/Econ/ Economics General #3: Trade Policy in 2017

t. david suzuki

Summers was probably referring more so to Peter Navarro's ideas on international trade rather than infrastructure, but Summers is still a dick.

>Does the rise of populist movements in America and Europe threaten international trade and, if so, is this a good or bad thing?

Maybe in the short term, but perhaps not in the longer run. Of course, in the beginning some of these populist movements will run protectionist trade agendas to try and keep up with the promises that got them into office. Within some time though, those policies might drive up the prices of products for everyday people by enough that it would be political suicide to continue.

At that point, the entire mindset of protectionism might shift. For example, trade agreements might be renegotiated such that they better reflect the foreign policy interests of the United States. I recall someone suggesting in the long run that we might end up embracing Mexico and diverting investments from China to enhance their economy. That way, we could stem off or even reverse illegal immigration by making the economies of our neighbors livable, all the while perhaps starting some kind of economic union with them.

Maybe the last part is a bit of a stretch, but in any case I think that protectionist trade will become too politically unwieldy to continue enforcing in the long run.

Most likely. Looking at the Reagan Revolution, there were a lot of protectionist measures implemented, like import quotas on Japanese cars and the Plaza Agreement, despite all the fervor about Milton Friedman and supply side economics. But it was followed by the free trade boom of the 1990s, so I'd assume this is just temporary. If you go after Chinese subsidies and make the business climate in America more conducive to business, things should clear up.

>That way, we could stem off or even reverse illegal immigration by making the economies of our neighbors livable, all the while perhaps starting some kind of economic union with them.
I honestly think this is the best way to deal with a lot of problems - economic, social, environmental

An economic union with other nations to make their nations livable would be good. I think that using our trade agreements to target more policy initiatives would a step in this direction, for instance, how our trade agreement in the 2000s made them privatize Japan Post. Using that on a larger scale with countries like Mexico and more importantly China could help other nations transition to market-based economies in an orderly manner and satisfy the protectionists by leveling all nations to a market-based standard and satisfy by free traders by expanding globalization.

"Making the economies of our neighbors livable" is a pretty broad term. It could refer to free trade agreements as seems to be arguing, or it could be something along the lines of the World Bank and the IMF.

Could you be more specific?

>t. Passed freshman macroeconomics with a C

kek

>ITT NEETs and wcon 101 students pretend to know what they're talking about

I'm in Econ 203, get on my level faggot

>tfw in Mathematical Econ, Public Policy Econ and Econometrics
My levels cannot be matched

Congratulations on mastering multiple equally useless fields of study.

If economics is such a hard science, then why have economists always dismissed looming financial crisises like the 2007/2008 one, and simultaneously predicted all kinds of bullshit like hyperinflation that never materialized?

Not going into an economics job, just enjoy the topic. Interning at the local Chase headquarters during the school year and going back for year 2 at Chicago during the summer.

Pretty comfy with my major, so thanks

>hyperinflation never happened or was close to happening

Someone's a millennial

They've been predicting it in the US since 2000. So where is it?

When the results of a physics experiement disagree with a model, physicists respond with "here is why our model is wrong and how to fix it." When an economist's model disagrees with their data, they say "here is why our data is wrong and how to fix it."

It happened in the 70's, inflation was really really about to fuck the U.S during that inflationary period, Volcker only barely pulled us out of it by raising unemployment by a shit ton

That was being predicted every since WW2, but it happened nearly 3 decades later, your span of

So changing perspective on data is bad?

Something something... broken clock... something... right twice a day

>So changing perspective on data is bad
That's the problem: they don't change their perspective based on data. When the data disagrees with the model, they think the problem is with the experimental data rather than the possibility that their model is faulty. See the episode where a spreadsheet error in an economist's study caused Europe to nuke itself financially.

>Does the rise of populist movements in America and Europe threaten international trade and, if so, is this a good or bad thing?

Why the fuck would that be a good thing for the economy? Trade less, close everything, buy all national and fuck the rest are ideas that should have died in the 18th century. But no, blue collars think they are entitled to jobs in dying, inefficient or soon-to-be-automatized industries just because and refuse to be retrained.

Someone predicts the next big financial crisis every week. Then when one does happen everyone gets mad at the people who didn't listen to the crazy "the end is near" guy.

I was just meme'ing, I've read a lot of economics in my free time. Are you currently employed in an econ-related position? What's the job market for econ majors like?

>equally useless fields of study
Found the STEMfag :^)

If you're using that as your metric for a hard science, mind explaining how Newtonian and Quantum physics are both used in different settings, yet utterly contradict one another?

I may be using the wrong terms for what it is i'm referring to, but there's a lot of stuff in other hard sciences that isn't definite. Your point is irrelevant anyway, economics, hard or soft, is still subject to various interpretations of data.

