I see it too, but worth noting that this is basically unprecedented at least within the last 25 years; I think you have to go back to export controlled cryptography for another example of this kind of abrupt and targeted regulation.
Huawei, Foreign gambling sites were banned on dubious reasons in 2006 (in reality American companies weren't as competitive and las Vegas needed to be protected), Japanese electronic tariffs in the 80s/90s ...
The US believed in free trade precisely when the politically connected needed labor arbitrage, and protectionism exactly when the politically connected needed protection. The pretense of underlying ideals was never more than a political tool - political economy was always political.
It depends on whether you believe US action is overdetermined, but I think if Trump didn’t get elected we would have continued on the path of free trade. His election wasn’t predestined. He had just the right mix of features to win at the time, but if this basket of features didn’t exist it’s not hard to imagine the country going down a very different path.
If we had continued on the path of free trade without "dealing in" those displaced by free trade, the pressure would have continued to grow. It certainly could have exploded in a different direction, at a different time, with a different champion, but so long as it was repressed instead of addressed it was always destined to explode.
Explosions are rarely productive. Populists are notorious for delivering lots of chaos and few results.
It's easier for everyone to just deal in the economic losers, but we didn't do that, and now they are burning the house down. This will not get them what they want, but they will continue doing it anyway.
True, and we've been here before. The industrial revolution got rid of the need for most labor, which at the time was overwhelmingly agricultural and textile. We came out the other side OK.
But there was a lot of pain. Living conditions got worse and stayed worse for entire lifetimes before they got better, and they didn't get better because the people who won decided to deal in the people who lost, they got better because the world went to war and incinerated most of its capital, literally and metaphorically, and the regrowth happened under conditions of scarce labor rather than abundant labor, allowing the people on the bottom to strike a decent deal the second time around.
That, uhh, won't happen the same way again. Now we have robots and nukes. But it's true that without the benefit of hindsight I'd have had an apocalyptic view going into the last kerfuffle, I'd have been wrong, and it would have been due to a failure of imagination. Let's all hope that I am wrong again, but the mechanism will again have to be a failure of imagination, and it takes a lot of optimism to fit my hope squarely inside my blind spot.
> But there was a lot of pain. Living conditions got worse [...]
No, living conditions did not get worse. Yes, livings conditions were pretty bad during the early industrial revolution. But they hadn't exactly been rosy before.
> [...] they got better because the world went to war and incinerated most of its capital, literally and metaphorically, and the regrowth happened under conditions of scarce labor rather than abundant labor, allowing the people on the bottom to strike a decent deal the second time around.
Which war are you talking about? There's been more than one, you know. And the decades after the second world war were probably the nadir for humanity: we never had as many dirt poor people as then and will hopefully never have as many. Remember, that's the time when there were genuine fears of global starvation. Things have been looking up a lot since perhaps around the 1980s and even more so in the following decades. Mostly thanks to PR China and India and South East Asia graduating from dirt poor to merely poor or even middle class.
You also seem confused. You seem to say that a relative capital scarcity is good for labour ('incinerated most of its capital') but also that relative labour scarcity is good for labour? Which way is it?
Conditions did get worse in the industrial revolution. People didn't go to the city because they thought it was brilliant, they went to the city because their livelihood in the rural economy was disrupted. They were pushed (shoved), not pulled.
> the decades after the second world war were probably the nadir
People compare themselves to their parents and grandparents, you can only hustle so far in the face of lived experience.
> You seem to say that a relative capital scarcity is good for labour ('incinerated most of its capital') but also that relative labour scarcity is good for labour? Which way is it?
In an extreme downturn (Europe bombing its cities), the poor undergo more real suffering but the rich undergo more nominal suffering so inequality is reset. Bombed out factories and apartments create an enormous demand for labor -- the broken window fallacy is only a fallacy if you studiously ignore distribution. This is why we should eagerly seek to fix r>g in peacetime -- it's guaranteed to be mathematically possible and it's clearly better for everyone.
