Thoughts on Capitalism and Socialism as economic models

[Mountain Man]

You mean like Trump's tariffs?


(I'm going to predict that there will be a reason why Trump's tariffs are necessary and permissible in a "free market.")

Not a hard prediction to make when you realize that Trump is using the threat of tariffs to renegotiate some very bad and one-sided international trade deals that were made by his predecessors and that have done great harm to the American economy. Seeing how it's the President's job to protect America from foreign predation, I don't have a problem with that, nor does it undermine the concept of a free market economy when looked at on a national scale.

[carpedm9587]

Not a hard prediction to make when you realize that Trump is using the threat of tariffs to renegotiate some very bad and one-sided international trade deals that were made by his predecessors and that have done great harm to the American economy. Seeing how it's the President's job to protect America from foreign predation, I don't have a problem with that, nor does it undermine the concept of a free market economy when looked at on a national scale.

An import tariff, MM, is a taxed imposed on the local population for a good brought in from another country. It is a tax on the citizens of the country, and it places a thumb on the scales of business - most especially when it is placed on items those businesses cannot secure in adequate amounts from any other source. Trump is not "protecting" anyone or anything. He's harming American businesses because he has a message that resonates with his base (i.e., anti-globalism, those nasty "other countries" and so forth.). Other than a constant verbal barrage of "care for Americans," I have seen little sign that Trump cares for anything other than himself (his image, his popularity, his money, etc.). The impacts of these tariffs is finally beginning to be revealed, and I suspect a lot of people who expected their lives to get better under Trump are going to find it getting significantly worse in the next two years.

Personally, I'm glad. I said, when he was elected, that we were going to have to go through a period of significant pain before people woke up and realized what they put in the White House. The more pain he causes, the better than chance we will be able to say "you're fired!" in 2020.

[seer]

Personally, I'm glad. I said, when he was elected, that we were going to have to go through a period of significant pain before people woke up and realized what they put in the White House. The more pain he causes, the better than chance we will be able to say "you're fired!" in 2020.

This probably nonsense. We have already negotiated new deals with South Korea, Canada, Mexico, we have a working framework with the EU. China is the big dog in the picture, and if can negotiated a better deal with them what is wrong with that? Should we let them keep stealing our intellectual property? Should we keep running billions of dollars in trade deficits?


https://www.thebalance.com/u-s-trade...rtners-3306276

[Mountain Man]

An import tariff, MM, is a taxed imposed on the local population for a good brought in from another country. It is a tax on the citizens of the country, and it places a thumb on the scales of business - most especially when it is placed on items those businesses cannot secure in adequate amounts from any other source. Trump is not "protecting" anyone or anything. He's harming American businesses because he has a message that resonates with his base (i.e., anti-globalism, those nasty "other countries" and so forth.). Other than a constant verbal barrage of "care for Americans," I have seen little sign that Trump cares for anything other than himself (his image, his popularity, his money, etc.). The impacts of these tariffs is finally beginning to be revealed, and I suspect a lot of people who expected their lives to get better under Trump are going to find it getting significantly worse in the next two years.

Personally, I'm glad. I said, when he was elected, that we were going to have to go through a period of significant pain before people woke up and realized what they put in the White House. The more pain he causes, the better than chance we will be able to say "you're fired!" in 2020.

I obviously don't share your absurdly cynical and shortsighted outlook.

Meanwhile, I will see your "study" bought and paid for by the virulently anti-Trump Koch Bros. and raise you two articles with a more positive message.

Manufacturing Industry Has Strongest Jobs Increase in Three Years

[carpedm9587]

This probably nonsense. We have already negotiated new deals with South Korea, Canada, Mexico, we have a working framework with the EU. China is the big dog in the picture, and if can negotiated a better deal with them what is wrong with that? Should we let them keep stealing our intellectual property? Should we keep running billions of dollars in trade deficits?

https://www.thebalance.com/u-s-trade...rtners-3306276

Have you actually looked at the structure of the "new deals" with those partners, Seer? The changes were ludicrously trivial. This is a marketing ploy - not one with actual content. It is full of the empty promises of the tax cut. Now, a year later, we are seeing that the majority of the tax cut for businesses went into stock buy-backs and dividends - going straight into the pockets of the wealthy. What was given out as income often took the form of one-time bonuses, which doesn't commit the business to long-term salary. What was given as salary were modest bumps - so they were more appeasement than actual change. People are slowly waking up to the fact that they are being conned. Not the die-hard Trump base, of course. But the more moderate people who voted for him as a way to avoid voting for Clinton are slowly slipping away. I don't think they will be conned by Trump's false promises a second time.

