The Brutal Economic Truth Behind the Rise of Trump

Posted by $ nickursis 8 years, 2 months ago to Government
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I would say this brings together a few posts that have been getting some attention, as well as seems to analyze exactly what is Trumps magnetic attraction to people. Something if the Republicrats only looked at, they would have been able to figure out, if they didn't just keep opening up the body bags and rolling the next one in line out.
SOURCE URL: http://www.thefiscaltimes.com/Columns/2016/03/01/Behind-Rise-Trump-It-s-Economy-Stupid


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  • Posted by CircuitGuy 8 years, 2 months ago
    Thanks for posting this article. I disagree with its thesis, but it's fun to talk about.

    I see this as making two claims:
    1) Much of Trump's support is based on CPI-adjusted incomes falling 7.5% since 1999.
    2a) With productivity and earnings growing, a decline in median wages must have a simple explanation.
    2b) The simple explanation is trade.

    I disagree with 2a: We could have had an anomalous period of income parity due to gov't controls in the economy followed by a post-war boom that made up for the negative effects of those gov't controls. After a couple decades, that situation becomes history, and there's no reason to think the anomaly would continue. The 7.5% drop in real median wages (would be less if they had used the GDP deflator to adjust for inflation) may just be noise and/or reversion from a past anomaly.

    I disagree with 2b: Trade actually creates value. The author seems to think if we just keep people who want to trade from trading, the 1950s will return.

    It concerns me that a minor fluctuation in median income could cause people to embrace fascism or socialism. I'm concerned what effect automation will have, since it tends to create value for top producers.
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    • Posted by $ 8 years, 2 months ago
      I think their theory is if I have my company got to Mexico to make trucks, then bring the truck in to the US, I have to send US dollars to the Mexican company that made them. In theory, that should all wash as it is an American parent, but because of all the regulations, tax crap and money laws, it seems it may stay there or migrates to who knows where. Ford reports earning from it's whole company, so it is transparent to us that this goes on. But the money still leaves the US, and pays Mexican workers vice American. Unless I get them to buy an equivalent amount back from me in the US, it still creates a trade deficit. That should mean money is borrowed to pay for it in some manner. As long as more leaves the country than comes in, we have a outflow of dollars to foreign accounts. I would think that would drive down wages here as jobs become scarcer and employers use it to cut wages (usually the "cutting costs excuse". I would venture there is a huge amount of manipulation involved that we do not see. But my personal experience is I see costs (prices) for all kinds of crap going up and up. I bought a video camera in 2010 for 130.00, the same camera is now 245. Did the camera market explode? I had to get a refurbished camera for 120.00 to have the same thing (my wife tends to leave it in the barn and our mini horse loves to throw it around the arena, so I hate to spend too much), but I can't explain what happened.
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