Comment by AbrahamParangi
5 hours ago
The tariffs have been highly destructive to local manufacturing because in the US we mostly build complex things made out of simpler parts which we import. The cost of everything we build simply increased and as a result many businesses selling relatively higher margin, higher complexity products had to scale back or shut down.
More to the point, the notion that dollars leaving the country is a real problem is really a kind of primitive understanding of money. Dollars are something we control. If dollars leave the country, that means there is demand for dollars. We control the supply of dollars. We literally can’t lose, so long as people are still using the USD, which they’re less inclined to when we’re tariffing their exports.
Also, by definition, if dollars left the country then stuff came in. We literally traded bit flips in a database for tangible stuff.
Bit flips in a database = years of people’s labor and planning
No, it's literally just bitflips. The supply of dollars increases by trillions a year between fractional reserve banking and, depending on the year, fed policy. We're not even printing them.
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An arbitrary score that's meant to represent said years, not the actual output of those years.
It's important to remember that money is not value. It's a score that's meant to represent value, but the value itself is entirely distinct.
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...and then whoever sold us the goods turns around and uses those dollars to bid up US assets. Next time you are bidding for a house, take some time to appreciate just how expensive those bit flips have made things.
It did make it easy to raise capital, though, which is nice.
Don’t blame imports for our sclerotic country banning construction nationwide. Plenty of countries have spent billions on new construction in the US and gotten smoked. The buildings still stand though.
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> uses those dollars to bid up US assets.
Predominantly US financial assets, like Treasuries and company equity.
> We literally can't lose
Who is "we"? Trade deficit dollars are recycled into assets, which compete with exports in the balance of payments. If you have a big house and fat brokerage account, you win big. If you have a job building shit, you lose big. If you have a job building tradeable shit and a low net worth, may god have mercy on your soul.
If you want the full economist version, "Trade Wars are Class Wars" by Klein and Pettis
We is the country. Yeah, not everyone gets to win the same amount at the same time. The alternative is just maga communism (pathetic).
"We" is 10% of the country at best. Asset ownership is concentrated.
No, the alternative is Alexander Hamilton protectionism, which built the country into an industrial superpower that eclipsed the very shadow it was put in place to escape.
What's done is done, though. We successfully sold the industrial base of the USA to the Communist Party of China in order to pump our brokerage accounts. Winning?