The Misleading Trade Rhetoric of Trump, Clinton and Sanders

Jack Hays said:

This election cycle threatens to do serious long term damage to US trade. Sanders, Trump and now Clinton (who I believe knows better) are dumbing down the campaign.

Trade myths and realities

Trump, Clinton and Sanders spread misleading rhetoric.




". . . An open trade policy has served the United States well. It has advanced our strategic goals — supporting Europe’s recovery in the 1950s and 1960s, improving relations with Mexico in the 1990s — while presenting U.S. consumers with more choices and lower prices. The constant problem is that the benefits are widely disbursed while the social costs concentrate on unemployed workers and bankrupt companies.

We have yet to cope with this, in part because it’s hard to draw a line between firms that fail from foreign competition and ones that fail from domestic competition. A similar dilemma involves the dollar. A “strong” dollar is good for the world; it creates certainty and confidence. But a strong dollar also penalizes U.S. exporters and subsidizes U.S. importers. Satisfying both goals simultaneously is tough.
The campaign’s misleading rhetoric is dangerous if it leads the next president to start a trade war (Trump) or to repudiate the TPP (Clinton and Sanders). It’s better to police for currency manipulation and illegal subsidies. The alternatives have more political appeal but would involve a huge self-inflicted economic wound."

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Yes we have trade deficits but its not for the reasons they say it is. this guy has a limited view... he talks about a strong dollar being part of it.. yet he forgets that the us dollar was quite weak it only rebounded in Nov 2014 to where it was at in Jan 2009.
he uses that excuse that we are less integrated into the global economy by attempting to compare our exported goods with chinas exported goods a ridiculous comparison as China is a goods economy.
He also doesn't mention this from the Dept of Commerce statement from March 4 - which states we have a 4.8% gain in deficit and we are exporting 6.6% less and importing 4.5% less. So trade stagnation along with greater trade loss.
"Year-over-year, the goods and services deficit increased $2.1 billion, or 4.8 percent, from
January 2015. Exports decreased $12.5 billion or 6.6 percent. Imports decreased $10.5 billion
or 4.5 percent."
Not a good article.

SocialD said:

Yes we have trade deficits but its not for the reasons they say it is. this guy has a limited view... he talks about a strong dollar being part of it.. yet he forgets that the us dollar was quite weak it only rebounded in Nov 2014 to where it was at in Jan 2009.
he uses that excuse that we are less integrated into the global economy by attempting to compare our exported goods with chinas exported goods a ridiculous comparison as China is a goods economy.
He also doesn't mention this from the Dept of Commerce statement from March 4 - which states we have a 4.8% gain in deficit and we are exporting 6.6% less and importing 4.5% less. So trade stagnation along with greater trade loss.
"Year-over-year, the goods and services deficit increased $2.1 billion, or 4.8 percent, from
January 2015. Exports decreased $12.5 billion or 6.6 percent. Imports decreased $10.5 billion
or 4.5 percent."
Not a good article.

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I'll take the author's word over yours, thanks.

Jack Hays said:

Public Citizen was an opponent of NAFTA from the beginning and continues their advocacy via "research."

Meanwhile, from the OP:

In this bitter campaign, one area of agreement unites the major candidates: trade. Bernie Sanders brags that he’s opposed all recent trade agreements; Hillary Clinton now rejects the Trans-Pacific Partnership (TPP), President Obama’s signature trade success that she once supported; and Donald Trump blames incompetent U.S. trade negotiators for devastating job losses to China that might be cured by a 45 percent tariff on Chinese imports.
You should take all this with a boulder of salt.



True, a flood of Chinese imports over the past 15 years has cost hordes of U.S. jobs. In a recent paper, three respected economists — David Autor of the Massachusetts Institute of Technology, David Dorn of the University of Zurich and Gordon Hanson of the University of California at San Diego — estimated the loss of manufacturing jobs at 985,000 from 1999 to 2011.


But this large number needs context. Over the same period, all U.S. manufacturing jobs dropped 5.8 million; the share caused by China was a bit less than one-fifth. When the economists added China’s impact on non-manufacturing firms, the job decline more than doubled to 2.4 million. Still, that’s less than 2 percent of total payroll employment of 131 million in 2011 and 143 million now. A more powerful job destroyer was the Great Recession (8.7 million jobs lost over two years).
In addition, there are export jobs. With U.S. exports about 80 percent of imports, they offset most — though not all — of trade-related job loss. In 2014, exports supported 11.7 million jobs, says the Commerce Department: 7.1 million for goods (aircraft, medical equipment) and 4.6 million for services (software, films). . . .

