Comment by anon84873628
1 day ago
That said, it's not necessarily a great deal for the US middle class anymore, due to the Triffin Dilemma:
https://en.wikipedia.org/wiki/Triffin_dilemma
This 2020 piece by Lyn Alden is a great explainer:
https://www.lynalden.com/fraying-petrodollar-system/
(Not that I think anything Trump has done has helped the situation even accidentally.)
Vance is making this idea popular/mainstream again lately, I wonder why? The US will predictably lose reserve-currency status as a consequence of losing all the rest of the trust and good will available to her, so it's time to make it seem like that was the plan all along.
Sure, there was a serious conversation to be had about this at some point, but it was probably before stacking up tons of unsustainable debt that directly depends on that part of the shell game. And there are many things that can/should change, but in a certain way and at a certain time to avoid pain and chaos. Arguing "this was always bad for us, fuck it" is kind of a pattern now, right? When someone wants to change some things, great, everything sucks. But when someone wants to tear down every status quo, and especially the ones that they apparently benefited from while saying "everyone after me doesn't need it", then it's a pretty clear sign.
US is now a lot of crazy old people finding new ways to eat their children and trying to see the world burn before they check out. They created the bulk of the debt, benefited from it immensely, propped it up with collateral that was always kind of imaginary, continue to increase the debt. Not great, but now we are also proposing to just destroy what's left of that thin collateral? I don't know how to explain that with greed or stupidity even, it just seems like spite.
Historian Timothy Snyder has called it "Superpower Suicide".
> US is now a lot of crazy old people finding new ways to eat their children and trying to see the world burn before they check out. They created the bulk of the debt, benefited from it immensely, propped it up with collateral that was always kind of imaginary, continue to increase the debt. Not great, but now we are also proposing to just destroy what's left of that thin collateral? I don't know how to explain that with greed or stupidity even, it just seems like spite.
And is your proposal to just hope to be one of the next generation who still can eat their children? Or better yet, the children of those who didn't make it before the ladder was pulled up?
Nothing there explains why it's a bad deal for the middle class.
The middle class actually benefits the most from this situation! More goods, more government services, etc. How much more? Just add up all the trade deficits, that's all benefit accrued almost entirely to the middle class.
It is explained in the Alden piece, section "The Fraying of the Petrodollar System", subsection "The Triffin Dilemma Unfolds".
What I meant was "blue collar working class" as opposed to the neo-artistocrat professional class. The Triffin Dilemma is a contributor to the K shaped economy and rise of populism.
>And from there, the value of the system depends on who you ask. Folks who are often on the higher end of the income spectrum who worked in finance, government, healthcare, or technology benefitted from this system, since they obtained many of the benefits of globalization and none of the drawbacks. Folks who are often on the lower end of the income spectrum, specifically those that make physical things, are the ones that benefitted least and gave the most up, since their jobs were outsourced and automated at a faster rate than other developed countries. But now with China also undermining the structure of the system, even the geopolitical/hegemonic benefits for the political class are subverted as well.
I guess I'm not seeing anything tying the trade deficit to the destruction of unions, to the massive reduction in top tax rates resulting in higher CEO compensation, etc.
The piece puts increasing trade deficits next to lots of stuff about increasing inequality, but it does not make the case that trade deficits are the cause of increasing inequality.
There's a person that had a job making physical things, but they are not inherently a "person that only makes physical things." The idea that bringing back the making of physical things will make these people wealthier is, well, suspicious. Unions? Better taxations systems? Modernizing manufacturing so that each worker is far more productive and we can compete with the world? That may help. But reducing trade deficits will not fix any of the K shaped economy.
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It certainly can't be leading to more government services. We get less every year. There might be more spending, but there's fewer results. We can't build trains, our police don't stop crime, healthcare covers less and costs more every year.
So good for the middle class they're evaporating at record rates!