PeakTrader.com

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PeakTrader said...

The goal of successful firms is not to create jobs, but to create value.

In the free and competitive market, firms that win produce the highest quality good at the lowest price (i.e. the greatest value), while at least maintaining an "accounting profit."

Society benefits when it takes less effort, time, costs, etc. to produce more and better output.

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PeakTrader said...

The causality is when the U.S. economy is expanding faster, it's a stronger engine of global growth, including consumption. Therefore, U.S. net imports rise.

Also, more jobs are created in export-led economies when the U.S. economy expands faster.

However, in the U.S., more net imports (or larger trade deficits) both destroy and create jobs.

The result is likely a U.S. net job loss (from larger trade deficits).

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PeakTrader said...

Buddy says: "those of you who promote markets would obviously be for mutual Free Trade, and not enriching mercantilists at the expense of markets, yes?"

Countries with inferior trade policies don't benefit more than free trade countries.

The U.S. has benefited more trading with China than China has trading with the U.S..

Trading worth less paper for real goods and selling eroding Treasury bonds benefited the U.S..

Also, offshoring low-end manufacturing and shifting resources into high-end manufacturing, retail, finance, biotech, etc. benefited the U.S..

Moreover, U.S. corporations importing goods at lower prices and higher profits benefited the U.S..

What did the Chinese get?

Yes, they stole some intellectual property. However, I'd like to see them reverse engineer a Cadillac SUV or a Wal-Mart.

They got lots of jobs. Unfortunately, if you weren't one of the 50 million communist elites (out of the 1.3 billion), your standard of living was still very low.

They got lots of negative externalities, including pollution, erosion, and deforestation.

They were able to buy lots of expensive oil for production.

And I doubt the communist party allocated most of their gains-in-trade wisely.

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