Against Free Trade

[Swordsmyth]

It's too late now but if the US had hermetically sealed off the US from 99.99% of trade back in the 60's, our economy, industrial, and technological progress, would be decades ahead of where we are now.

Instead, the US economy has been stagnating for decades, and we've been subsidizing the rest of the world to catch up to us (or even surpass) us economically.

Free trade isn't idiotic by default but it's pretty goddamn stupid to basically sell off the family business in exchange for plastic lawn chairs and buckets of purple dildos. No rational individual would do it, and yet that's exactly what we did as a nation.

Same with immigration, which is just the human trafficking trade for the corporate class.

[acptulsa]

Same with immigration, which is just the human trafficking trade for the corporate class.

So you're saying the Iroquois should have killed off all the Pilgrims.

Is it too late, do you suppose?

[Swordsmyth]

So you're saying the Iroquois should have killed off all the Pilgrims.

Is it too late, do you suppose?

All people should fight against invaders who want to take their lands, the Injuns lost, we don't have to.

[Swordsmyth]

Gee. I wonder why they're so poor.

All of a sudden no tariffs and foreign dumping are bad now?
Every time I try to say that I'm am repeatedly told that they are nothing but good, didn't Clinton gift them a bunch of cheap food?
They should have become richer than ever with that giant injection of wealth into their economy, right?

[jmdrake]

All of a sudden no tariffs and foreign dumping are bad now?
Every time I try to say that I'm am repeatedly told that they are nothing but good, didn't Clinton gift them a bunch of cheap food?
They should have become richer than ever with that giant injection of wealth into their economy, right?

I've never said anything Bill Clinton did was "good" and I'm hard pressed to think of anything. Nor have I taken a position that "no tariffs and foreing dumping" are not "bad." And government subsidized "dumping" isn't free trade. If Arkansas rice farmers wanted to actually exchange their rice for Haitian goods without being subsidized by U.S. taxpayers that would have been a win/win. Maybe some Arkansas farmers could have arranged for expert mining operations to go to Haiti. Who knows?

I'm surprised you're defending Bill Clinton when even Donald Trump attacked the Clintons over Haiti back in 2016.

https://www.washingtonpost.com/news/...scovers-haiti/

[Swordsmyth]

I've never said anything Bill Clinton did was "good" and I'm hard pressed to think of anything. Nor have I taken a position that "no tariffs and foreing dumping" are not "bad." And government subsidized "dumping" isn't free trade. If Arkansas rice farmers wanted to actually exchange their rice for Haitian goods without being subsidized by U.S. taxpayers that would have been a win/win. Maybe some Arkansas farmers could have arranged for expert mining operations to go to Haiti. Who knows?

I'm surprised you're defending Bill Clinton when even Donald Trump attacked the Clintons over Haiti back in 2016.

https://www.washingtonpost.com/news/...scovers-haiti/

Your reading comprehension doesn't exist.
I'm in favor of tariffs and pointing out that getting rid of them in favor of cheap foreign food was destructive.

[jmdrake]

Your reading comprehension doesn't exist.
I'm in favor of tariffs and pointing out that getting rid of them in favor of cheap foreign food was destructive.

LOL. So logic circuits are broken as hell. I talk about what Bill Clinton did wrong, you respond to me with saying "All of a sudden no tarriffs and foreign dumping are bad now?" and somehow you come back and pretend my "reading comprehension doesn't exist" when I point out to your lying butt that I've never argued that no tarriffs and foreign dumping are bad? GTFO with that nonsense! You made a straw man argument. I never said you weren't in favor of tariffs just like I never said I was against them.

Edit: And for the record I didn't even initally post in this thread. You copied my attack on Bill Clinton's trade policy with respect to Haiti over to this thread for reasons only you can fathom.

[Swordsmyth]

LOL. So logic circuits are broken as hell. I talk about what Bill Clinton did wrong, you respond to me with saying "All of a sudden no tarriffs and foreign dumping are bad now?" and somehow you come back and pretend my "reading comprehension doesn't exist" when I point out to your lying butt that I've never argued that no tarriffs and foreign dumping are bad? GTFO with that nonsense! You made a straw man argument. I never said you weren't in favor of tariffs just like I never said I was against them.

