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The General Economics Thread

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There was talk about renaming the Krugman thread for this purpose, but that seems to be going nowhere. Besides which, I feel the Krugman thread should be left to discuss Krugman while this thread can be used for more general economic discussion.

Discuss:

  • The merits of competing theories.
  • The role of the government in managing the economy.
  • The causes of and solutions to our current economic woes.
  • Comparisons between the economic systems of different countries.
  • Theoretical and existing alternatives to our current market system.

edited 17th Dec '12 10:58:52 AM by Topazan

Redmess Redmess from Netherlands Since: Feb, 2014
Redmess
#19501: May 7th 2020 at 7:25:42 PM

Uber lays off 3,700 people as its ride business craters: Uber’s ride business has reportedly fallen by 80 percent from a year earlier.

And of course, with Uber's business model, those workers will be left in the cold.

How Animal Crossing’s fake industries let players afford real rent amid COVID-19: Amid quarantine, New Horizons provides an outlet for creativity and commerce.

Wow, that's interesting. Apparently players are doing the Animal Crossing variant of gold farming to earn money for their rent. Normally not a very admirable industry, but in these times, very innovative.

Hope shines brightest in the darkest times
DeMarquis (4 Score & 7 Years Ago)
#19502: May 7th 2020 at 7:52:58 PM

How's Lyft doing?

I'm done trying to sound smart. "Clear" is the new smart.
RainehDaze Nero Fangirl (4 Score & 7 Years Ago)
Nero Fangirl
#19503: May 7th 2020 at 8:08:15 PM

Also layed off 1,000 employees. These are customer service types, though.

Mio Since: Jan, 2001
#19504: May 7th 2020 at 9:24:47 PM

[up][up][up][up]I'm curious as to how much, if at all the Unemployment Rate is going to reflect all of those unemployment claims, and how much the labor force participation rate will have shrunk as well.

A lot of these people are probably not going to be in a hurry to look for jobs so BLS is probably not going to count them as "unemployed", instead considering them to have dropped out of the labor force. A relatively even split between people who have become "unemployed" or have "dropped out of the labor force" may make it easy to obfuscate just how severe the job loses are, and a huge drop off in the labor force may also make for excellent political fodder for austerity games if the "unemployment benefits are too generous" card is played.

Edited by Mio on May 7th 2020 at 12:28:38 PM

megarockman from The Sixth Borough (Experienced Trainee)
#19505: May 7th 2020 at 10:14:28 PM

If people are not currently working because they are unable to go to their normal workplace but expect to return to them in the future, they count as unemployed for the LAUS/CPS program.


At any rate, April numbers have been posted for the US. CES (establishment survey) records loss of 20.5 million jobs; CPS (household survey) records jump in unemployment rate to 14.7%.

Interesting to note that BLS noticed a jump in respondents who said they were employed but not working/getting paid for "other reasons", including coronavirus — they technically should be classified as "unemployed" but were not because long-standing practice is to accept what the survey respondents say as true rather than change their answers afterward. If those had been counted as "unemployed" rather than "employed", BLS estimates this month's rate would have been like 19%.

Edited by megarockman on May 8th 2020 at 8:48:30 AM

The damned queen and the relentless knight.
DeMarquis (4 Score & 7 Years Ago)
#19506: May 8th 2020 at 8:13:40 AM

In a sense it doesn't matter how you count them. People vote based on their own experiences, and nearly everyone has been affected by someone losing their job.

I'm done trying to sound smart. "Clear" is the new smart.
FluffyMcChicken My Hair Provides Affordable Healthcare from where the floating lights gleam Since: Jun, 2014 Relationship Status: In another castle
My Hair Provides Affordable Healthcare
#19507: May 17th 2020 at 12:19:31 PM

Bloomberg: Americans Are Giving Made-in-China the Cold Shoulder

Some 40% of Americans said they won't buy products from China, according to a survey of 1,012 adults conducted May 12-14 by Washington-based FTI Consulting, a business advisory firm.

