Uh… that’s not what a COUNTRY’s trade deficit is. It’s a measure of what domestic consumers buy from overseas producers vs. what overseas consumers buy from American producers.
Well a trade deficit is a trade deficit whether it's personal or national. My point was that a trade deficit is not necessarily bad. In fact it's often a sign of well-being. Would I be better off if I didn’t buy groceries? Would I be better off without electricity?
I spend a lot of money on restaurants. That is not a sign of my impoverishment. To the contrary, it's a sign that I am well-off enough to be able to eat out a lot.
To be fair, in the interview they use this analogy specifically in relation to a bilateral trade deficit. Trade deficit would be the aggregate trade flows of the country, but a bilateral trade deficit would be the trade flows with a single other country, which is the context in which the example of a grocery store was used.
The trade deficit under Bush/Cheney was negative because it involved expensive oil and the countries we were buying from weren’t investing enough in more production. Also, Detroit essentially ran a trade deficit with the rest of America and it works until it doesn’t work. So they were getting everyone else to fund their health care and then once fewer manufacturing jobs were necessary in the 1980s Detroit couldn’t sustain ancillary jobs like teachers and nurses and waitresses. Which begs the question—export economies outsource their economy to other countries!! Do we want to do that when there isn’t another America?!?
There's no deficit because they provide electricity,water groceries trash collection and you you pay them money they think is a fair amount. Even-steven.
If what you say is true then there is no such thing as a balance of PAYMENTS deficit. When I exchange cash for a good or service the cash is gone and I am poorer. The thing I buy with that cash satisfies a need, but it does not enrich me. I am poorer by the amount of cash I exchanged.
But that's the whole point of trade. One side gets cash, and the counterparty get a need fulfilled.
Now of course I run large trade surpluses with my clients and also with Social Security. As Krugman points out "my spending is your income and your spending is my income."
What is the difference when I pay for groceries or an importer pays for a car? Nada, zip, zilch.
Thank you for commenting on my remark in the manner you did because it caused me to seek better understanding. My error was in thinking balance of trade and balance of payment were the same thing. Now I see that bot is a part of bop. For example when I pay my electric bill, I'm not trading cash for electricity. I'm paying cash to balance the account with the elect. co. I've imported some electricity but I have no goods or service to export to the electric co. so here I am with a trade deficit. TaDa! Maybe? Am I getting smarter in my old age?
You forgot to point out that during Biden's Presidency, Trump was responsible for the good economy, and during Trump's Presidency, Biden is responsible for the bad economy. Welcome to "Through the Looking Glass Economy"!
Trump inherited the Obama economy…and then the key metric is the deficit increased every year under Trump. You could never admit that fentanyl deaths and the deficit increased under Trump and it’s very obvious Trump considers his first term a failure.
Also love Paul's work. I do want to correct him, however, on his comment that Shawn Fain and UAW represent workers in Canada. They do not. The UAW split with the CAW, which is now Unifor, in the 1980s.
I ignore that guy—Detroit metro lost population in the 1980s and then gained significant population through 2000…NAFTA was good for Detroit. Now China in the WTO which happened in December 2001 is another story! But anyone who conflates those two events should be ignored because every metric shows Detroit prospered immediately after NAFTA.
And note, the problems in the auto industry began during the 70s oil embargo. It took till the 80s to retool to efficient vehicles. Population decline in Detroit also traces to 70s ..laid off worker went southwest to Texas and California while the move from city to suburbs that began in the late 60s continued.
Correct, and the WSJ of all papers was calling out Detroit for putting all of its eggs in the gas guzzling SUV basket as early as 2000. Believe it or not oil prices were an issue in the 2000 election and then the mild 2001 recession and 9/11 delayed the inevitable energy crisis we had from 2005-2008 that exacerbated Big 3 economic issues that resulted in bankruptcy.
So the 1990s Detroit renaissance was in part due to the success of SUVs which had a lot to do with cheap gasoline. But also SUVs were body on frame and really only Toyota and Land Rover had off the shelf vehicles to sell in the 1990s…by 2000 the other car companies had developed SUVs to compete with the Jeep and Explorer and Tahoe. Btw, check out the sales numbers in the 1990s—400k Explorers sold a year for 8 years!! Pisses me off that people pretend that didn’t happen to bash NAFTA.
Well now, the orange pustule just let the cat out of the bag today. Consider; if he truly believes his lie that China pays the tariff, then why would he be upset that they haven’t backed down? Backed down from what? Why threaten more tariffs if the one you put in place the first time was the one that was going to make us so stinking rich? Because China paying for the tariffs we place on them is absolute bullshit, and he knew it all along. Will we get that from anyone in the corporate media tonight? Don’t hold your breath. They’re still trying to figure out how Cory Booker spoke for 25 hours without taking a pee.
What is the motivation for Congressional republicans NOT to act quickly to curb the power for POTUS to tariff other countries? Why walk a tight rope when we are careening off a cliff. .