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Jack do you see any irony at all that people claim that trade agreements costs zillions of jobs, but when you tell them automation will costs zillions of jobs, many of the same people that decry the evil of free trade say, no worries about automation, people will just move on to other jobs.....

Jack Hays said:

This election cycle threatens to do serious long term damage to US trade. Sanders, Trump and now Clinton (who I believe knows better) are dumbing down the campaign.

Trade myths and realities

Trump, Clinton and Sanders spread misleading rhetoric.




". . . An open trade policy has served the United States well. It has advanced our strategic goals — supporting Europe’s recovery in the 1950s and 1960s, improving relations with Mexico in the 1990s — while presenting U.S. consumers with more choices and lower prices. The constant problem is that the benefits are widely disbursed while the social costs concentrate on unemployed workers and bankrupt companies.

We have yet to cope with this, in part because it’s hard to draw a line between firms that fail from foreign competition and ones that fail from domestic competition. A similar dilemma involves the dollar. A “strong” dollar is good for the world; it creates certainty and confidence. But a strong dollar also penalizes U.S. exporters and subsidizes U.S. importers. Satisfying both goals simultaneously is tough.
The campaign’s misleading rhetoric is dangerous if it leads the next president to start a trade war (Trump) or to repudiate the TPP (Clinton and Sanders). It’s better to police for currency manipulation and illegal subsidies. The alternatives have more political appeal but would involve a huge self-inflicted economic wound."

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It is not so much the election cycle that is threatening us as the level of misunderstanding of economic law among the electorate.

Jack Hays said:

The constant problem is that the benefits are widely disbursed while the social costs concentrate on unemployed workers and bankrupt companies.

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Which has only a wee-bit to do with "Trade", in that trade helps corporations make very good profits. Which are taxed rather heavily in terms of international comparisons, but which also give rise to inordinately high corporate salaries and, worst of all, the stock-option unfairness.

"Unfairness? Dammit! They worked hard for those stock-options!" (I can hear it now ... ;^)

Perhaps they did, though as an ex-Executive, I kinda-sorta doubt it. Regardless, both stock-options and fair-pay should exist throughout the corporation and not just focused upon TopManagment - with all its sundry prerogatives already in place.

Given Reagan's hatchet-job on upper-income tax rates, Executive earnings are another nail in the casket that should be put to the grave along with other TopManagement Perquisites.

In all my career, I have never ever seen a company that was wholly in debt to TopManagement for its profits. TopManagement sets goals, the rest of a company's staff works-like-hell to obtain said goals.

Therefore they deserve but do not have the same rewards.

What can be done? It's damn easy - the government legislates new rules regarding upper-income taxation. For instance:
*The rates go back up to where they were (90%) before LBJ (of all people!) started tinkering with them in the 1960s. (See here.)
*Why? Because with present flat-rate (non-progressive) taxation at a maximum of only 30%, the incentive to foment (for instance) a SubPrime Mess is not mitigated. Aside from going to jail - IF THEY GET CAUGHT - "why not take the risk", they ask themselves. Those who do become multi-millionaires, having bilked the rest of the nation due to immoderately low income-tax rates.
*TopManagment-only stock-options are unfair because Setting Objectives (for profit) is only half the equation. The other half is a corporate staff that works diligently to achieve them. Any "reward for achievement" should also include stock-option payouts. Not all equally, but all equitably.

And that's just for starters. Anyway, with sufficient will, it can be made to work ... but first upper-income taxation must be put back where it was (pre-LBJ).

Present taxation-levels are giving incentive to a people that do not need it because they are sufficiently well pid. Worse yet, low-taxation incentivizes individuals to undertake outrageous risks/manipulations (especially in Finance) in order to make a quick megabuck.

With 15% of the population below the Poverty Threshold, the very last thing Uncle Sam needs is another flock of newly-minted billionaires ...

Jack Hays said:

It’s better to police for currency manipulation and illegal subsidies. The alternatives have more political appeal but would involve a huge self-inflicted economic wound.

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Illegal subsidies, yes! They are a device very wildly employed because easy-to-hide.

Currency manipulation is done on open currency-exchanges and a bit more difficult to be executed covertly.