Edit: And for the record I didn't even initally post in this thread. You copied my attack on Bill Clinton's trade policy with respect to Haiti over to this thread for reasons only you can fathom.

A search has informed me that my memory was wrong and that you have not opposed tariffs on dogmatic free trade grounds.
I'll admit being mistaken about that and give you credit for it.

However, many of the people agreeing with you about what happened with Clinton and Haiti have vehemently opposed tariffs and promoted free trade arguments claiming that foreign countries dumping and destroying our industries is actually a gift to us, so I stand by my use of your post to make my point to them.

[jmdrake]

A search has informed me that my memory was wrong and that you have not opposed tariffs on dogmatic free trade grounds.
I'll admit being mistaken about that and give you credit for it.

However, many of the people agreeing with you about what happened with Clinton and Haiti have vehemently opposed tariffs and promoted free trade arguments claiming that foreign countries dumping and destroying our industries is actually a gift to us, so I stand by my use of your post to make my point to them.

Fair enough. I am a free trade agnostic. I think it's a great idea in theory but I'm totally against NAFTA, GATT and pretty much every other free trade "deal" that's been proposed in my lifetime. Even when I voted for Bill Clinton, something about NAFTA didn't sit right with me. If I had to do it all over again I would have voted for Ross Perot.

[Swordsmyth]

A Timely Reminder on Tariffs

This is a repeat of a 2018 post that is itself a rehash from a paragraph of my 2009 book entitled The Return of the Great Depression. And contra Martin Armstrong and everyone else who is pontificating about how Trump’s proposed tariffs would “destroy the global economy”, it’s just not true, at least not on the historical comparison to which most of them are appealing.

Every single talking head who makes any reference whatsoever to Smoot-Hawley is a poser and a fraud who knows nothing about economics or economic history. This is basically a variant of the “Um, Ricardo?” pseudo-rebuttal to an argument for tariffs or other forms of protectionism. It is proof that the speaker has heard about the subject, but doesn’t actually know the subject at all.

The point is so trivial that I dealt with it in a single paragraph in The Return of the Great Depression ten 16 years ago and haven’t seen the need to mention it again since until now.

For many years, it was supposed that the Smoot-Hawley tariff of 1930 played a major role in the economic contraction of the Great Depression. As more economists are gradually coming to realize, this was unlikely to have been the case for several reasons. First, the 15.5 percent annual decline in exports from 1929 to 1933 was less precipitous than the pre-tariff 18.3 percent decline from 1920 to 1922. Second, because the amount of imports also fell, the net effect of the $328 million reduction in the balance of trade on the economy amounted to only 0.3 percent of 1929 GDP. Third, the balance of trade turned negative and by 1940 had increased to nearly ten times the size of the 1929 positive balance while the economy was growing.

There was nowhere nearly enough international trade taking place at the time to cause or account for the Great Depression. Whoever originally came up with that idea didn’t know what they were talking about and didn’t understand economics. And neither does anyone who still takes the ridiculous idea seriously.

The reason the Great Depression happened was the same reason that the financial crisis of 2008 happened. Everyone was overleveraged and the total amount of money being borrowed collapsed. That is why an average of 1,287 banks failed every year from 1930 to 1933. The historical credit collapse had vastly more impact on the economy than a smaller annual decline in exports than had been experienced seven years before as a result of the Fordney–McCumber tariff act.