The poll also found that:

  • 55% don't think China can be trusted to follow through on its trade-deal commitments signed in January to buy more U.S. products
  • 78% percent said they'd be willing to pay more for products if the company that made them moved manufacturing out of China
  • 66% said they favor raising import restrictions over the pursuit of free-trade deals as a better way to boost the U.S. economy

For observers of trade policy, that last point is striking because a large majority in the U.S. have traditionally shunned protectionism.

FTI's survey from last week showed 86% of respondents say the U.S. relies too heavily on foreign supply chains.

For a majority of U.S. companies that do business in China, uprooting themselves from world's second-largest economy isn't really feasible. But according to a March survey of members of the American Chamber of Commerce in China, 44% of respondents said it's not possible for the two economies to decouple, down from 66% polled in October. A fifth said decoupling will accelerate.

For U.S. consumers, who may not fully grasp how much they consume from China, the desire for a breakup is intensifying. According to Kat Devlin, a research associate at the Pew Research Center's Global Attitudes Project, "we're in somewhat uncharted territory with how Americans see China."

A Pew poll taken in March showed 66% of U.S. adults held China in an unfavorable light - a record high in Pew surveys going back to 2005 and up almost 20 percentage points since Trump took office in January 2017. The survey didn't explicitly ask about the coronavirus. It measured favorable views at 26%, down from 44% three years ago.

Redmess Redmess from Netherlands Since: Feb, 2014
Redmess
#19508: May 17th 2020 at 12:21:28 PM

Good luck with that. I don't think many of these people realize just how much stuff in their products comes from China.

I think a lot of older Americans are under the (subconscious or otherwise) impression that China still mostly sells t-shirts, cheap toys, and ceramics.

Edited by Redmess on May 17th 2020 at 9:26:23 PM

Hope shines brightest in the darkest times
TheWildWestPyro from Seattle, WA Since: Sep, 2012 Relationship Status: Healthy, deeply-felt respect for this here Shotgun
#19509: May 17th 2020 at 1:12:27 PM

These days we'll have to depend on Vietnam.

FluffyMcChicken My Hair Provides Affordable Healthcare from where the floating lights gleam Since: Jun, 2014 Relationship Status: In another castle
My Hair Provides Affordable Healthcare
#19510: May 17th 2020 at 5:11:37 PM

Friendly reminder that during The '90s, so much production was in Taiwan that Pixar made it Buzz Lightyear's birthplace.

Edited by FluffyMcChicken on May 17th 2020 at 5:11:50 AM

Fourthspartan56 from Georgia, US Since: Oct, 2016 Relationship Status: THIS CONCEPT OF 'WUV' CONFUSES AND INFURIATES US!
#19511: May 17th 2020 at 5:13:20 PM

I'm going to need some significant evidence before I accept that Taiwan could replace China, that just doesn't make sense logically.

Not only is it much smaller if such a thing were possible then why did industry transfer to China in the first place?

No, that just sounds like wishful thinking.

Edited by Fourthspartan56 on May 17th 2020 at 5:13:33 AM

"Einstein would turn over in his grave. Not only does God play dice, the dice are loaded." -Chairman Sheng-Ji Yang
archonspeaks Since: Jun, 2013
#19512: May 17th 2020 at 5:43:51 PM

Taiwan is a pretty major manufacturer of intermediate electronic goods. With how politically and culturally volatile “made in China” is becoming I could see them picking up a lot of slack.

What they lack is textile and plastics manufacturing, which China is undoubtedly the regional leader in.

In the industries it’s active in, Taiwan has better productivity as far as GDP per capita and way more automation, which could give them a competitive advantage.

Edited by archonspeaks on May 17th 2020 at 5:46:16 AM

They should have sent a poet.
Izeinsummer Since: Jun, 2013
#19513: May 17th 2020 at 5:55:33 PM

China has been selling a lot of stuff at very minimal profits - mainly, near as I can tell, because it is one heck of a lot easier to get the west to transfer tech to you if you need that tech to make things for the west. - it is not just patents, but also all the things nobody really writes down. If you start a factory to mass produce washing machines, and you are aiming at your own domestic market, people will sell you the lathes, steel presses and so on, and then you get to waste enormous amounts of time setting up a proper factory floor with very little clue what a good layout is.

