The TPP (and similar things) thread

[visionary]

 

 

 

[visionary]

 

 

 

 

 

 

 

 

 

 

 

 

[visionary]

 

 

 

 

 

 

[DCSaints_fan]

2 hours ago, visionary said:

 

 

 

What would be the cost to Indiana taxpayers if no deal was made and those 800 jobs were going to Mexico along with the 1300?

[PeterMP]

With respect to the TPP, I think there are 2 different groups opposed to it.  Reading things like this, the issue isn't so much free trade and lost (manufacturing jobs), it is in fact protectionism that is geared to benefiting the most wealthy.

 

" The basic point that everyone should know by now is that the TPP had little to do with trade. The United States already had trade deals with six of the 11 other countries in the pact. The trade barriers with the other five countries were already very low in most cases, so there was little room left for further trade liberalization in the TPP.

Instead, the main purpose of the TPP was to lock in place a business-friendly structure of regulation. The deal was negotiated by a series of working groups that were dominated by representatives of major corporations. The regulatory structure was to be enforced by investor-state dispute settlement tribunals. This is an extrajudicial system that would be able to override US laws with secret rulings that were not bound by precedent or subject to appeal.  

In addition, the TPP would strengthen and lengthen patent and copyrights and related protections. This is protectionism: It is 180 degrees at odds with free trade. These protections can raise the price of protected items, like prescription drugs, by a factor of 10 or even 100. This is equivalent to tariffs of several thousand percent, with the same waste and incentives for corruption. Free-traders oppose such protections, if they are honest. "

 

http://cepr.net/publications/op-eds-columns/the-slow-painful-death-of-the-tpp

 

I think the person that wrote it (Dean Baker) is wrong on somethings, but I'm not sure he's wrong on the part that I quoted.

[Larry]

Yeah, Peter, I wondered about things like that, too.  

 

As I mentioned in another thread, I've at least had this (unsupported) feeling that a lot of our "free trade" deals are really about making big businesses more powerful   

 

[FanboyOf91]

 

[LadySkinsFan]

But he won't because of his and Ivanka's businesses that manufacture goods outside the United States.

[twa]

On 12/2/2016 at 1:39 PM, Larry said:

Yeah, Peter, I wondered about things like that, too.  

 

As I mentioned in another thread, I've at least had this (unsupported) feeling that a lot of our "free trade" deals are really about making big businesses more powerful   

 

 

Must be why Trumps SoS pick supported TPP.....unless he pulls a Hillary 

[PeterMP]

I am going to put this here.  It isn't directly related to the TPP, but is about trade policy in general:

 

http://www.nytimes.com/2016/12/02/upshot/want-to-rev-up-the-economy-dont-worry-about-the-trade-deficit.html?smid=pl-share

 

" The most important lesson about trade deficits is that they have a flip side. When the United States buys goods and services from other nations, the money Americans send abroad generally comes back in one way or another. One possibility is that foreigners use it to buy things we produce, and we have balanced trade. The other possibility, which is relevant when we have trade deficits, is that foreigners spend on capital assets in the United States, such as stocks, bonds and direct investments in plants, equipment and real estate.

 

In practice, these capital inflows from abroad have been large. Net foreign ownership of American capital assets has risen to about $8 trillion from $2.5 trillion at the end of 2010. American companies moving production overseas get a lot of attention, but this data shows that capital has, over all, moved in the opposite direction.

 

It is easy to understand why foreigners are eager to buy American assets. Despite the meager recovery from the financial crisis and recession of 2008-9, the United States remains one of the more vibrant economies of the developed world. And if you want a safe place to park your wealth, United States Treasuries are your best bet.

 

The trade deficit is inextricably linked to this capital inflow. When foreigners decide to move their assets into the United States, they have to convert their local currencies into American dollars. As they supply foreign currency and demand dollars in the markets for currency exchange, they cause the dollar to appreciate. A stronger dollar makes American exports more expensive and imports cheaper, which in turn pushes the trade balance toward deficit.

 

From this perspective, many of the policies proposed by Mr. Trump will increase the trade deficit rather than reduce it."

 

Our trade deficit fuels foreign investment in the US, which help create jobs in the US, but hurts the trade deficit (by increasing the value of the dollar).

 

"But it doesn’t matter much, anyway, because in reality, trade deficits are not a threat to robust growth and full employment. The United States had a large trade deficit in 2009, when the unemployment rate reached 10 percent, but it had an even larger trade deficit in 2006, when the unemployment rate fell to 4.4 percent. "

 

This also not really related to the TPP directly, but I do think points to a general point of these large complex trade agreements (including the WTO) stifling policies and government regulatory innovation that might otherwise make sense if not illegal due to the large trade agreements:

 

http://www.nytimes.com/2016/12/12/business/economy/new-approach-to-corporate-tax-reform.html?_r=0

 

"Mr. Auerbach’s approach, embraced by the Brady proposal, will also face a hurdle at the World Trade Organization. Among its provisions is to allow American companies to deduct domestic wages from taxation, which makes it less costly to employ workers and helps them offset the higher price of imported goods. A wage deduction is not currently permitted under W.T.O. rules, and is likely to be seen as an unfair subsidy to American companies and a trade barrier.

