Liberal think tank says chinese trade deficit cost 2.4 million jobs

[Rick]

http://www.epi.org/publications/entry/bp260/

 

[BigRob]

http://www.epi.org/publications/entry/bp260/

You need to post some of your own commentary along with the links as a forum policy.

 

[pocketfullofshells]

You need to post some of your own commentary along with the links as a forum policy.

but thats just to hard, whats next, actually posting info besides a link so we can see if the link was even worth checking out? by the way, you should deal with mr Jews are all evil boy...same issue...over and over and over...

 

[Rick]

You need to post some of your own commentary along with the links as a forum policy.

OK - howszis:

You were wrong ....You were wrong ....You were wrong ....

 

[BigRob]

OK - howszis:

You were wrong ....You were wrong ....You were wrong ....

....and here is commentary from the CATO Institute that says the exact opposite. (It is taken from testimony before the Senate finance committee in 1998 and still rings true)

The second myth is that trade deficits are caused by a lack of U.S. industrial competitiveness. This myth has been refuted by the stellar performance of the American economy, which today is the envy of the world. Since 1992, the U.S. trade deficit has tripled. During that same time, U.S. industrial production has surged 24 percent and manufacturing output 27 percent. The American people sell more goods and services in the global marketplace than people of any other country.

A third myth is that trade deficits destroy jobs. Again, the performance of the U.S. economy in the last decade should lay that myth to rest. While the trade deficit has expanded, so have American payrolls. Indeed, there is a strong correlation between rising trade deficits and falling rates of unemployment. The reason is simple: The same expanding economy that stimulates demand for labor also raises demand for imported goods and capital.

The final myth is that trade deficits are a drag on the U.S. economy. With the slowdown in East Asia, this seems a reasonable claim. But the drag is not the trade deficit itself, but falling demand for our exports in the Far East. A trade deficit that reflects both rising exports and even more rapidly rising imports can be a sign of health. That has been the case in the United States for most of past two decades. Since 1980, the U.S economy has grown an average of 3.1 percent in years in which the current account deficit has expanded from the previous year, and an average of only 2.0 percent in years in which the deficit has shrunk. If trade deficits are bad for growth, why does the U.S. economy grow more than 50 percent faster when the trade deficit expands?

Frankly, we would have more reason to worry if the U.S. were running a trade surplus. In Mexico in 1995 and more recently in South Korea and other East Asian countries, trade balances flipped overnight from deficit to surplus because of plunging domestic demand and the flight of foreign capital. In Japan today, a soaring trade surplus has been accompanied by record high unemployment. It's no coincidence that America's smallest trade deficit in recent years occurred in 1991 — in the trough of our last recession

Notably again, of course you probably missed this, is that your entire post is about a bilateral trade imbalance, which almost all mainstream economists view as irrelevant to the larger picture...more real world numbers not supporting your position...

Honestly, it is people such as yourself that make me embarrassed to be Republican at times.

 

[BigRob]

And more from CATO in 2010:

It has become conventional wisdom that a rising trade deficit is bad news for the economy. This week’s announcement of an expanding deficit in June prompted such headlines today as this one in the news pages of the Wall Street Journal: “Wider Trade Gap Signals Weak Growth.” As my colleague David Boaz blogged earlier today, the trade deficit is even blamed for daily swings in the stock market.

I’ve been studying and writing about the trade deficit for years, and devoted a whole chapter of my 2009 Cato book Mad about Trade to the subject, and I keep coming back to a basic question: If the trade deficit signals weak growth, why does the U.S. economy seem to perform so much better during periods when the trade deficit is growing, and so much worse when the trade deficit is shrinking?

Think back to the 1990s, the “goldilocks economy” when growth was strong, jobs plentiful, and inflation low. That was also a time of rising trade deficits. In fact, the trade gap grew for eight years in a row, rising from $77 billion in 1991 to $455 billion in 2000. In that same period, the unemployment rate dropped from 7.3 to 3.9 percent.

Again, in the middle of the George W. Bush presidency, the trade gap grew for five straight years, during a period when the economy expanded and the unemployment rate fell from 5.7 to 4.4 percent.

In contrast, the trade deficit invariably shrinks during periods of recession. The trade deficit fell by more than half from 2007 to 2009 as domestic demand and imports plunged and unemployment soared. Sagging domestic demand means fewer imports.

Of course, I’m not arguing that a bigger trade deficit stimulates the economy. I am arguing, contrary to the conventional wisdom reflected in this morning’s headlines, that an expanding trade deficit does not appear to be a drag on growth. In fact, the plain evidence is that an expanding trade deficit is more often than not a signal of stronger growth.

 

[pocketfullofshells]

.
Honestly, it is people such as yourself that make me embarrassed to be Republican at times.