> People compare themselves to their parents and grandparents, you can only hustle so far in the face of lived experience.
Different people in different parts of the globe had different experiences.
People in rich parts of the globe had a pretty decent 1960s. People in PR China had the Cultural Revolution..
> This is why we should eagerly seek to fix r>g in peacetime -- it's guaranteed to be mathematically possible and it's clearly better for everyone.
Why do you want to compare these two variables specifically?
Btw, during much of the 2010 real interest rates in the western world were negative while we had positive real growth. Thus r<0<g. Was that the golden age you yearn for?
George Friedman disagrees with you: he's been saying for years that US trade policy towards China had to change no matter who won the 2016 election (because an economy cannot rely on a trade partner it might go to war with, among other reasons).
When last year the Trump admin started interdicting oil shipments out of Venezuela, it left shipments heading to China intact. Then during Trump's visit to China, the two parties made a lot of progress on trade and other issues (in part because Beijing's attitude improved because the first Trump administration's restrictions on trade underlined to Beijing how dependent China is on trade with the US).
"Kicking Away the Ladder: Development Strategy in Historical Perspective by Ha-Joon Chang"
"How did the rich countries really become rich? In this provocative study, Ha-Joon Chang examines the great pressure on developing countries from the developed world to adopt certain 'good policies' and 'good institutions', seen today as necessary for economic development. His conclusions are compelling and disturbing: that developed countries are attempting to 'kick away the ladder' with which they have climbed to the top, thereby preventing developing countries from adopting policies and institutions that they themselves have used."
Taking that political scenario as an example. Was the decline caused simply because Harley kept to the same working formula refusing to innovate for competition? As to the likes of Honda and Co?
Manufacturing is cheaper if you have access to resources and such. Japan may of had abundant of but in this case I don't feel it's was all about manufacturing costs.
Was it a cash cow situation, where their one formula was working but as well as where Harley were reluctant to invest in a different avenue, to innovate causing cow to dry up.
And that is when they called in the government to settle? That is always the impression I seem to receive.
Excluding manufacturing costs was it because they were scared of an innovation being a failure?
The same cash cow formula can be seen with the likes of Disney Pixar and Toy Story 5, a pointless movie plot at this point where if money was invested, a new creation could be born.
A current account deficit is a capital account surplus, assets and exports compete in the balance of payments, an asset windfall kills exports by increasing the currency hurdle and embedded asset price.
What you are seeing is "the bar" for a successful manufacturing business increasing until only the most profitable are left -- things like chips, things like shell companies that exist to monetize a brand. "New growth" isn't highly profitable so it never has a chance to get started (unless a recipient of an asset windfall is willing to finance it all the way to "the bar" -- see: Elon Musk).
Ah. I get it now. A established economic model is provable and that in five years you can forecast that if you follow X guide you'll end up on top with Y.
If competition is on the scene then how can you assure me that myself taking the risk of investing will return me the sum I wish for in return.
Production has already been established but the threat is in that an another forecastable model exists and that to catch up to their market will require more investment and expenditure which could lead in less chance of a return. And even if the model is copyable; as like the trope of Chinese knockoffs to of Japanese products, you're still at a lower advantage.
It's not they don't want to innovate but the risk to gamble on innovation is high enough that you could stifle competition cheaper via governmental means.
This slows their forecast and where you can then strategise to overcome the competition rather than risking expenditure via innovation. Crafty, cheers.
It's worth tracing this through every level in order to get the causality correct.
Triffin's Dilemma says that in the case of the modern USA, assets will be pumped. Macroeconomics says asset pump = export dump.
The way that economics dumps exports is by raising the bar (strong currency = poor customers, expensive assets = expensive houses = expensive labor, costs go up, price goes down, profitability is squeezed). Eventually the bar became impossible to hop without a cheat code like "good brand and no R+D" or "software level profitability".