 

But Mr. Auerbach replies that his system is the “economic equivalent” of policies that comply with W.T.O. rules — a value-added tax that is border-adjusted, combined with a reduction in payroll taxes and lowering income taxes."

 

I generally think free trade is good, but I'm not sure it is good at the cost of stifling innovation in government regulations.  Obviously, there is a balance somewhere.

 

(Generally, the idea presented seems interesting.)

[Larry]

Yeah, I've had this theory for some time that it's impossible to run a trade deficit, long term, unless there's some kind of translations going on which the trade deficit numbers aren't counting.  

 

My reasoning was rather simple.  (I bet you're shocked.)  

 

When Wal Mart buys something from China, we send dollars to China.  

 

Those dollars have to come back here.  Because they're worthless pieces of paper, anywhere else.  China has to either turn around and buy something American, sell the dollars to somebody else who wants to buy something American, or bury them in a pit in the back yard.  

 

Now, I have to confess, I'm not certain that having that money come back in the form of (some purchase that doesn't count in the BoT statistic) is necessarily good for the country.  If China decides to take their money and, say, buy Boeing, then the money came back, but I'm not sure that it's good for the country.  

 

That's something that's beyond my simplistic economic knowledge.  

 

 

[PeterMP]

5 minutes ago, Larry said:

Now, I have to confess, I'm not certain that having that money come back in the form of (some purchase that doesn't count in the BoT statistic) is necessarily good for the country.  If China decides to take their money and, say, buy Boeing, then the money came back, but I'm not sure that it's good for the country.  

 

That's something that's beyond my simplistic economic knowledge.  

 

 

 

Realistically, that's going to depend on what the people that sold Boeing did with the money.  If they did something with that resulted in the employing of Americans, then it isn't hard to imagine it is good.

 

The general point is the whole thing is complicated, and people that simply look and say trade deficit bad are treating the system in an overly simplistic manner.

 

(And in general, when this happened between the US and Japan long term is the Japanese ended up buying over valued assets and taking losses on lots of things over time.  Now, I do think China is cognizant of that issue and is trying hard to avoid it.)

[visionary]

 

[No Excuses]

!!!!

 

 

A trade war with Germany? Lol ok

[Riggo-toni]

From the article:

 

"It is surprising that Trump singles out the carmaker that exports more vehicles from the United States than any other manufacturer," Evercore ISI analysts said.

[Going Commando]

It would be far cheaper to pay those 1,000 workers 50,000 dollars a year to do nothing.

[Hersh]

13 hours ago, No Excuses said:

!!!!

 

 

A trade war with Germany? Lol ok

It really goes to show how little he actually knows. He probably had no idea that BMW produces cars in the US. He definitely had no idea that they export some of those cars made here to other countries. I wonder which sector will be next once he is done threatening every car maker in the world. 

[zoony]

On 12/13/2016 at 9:16 PM, PeterMP said:

The most important lesson about trade deficits is that they have a flip side. When the United States buys goods and services from other nations, the money Americans send abroad generally comes back in one way or another. One possibility is that foreigners use it to buy things we produce, and we have balanced trade. The other possibility, which is relevant when we have trade deficits, is that foreigners spend on capital assets in the United States, such as stocks, bonds and direct investments in plants, equipment and real estate.

 

Where have i heard that before? 

 

Oh yah, trickle down ecomomics

[LD0506]

Hmmmm, would paying the Russian hookers be considered trickle down economics too?

[visionary]

 

[Larry]

3 minutes ago, visionary said:

 

 

Yeah, we all know how strongly China objects to the government interfering in matters of business.  

 

[visionary]

 

 

 

[visionary]

 

 

 

[Hersh]

2 hours ago, visionary said:

 

If they go along with this, and I'm guessing they do, it will continue to set terrible precedents. The report says the job creation would be in the same number as the Carrier deal. A whopping 800 in exchange for a merger that will likely see layoffs at some point. SMH. 

[PeterMP]

11 hours ago, zoony said:

 

Where have i heard that before? 

 

Oh yah, trickle down ecomomics

 

No, not really because the idea has nothing to do with taxes.  I can recognize that a trade balance isn't just all negative and have high taxes or other systems in place to force money to trickle down.

 

Going back to Larry's idea of somebody selling Boeing:

 

1.  I could have higher taxes on the person selling Boeing, especially on their sell of Boeing (trickle down economics essentially asserted that it would be good to have low taxes on the person's sell of Boeing.  I'm not saying that).  That partly gets into what does the person that sells Boeing do with the money.  If the person that sells Boeing pays a lot of taxes that are then used to fund quality programs targeting schools in low income neighborhoods, it isn't hard to imagine the sell of Boeing would be a net positive, while the fundamental idea behind trickle down economics was that those taxes would have a negative effect.

 

2.  The other thing, that I think makes sense, is to not treat all charities equal.  While there might be a local museum, opera house, or theater group that is acting as a non-profit, giving money to them is not the same as giving money to the salvation army.  I think it might make sense to start treating those things differently.