whiterock said:
ATL Bear said:
whiterock said:
Again, you understand the argument for globalism very well, but you are blind to to the fact that it was carefully designed and implemented over decades, imputing an economic libertarianism to it....that it sprang to life on its own, just corporations engaged in free market activity building the best supply chains it can.
You are also blind to globalism's failings. It is not sustainable, at least for the USA. Trade deficits do matter. We have to give away national equity to finance them. That diminishes our long-term future.....sending ever greater amounts of rents to foreign entities, amounts which could be used to invest in our own production. And, of course, it gutted the middle class.
I mean, you are arguing that trade deficits have made us the richest and most powerful country in the world. If that were the case, all of our trade partners would have long-ago launched a trade war against us demanding that we export more to them than we buy from them.........
I can't keep disproving your same points, only for you to double down on them. You completely ignore my answers to the solutions
whiterock said:
Your arguments studiously avoid addressing what changes WE need to make to spark a 20yr transformation of our own economy.
WTH? How many times have I repeated the solutions?
And you have an antiquated understanding of the global economy. I'm frankly not even sure if you have any sense of how international commerce operates today. I'm not trying to be condescending, but how am I supposed to address something as misunderstood as this point of yours.
whiterock said:
Giving away our national equityโฆyou are arguing that trade deficits have made us the richest and most powerful country in the world. If that were the case, all of our trade partners would have long-ago launched a trade war against us demanding that we export more to them than we buy from them.
You keep repeating this line about "selling our equity" like it's some kind of economic tragedy, but it fundamentally misunderstands how capital markets, and economic strength actually work.
The U.S. doesn't give away equity. We sell it, voluntarily, at market rates, in a system where foreign investors choose to invest here because our institutions are stable, our returns are strong, and our rule of law is unmatched. That's not a weakness, it's a feature of a high trust, high performance economy.
So then it doesn't matter if foreign interests own 100% of US stocks?
There is no consequence on the matter of who owns our federal debt, or how much?
All the rents on that capital remitted abroad and that is good for us?
Foreign interests having significant influence if not control over our wealth is good for us?
You are making an extreme argument here that flies in the face of reality.
You act like foreign capital ownership is some form of colonization. It's not. It's investment. And the returns they earn are matched or outpaced by the growth and productivity gains we unlock by using that capital to fund businesses, innovation, and expansion. If we weren't attractive to foreign investors, that would be the red flag.
Beyond the matter of balance, does that investment grow our production capacity? Do foreign investors concern themselves with the interests of the American people or the interests elsewhere?
What's more, the U.S. owns far more foreign assets (over $35 Trillion) than any country on Earth. Our multinationals generate global profits, our pension funds hold international equities, and our economy extracts value from the world, not just sells it. The Fortune 500 alone generates trillions more in annual revenue outside the United States than the total value of our imports. You want to talk about balance sheets? Ours is the envy of the world.
https://apps.bea.gov/scb/issues/2025/04-april/0425-international-investment-position.htm
And this..
whiterock said:
Everything you said about our production base limitations applied also to China in 2020. But we changed policies and a 20 year transformation of their economy began.
You can't invoke China's decades long transformation (assuming your 2020 date was a typo) as proof of concept while ignoring the obvious. China spent those decades executing massive state driven industrial policy, with strict currency controls, suppressed wages, and enormous infrastructure spending all under an authoritarian regime.
These domestic policy choices that limited the benefits of their trade surplus....not, as you suggest, an inherent trade-off feature of trade surpluses.
None of that exists here, nor would we ever invoke that! Heck, we aren't even willing to be serious about regulatory overhaul, education and skills investment, or infrastructure and industrial planning that would be required to execute the "renaissance" being promoted. Let me make a very basic point to you. Tariffs DO NOT make us competitive, and competitiveness is what we're missing. Tariffs distort consumption and production, especially in economies like ours where supply chains stretch globally and inputs are as important as outputs.
This is perhaps where you are most blind. It does not matter what kind of regulatory overhaul or education or skills or infrastructure or planning we engage in, if we simply allow our trade partners to engage in unfair trade practices to offset those things. Which is what they do. How do we know this? Look at the size and trend of our trade deficits.....res ipsa loquitur.
Now China is proving the point that a production based and not capital focused economy is overly vulnerable. Meanwhile you're advocating for us to pursue the same while simultaneously depressing demand. That's an incredibly dangerous economic conflict.
False dilemma. More production does not mean less capital.
amazing. the willful blindness. You suspend pieces of economic reality. In classical free trade, the values of currencies are supposed to rise & fall to offset trade surpluses and deficits, keeping systems in balance. Yet we have in place a system which guarantees a strong dollar no matter how large or long are US trade deficits. IS THAT SUSTAINABLE? Nope. it will fail At. Some. Point. Better to address it now, before the crisis.
Tariffs don't make us more competitive abroad. They make imports less competitive here. And when jacked to high levels, they effectively close our markets. That is a powerful tool in negotiation. We are telling our trade partners "we don't really need you. Same isn't true for you. So lets talk about the size of our deficit. How do your propose we to fix that?" (within a context of production lines starting to close down.) Yes, that is a harsh way to negotiate. But things are getting wildly out of balance and the nice way hasn't exactly had much impact.
"....supply chains stretching globally....." I addressed that in a post just above (as well as many times previously). How do global supply chains help us, AND how do they hurt us? are there any risks, tradeoffs, costs, etc....? globalism is a god to whom we shall pay homage, no matter the cost?
