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Originally Posted by RFlushDiamonds
I'm going to have to read up on this topic a bit as I think it's very interesting.
Hallowing out the American middle class while relying on the for consumption never seemed like a viable long term strategy to me.
And I was never impressed with the shoddy Chinese goods we got to enjoy for cheap. Seemed like someone was gaming the system. lol
Good to see there may be a lean towards common sense economic policies, if only for a while.
As i understood it, the long term vision of Freer world Trade was that in an increasingly Global Economy with Capital free flowing you could not maintain restrictive Nationalistic type policies on Trade or Worker protections.
If you did, you would see your goods eventually become over prices and uncompetitive and fail, as you forced the lowest paying jobs to stay in America at much higher pay scales. If for instance China can build a widget at 1/5th the cost, that it can be built in America, then they can utilize that extra available money to improve quality beyond what US companies could afford to do, and soon you would have US citizens paying way more for an inferior product.
And increasingly the US would have to lock out better goods to keep US citizens from wanting them. That would then lead to the US being less efficient over all and a decline in the economy as the lower cost one, with more profits grew. You trap the US in that bubble.
The flip side was to allow the lower end stuff to go China and elsewhere but bring it back for the higher paying jobs here. At first that would shift more production and jobs to China but long term as the Chinese middle class grew, China would not be able to supply even their own needs, let alone export much. So that would mean a shift back to the US and others of many of those jobs but now at higher pay rates. Win/Win.
A few things happened along that road though.
China was reaching up and competing in the higher end jobs (no fair!!!)
And AI was changing the production dynamic. Perhaps China would be able to supply their own growing MC and the world goods with an increasingly shrinking HUMAN manufacturing footprint and a bunch of automated facilities. Perhaps there would be no Part 2 with the 'shift back' of jobs and wealth and it would just stay out in a huge Chinese Manufacturing sector the West built.
I would like to say it was those two things Trump and Co were reacting to and trying to rebalance but I think they would have been fine with that. What bothered them was the Military Complex saying CHina was a legit threat to vie for Super Power supremacy and if not stopped soon, then it may be impossible to stop, ever.