The only way Trump’s proposed tariffs can “collapse the global economy” is if the resulting shift in purchasing preferences toward domestic producers results in the collapse of overleveraged corporations and banks that will no longer be able to service their debts in countries that have a trade surplus with the USA. But that’s going to happen anyhow. What 100-percent tariffs really mean is that global producers will have a serious incentive to produce goods in the USA instead of manufacturing them elsewhere and shipping them into the USA; it would definitely alter the relevant math on leather book production, just to give one example.

https://voxday.net/2024/12/02/a-time...er-on-tariffs/

[PAF]

The Cartel Behind The Blockchain


https://youtu.be/Z3D8Vo9hRyw



Related:

The Menace of Tariffs ~ Mises.org

Trump’s Latest Tariff Plan ~ Mises.org

After Six Years of Tariffs, Small-Business Owners Aren't Eager for More

Tariffs Are Attacks on Property Rights and Freedom ~ Mises.org

Tariffs: Tax Hikes Wrapped in the Flag ~ Mises.org

Peter Thiel Donations to J.D. Vance Groups: $15 Million


A Guide to Tech Billionaire Peter Thiel's Washington Web

[Swordsmyth]

The Cartel Behind The Blockchain


https://youtu.be/Z3D8Vo9hRyw



Related:

The Menace of Tariffs ~ Mises.org

Trump’s Latest Tariff Plan ~ Mises.org

After Six Years of Tariffs, Small-Business Owners Aren't Eager for More

Tariffs Are Attacks on Property Rights and Freedom ~ Mises.org

Tariffs: Tax Hikes Wrapped in the Flag ~ Mises.org

Peter Thiel Donations to J.D. Vance Groups: $15 Million


A Guide to Tech Billionaire Peter Thiel's Washington Web

Sounds like you want no competition, after all free trade concentrates industries in the single country best able to manipulate it, and it concentrates governments into regional and then a single world government.

America is a big country, we can have all the competition we need here, especially if we encourage it with smaller internal tariffs to produce lots of different competitors in different regions and states.

[Swordsmyth]

And notice that all we get in the post by PAF is a rote repetition of dogma and propaganda, not engagement on the facts and logic.

[PAF]

And notice that all we get in the post by PAF is a rote repetition of dogma and propaganda, not engagement on the facts and logic.

A Brief History of Tariffs and Stock Market Crises

Mises Wire
David R. Breuhan
11/04/2024


The most important and globally misunderstood aspect of tariffs is their impact on the stock market. History has demonstrated that tariffs can cause immediate market corrections and destroy investor capital. They also backfire on American manufacturers and consumers.

Tariffs may be aimed at foreign companies and governments, but their domestic consequences are often far greater. Advocates for protectionist measures on steel, lumber, electric vehicles, and other products fail to understand that everyone who invests in the stock market has suffered losses because of this policy. It isn’t just the approximately 60 percent of Americans who directly own stocks, often in their 401(k)s and individual retirement accounts, union pensions and teacher retirement plans will be affected, too. The minor bump in price protection for certain industries is more than wiped out by trillions eviscerated in the market capitalization in the major indexes and the domestic economic dislocation.

Depending on the economist or analyst, assessments regarding new policy proposals vary on the inflationary impact of tariffs on the American family. Estimates range from an annual impact of a few hundred dollars to well over $1,000. Making matters worse, once U.S. tariffs are in place, foreigners routinely retaliate against American exporters, causing earnings and stock prices to decrease further. Material shortages and job losses follow.

Markets react to tariffs. Three examples show the historical folly.

In 1928, Herbert Hoover campaigned on a protectionist platform, to support American agriculture. As the tariff movement grew after his election, many industries supported the levy. It grew to encompass a tax on 25,000 imported goods. In October 1929, rumors spread that the tariff bill might fail, which Sen. Reed Smoot of Utah promptly dismissed.

The stock market collapse began on Oct. 28, 1929, as news spread that the Smoot Hawley Tariff Bill would become law. The front-page New York Times article read: “Leaders Insist Tariff Will Pass.” Although the tariff bill didn’t become law until June 1930, its effects were felt eight months prior. Markets reacted immediately, as they discount future earnings. Most economists blame the gold standard for the crash, but this analysis misses the forward-looking nature of the human mind, which is the market itself. Markets need not wait for earnings to decrease due to imminent policies that will result in future losses. Hence the rapid nature of the crash. The use of leverage in the 1920s exacerbated the crash. Margin calls were made, further cascading the markets.