The globe is occupied by hundreds of sovereign powers, only a few dozen of which matter very much. Those sovereign powers have interests. They will use globalism when it suits (like we did in the Cold War). And they will curtail globalism when it suits (like we are doing now). You treat globalism as a moral imperative, a law of gravity that must be obeyed. In reality, sovereign powers create the laws of gravity in trade by executing trade agreements. Within that context, globalism isn't inherently good or bad. It's just a tool. A tool with pros & cons, advantages & tradeoffs, etc..... When it solves important problems, it's a good thing. When it quits working, you need another tool. And that's where we are now. It is just incomprehensible that you can look at where we are at this moment in time and insist that there are no problems. The trade and net investment numbers scream OUT OF WHACK. As is the case with so many things in life, success is usually about balance. And our economy is wildly out of balance. Yet, here you come to tell us that selling equity to foreign interests to finance consumption is without any negative consequences no matter how big the gaps in the numbers might yawn.
You should read Friedman's "Storm Before the Calm." He makes a well documented observation that two major cycles occur in the USA with amazing regularity - a socio-economic cycle (class oriented political realignment) of 50yrs, and an 80yr institutional cycle where structures of government & business emerge thru crisis with major restructuring/reforms. the 2020's are unique in that it is the first time in history where the two cycles converge at the same point in time. We are currently in what I have called "the post WWII order." As I've said repeatedly here.....we built the post WWII order, to deal with realities on the ground in 1945-55, with globalism as a foundation stone. It worked spectacularly well. But it has run its course. LIke any late-stage system, it tends to get less and less responsive to the old stimuluses that once worked so well. Or it just doesn't address new problems well at all (which in some cases problems are simply the tradeoffs of the system itself). Globalism is not well structured to deal with the biggest problems facing us today. Not surprisingly, it is dying. (for lack of constituents....look who's getting elected). Yet, here you sit, over and over an over singing the praises of a system which no longer well serves the interests of ordinary Americans. Globalism was perhaps the most important part of building "containment," yet it has ALSO delivered to the USA a structural and growing trade deficit that is unsustainable.
Might also read Robert Lighthizer's book "No Trade is Free." He was Reagan's lead trade negotiator, ya know and was US Trade rep in the first Trump admin. He pokes so many holes in your theories (as I have done as well....)
You are defending the most dysfunctional component of a dying order - that trade deficits don't matter....
Maintaining a strong dollar requires US trade BALANCE.
There's a lot to unpack here, but if I responded point by point, I'm sure I'd be faulted for writing a book. So I'll focus on what stands out most. You're approaching this debate with political emotion masked as economic insight. I'm sticking to the fundamentals of global economics, not Cold War nostalgia or populist slogans.
You're looking for "wins" in places we're not losing, like consumer demand, capital inflows, and innovation, and painting strengths as vulnerabilities (we have tremendous industrial output and we lead the world in high end services). Your continued conflation of our fiscal deficit (a real issue) with our trade deficit (a misunderstood structural feature of a reserve currency economy) is one of the clearest indicators that this conversation keeps circling the same economic misunderstandings.
But let's be clear, maintaining a strong dollar does not require a balanced trade ledger. That's 80's textbook thinking applied to a post textbook reality. The U.S. dollar holds reserve currency status because of our unmatched capital markets, rule of law, geopolitical power, and economic scale, not because we run trade surpluses. In fact, the persistent global demand for dollars as a settlement instrument in trade and finance requires the U.S. to run a trade deficit because that's how those dollars get into the global system in the first place. A perfectly balanced trade account would shrink the availability of global dollars and undercut the very system you claim to want to defend. You can't both champion the dollar's supremacy and wage war against the structural mechanism that sustains it.
The bigger issue, the one you consistently gloss over, isn't our trade imbalance, it's our fiscal imbalance. If you want to address unsustainable trajectories, start with entitlements and structural deficits. But instead, you're fixated on a misdiagnosis of attacking trade flows as if they're responsible for everything from debt to middle-class erosion to strategic decline. That's not economics. It's deflection.
And let's spotlight one of the more glaring ironies. Your strawman about "100% foreign ownership" was beneath the level of debate you've otherwise tried to hold. Nobody is advocating for complete foreign control of U.S. assets. What I am saying is that foreign investment reflects confidence in our economy. Yet here you are trumpeting Trump's announcement of $8 trillion in foreign investment, touting his global "America is open for business" tour, while in the same breath suggesting foreign capital is some creeping form of destruction for our nation. So which is it? Foreign ownership of land, factories, and profit flows is fine when Trump encourages it, but equity purchases through capital markets are somehow unacceptable? C'mon now.
Let's be honest, this isn't about economics for you. It's about scoring a narrative win. Because if it were about actual strategy, you'd acknowledge that tariffs aren't making us stronger, they're creating volatility. Trump hiked tariffs, markets wobbled, global supply chains adjusted, and now he's rolling them back to claim credit for the rebound. That's not strategy. That's setting the house on fire just so you can show up with a garden hose and take a victory lap.
I think we are being liberated from the dangers of the policies espoused on liberation day. I'll give Trump credit for pivoting to Bessent and the CEOs he's spoken with, and away from that idiot Navarro and trained parrot Lutnick. I care about the country and principles much more than I do the parties involved. I am hopeful he'll take the off ramp that's being provided and we'll end up with some lower tariffs from several of our key partners, and we'll avoid the huge inflation increases and the demand trap had the policies actually been applied.