SocialD said:

So trade stagnation along with greater trade loss. "Year-over-year, the goods and services deficit increased $2.1 billion, or 4.8 percent, from January 2015. Exports decreased $12.5 billion or 6.6 percent. Imports decreased $10.5 billion
or 4.5 percent."

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Which resulted from the Great Recession that started in 2009 and of which the effects have been lasting.

The world is and has been undergoing for some time a recessionary period, though coming out of it - even some countries in Europe, if not all.

So trade figures in such an environment are naturally lower than they would be ordinarily ...

joG said:

It is not so much the election cycle that is threatening us as the level of misunderstanding of economic law among the electorate.

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What is it the great under educated unwashed seems to be ignorant of?

The TPP was an interesting thing. It actually benefited small businesses some and was completely quiet on the lips of both Democrats and Republicans.

Jack Hays said:

And it's all false.

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So, going by the song lyrics and your refute. You are saying there are no struggling American workers?

What if...? said:

Our off shoring is supposed to create new consumers for us to sell to.

In fifty to a hundred years. "Over time..."

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Still, it's true - that is the effect trade has. It increases global business, and foreign incomes that access American products.

We'd be blind to overlook it, and to think (like you) that it is unimportant is sheer foolishness.

An error which, we, as a nation, are also highly capable of committing ... especially with all the Replicant talk at the moment dishing anything that "aint Amurikun" ...

Lafayette said:

Still, it's true - that is the effect trade has. It increases global business, and foreign incomes that access American products.

We'd be blind to overlook it, and to think (like you) that it is unimportant is sheer foolishness.

An error which, we, as a nation, are also highly capable of committing ... especially with all the Replicant talk at the moment dishing anything that "aint Amurikun" ...

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My point was that nobody me mentioned that when they were selling us the trade deals. That and only the working class took a haircut lifting the rest of the world up. The ownership class has claimed almost all of the new "pie" for forty years now. Another 50-100 years of the same and nobody will remember what it used to be like to share in a countries rise.

We will have been conditioned to accept a second world lifestyle.

Capitalism changed when the world filled up. Unable to expand anymore, they turned inward for their profits. Became parasitic, rent seeking. Wages stagnated as profits soared.

Had everybody agreed to take a hit to lift the rest of the world up to consumer status I might be OK with that. That's not what has happened. Everybody was supposed to benefit. That isn't happening either. What has happened is the rate at which capital is concentrating has gone way up. And the money piles have grown so large that when they fart the world changes.

I honestly can't see a model based on current trends that doesn't end in dystopia.

haymarket said:

What is it the great under educated unwashed seems to be ignorant of?

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Of choosing good candidates.

Lafayette said:

Which resulted from the Great Recession that started in 2009 and of which the effects have been lasting.

The world is and has been undergoing for some time a recessionary period, though coming out of it - even some countries in Europe, if not all.

So trade figures in such an environment are naturally lower than they would be ordinarily ...

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apparently you are ignoring what was said , either that or intentionally making it out to be something its not....... this was the change from jan 2015 to jan 2016. this was not a change from 6 or 7 years ago.

joG said:

Of choosing good candidates.

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Which is like telling me its my fault for not finding good to dine upon at McDonalds.

Ntharotep said:

The TPP was an interesting thing. It actually benefited small businesses some and was completely quiet on the lips of both Democrats and Republicans.


So, going by the song lyrics and your refute. You are saying there are no struggling American workers?

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Some workers always struggle, but they do not grow thin because the banker grows fat.

What if...? said:

That and only the working class took a haircut lifting the rest of the world up.

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May be "they" did, but the rest of America went on blithely buying Far-East goods at WalMart or any outlet that would sell them.

After all, when it all started in the 1970s/80s, employment was high, jobs were paying rather well, so why not save money and by the "foreign-stuff? (Made the Walton Family multi-billionaires.)

Have a look at the WTO Trade Figures. Scroll down to Merchandise Trade on page 44 - the US is no longer the lead exporter and is now the lead importer of such trade, which will surprise no one.

But, if we slap tariffs on imported trade - both merchandise and commercial-services (where we lead) - expect other countries to reciprocate in kind, which diminishes American trade-produce exported - and thus the jobs necessary to produce them.

That sad fact has already reared its ugly-head as the stats show ...

What if...? said:

Everybody was supposed to benefit. That isn't happening either. I honestly can't see a model based on current trends that doesn't end in dystopia.

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Ask yourself why that happened.