Once the bill became law, other nations retaliated. The agricultural sector was among the worst affected, as farmers couldn’t competitively export their crops. Hoover followed up with the Revenue Act of 1932, increasing taxes in the middle of the economic collapse. By 1934, global trade dropped 66 percent, back to the levels of 1905. The Great Depression continued, increasing economic nationalism, allowing radicals to come to power, resulting in World War II. The adage proved true: When goods cannot cross borders, armies will.

Much later, as we opened a new century, protectionist hawks still believed that tariffs protect American jobs. Recent history shows otherwise. President George W. Bush imposed steel tariffs on March 20, 2002. According to the Bureau of Labor Statistics, from March 2002 to March 2003, manufacturing lost 475,000 jobs, more than existed in the entire steel industry. Manufacturers were unable to pass along higher steel prices to their customers, as many fixed contracts were in place that prohibited price increases.

The tariff impacted the performance of the stock market. This fact is often missed due to the attention given to the dot-com bust over the prior two years. From March 2002 to May 2003, with tariffs in place, the S&P 500 lost $2 trillion in market cap. The Dow Jones Industrial Average reached a post-Sep. 11, 2001 peak on March 19, 2002 at 10,635.25. The steel tariffs took effect the next day. Lumber tariffs followed in May. The Dow didn’t fully recover until the steel tariffs were lifted on Dec. 4, 2003. The Bush administration lifted the tariffs after it learned that the European Union would retaliate. Had it, the American stock market could have suffered another severe downturn, as it had in 1929.

During the Trump administration, the stock market peaked in January 2018, when President Trump announced tariffs on China. China responded in kind. He also imposed tariffs on steel and aluminum imports from around the world, including Mexico, Canada and the European Union. Canadian lumber also received a tariff, resulting in higher domestic prices. The market retreated and didn’t reach its January high until August 2018. A minor setback, but a setback nonetheless.

As the Nov. 5 election nears, both parties are quietly grappling with the nightmarish reality that the government is paying $2 million a minute in interest to fund the national debt. The most recent policy proposal from the Republican Party involves replacing some of the current income tax with a 10 percent tariff on all goods and services entering the U.S. Democrats also favor tariffs, with the Biden administration keeping most of the Trump tariffs in place and recently instituting 100 percent tariffs on EV’s from China. Vice President Kamala Harris is expected to continue these policies should she win. Most observers believe that the tariff will be paid by the nation that exports the product into our country, but this isn’t the case. Domestic consumers pay for most tariffs, including on imports of raw materials, as they are imposed by the U.S. Government at the port of entry. No one doubts that there are many bad actors on the global stage. We need to address China and other nations’ behavior, especially when it comes to currency devaluation and subsidizing their own industries to unfairly compete with American firms. Free trade must be fair trade.

The free market and trade require an honor system that is rigorously enforced through existing bodies, developed to resolve disputes in front of panels rather than on battlefields. If a nation violates the rules established for fairness and integrity, it should be addressed. Denial of market access, import quotas, loss of most favored nation trading status, expulsion from the World Trade Organization, and repeal of foreign aid are only a few of many options.

Tariffs backfire on American investors, consumers, and businesses. Repeating the failed trade policies of the past will only result in lower performing equity markets and massive economic distortions.


https://mises.org/mises-wire/brief-h...-market-crises

[Swordsmyth]

A Brief History of Tariffs and Stock Market Crises

Mises Wire
David R. Breuhan
11/04/2024


The most important and globally misunderstood aspect of tariffs is their impact on the stock market. History has demonstrated that tariffs can cause immediate market corrections and destroy investor capital. They also backfire on American manufacturers and consumers.

Tariffs may be aimed at foreign companies and governments, but their domestic consequences are often far greater. Advocates for protectionist measures on steel, lumber, electric vehicles, and other products fail to understand that everyone who invests in the stock market has suffered losses because of this policy. It isn’t just the approximately 60 percent of Americans who directly own stocks, often in their 401(k)s and individual retirement accounts, union pensions and teacher retirement plans will be affected, too. The minor bump in price protection for certain industries is more than wiped out by trillions eviscerated in the market capitalization in the major indexes and the domestic economic dislocation.