[carpedm9587]

I obviously don't share your absurdly cynical and shortsighted outlook.

Meanwhile, I will see your "study" bought and paid for by the virulently anti-Trump Koch Bros. and raise you two articles with a more positive message.

Manufacturing Industry Has Strongest Jobs Increase in Three Years

Ignoring a study because of its source, MM, is the very definition of the genetic fallacy. Yes, I was suspicious of the study based on the supporters. But if you check out the facts IN the study, my sampling found them to be spot-on. So my confidence is fairly high.

As for the jobs-related articles, it is interesting how everyone was screaming that the dropping unemployment rate under Obama ignored the workforce participation rate numbers, but now that Trump is in office, no one is mentioning it, even though the unemployment numbers and job numbers continue to ignore those numbers. Workforce participation has been essentially flat since 2014. In that link, set the scale to 5 years to see the effect. An economists may be "wowed" according to your articles, but it doesn't change the fact that job growth under Trump, while healthy, is still below the rate of job growth in Obama's second term.

Finally - those same economists made a prediction last year: that the tax cut would "juice" the economy - for about a year or so - and then it would begin retracting. Meanwhile, it would reduce government revenues and swell the deficit. We're beginning to see signs of the end of the juice. The deficit is climbing precipitously despite this being a good economy (which is a bad sign). Finally, we have several times come close to an inverted yield curve, which is one of the best known predictors of a pending recession.

But - as with so many things - we will have to wait and see. I suspect the economy will begin to tank in the next 12 months. I'm adjusting my portfolio accordingly.

[seer]

Have you actually looked at the structure of the "new deals" with those partners, Seer? The changes were ludicrously trivial.

Yes I have and they are generally better for the America worker, of course it is trivial unless it helps save YOUR job... So you would support tariffs if they were less trivial?

This is a marketing ploy - not one with actual content. It is full of the empty promises of the tax cut. Now, a year later, we are seeing that the majority of the tax cut for businesses went into stock buy-backs and dividends - going straight into the pockets of the wealthy.

That is just silly. The vast majority of Corporations are mom and pop businesses and they did no such thing, I know many of them. Our company invested in new equipment, and we are getting Christmas bonuses for the first time in many years. Some large corporations did what you said, but they are a small minority of the corporations in this nation.

What was given out as income often took the form of one-time bonuses, which doesn't commit the business to long-term salary. What was given as salary were modest bumps - so they were more appeasement than actual change. People are slowly waking up to the fact that they are being conned. Not the die-hard Trump base, of course. But the more moderate people who voted for him as a way to avoid voting for Clinton are slowly slipping away. I don't think they will be conned by Trump's false promises a second time.

More nonsense, how is paying more taxes better for corporations, business and the economy in general?

[carpedm9587]

Yes I have and they are generally better for the America worker, of course it is trivial unless it helps save YOUR job... So you would support tariffs if they were less trivial?

I actually have no problem with tariffs. They are a means for providing protection for vulnerable industries within a country. But then again, I recognize that "free market" is not actually a good thing. All markets need to be regulated to some degree, all trade needs to be controlled to balance the needs of differing countries. My observation is mostly that those who continually call out "free markets" and "free trade" are being inconsistent when they then laud Trump for specific regulations or trade controls.

That is just silly. The vast majority of Corporations are mom and pop businesses and they did no such thing, I know many of them. Our company invested in new equipment, and we are getting Christmas bonuses for the first time in many years. Some large corporations did what you said, but they are a small minority of the corporations in this nation.

You are aware that just calling something "silly" doesn't actually make it so, right? And, using MM's formula, that opening phrase was unnecessary to your point - so it's basically just a way of ridiculing a person or position. As to the point: you are counting businesses - and I am counting dollars. The vast majority of the tax cut went to large businesses, with the result I noted. But even in small businesses, the numbers suggest that the vast majority of the tax cut went into the pocket of the business owners.

