fact that MMT, either in the short or long term, would create inflation, leading to an increase in interest rates to curb that inflation, leading to the debt created by printing money willy-nilly "trickling down" to the same citizenry, who would bear the burden of that debt, as they try to further their education, buy cars, homes, tools of the trade, start small businesses, raise their families and save for the future.

Sure, printing money can and should be done in times of economic downturn, which was not the case when Drumpf took office. And it's not me who is fearmongering, it's Republicans, who are largely responsible for the debt we now face. What will happen is another economic downturn, only this time it will more resemble the 1930's instead of 2008. And they'll try to blame it on the Democrats.

Just say it... "income disparity" is your conditioned response... and you seem to think that a tax code is the path. Tax cuts are for tax payors. I've always wondered why when socialist States are created that the redistribution doesn't take place? You know... level the field. Why doesn't that happen? Ever? You ought to wonder too.

It takes tax revenues to run a government. When the bread winner of a family decides to ask the boss to cut his pay, and the family goes into debt.....One would think that redistribution is the last thing that anybody would be thinking about. It is far more simple. Cut revenue, create debt......and therein is an introduction to PK's mouth which consistently on this subject can talk out of both sides of his mouth.

2seaoat wrote:It takes tax revenues to run a government.

HA! Think about it, Sparky, where did the first dollar come from? Spending PRECEDES taxation. The Government had to spend dollars into the economy before it could tax them out of it. DUH!