Depending on the economist or analyst, assessments regarding new policy proposals vary on the inflationary impact of tariffs on the American family. Estimates range from an annual impact of a few hundred dollars to well over $1,000. Making matters worse, once U.S. tariffs are in place, foreigners routinely retaliate against American exporters, causing earnings and stock prices to decrease further. Material shortages and job losses follow.

Markets react to tariffs. Three examples show the historical folly.

In 1928, Herbert Hoover campaigned on a protectionist platform, to support American agriculture. As the tariff movement grew after his election, many industries supported the levy. It grew to encompass a tax on 25,000 imported goods. In October 1929, rumors spread that the tariff bill might fail, which Sen. Reed Smoot of Utah promptly dismissed.

The stock market collapse began on Oct. 28, 1929, as news spread that the Smoot Hawley Tariff Bill would become law. The front-page New York Times article read: “Leaders Insist Tariff Will Pass.” Although the tariff bill didn’t become law until June 1930, its effects were felt eight months prior. Markets reacted immediately, as they discount future earnings. Most economists blame the gold standard for the crash, but this analysis misses the forward-looking nature of the human mind, which is the market itself. Markets need not wait for earnings to decrease due to imminent policies that will result in future losses. Hence the rapid nature of the crash. The use of leverage in the 1920s exacerbated the crash. Margin calls were made, further cascading the markets.

Once the bill became law, other nations retaliated. The agricultural sector was among the worst affected, as farmers couldn’t competitively export their crops. Hoover followed up with the Revenue Act of 1932, increasing taxes in the middle of the economic collapse. By 1934, global trade dropped 66 percent, back to the levels of 1905. The Great Depression continued, increasing economic nationalism, allowing radicals to come to power, resulting in World War II. The adage proved true: When goods cannot cross borders, armies will.

Much later, as we opened a new century, protectionist hawks still believed that tariffs protect American jobs. Recent history shows otherwise. President George W. Bush imposed steel tariffs on March 20, 2002. According to the Bureau of Labor Statistics, from March 2002 to March 2003, manufacturing lost 475,000 jobs, more than existed in the entire steel industry. Manufacturers were unable to pass along higher steel prices to their customers, as many fixed contracts were in place that prohibited price increases.

The tariff impacted the performance of the stock market. This fact is often missed due to the attention given to the dot-com bust over the prior two years. From March 2002 to May 2003, with tariffs in place, the S&P 500 lost $2 trillion in market cap. The Dow Jones Industrial Average reached a post-Sep. 11, 2001 peak on March 19, 2002 at 10,635.25. The steel tariffs took effect the next day. Lumber tariffs followed in May. The Dow didn’t fully recover until the steel tariffs were lifted on Dec. 4, 2003. The Bush administration lifted the tariffs after it learned that the European Union would retaliate. Had it, the American stock market could have suffered another severe downturn, as it had in 1929.

During the Trump administration, the stock market peaked in January 2018, when President Trump announced tariffs on China. China responded in kind. He also imposed tariffs on steel and aluminum imports from around the world, including Mexico, Canada and the European Union. Canadian lumber also received a tariff, resulting in higher domestic prices. The market retreated and didn’t reach its January high until August 2018. A minor setback, but a setback nonetheless.

As the Nov. 5 election nears, both parties are quietly grappling with the nightmarish reality that the government is paying $2 million a minute in interest to fund the national debt. The most recent policy proposal from the Republican Party involves replacing some of the current income tax with a 10 percent tariff on all goods and services entering the U.S. Democrats also favor tariffs, with the Biden administration keeping most of the Trump tariffs in place and recently instituting 100 percent tariffs on EV’s from China. Vice President Kamala Harris is expected to continue these policies should she win. Most observers believe that the tariff will be paid by the nation that exports the product into our country, but this isn’t the case. Domestic consumers pay for most tariffs, including on imports of raw materials, as they are imposed by the U.S. Government at the port of entry. No one doubts that there are many bad actors on the global stage. We need to address China and other nations’ behavior, especially when it comes to currency devaluation and subsidizing their own industries to unfairly compete with American firms. Free trade must be fair trade.