>implying the inflation of the 1970s was "hyperinflation"

It was bad, but it wasn't hyperinflation. Nixon, Ford, and Carter were not the American equivalents of Robert Mugabe.

It resulted from the fiscal, not monetary, policy of the 1960s in the guns and butter rally. That was created by Keynesian thought.

We don't have that kind of stuff. The stimulus that we had, though ineffective, was meager spending compared to what some Keynesians would've wanted it to be at. We injected nearly $4 trillion, if not more, into the economy as part of monetary policy and there's a difference. When you're in the zero lower bound, you can take radical actions in monetary policy and still have little to no effect on inflation.

Who's "they?" Most mainstream economists haven't been predicting this. The ones who have are mainly Austrian economists, who reject the use of empirical data modeling in favor of praxeology.

Pretty much this. I consider myself a free trader and economically speaking there's nothing wrong with it. I think there are certain national security effects to be taken into account, for instance, China using its state owned companies as fronts for its military or illegal export subsidies and the sort that challenge the market consensus.

my country practically killed PEMEX with taxes and now they giving it to USA

bloomberg.com/news/articles/2017-01-13/pemex-so-cash-starved-it-s-selling-little-league-baseball-field

dailymail.co.uk/wires/reuters/article-4116870/Pemex-sells-Maya-crude-U-S-West-Coast-time-2008.html

youtube.com/watch?v=o3VhSQe_oKg

There's nothing wrong with privatizing PEMEX kek, it's the market at work

>being a protectionist
Maybe with the US something good will finally come out of PEMEX.

This, it's not a coincidence that one of Mexico's slowest and least competitive sectors is run by a state monopoly. How is it that you can defend the company that has presided over falling oil production for every year since 2009?

Also, pic related. Even by the standard of other state-owned oil companies, PEMEX looks like shit

You're confusing actual economics with pop-economics.
Peter Schiff being a fuccboi on cnbc isn't actual economics.
aeaweb.org/journals/
This is a good resource.

Schiff for brains couldn't even make money off of his predictions. His clients lost money in 2008 because of his conspiracy theory bullshit (businessinsider.com/2009/1/peter-schiffs-clients-got-hosed-this-year-too).

>judging the field of economists
>uses Austrian predictors

Austrian economics reject all forms of empirical data modeling in favor of praxeology, a series of assumptions about human behavior.

In other words, you're basically judging the validity of chemistry by people with homeopathic medicine degrees.

International trade isn't threatened because "capitalism in one country" can't work. What is happening is American hegemony has been slowly collapsing, an economy based on military Keynesianism... that keeps losing wars... will destroy itself. You'll eventually have a Soviet Union style "collapse" and restructuring.
The global system of trade requires a central dominant city to act as the coordinator and clearing house of international capital... it was Venice in 1450, Antwerp in 1550, Amsterdam in 1650, London in 1850, and New York City in 1950. If America wants to stop exporting capital someone else will just take on the role.

Here's the global economy for the next 8 years.
USA USA USA USA USA USA USA USA USA.
Sorry chingchongbong commiefuckland no more easy money for you.
Canada is already getting fucked and now shits crashing even further. Short the Canadian housing market because by Dec it's gonna be in a pit so big you can stuff 6 million in it.

Too bad America makes its money by riling up sand people and then selling them a shit load of guns. There is literally no shortage of muslims or niggers to piss off and make a buck off of. Eventually they might end up wiping themselves out but that's just a win-win

How much economics did you have to take in college to participate in this thread?
Do you have to know micro to be able to discuss macro?

What about the resulting actions of protectionism that could occur? For instance, a trade war between America and China would be catastrophic for China, America, and the rest of the world, wouldn't it?

I'm a sophomore in college and have taken four semesters of economics, but I've read into it in my spare time before (especially political issues dealing with economics).

I'd say you don't have to learn micro to discuss macro. I took a class in macro before I did one in micro and the stuff in macro made sense. Most of macro and micro 101 are the same concepts, just applied to different areas (for instance, supply and demand, equilibria, elasticity, etc. etc.), but there are things you learn in macro that you wouldn't learn in micro and vice versa.

>no more easy money for you
What's going on in Canada? I've heard about the massive boom in real estate, but I was of the impression that Asian investors will continue sending their money to other markets until the Chinese get their shit together and stop seizing assets of successful businessmen

(before you call me a cuck I voted for Trump plsnobully)

wired.com/2015/02/scientists-wrong-time-thats-fantastic/

Hard scientists are wrong as well, economics isn't really an outlier in that respect.

Krugman is great. Right up until he goes anywhere near politics. Then he speaks with the same authority as he does on economics despite understanding politics on a highschool senior level.

Source: your ass