At the individual level, manufacturing pay went in the shitter as the jobs dried up while house prices and stock prices went through the roof... so everyone who could became real estate agents, or doctors overcharging real estate agents, or sellers of investment scams to venture capitalists.
What's wild is that this happened to the Spanish, the Dutch, the English, and by the 1960s Triffin could see that it would happen to the US as well.
If you want details from an economist who does his homework, "Trade Wars are Class Wars" by Klein and Pettis.
Weakening the dollar would make the export sector happy, but if you did enough of it to make the US export sector strong you would make assets unhappy. In fact, we have front row seats to this very lesson which appears to be even stronger in reality than it is in theory: we are already seeing yields rise despite a dollar that is still strong enough to crush exports.
Assets have had such a stranglehold over US politics for the last 50 years that if we ever actually run pro-export policy it won't be due to doomed self-promotion by exports (we even have a term for the pattern where this fails on first contact with tradeoffs: TACO) it will be because assets self-sabotage, implode, and exports fill the vacuum.
The exchange rate is a nominal phenomenon. Inflation adjusted interest rates and inflation adjusted asset values are a real phenomenon. They don't necessarily have much to do with each other.
Germany and Singapore are two prominent historic examples of countries that export just fine despite a strong currency.
Weakening your domestic currency has barely any impact on the real price of traded goods and commodities: they just price at the world market rate. The impact is felt for goods with sticky prices, chiefly labour. Weakening your currency is mostly a way to try and give everyone a wage cut. That can make your exports more competitive for a while. But it's not the only way to cut workers' wages. (And in general, later you seem to agree that giving ordinary people more real income is kind of the point of economics. So giving everyone a real wage cut seems a bit of a curious way to get there.)
> we are already seeing yields rise despite a dollar that is still strong enough to crush exports.
Rising yields fairly mechanically leads to a stronger dollar.
The Lerner Symmetry Theorem suggests roughly that import tariffs are equivalent to export taxes; and export subsidies are equivalent to import subsidies.
And the US is actually doing pretty well in exports, if you take into account that they are exporting not just goods but also services; and if you squint a bit, you can also see that Americans love to found new start-ups and new world beating companies and sell shares in them to the world. That's also a kind of export, but it shows up on the other side of the ledger for accounting reasons.
Similarly, if you build an office building in Seattle and sell it to a foreigner, that also doesn't show up as an export for accounting reasons.
The entire US auto industry is predicated on protectionism. Without it the Japanese would have wiped out GM/Ford/Chrysler in the 1980s, and now the Chinese in the 2020s-2030s.
TikTok ban was the worst one because it was about speech, not trade or security. If the bill said "China banned our social media so we're gonna ban theirs in reciprocity," that'd be a way more valid reason.
It's also super annoying being collateral damage in America's war on free speech. Canadian TikTok is now also being similarly moderated for content unfriendly of your administration. I guess we're still in a position of privilege where we can grow domestic social platforms to compete while American simply have no alternatives - anything that grows sufficiently large will be turned towards similar propaganda aims.
> Canadian TikTok is now also being similarly moderated for content unfriendly of your administration.
I feel like this has to do more with the consolidation you typically see international companies do with their North American operations than anything. More often than not do things have to go across the border for warranty repair. Even when a 'local' Canadian presence exists (like Asus has), they themselves generally act as a middleman between you and their 'parent' operation in the US. It would not be surprising to find out that TikTok US operates the Canadian version as well.
China didn't even blanket ban them. They established laws that Internet companies have to follow and most U.S. tech companies refused to comply. Some did (e.g. Bing) and aren't banned.
All social media is a toxic, ad-driven, algo-fueled surveillance tool at this point. Just regulate it all, equally, into the ground if we want to do society a service.
The fact that China's version of TikTok is nothing like what's available in the US should showcase how much the USG gives zero F's about it's citizens regardless of the political party you lean towards.