The free market and trade require an honor system that is rigorously enforced through existing bodies, developed to resolve disputes in front of panels rather than on battlefields. If a nation violates the rules established for fairness and integrity, it should be addressed. Denial of market access, import quotas, loss of most favored nation trading status, expulsion from the World Trade Organization, and repeal of foreign aid are only a few of many options.

Tariffs backfire on American investors, consumers, and businesses. Repeating the failed trade policies of the past will only result in lower performing equity markets and massive economic distortions.


https://mises.org/mises-wire/brief-h...-market-crises

Pro-Fed propaganda.
The tariffs did not cause the crash, the Fed did.

[Swordsmyth]

The whole thing is garbage correlation=causation propaganda that ignores all the other factors.

Trade causes wars by causing trade dependency and trade disputes.
America has been hemorrhaging manufacturing from free trade since WWII and a few small tariffs on just one or two industries is not going to halt or cause it.

Fixing the devastation caused by free trade will possibly lead to some short term pain (not nearly what is fantasized) like ending any addiction, but it is necessary for long term good health and survival.

That entire article is goal seeking analysis that ignores the 10 ton elephant in the room (the fed) and all the other elephants in the room that just cherry picks things that can be forced into looking bad for tariffs and ignores the overwhelming success of tariffs in building America from the beginning.

[Swordsmyth]

Just more repetition of the same old lies and dogma.

[Swordsmyth]

It's demonstrably true.

It's not just the gold standard that explains this, money printing alone would see inflation trickle down to wages with a delay.
Offshoring and mass immigration are the weapons the ultra rich and boomers (See also Mises types) used against their children and grandchildren to keep wages down and launch wealth inequality into the stratosphere.

..

[Swordsmyth]

This is proof-positive we're not just poorer now than we were 40 years ago, we're much, much poorer.

Armies of well-paid apologists, apparatchiks and propaganda peddlers--economists, pundits, statisticians, influencers--spend their entire careers pushing a big shining lie; we're more prosperous now than ever before. This is demonstrably false, as the truth--that we're much poorer than we were 40 or 50 years ago--would disrupt the status quo in which the few at the top get to control the narratives and wealth as long as the masses believe the propaganda that we're all better off.

This is the reason why the four-decade collapse of the purchasing power of wages must be papered over with propaganda and gamed statistics. If we accept the reality of our declining standard of living and well-being, then a few reforms will be recognized as insufficient; we'll awaken to the necessity of a Reformation, not just a handful of standard-issue policy tweaks.

Inflation statistics are easily gamed. So are statistics such as median wages. Official inflation is gamed by various statistical tricks (hedonics and what's in the price basket) to understate the real-world decline in purchasing power.

There is only one true measure of prosperity: the purchasing power of an hour's labor / wage. It doesn't matter what the wage or price numbers are, what matters is: how much can you buy with an hour's wage?

Fact: in 1977, it took 2.25 days of work (18 hours) to pay the monthly rent on my studio apartment in the most expensive city in the U.S., Honolulu. In virtually any other city or town, the rent would have been less. I was 23 years old, working as a non-union apprentice carpenter for a small contractor. The pay was a bit above average, but by no means fabulous. I wasn't working at Goldman Sachs. The rent was fair market; it wasn't some special deal offered by a relative.

Since this was a cheap apartment, let's round that up to 3 days of work to pay the monthly rent.

OK, so how many young wage earners today can pay the rent for their own apartment with 3 days' pay? Any hands? OK, the Ivy League MBA working at Goldman Sachs, making mega-six-figures in annual compensation. Any average folks out there paying their rent with 3 days' pay? No?

Today, that would require an hourly wage of $60 to $90 an hour. The median annual wage is around $60,000, around $30/hour--half or a third of what it takes to pay the rent on a studio apartment in a high-cost urban area with 3 days of work.