Quite a conundrum for the House in particular ... their jobs are on the line. We do not need many to flip, as we saw in the Senate after the Corey Booker filibuster. Continued pressure from their constituents could lead to some to reach across the aisle to work with the Dems and replace the Speaker to get bills to the floor and stop the bleeding.
Remember ... Congress declares war NOT the president. If they declare Not War ... that ends the ability of DJT to use Aliens and Enemies act.
It is becoming more and more clear, even to a simple ignoramus like me, that Trump is the instrument of a surgical strike against every facet of the strengths of the United States; built over centuries of diligent, patriotic effort by generations. I was in the south of France last week and the overwhelming sentiment I got from people I spoke with, who knew me to be American, was sympathy. That is very hard to take...very hard to take. I wonder whose instrument he might be.
Mehdi: You made a forgivable mistake about Trump’s education - because he lies so much through inference. He never attended or graduated from Wharton’s business school. He ‘attended’ the University of Pennsylvania and took undergraduate classes at Wharton. Btw he has also claimed that he graduated top of his class at Wharton. These are all part of his big lie. Problem is: it works for a lot of people.
3000 autoworkers in Windsor, Ontario lost their jobs so shame on that Union rep Sean Fien (sp?!) supporting the tariff’s slapped on the auto industry. Sean is always on the wrong side. Weird. UK car exports have been paused. Thank you for keeping us sane 🙏🇺🇸🇬🇧
And, Canadian Auto Workers make the Best Cars, Vehicles like the Japanese. I know you also make the best Lexus Vehicles, I owned them. Thank you for superior workmanship. ❤️
As a paid subscriber and devoted student to your views and knowledge about economics, I’m a bit worried about your well-being right now.
You are being asked to speak by every well respected journalist out there!
We are all hanging on your every word and thought process about what’s going on.
But …
Please take care of your vocal cords, hydrate, breathe, and get some rest if possible.
Thank you for all your input!!!
I’m worried too at this point, I’m not sure what to do. I have no idea how I got put in this boat. I do agree with this totally,
Presumptuous
You know the old adage: If it ain't broke ... set fire to it, hit yourself with a hammer and put your finger in a socket.
I run big trade deficits with the grocery store, my electric utility, trash collection and water. Is that bad?
Uh… that’s not what a COUNTRY’s trade deficit is. It’s a measure of what domestic consumers buy from overseas producers vs. what overseas consumers buy from American producers.
Well a trade deficit is a trade deficit whether it's personal or national. My point was that a trade deficit is not necessarily bad. In fact it's often a sign of well-being. Would I be better off if I didn’t buy groceries? Would I be better off without electricity?
I spend a lot of money on restaurants. That is not a sign of my impoverishment. To the contrary, it's a sign that I am well-off enough to be able to eat out a lot.
Excellent point - it is the US's wealth that enables it to purchase goods and services produced abroad
To be fair, in the interview they use this analogy specifically in relation to a bilateral trade deficit. Trade deficit would be the aggregate trade flows of the country, but a bilateral trade deficit would be the trade flows with a single other country, which is the context in which the example of a grocery store was used.
The trade deficit under Bush/Cheney was negative because it involved expensive oil and the countries we were buying from weren’t investing enough in more production. Also, Detroit essentially ran a trade deficit with the rest of America and it works until it doesn’t work. So they were getting everyone else to fund their health care and then once fewer manufacturing jobs were necessary in the 1980s Detroit couldn’t sustain ancillary jobs like teachers and nurses and waitresses. Which begs the question—export economies outsource their economy to other countries!! Do we want to do that when there isn’t another America?!?
There's no deficit because they provide electricity,water groceries trash collection and you you pay them money they think is a fair amount. Even-steven.
If what you say is true then there is no such thing as a balance of PAYMENTS deficit. When I exchange cash for a good or service the cash is gone and I am poorer. The thing I buy with that cash satisfies a need, but it does not enrich me. I am poorer by the amount of cash I exchanged.
But that's the whole point of trade. One side gets cash, and the counterparty get a need fulfilled.
Now of course I run large trade surpluses with my clients and also with Social Security. As Krugman points out "my spending is your income and your spending is my income."
What is the difference when I pay for groceries or an importer pays for a car? Nada, zip, zilch.
Thank you for commenting on my remark in the manner you did because it caused me to seek better understanding. My error was in thinking balance of trade and balance of payment were the same thing. Now I see that bot is a part of bop. For example when I pay my electric bill, I'm not trading cash for electricity. I'm paying cash to balance the account with the elect. co. I've imported some electricity but I have no goods or service to export to the electric co. so here I am with a trade deficit. TaDa! Maybe? Am I getting smarter in my old age?
You forgot to point out that during Biden's Presidency, Trump was responsible for the good economy, and during Trump's Presidency, Biden is responsible for the bad economy. Welcome to "Through the Looking Glass Economy"!
Trump inherited the Obama economy…and then the key metric is the deficit increased every year under Trump. You could never admit that fentanyl deaths and the deficit increased under Trump and it’s very obvious Trump considers his first term a failure.
oy vey
Also love Paul's work. I do want to correct him, however, on his comment that Shawn Fain and UAW represent workers in Canada. They do not. The UAW split with the CAW, which is now Unifor, in the 1980s.