DJI, Huawei and the list goes on. Definitely no need to go back "25 years". The USG is turning into a joke of a surveillance state. As if any of the US based tech is truly any less backdoor'd? Cisco and Flock and Google and Facebook and Microsoft, oh what amazing technology companies that could never be used for... Oh wait, what a fantastic endgame we're on course for! I wonder why other nations are actively moving away from US tech?
A real headscratcher isn't it? And from a government that is supposedly priding itself on small government. How should companies navigate this? What's the framework they should operate within?
Claiming the mantle of "small government" was simply an exercise in marketing to relax regulation meant to prevent bribery and corruption. In practice, the current slate of government officials believes in absolute control of whatever they want whenever they want.
It's a mirror case of the supposed "free speech absolutists" who immediately turned around and silenced, sued, fired or jailed once granted the power to do so.
This was certainly the rallying cry behind DOGE and the general push to rip the entrails out of many federal agencies. Combatting "waste" and "inefficiency," with strong implications that most of what those agencies do is pointless government meddling.
Whether he's actually driving towards small government with that or anything else - in the good-faith spirit of that policy - that's definitely up for debate.
No I’m asking if ever said he was for small government.
From 2015 Trump has positioned himself as opposed to that style of republicanism. He offered a different playbook and the base followed.
What is happening is 40-50+ year olds haven’t updated their map of reality and continue to use talking political points from when they were 25.
One of the critiques of small government is its valueless. Instead of having to argue for or against positions you just say you don’t like it because it’s out of scope. Well now the inverse thing is happening in this thread. People are just saying he’s in violation of a small government principle he never espoused.
Good grief. I hadn't been watching reddit or the news today so you had me go check. Should've known. Friday at market close on the dot. So much for that deal huh.
Oh yes, the country that lost basically all its navy, air force, a large number of military facilities and couldn't defend its airspace. Iran won a lot indeed!
You are misled/misleading. Get informed about the political theory of domestic deployment of troops for the purpose of policing in western democracues. Look how those who speak for the U.S. military personell (former generals, the editorial of that magazine they produce in the U.S. army prior to being pruned) if you need some motivation.
The most important part of the mafia state is making everyone else a participant. It enforces your personal power and once in the system those parties will do things they would never imagine doing when they were outside of it.
It's also a defensive self-interest: A corrupt senior who takes bribes is indirectly threatened by any junior with a clean record, because they aren't "in the same boat."
So each wave corrupts (or eliminates) members of the next, in order to secure the safety of their own retirement when they won't have direct power.
This whole administration is absolutely rampant with corruption. Just yesterday we had JD Vance on TV saying that if Watergate happened today, it would just be a 12 hour news story, because they are getting away with so much worse.
Anyone who denies or defends this administration's corruption is complicit.
Can you point to examples in the past of a sitting US president pardoning the people who broke into a government building and tried to overthrow an election? Or one who accepted bribes for pardons? Started an unregulated cash exchange we can get accept money from foreign governments without oversight? What about giving their family members no-bid defense contracts?
There is one major reason why oligarchs are in favor of small government, when it's in their way. Another commenter said it already: it's only about power.
Munitions exporting. I fondly remember the PGP feasco. I spent years using PGP to encrypt my emails to several people who refused to use email without it. Good times.
Yeah, that's what we need, frontier intelligence models open in the wild that, if a jailbreak is reliably established, there's no possibility for anyone to ever patch at the API layer. Because there is no API layer.
Between $5-10T of the US economy is subject to export controls. Nobody disputes that Mythos is dual-use technology, which means it has been export controlled since the day it was created.
Companies are responsible for demonstrating criteria to export (for example) a nerfed version (Fable) of an export controlled item (Mythos)
Nothing here is novel, unusual, capricious, or … fascisistic.
We saw what happened with banning nvidia flagship compute GPU exports to China; it just spurred them to develop a domestic semiconductor industry while still importing black market GPUs at a minor markup. The US would do well to keep the world dependent on American products that are under the jurisdiction of the US government, and can therefore be regulated or killswitched. All this will do is allow China to have flagship model capabilities without being subject to the US at all.