Because in the "good-ole-days", Uncle Sam built solid merchandise that the world needed. Why Uncle Sam?

For two reasons:
*Because WW2 had devastated all of Europe and most of the Far East,
*Communism came to the fore in the Soviet Union and China, with which trade was blocked by the "Allies".

That period lasted from 1946 to 1991 - almost half a century. Then, in 1991, China decided on a "coming-out party" and began to engage seriously in Foreign Trade with seriously lower production costs (and some very bad-quality products). And the Walton Family (as well as a good many others) were there to welcome cheaper Chinese-built goods to American markets.

Besides, Europe eventually recovered and became not only a major trading-partner but also, globally, an effective competitor.

It's no great mystery. The mystery is why did Americans assume that their country's Natural Prominence in trade (which had not been devastated by war) would continue forever as a dominant factor in World Trade?

Because we are country anchored in the future, with little respect for the past (or history). So, the lessons to be learned become even harder to assimilate.

Uncle Sam is no longer the dominant trading partner, both the EU and China now share global volumes of World Trade - and in both countries (the EU and US) employment has been impacted seriously since the "coming-out" of China since 1991. That's now almost a quarter of a century.)

Nobody saw what was coming - and we are now paying the price of that lack of foresight ...

haymarket said:

There is a price to pay for everything and in this case the price is millions of American jobs. I guess for somebody whose only concern is toilet paper at five cents less a package - screw the American workers because I can now wipe by behind more cheaply.

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If the American Worker can't compete in manufacturing, then they should find another line. There's always lawn work or agriculture. Roofing, plumbing, or electrician also is good.

haymarket said:

Which is like telling me its my fault for not finding good to dine upon at McDonalds.

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I prefer Burger King, personally.

Citizen.Seven said:

If the American Worker can't compete in manufacturing, then they should find another line. There's always lawn work or agriculture. Roofing, plumbing, or electrician also is good.

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Can you explain how the American worker is suppose to compete against wages making less than a dollar an hour?

Bruce Springsteen wrote about just what you suggested



"Jack Of All Trades"

I’ll mow your lawn, clean the leaves out’ your drain
I’ll mend your roof, to keep out the rain
I take the work that God provides
I’m a jack of all trades, honey we’ll be all right

I’ll hammer the nails, I’ll set the stone
I’ll harvest your crops, when they’re ripe and grown
I’ll pull that engine apart, and patch’er up ’til she’s running right
I’m a jack of all trades, we’ll be all right

The hurricane blows, brings the hard rain
When the blue sky breaks
It feels like the world’s gonna change
And we’ll start caring for each other
Like Jesus said that we might
I’m a jack of all trades, we’ll be all right

The banker man grows fat, working man grows thin
It’s all happened before and it’ll happen again
It’ll happen again, yeah they’ll bet your life
I’m a jack of all trades, darling we’ll be all right

Now sometimes tomorrow comes soaked in treasure and blood
We stood the drought, now we’ll stand the flood
There’s a new world coming, I can see the light
I’m a jack of all trades, we’ll be all right

So you use what you’ve got and you learn to make do
You take the old, you make it new
If I had me a gun, I’d find the bastards and shoot ’em on sight
I’m a jack of all trades, we’ll be all right
I’m a jack of all trades, we’ll be all right





I don't think he was advocating for a America made up of such jobs. His message was not a happy one. We need to listen.

haymarket said:

Can you explain how the American worker is suppose to compete against wages making less than a dollar an hour?

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very very easy!! The American workers are 95% employed, making 15 times what the Chinese workers are making and so competing very very very well!! And, they could be doing a lot better in terms of wages if liberal taxes unions and deficits did not drive jobs off shore. Make sense??

James972 said:

very very easy!! The American workers are 95% employed, making 15 times what the Chinese workers are making and so competing very very very well!! And, they could be doing a lot better in terms of wages if liberal taxes unions and deficits did not drive jobs off shore. Make sense??

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except they do not live in China.

haymarket said:

except they do not live in China.

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no idea what you mean or what your point is

James972 said:

no idea what you mean or what your point is

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The point is who the hell cares about what people in China make and why did you bring it up in the first place?

haymarket said:

The point is who the hell cares about what people in China make and why did you bring it up in the first place?

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you said we cant compete with cheap Chinese labor . I said we can. That's why we are all employed and making 10 times what they make. But we could make even more if not for liberal taxes unions and deficits that drive high paying jobs offshore!! NOW do you understand?