patrick.net

Can we impeach him yet?

Wow - didn't see that coming. Caught the EUrocrats off-guard. Smart move.

#MAGA

Haha let's see how libs spin this.

Libs are going to just focus on hookers instead...

They don’t understand economy or jobs.

This move was obvious to anyone who’s been paying attention to Trump’s negotiation strategy. He puts the hurt on his foe, takes away what they have, threatens to take away even more until they are really hurting. Then he offers an olive branch along with a better deal than his foe thought possible and they snap it up like a trout taking a mayfly. Except that mayfly is on a hook and the olive branch is a fishing pole. So when they do that, he owns them.

China will be the toughest nut to crack, and it will take some pain before they agree to trade fairly, but if we give Trump room to work his magic, we will be in for fantastically good times down the road.

Aphroman says

Holy shit! Now this is getting down to the core of the problem. Trump is just asking for fairness in trade with the US.

——————

Is it really though? Let’s say they take the deal, what will happen with the trade deficit we have with the EU?

I didn’t think that fairness in trade was the problem, i thought the imbalance of trade was the greater issue. We buy far more from them than we sell. Will that change with the removal of all tariffs?

EU has overall higher tariffs.

https://global.handelsblatt.com/politics/trump-may-point-eu-tariffs-ifo-says-899083

“The EU is by no means the paradise for free traders that it likes to think,” said Gabriel Felbermayr, director of the ifo Center for International Economics, a division of the Munich-based ifo Institute. The European Union actually comes off as the bigger offender when compared to the US, he added. The unweighted average EU customs duty is 5.2 percent, versus the US rate of 3.5 percent, according to ifo’s database.

The EU has a much better trade relationship with China for this exact reason. They bargained much harder, requiring China to buy their goods equally as they bought Chinese goods. That’s why we see Chinese heavy equipment with German control systems.

All countries try to maximize their trade deals to get an advantage. This is normal and natural and healthy. What’s NOT healthy is when a nation refuses to negotiate its own deals and lets itself be taken advantage of by everyone else. Our wonderful pantheon of past Presidents did exactly this and we are still paying that price.

Aphroman says

Will that change with the removal of all tariffs?

Having lived in Europe for two years, I can say that many things which are cheap here are expensive there. Take American-made jeans for example. They typically cost 2 to 3 times what they do in the US.

Given that wages, worker rights, and pollution controls in Europe are similar to those in the US, it seems possible that completely free trade between Europe and the US would benefit both sides without either side losing jobs due to fundamental imbalances, the way America loses jobs to China because of its low wages and lack of worker rights or pollution controls.

Greatest free trade, non globalist POTUS ever.

Quigley says

What’s NOT healthy is when a nation refuses to negotiate its own deals and lets itself be taken advantage of by everyone else. Our wonderful pantheon of past Presidents did exactly this and we are still paying that price.

Past presidents betrayed us because it allowed our oligarchs to suck money out of the American economy for their own benefit. And our past presidents were utterly owned by Wall Street. They should have bought presidents knee pads upon election.

Cheap production in China, relatively high sale prices in America => big profits at the expense of American workers. Let's see if you can find the point where that started happening, in the graph below:

Patrick says

Let's see if you can find the point where that started happening, in the graph below:

Fucking Nixon went to fucking China, duh.

Patrick says

Cheap production in China, relatively high sale prices in America => big profits at the expense of American workers. Let's see if you can find the point where that started happening, in the graph below:

Hassan_Rouhani says

Fucking Nixon went to fucking China, duh.

Don't let facts interfere with a good nonsense rant. Imports from china were basically nothing until 2001 when bush and the republican congress gave China MFN Fucking libbie losers.

Aphroman says

I’ve got seven words for you

Liberals
Liberlas
LIB ER Als
Liberlas
Liberals
LIB ER ALLSSS
LLLIIIBBBVEERRRALLLLLSSSSS!!!

That would be another way of saying I fucked up chine didn't start exporting large amounts of goods in the 70's creating a huge gap be between wages and productivity?

Patrick says

Brilliant political move.