If you start a factory to manufacture washing machines cheaply for whirlpool or whatever, you get an in person visit from a manufacturing engineer with 30 years experience and their career (or at least their year end bonus) on the line as well as the tools. That kind of thing matters.

But China has mined that vein mostly dry, so I honestly expect them to refocus on making stuff for China, on the simple grounds that eternally selling more than you buy is just daft.

Fourthspartan56 from Georgia, US Since: Oct, 2016 Relationship Status: THIS CONCEPT OF 'WUV' CONFUSES AND INFURIATES US!
#19514: May 17th 2020 at 5:56:31 PM

[up][up]Interesting, but that doesn't really address my point. Taiwan being a major industrial center, while fascinating, doesn't mean it could replace China.

Furthermore, I question if such a thing is desirable, trying to economically strangle them is a terrible idea when we have to cooperate on extremely serious issues such as Climate Change.

Edited by Fourthspartan56 on May 17th 2020 at 5:57:11 AM

"Einstein would turn over in his grave. Not only does God play dice, the dice are loaded." -Chairman Sheng-Ji Yang
M84 Oh, bother. from Our little blue planet Since: Jun, 2010 Relationship Status: Chocolate!
Oh, bother.
#19515: May 17th 2020 at 5:57:52 PM

[up]Oh geez not this again...

Are you going to point at climate change every time someone criticizes the CCP or brings up alternatives to being so dependent on them?

What exactly is the problem with not putting so many eggs in mainland China's basket? Especially if the CCP has proven itself increasingly unreliable? Remember that a big part of why the rest of the world faced a PPE shortage is because they depended so much on production in mainland China — and then the CPP nationalized the production lines. And that's on top of all of the other issues with the stuff produced in mainland China.

Edited by M84 on May 17th 2020 at 9:04:02 PM

Disgusted, but not surprised
DeMarquis (4 Score & 7 Years Ago)
#19516: May 17th 2020 at 6:03:10 PM

What we need is an effective competitor to China, not enough to isolate their economy, but enough to act as leverage toward international cooperation on economic policies (including carbon emissions). Unfortunately, the only country I can think of that might be able to achieve that is India, and they have their own issues.

I'm done trying to sound smart. "Clear" is the new smart.
Fourthspartan56 from Georgia, US Since: Oct, 2016 Relationship Status: THIS CONCEPT OF 'WUV' CONFUSES AND INFURIATES US!
#19517: May 17th 2020 at 6:07:47 PM

Are you going to point at climate change every time someone criticizes the CCP or brings up alternatives to being so dependent on them?

No, I bring up Climate Change when people advocate taking adversarial actions. Which complete economic decoupling would certainly constitute.

I am willing to accept a certain level of decoupling, but considering the context, it should be clear that we were talking about significantly more than that.

Edited by Fourthspartan56 on May 17th 2020 at 6:08:03 AM

"Einstein would turn over in his grave. Not only does God play dice, the dice are loaded." -Chairman Sheng-Ji Yang
KazuyaProta Shin Megami Tensei IV from A Industrial Farm Since: Jan, 2015 Relationship Status: [TOP SECRET]
Shin Megami Tensei IV
#19518: May 17th 2020 at 6:14:02 PM

So, we literally should buy stuff from China to get them to cooperate with Climate Change?

Like, this isn't even putting santions, is literally just NOT buying stuff from them.

There's Realpolitik and there's that

Edited by KazuyaProta on May 17th 2020 at 8:14:52 AM

Watch me destroying my country
LeGarcon Blowout soon fellow Stalker from Skadovsk Since: Aug, 2013 Relationship Status: Gay for Big Boss
Blowout soon fellow Stalker
#19519: May 17th 2020 at 6:15:43 PM

If China is holding us hostage with climate change then the last thing we should do is kowtow to them.

Oh really when?
Fourthspartan56 from Georgia, US Since: Oct, 2016 Relationship Status: THIS CONCEPT OF 'WUV' CONFUSES AND INFURIATES US!
#19520: May 17th 2020 at 6:28:34 PM

So, we literally should buy stuff from China to get them to cooperate with Climate Change?

