alextheblue :
I'd like to see more manufacturing moved outside of China, almost regardless of where. It's not just about promoting domestic production... anything that doesn't address China isn't a good long-term solution. They take the "long game" seriously, and eventually we'll just end up back at square one if we just ignore their abuses.
True, though I've heard China is even outsourcing some manufacturing for a few years, now. Production might just move to Chinese-owned/funded plants, elsewhere.
One Belt, One Road.
alextheblue :
As for capacity, the reason we don't have underutilized capacity is because outsourcing/importing *annihilated* underprotected domestic production in many sectors (and it wasn't always unintentional).
Yeah, I get that. But the best solution needs to target the actual problem. In the case of the steel/aluminum tariffs, there actually was overcapacity, as evidenced by mills having to shut down. I'm not fully supportive of that move, but at least it made sense at some basic level.
However, in industries where there's no overcapacity (and, in many cases, no capacity), then you need to take a longer-term approach to build the capacity. That way, you at least get some gain for the pain. So, you could do this by having government-underwritten loans and subsidies. I don't want to get into an ideological debate about whether that's the best option, but I'm just giving a for-instance (and this is essentially standard practice, in China).
alextheblue :
What should have happened is we should have dealt with this impending trade monster many years ago. The Bushes and Clintonbamas all ignored it.
It actually goes back further than that. Since the 1960's or 1970's, US political culture has been dominated by free trade ideology, sometimes referred to by one of its chief proponents, the
Chicago school of economics.
I don't actually know what Obama
wanted to do, but his work on TTIP and TPP were efforts supported by the Congress he had to work with. He definitely took the conservative approach, as in going with the conventional wisdom. Although, if you look back to the original economic stimulus package from 2009, there were some parts which tried to favor domestic suppliers for goods and materials that either got removed or disregarded (after outcry from countries who blamed the US for causing the world-wide recession of the time).
alextheblue :
Now we are fighting an uphill battle and frankly, I don't see a lot of good options.
There are a few easy options that are politically difficult. Most of our global competitors don't have employer-sponsored healthcare, for instance. This requirement makes US workers significantly more expensive to employ.
Probably a less controversial idea would be to invest in infrastructure, prioritizing things that would make it cheaper for businesses to operate. This would create jobs both in the short and long term. Infrastructure spending is another thing China has done quite heavily, and for quite a while.
alextheblue :
With that said, the status quo wasn't heading in a good direction long-term,
It was easy for politicians to buy into it, since the major economic indicators seemed headed in the right direction. The problems mainly had to do with unequal sharing of the benefits. You had a growing population of folks who were disenfranchised, and somewhere in the past 50 years, I guess people stopped caring about the welfare of their countrymen. The business community was all to happy to outsource jobs and import immigrant labor, and the politicians' patronage was easily secured.
alextheblue :
bit_user :
One alternative was to create a trading block which excluded China. This was known as the Trans-Pacific Partnership.
The TPP was such a monstrosity that even Clinton dropped support.
Clinton dropped it for political reasons. She probably thought it was the right (and not too controversial) thing to do, but realized her position was untenable after Bernie and Trump came out against it.
I don't think it was worse than what Trump will eventually negotiate. In fact, he might just be the one to revive it, although rebranded as something else.
Certainly, if he wants to get anything in place with the EU, in his first term, it'll be heavily based on
TTIP. Negotiating trade agreements of such scope and scale is an extremely drawn-out process, so it's probably his only option.