More nonsense, how is paying more taxes better for corporations, business and the economy in general?

Again - the first two words of this sentence are unnecessary to your point - so they are simply a somewhat rude jibe.

As for the rest, I have made my tax positions well known, Seer. I am actually for a flat tax with NO business taxes. My objection was not to the tax cut per se, but to the way it was implemented - ensuring that the wealthy would simply get wealthier, the economy would see a short-term jolt, and (when coupled with the spending bill) the deficit would soar. Those are the results we are seeing.

[seer]

I actually have no problem with tariffs. They are a means for providing protection for vulnerable industries within a country. But then again, I recognize that "free market" is not actually a good thing. All markets need to be regulated to some degree, all trade needs to be controlled to balance the needs of differing countries. My observation is mostly that those who continually call out "free markets" and "free trade" are being inconsistent when they then laud Trump for specific regulations or trade controls.

Well being a protectionist, I wouldn't fall under the classic definition of free markets.

You are aware that just calling something "silly" doesn't actually make it so, right? And, using MM's formula, that opening phrase was unnecessary to your point - so it's basically just a way of ridiculing a person or position. As to the point: you are counting businesses - and I am counting dollars. The vast majority of the tax cut went to large businesses, with the result I noted. But even in small businesses, the numbers suggest that the vast majority of the tax cut went into the pocket of the business owners.

The fact is Carp, you have no idea. How many thousands of small businesses poured monies back into equipment, hired more people (we just hired three new people) or gave raises or bonuses. And unless you have these numbers from smaller businesses you have nothing to compare. You are not counting dollars.

As for the rest, I have made my tax positions well known, Seer. I am actually for a flat tax with NO business taxes. My objection was not to the tax cut per se, but to the way it was implemented - ensuring that the wealthy would simply get wealthier, the economy would see a short-term jolt, and (when coupled with the spending bill) the deficit would soar. Those are the results we are seeing.

Carp having a lower across the board lower tax rate for businesses is not a short term jolt, it sets the ground work for a long term better business atmosphere. Deficits have more to do with spending, which I agree we should get a hold of. Perhaps if we only spent on what the Constitution requires we would not be in this position.

[carpedm9587]

Well being a protectionist, I wouldn't fall under the classic definition of free markets.

That much is evident.

The fact is Carp, you have no idea. How many thousands of small businesses poured monies back into equipment, hired more people (we just hired three new people) or gave raises or bonuses. And unless you have these numbers from smaller businesses you have nothing to compare. You are not counting dollars.

Yes, I actually am. In addition to the data that has been gathered, I have anecdotal evidence from my own circle. As a business owner, I have an extensive network of fellow business owners. The local chamber had a meeting recently, and one of the things I took the time to ask of my peers was how many of them used the tax savings to increase salaries or create jobs. I talked to a few dozen people over the course of the evening. The result: zero new jobs - zero pay raises. The money either was passed through to their income (about half) or was used for capital expenses that had been deferred (about half). Three people gave employees a small bonus.

Yes - the latter is anecdotal - but in a random sampling of businesses throughout northern Vermont, the results were pretty eye-opening. And the response I got when I asked about hiring or raises was usually something like, "Are you kidding? I don't hire people or give raises because I have more money. I hire people if my business grows and I need them. I give cost-of-living wages only. I give merit raises to keep employees I don't want to lose if their wages become less than competitive." That's how most businesses work....because most businesses are all about the bottom line and shareholder value.

Carp having a lower across the board lower tax rate for businesses is not a short term jolt, it sets the ground work for a long term better business atmosphere. Deficits have more to do with spending, which I agree we should get a hold of. Perhaps if we only spent on what the Constitution requires we would not be in this position.

Actually, Seer, it is. You see - businesses see a sudden influx of cash - but then they adjust to the new reality and business continues as usual. Except, with less taxes to pay, more money can flow to shareholders and owners. And deficits do NOT have more to do with spending. They are exactly about the difference between spending and revenue. Focusing on only one of those two elements is purely arbitrary. Trump and the Reps simultaneously cut taxes and increased spending at a time when we still had a deficit. It was fiscally irresponsible. The fact that we have an increasing deficit in the time of a good economy attests to just how irresponsible they were.