It's important to understand that I didn't have the only cheap apartment in the city. Most of my friends had similar cheap housing, because there were more nooks and crannies in the housing market and in the economy: more small landlords and lower costs of doing business. One friend rented a converted WW2-era Quonset hut on the edge of an upscale neighborhood. Another lived in an old apartment next to the freeway. Another rented an in-law cottage in a single-family home neighborhood. I rented a wealthy couple's poolside cabana for a year. (Most of the space was filled with their stuff, but the price was right.)

Much of this low-cost housing has been demolished or rehabbed into high-priced rentals.

Fact: in 1985, it took about four hours of work to pay my individual healthcare insurance premium for the month ($54). This wasn't phantom insurance with a huge deductible--it was the standard insurance offered by employers large and small. Being self-employed, I paid the premium myself.

OK, everyone who can pay a market-rate, non-subsidized, non-giant-deductible monthly healthcare insurance premium (for an individual) with good coverage with 4 hours of work, raise your hand. With an average cost around $350 a month according to reputable sources, that requires a wage of $87 an hour--roughly triple the median wage.

Costs were lower across the board: my monthly utility bill: two hours of work. Three full lunches at a working-class cafe--one hour of work. And so on. The key takeaway here is that the cost of doing business was lower across the board, so everything from auto repairs to going to the dentist was much cheaper. Compared to the present, it took very few hours of work to pay for auto repairs, dental work and other services.

We're told our vehicles are so much better now, but this too is open to debate. Cars and trucks cost a fortune now, and they're bigger and heavier and dependent on electronics that can't be repaired at home and that are super-costly to repair. And what exactly makes them so much better? Recall that we all managed to get by without rearview cameras and hands-free mobile phone technology for decades. Let's look at vehicles as transport, not rolling entertainment centers.

My 1979 Honda Accord (bought used for $2,600 ($7,350 in today's dollars) operated for many years with little more than routine maintenance despite being 8 years old when I bought it. It got about the same mileage (40 MPG) as my current 2016 Civic, which has a bigger engine and is much heavier. Is it a "better" vehicle given that repair estimates of $3,000 or more are now the norm? I could still replace a defective sensor in my 1998 Civic myself. Now--forget it.

In terms of repairability, modern vehicles are off-the-scale worse than the highly reliable vehicles of 30 or even 40 years ago.

Given the impossibility of doing much more than changing the oil at home and the insane costs of repairs, it's clear that the hedonics aren't worth the stupefying increases in costs. The same can be said of the 4-cylinder pickup trucks of that era, which did the same work as the far larger, far more costly and unrepairable trucks of today that cost $80,000. How many hours of work does it take now to own and operate a vehicle? Far more than in the past.



In the 1980s, I paid my annual home insurance with a few days' labor. Is that possible now? Sure, if you make $80/hour. Even at that rate, it takes a couple weeks' earnings to pay home insurance in some areas. And yet we're all more prosperous now?



How about the cost of building a new home? In the early 1980s, I built my own 1,400 square foot conventional house with a two-car garage for $26,000, which equates to about $90,000 in today's dollars. It took 2,600 hours of work to pay for my house in full (not counting my carpentry labor). I performed all the labor other than the licensed subcontractors (electrical, plumbing, cesspool excavation, carpet installation, etc.).

Can an owner-builder construct the equivalent house today for 2,600 hours of work? At $30/hour, that's $78,000. Good luck building a middle-class house turnkey (all appliances, flooring, etc.) for $78,000, even if you do all the carpentry yourself. That might cover the materials--but maybe not.

Around this same time (1983) I built numerous modest starter homes as a fully licensed and insured contractor for under $35,000, which equates to $110,000 in today's dollars. Compare this to today, where you need a construction loan of $400,000 to build a nothing-special middle-class house.

Are the houses "better" today? In terms of the quality and durability of materials and appliances, they're worse. The materials today are low quality, as are the appliances. 30 or 40 years ago, you could buy a fridge, washer, stove/oven, etc. and it would last decades. Now, all I hear are accounts of costly appliances failing in a few years--and that's been my experience. Today's lumber is lower quality, too, as is the hardware. Standard (i.e. not fancy-expensive) locksets in 50-year old houses are still untarnished and working fine. Modern hardware is--sorry to be blunt--mostly rubbish.