I ignore that guy—Detroit metro lost population in the 1980s and then gained significant population through 2000…NAFTA was good for Detroit. Now China in the WTO which happened in December 2001 is another story! But anyone who conflates those two events should be ignored because every metric shows Detroit prospered immediately after NAFTA.
And note, the problems in the auto industry began during the 70s oil embargo. It took till the 80s to retool to efficient vehicles. Population decline in Detroit also traces to 70s ..laid off worker went southwest to Texas and California while the move from city to suburbs that began in the late 60s continued.
Correct, and the WSJ of all papers was calling out Detroit for putting all of its eggs in the gas guzzling SUV basket as early as 2000. Believe it or not oil prices were an issue in the 2000 election and then the mild 2001 recession and 9/11 delayed the inevitable energy crisis we had from 2005-2008 that exacerbated Big 3 economic issues that resulted in bankruptcy.
So the 1990s Detroit renaissance was in part due to the success of SUVs which had a lot to do with cheap gasoline. But also SUVs were body on frame and really only Toyota and Land Rover had off the shelf vehicles to sell in the 1990s…by 2000 the other car companies had developed SUVs to compete with the Jeep and Explorer and Tahoe. Btw, check out the sales numbers in the 1990s—400k Explorers sold a year for 8 years!! Pisses me off that people pretend that didn’t happen to bash NAFTA.
Well now, the orange pustule just let the cat out of the bag today. Consider; if he truly believes his lie that China pays the tariff, then why would he be upset that they haven’t backed down? Backed down from what? Why threaten more tariffs if the one you put in place the first time was the one that was going to make us so stinking rich? Because China paying for the tariffs we place on them is absolute bullshit, and he knew it all along. Will we get that from anyone in the corporate media tonight? Don’t hold your breath. They’re still trying to figure out how Cory Booker spoke for 25 hours without taking a pee.
What is the motivation for Congressional republicans NOT to act quickly to curb the power for POTUS to tariff other countries? Why walk a tight rope when we are careening off a cliff. .
Quite a conundrum for the House in particular ... their jobs are on the line. We do not need many to flip, as we saw in the Senate after the Corey Booker filibuster. Continued pressure from their constituents could lead to some to reach across the aisle to work with the Dems and replace the Speaker to get bills to the floor and stop the bleeding.
Remember ... Congress declares war NOT the president. If they declare Not War ... that ends the ability of DJT to use Aliens and Enemies act.
It is becoming more and more clear, even to a simple ignoramus like me, that Trump is the instrument of a surgical strike against every facet of the strengths of the United States; built over centuries of diligent, patriotic effort by generations. I was in the south of France last week and the overwhelming sentiment I got from people I spoke with, who knew me to be American, was sympathy. That is very hard to take...very hard to take. I wonder whose instrument he might be.
That is the way Canadians feel about ordinary people from the US. We have a common "enemy".
Thank you for your kind words, andré.
I don’t want to have angered the rest of the world. Can we make tshirts that say, “I didn’t want this!”?
Seeing shirts and signs in Detroit area Canada, we don't like him either!
The new system of government should be called Idiocracy. Mike Judge got it right, but his film projected 500 years into the future, not right now.
The difference is, in Idiocracy the movie, the President found a way to *solve* a crisis...
And President Camacho cared for the people he represented. He was not a psychopathic malignant oaf like trump.
Do you think it’s possible that the economic disaster about to occur will be enough for republicans to impeach him
he will go on and on...Help!
Unfortunately, no, or at least not enough of them.
It will take only a few Republicans to start the impeachment process. The 2/3 in trial in the Senate will be more difficult, but don't give up hope.
Mehdi: You made a forgivable mistake about Trump’s education - because he lies so much through inference. He never attended or graduated from Wharton’s business school. He ‘attended’ the University of Pennsylvania and took undergraduate classes at Wharton. Btw he has also claimed that he graduated top of his class at Wharton. These are all part of his big lie. Problem is: it works for a lot of people.
Keep up the great work! Love the Mehdi and Paul discussions.
3000 autoworkers in Windsor, Ontario lost their jobs so shame on that Union rep Sean Fien (sp?!) supporting the tariff’s slapped on the auto industry. Sean is always on the wrong side. Weird. UK car exports have been paused. Thank you for keeping us sane 🙏🇺🇸🇬🇧
And, Canadian Auto Workers make the Best Cars, Vehicles like the Japanese. I know you also make the best Lexus Vehicles, I owned them. Thank you for superior workmanship. ❤️
Thank you for doing this. I love Paul's work! What are your thoughts on the S and P 500 today?
I recommend -- Paul Krugman's small booklet "A Country is not a Company"
That paper is on Harvard Business Review's web site. No charge...
thanks for the recommendation for "A Country is not a Company"
https://hbr.org/1996/01/a-country-is-not-a-company
A corporation is a Dictatorship. It makes Billions for the Company elites.