Like, this isn't even putting santions, is literally just NOT buying stuff from them.

There's Realpolitik and there's that

Are we now pretending that refusing to engage economically with another state is a neutral action?

"Buying stuff from them" is what fuels their economy, the livelihoods of their people, and the stability of their government. Do you think they are going to sit back and just consider it a fair action? Climate Change exists, it is counterfactual to act as if we can fight it and also engage in hostile action against them.

We have to ask ourselves, what's more important, fighting the existential global threat or giving China the finger.

If China is holding us hostage with climate change then the last thing we should do is kowtow to them.

This is the exact kind of absolutist zero-sum thinking which is so counterproductive when we have a mutual foe.

No, continuing mutually beneficial economic interactions is not submission.

Furthermore, they aren't "holding us hostage", I am describing the reality of the situation. Climate Change exists, it can only be fought Globally. Thus rationally confrontation at this juncture is a terrible idea.

Edited by Fourthspartan56 on May 17th 2020 at 6:31:35 AM

"Einstein would turn over in his grave. Not only does God play dice, the dice are loaded." -Chairman Sheng-Ji Yang
archonspeaks Since: Jun, 2013
#19521: May 17th 2020 at 6:55:34 PM

Furthermore, I question if such a thing is desirable, trying to economically strangle them is a terrible idea when we have to cooperate on extremely serious issues such as Climate Change.

Dispersing manufacturing from China may actually not be a bad idea when it comes to combatting climate change. The vast majority of industrial emissions come from supply chains, increased local manufacturing capabilities mean shorter supply chains and less overall emissions. If companies which primarily sell their products in the US and Europe move their manufacturing closer it may well be beneficial.

Frankly, there’s going to be a certain level of decoupling we have to accept as many businesses simply will not want to cooperate with the Chinese government.

Edited by archonspeaks on May 17th 2020 at 7:01:02 AM

They should have sent a poet.
Fourthspartan56 from Georgia, US Since: Oct, 2016 Relationship Status: THIS CONCEPT OF 'WUV' CONFUSES AND INFURIATES US!
#19522: May 17th 2020 at 7:00:20 PM

That might be a valid point if we ignore the opportunity cost of doing such a thing.

They'll still be developing new industries, but because of the diplomatic fallout of economically isolating China, we wouldn't be able to work with them to green their economy.

My point stands, you cannot fight global threats while purposefully antagonizing China. Moving away from harmful dependency? Acceptable. But trying to destroy, or harm, their economy is the height of folly. Petty nationalistic rivalry should not be more important to us then Climate Change.

Edited by Fourthspartan56 on May 17th 2020 at 7:02:31 AM

"Einstein would turn over in his grave. Not only does God play dice, the dice are loaded." -Chairman Sheng-Ji Yang
archonspeaks Since: Jun, 2013
#19523: May 17th 2020 at 7:05:15 PM

Well, sure, we can’t do it without them, but we can’t really do it with them either. They’ve proven they’re really only willing to go so far on the issue and we don’t have enough leverage to force them further. Economic failure is a powerful motivator, and we shouldn’t be letting China dictate terms for the fight against climate change.

There’s also the more philosophical question of whether we really want to enable a regime with such an abysmal human rights record.

Edited by archonspeaks on May 17th 2020 at 7:09:38 AM

They should have sent a poet.
DeMarquis (4 Score & 7 Years Ago)
#19524: May 17th 2020 at 7:27:29 PM

You know, the whole argument would make a lot more sense if the US were seriously trying to limit it's own carbon emissions in an authentic manner, but of course we aren't. Kind of hard to take the moral high ground when we withdrew from the Paris Accords and all.

I'm done trying to sound smart. "Clear" is the new smart.
RainehDaze Nero Fangirl (4 Score & 7 Years Ago)
Nero Fangirl
#19525: May 17th 2020 at 7:27:59 PM

Moving away from harmful dependency? Acceptable.

You've, in this page, essentially dismissed all attempts at moving industries out of China as being aggravating acts that would inhibit a global response to climate change. You somehow even worked "it would be bad for China's populace into it".

Pretty much the only thing you've stopped short of is advocating we all just submit to China's suzerainty.


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