Meanwhile, as the costs in hours needed to pay for essentials have soared, we're told by apologists and propaganda pundits that cheap TVs and clothing have offset the the collapse of our purchasing power. Does anyone else find this ceaseless spew of lies irksomely misleading?

The collapse of quality has stripped away the purchasing power of earnings. Two generations ago, you could buy just about anything you needed used for a low cost, and that product would last for years or decades. My Mom bought a "vintage" dining set in 1970 that supposedly came around the Horn. Given the square nails and other indicators, I would estimate it was 100 years old at that time. I still use it today, so it's 150 years old. I've reglued some of the chairs, but other than that, they've been zero-cost for 50 years.

Are the chairs being bought today at Ikea going to last 150 years? I've repaired many that fell apart in the first year. The same can be said of almost everything being manufactured today. This collapse of quality has dramatically reduced the purchasing power of wages in fundamental ways.

Then there's this chart: wages' share of the economy, which has dropped from 51.6% in 1975 to 43% today. Given that the U.S. GDP is $29 trillion, each point of that decline translates into major money. 8% of $29 trillion is $2.3 trillion. Now there are various ways to measure this, but you get the point: wage earners are receiving a smaller share of the economy's output.



How many hours of work does it take to buy essential products and services now, and how long do the products last? By this measure, we're poorer, much poorer. After paying for essentials, we have less disposable income available to save or spend on non-essential stuff.

In the mid-1970s, I was having lunch with two older buddies. One was a public school teacher (he taught science) who'd served in West Africa in the Peace Corps, the other was an ex-Marine officer who'd served boots on the ground in Vietnam. Both agreed that if anyone was serious about achieving anything that required money, they had to save 40% to 50% of their net pay. Anything less indicated they weren't actually serious.

With even an average measure of frugality, this was entirely possible. It was well within reach. How many wage earners today save 40% - 50% of their net pay? Sure, some do, but how many do so without help from the family, special discounts or subsidies, or earnings in the top 10%? Not many. And this is proof-positive we're not just poorer now than we were 40 years ago, we're much, much poorer.

If we refuse to accept reality, what are the chances we'll be able to fix what's broken? Delusion and wishful thinking are not successful survival strategies.

https://www.zerohedge.com/personal-f...ere-better-now

[TheTexan]

Are the houses "better" today? In terms of the quality and durability of materials and appliances, they're worse. The materials today are low quality, as are the appliances. 30 or 40 years ago, you could buy a fridge, washer, stove/oven, etc. and it would last decades. Now, all I hear are accounts of costly appliances failing in a few years--and that's been my experience. Today's lumber is lower quality, too, as is the hardware. Standard (i.e. not fancy-expensive) locksets in 50-year old houses are still untarnished and working fine. Modern hardware is--sorry to be blunt--mostly rubbish.

These are predictable consequences of using cheap labor to drive down prices instead of actually making better products. It's a race to the bottom.

[Swordsmyth]

These are predictable consequences of using cheap labor to drive down prices instead of actually making better products. It's a race to the bottom.

And exactly the intent of free trade.
The rich profit by reducing everyone else down to the lowest common denominator of slaves who own nothing of value and are paid little more than what is required to live paycheck to paycheck. (if that much)

[TheTexan]

And exactly the intent of free trade.
The rich profit by reducing everyone else down to the lowest common denominator of slaves who own nothing of value and are paid little more than what is required to live paycheck to paycheck. (if that much)

And when those slaves actually start making a half decent wage, they've got to up and move their factories again to the next poorest country. India, Thailand, China, Philippines, is Africa next?

Constantly moving factories is inefficient as $#@!.

The net result is economic stagnation for countries that are already at the top of the economic ladder, and massive economic growth for countries at the bottom of the economic ladder.

Those charts you posted, assuming we stay on this course of free trade, won't start to look better until global labor prices have equalized. Basically once the world is equally poor across the globe, then and only then, can the United States start to actually move forward economically.

Or we could just stop subsidizing the economic development of the rest of the world, but we both know that's not gonna happen.