I honestly feel sorry for the smaller and smaller numbers of thinking republicans...I think if the Republicans became more the thinkers they use to be know for ..rather then the Glen Beck , Palin, Rush Party they have become...the US would be better off...and yes even the liberal democrats would be better off. I would rather see a honest fight of ideas, and then real compromise...vs the..we will just scream no, make things up, and call you Communist and call it leadership..idea the republicans often now fall to

 

[Rick]

I honestly feel sorry for the smaller and smaller numbers of thinking republicans...I think if the Republicans became more the thinkers they use to be know for ..rather then the Glen Beck , Palin, Rush Party they have become...the US would be better off...and yes even the liberal democrats would be better off. I would rather see a honest fight of ideas, and then real compromise...vs the..we will just scream no, make things up, and call you Communist and call it leadership..idea the republicans often now fall to

A supporter of the party of the Koolaid Kadet Korps dares to lecture about "thinking republicans". The leftwing steadfastly refuses to debate ideas, because they know they'll lose. Their stock in trade is limited to such as defamation, distortion, and the race card.

 

[Rick]

....and here is commentary from the CATO Institute that says the exact opposite. (It is taken from testimony before the Senate finance committee in 1998 and still rings true)

That the economy has a "stellar performance" as in 1998 still rings true???

HAW HAW HAW!!!

Notably again, of course you probably missed this, is that your entire post is about a bilateral trade imbalance, which almost all mainstream economists view as irrelevant to the larger picture

A repeated claim, which like most of your claims, you've provided no evidence.

 

[BigRob]

That the economy has a "stellar performance" as in 1998 still rings true???

HAW HAW HAW!!!

I notice you ignored my follow up to that post taken from April of 2010 which discussed issues in the "trade deficit" up to 2009...typical.

A repeated claim, which like most of your claims, you've provided no evidence.

How much more real world evidence do you want?

Your assertion is that trade deficits are bad for jobs, that is clearly shown to be false in the CATO information.

 

[Rick]

I notice you ignored my follow up to that post taken from April of 2010 which discussed issues in the "trade deficit" up to 2009...typical.

Your follow up post cites 2007-2009, not 2010, and ignores the fact that unemployment is at calamitous levels >>NOW<<, and the trade deficit is huge >>NOW<<.

How much more real world evidence do you want?

Cite lots of "top" economists, you've never cited a single one by name, even though you keep repeating that they all think that there's no connection.

 

[BigRob]

Your follow up post cites 2007-2009, not 2010, and ignores the fact that unemployment is at calamitous levels >>NOW<<, and the trade deficit is huge >>NOW<<.

It was written in 2010 genius. Since the data I have presented clearly goes against your assertion, please show me where the data is wrong.

Cite lots of "top" economists, you've never cited a single one by name, even though you keep repeating that they all think that there's no connection.

As I said numerous times, and you apparently cannot grasp... most economists think BI-LATERAL trade deficits are meaningless, and the issue is split on the overall deficit.

 

[BigRob]

Your follow up post cites 2007-2009, not 2010, and ignores the fact that unemployment is at calamitous levels >>NOW<<, and the trade deficit is huge >>NOW<<.




Cite lots of "top" economists, you've never cited a single one by name, even though you keep repeating that they all think that there's no connection.

Since you wanted a name, Milton Friedman argued that trade deficits were not very meaningful.

 

[Rick]

Since you wanted a name, Milton Friedman argued that trade deficits were not very meaningful.

He said nothing of the kind.

He said they weren't necessarily harmful, and even that assertion was predicated on a free international market in currencies, which doesn't obtain, and certainly not in the case of PRC currency.

 

[BigRob]

He said nothing of the kind.

He said they weren't necessarily harmful, and even that assertion was predicated on a free international market in currencies, which doesn't obtain, and certainly not in the case of PRC currency.

Here is testimony Friedman gave before the US Trade Deficit Commission:

In the process, deficits and surpluses in balances of payments are unavoidable. The countries to which capital is moving will have balance of payments deficits - the opposite face of a capital surplus - financed by countries whose internal savings are larger than can be absorbed in domestic activities that yield a competitive rate of return.

Such deficits, far from being a burden, are an essential ingredient in the adjustment process. The remarkable performance of the U. S. economy in the past few years would have been impossible without the inflow of foreign capital -- the mirror image of large balance of payments deficits.

California is a splendid example. If balance of payments figures were available for California alone, they would show that California has experienced a steady stream of deficits for decades on end just as the U.S. on a whole did in the last half of the nineteenth century. California has grown far more rapidly than most of the rest of the country. If California enterprises had been forced to rely on the savings of California citizens alone, it could never have financed its rapid growth.

That was possible because capital was moving from the East to the West to benefit from the higher rates of return that were attainable in California. It was possible because California was experiencing large and continuous balance of payments deficits.