Fast forward to 02/22/2019....EU Ready to Target Caterpillar, Xerox if Trump Hits Cars, Source Says

Caterpillar Inc. trucks, Xerox Corp. machines and Samsonite International SA luggage are among U.S. goods that would face retaliatory European Union tariffs should President Donald Trump follow through on a threat to impose automotive duties against the bloc, according to a senior EU official.

The person commented Friday on the condition of anonymity because the tit-for-tat list drawn up by the European Commission, the EU’s executive arm in Brussels, is still a confidential draft.

The commission said last month the EU would hit 20 billion euros ($22.7 billion) of U.S. products should Trump impose duties on European cars and auto parts on the same national-security grounds that he invoked last year to tax foreign steel and aluminum. The commission has declined to disclose any U.S. products that would be subject to EU duties prompted by any U.S. automotive levies.

“Should there be tariffs on car and car parts, which we don’t want, we have started internally to prepare a list of re-balancing measures,” EU Trade Commissioner Cecilia Malmstrom told reporters on Friday in Bucharest, after a meeting of the bloc’s commerce ministers. “There is full support to do this.”

Caterpillar, which announced earnings last month, had its biggest profit miss in a decade on worries over trade tensions. The Deerfield, Illinois-based company also issued a 2019 profit forecast range which, at the low end, was below the average of analysts’ expectations.

Shares of Caterpillar fell as much as 1.1 percent in early trading before U.S. markets opened on Friday, while Xerox dipped as much as 3.9 percent. S&P 500 futures pared their gains.

If the U.S. raises tariffs on vehicles and auto parts, it will make the levies imposed on steel and aluminium last year “look like a picnic,” Mike Jackson, the CEO of car-dealership group AutoNation, said in an interview.

“It’s almost so unthinkably, draconianly disruptive to everything he’s trying to do with the economy that, at the end of the day, I don’t believe it will happen,” Jackson said, referring to Trump, adding that higher car duties would be “the nuclear tariff option.”

https://www.bloomberg.com/technology

EU's been run over by the hordes.
Cut em loose while there's still time.

Jimmy Carter?

Patrick says

Per comment #18, no not Jimmy Carter

Understanding the Historic Divergence Between Productivity and a Typical Worker’s Pay - Why It Matters and Why It’s Real

Introduction and key findings

Wage stagnation experienced by the vast majority of American workers has emerged as a central issue in economic policy debates, with candidates and leaders of both parties noting its importance. This is a welcome development because it means that economic inequality has become a focus of attention and that policymakers are seeing the connection between wage stagnation and inequality. Put simply, wage stagnation is how the rise in inequality has damaged the vast majority of American workers.

The Economic Policy Institute’s earlier paper, Raising America’s Pay: Why It’s Our Central Economic Policy Challenge, presented a thorough analysis of income and wage trends, documented rising wage inequality, and provided strong evidence that wage stagnation is largely the result of policy choices that boosted the bargaining power of those with the most wealth and power (Bivens et al. 2014). As we argued, better policy choices, made with low- and moderate-wage earners in mind, can lead to more widespread wage growth and strengthen and expand the middle class.

This paper updates and explains the implications of the central component of the wage stagnation story: the growing gap between overall productivity growth and the pay of the vast majority of workers since the 1970s. A careful analysis of this gap between pay and productivity provides several important insights for the ongoing debate about how to address wage stagnation and rising inequality. First, wages did not stagnate for the vast majority because growth in productivity (or income and wealth creation) collapsed. Yes, the policy shifts that led to rising inequality were also associated with a slowdown in productivity growth, but even with this slowdown, productivity still managed to rise substantially in recent decades. But essentially none of this productivity growth flowed into the paychecks of typical American workers. Second, pay failed to track productivity primarily due to two key dynamics representing rising inequality: the rising inequality of compensation (more wage and salary income accumulating at the very top of the pay scale) and the shift in the share of overall national income going to owners of capital and away from the pay of employees. Third, although boosting productivity growth is an important long-run goal, this will not lead to broad-based wage gains unless we pursue policies that reconnect productivity growth and the pay of the vast majority.

