Suppose you’re the richest person in town. You spend your money to buy stuff you want from the local townspeople, and they’re happy to sell stuff to you.<\/p>\n\n\n\n
After you buy something, you’re better off (because you have the stuff you wanted), and the local sellers are better off (because they have money they wanted). Nobody is “getting screwed,” (putting aside the baseline of economic inequality). To the extent free trade is free, people only trade when they’re going to better off afterward.<\/p>\n\n\n\n
This is the situation we Americans find ourselves in. We are a rich country. We have a lot of money to spend. Other countries don’t have as much money, but they have a lot of people who are willing to work to make stuff for us. Are those countries “screwing us”? No. Are we screwing them? Also no (again putting aside the economic asymmetry as starting point).<\/p>\n\n\n\n
So one side has money but doesn’t want to make stuff, and the other side can make stuff, but needs money. Both sides get what they want. Both sides are better off. I child could tell you this.<\/p>\n\n\n\n
Trump is astoundingly stupid, for not understanding that a trade deficit is not a bad thing. Our trade deficit shows that we are FUCKINGLY RICH<\/strong>, that we can afford to be buyers, while other countries are forced (by circumstances) the be the makers and sellers of stuff.<\/p>\n\n\n\n We know he is stupid because he’s had his idiotic idea about trade deficits for literally decades. There are videos of him, from decades ago, spewing his ignorant misunderstanding of trade.<\/p>\n\n\n\n You might assert that Trump’s goal is to “bring manufacturing back to the US.” That’s stupid, because the ramp-up time to build factories is measured in years. Also, do you want to work a factory job? Not to mention, factory jobs are quickly becoming automated. So even if his crazy tariff idea was correct, it wouldn’t do what he wanted.<\/p>\n\n\n\n Circling back to the thought experiment at the beginning of this rant, if you were the rich guy in town, would you want to go back to being a producer? Why? It would only make you poorer, since other people already produce anything you could, but cheaper. If you tried to become a producer, you’d truly be screwing both yourself and the other folks in town. <\/p>\n\n\n\n Just as trade makes both sides better off than they would have been otherwise, interfering with trade makes both sides worse off.<\/p>\n\n\n\n Trump is astoundingly stupid, or ignorant, or both. And his enablers all know that, which makes them vile toadies.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" And Trump is a dolt Suppose you’re the richest person in town. You spend your money to buy stuff you want from the local townspeople, and they’re happy to sell stuff to you. After you buy something, you’re better off (because you have the stuff you wanted), and the local sellers are better off (because … Continue reading “Trade deficits are not (necessarily) bad”<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,5],"tags":[],"class_list":["post-10","post","type-post","status-publish","format-standard","hentry","category-trade","category-trump"],"_links":{"self":[{"href":"https:\/\/erniebornheimer.com\/stuff\/index.php?rest_route=\/wp\/v2\/posts\/10","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/erniebornheimer.com\/stuff\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/erniebornheimer.com\/stuff\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/erniebornheimer.com\/stuff\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/erniebornheimer.com\/stuff\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10"}],"version-history":[{"count":3,"href":"https:\/\/erniebornheimer.com\/stuff\/index.php?rest_route=\/wp\/v2\/posts\/10\/revisions"}],"predecessor-version":[{"id":15,"href":"https:\/\/erniebornheimer.com\/stuff\/index.php?rest_route=\/wp\/v2\/posts\/10\/revisions\/15"}],"wp:attachment":[{"href":"https:\/\/erniebornheimer.com\/stuff\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/erniebornheimer.com\/stuff\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/erniebornheimer.com\/stuff\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}