Who’ll pay to “fix” trade, jobs, and wages?

“If he institutes a 35-percent penal tariff on every export from China, then most of what you buy at Walmart is 35 percent more expensive,” said Roger Entner, a wireless analyst at Recon Analytics.

The intention of plans like this is always to re-build the entire system and structure. That takes a long time, one assumes. So, what’s important is to describe how the transition phase works.

Another unstated assumption of such thinking is “corporations make too much profit,” that is, Apple and Wal-Mart should take the hit. I’d rather we be having a debate about that: how much money do individuals deserve versus corporate profits and how do we do anything about it?


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1 Comment

  1. the answer is simply to look at history: when (end of WWII to 1973) the middle class actually got most of GDP, the US had large growth. now that the 1% get most of GDP, we get little or no growth. the CxO class whines, “we don’t see the demand for our stuff!!! so The Donald must fix that!! Laffer’s supply side economics really is voodoo economics. you want growth? then aggregate demand must grow, there is no other option. the supply side effect of QE resulted in corporations and 1%-ers not making physical investment, but rather just chasing Treasuries. there is a reason Treasuries’ rate was ~1.5%: a global glut of money, led by corporation retained profits. in all, trillions of dollars sitting around idle, or, of course, chasing Treasuries.

    it all started with the DotBomb, when the growing pool of idle cash sought sure-thing returns. when that Bomb-ed, the pool sought sure-thing returns elsewhere, and decided that US mortgages were the best bet. historically, that was true. but with so much cash to be absorbed by mortgages (demand for mortgages far outstripped historical supply), it was necessary for mortgage companies and then commercial banks to figure out how to generate enough mortgages to absorb the cash. thus the Liar Loan.

    so, yes, wages are currently too small a proportion of GDP to support robust growth. it doesn’t matter how the (re-)distribution happens, so long as it happens. in the post WWII period, it was largely unionized manufacturing that drove growth. but the billionaire boys decided to destroy unions starting with Goldwater, thence Reagan. in due time we’ve gotten falling real median income and no growth.

    why would anyone be surprised?????

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