Ever since EPI first drew attention to the decoupling of pay and productivity (Mishel and Bernstein 1994), our work has been widely cited in economic analyses and by policymakers. It has also attracted criticisms from those looking to deny the facts of inequality. Thus in this paper we not only provide an updated analysis of the productivity–pay disconnect and the factors behind it, we also explain why the measurement choices we have made are the correct ones. As we demonstrate, the data series and methods we use to construct our graph of the growing gap between productivity and typical worker pay best capture how income generated in an average hour of work in the U.S. economy has not trickled down to raise hourly pay for typical workers.

Key findings from the paper include:

For decades following the end of World War II, inflation-adjusted hourly compensation (including employer-provided benefits as well as wages) for the vast majority of American workers rose in line with increases in economy-wide productivity. Thus hourly pay became the primary mechanism that transmitted economy-wide productivity growth into broad-based increases in living standards.

Since 1973, hourly compensation of the vast majority of American workers has not risen in line with economy-wide productivity. In fact, hourly compensation has almost stopped rising at all. Net productivity grew 72.2 percent between 1973 and 2014. Yet inflation-adjusted hourly compensation of the median worker rose just 8.7 percent, or 0.20 percent annually, over this same period, with essentially all of the growth occurring between 1995 and 2002. Another measure of the pay of the typical worker, real hourly compensation of production, nonsupervisory workers, who make up 80 percent of the workforce, also shows pay stagnation for most of the period since 1973, rising 9.2 percent between 1973 and 2014. Again, the lion’s share of this growth occurred between 1995 and 2002.

Net productivity grew 1.33 percent each year between 1973 and 2014, faster than the meager 0.20 percent annual rise in median hourly compensation. In essence, about 15 percent of productivity growth between 1973 and 2014 translated into higher hourly wages and benefits for the typical American worker. Since 2000, the gap between productivity and pay has risen even faster. The net productivity growth of 21.6 percent from 2000 to 2014 translated into just a 1.8 percent rise in inflation-adjusted compensation for the median worker (just 8 percent of net productivity growth).

Since 2000, more than 80 percent of the divergence between a typical (median) worker’s pay growth and overall net productivity growth has been driven by rising inequality (specifically, greater inequality of compensation and a falling share of income going to workers relative to capital owners). Over the entire 1973–2014 period, rising inequality explains over two-thirds of the productivity–pay divergence.

If the hourly pay of typical American workers had kept pace with productivity growth since the 1970s, then there would have been no rise in income inequality during that period. Instead, productivity growth that did not accrue to typical workers’ pay concentrated at the very top of the pay scale (in inflated CEO pay, for example) and boosted incomes accruing to owners of capital.

These trends indicate that while rising productivity in recent decades provided the potential for a substantial growth in the pay for the vast majority of workers, this potential was squandered due to rising inequality putting a wedge between potential and actual pay growth for these workers.

Policies to spur widespread wage growth, therefore, must not only encourage productivity growth (via full employment, education, innovation, and public investment) but also restore the link between growing productivity and the typical worker’s pay.

Finally, the economic evidence indicates that the rising gap between productivity and pay for the vast majority likely has nothing to do with any stagnation in the typical worker’s individual productivity. For example, even the lowest-paid American workers have made considerable gains in educational attainment and experience in recent decades, which should have raised their productivity.

Whole bunch more including graphs etc. - really long marginally technical read, worthwhile if you have some patience:

https://www.epi.org/publication/understanding-the-historic-divergence-between-productivity-and-a-typical-workers-pay-why-it-matters-and-why-its-real/

Kakistocracy says

But essentially none of this productivity growth flowed into the paychecks of typical American workers. Second, pay failed to track productivity primarily due to two key dynamics representing rising inequality: the rising inequality of compensation (more wage and salary income accumulating at the very top of the pay scale) and the shift in the share of overall national income going to owners of capital and away from the pay of employees. Third, although boosting productivity growth is an important long-run goal, this will not lead to broad-based wage gains unless we pursue policies that reconnect productivity growth and the pay of the vast majority.

I'm failing to see a cohesive thesis in here. It reads like "employee wage growth lagged production growth, because employees get paid less than the owners". The question why? Did I miss something?

Jimmy Carter was the POTUS after bretton woods dissolved in 1971. Dropping the international gold standard is the oversimplified libertarian explanation for the divergence.

^^agree, disagree, or incomplete? I'm not totally sure.