Tag: economy

How can China be socialist if it has a stock market? Understanding the Chinese economy

Posted on by Lone Candle

China is not really capitalist because some of their most important industries are owned by the government and the government doesn’t care about the stock market. The main goal of those state owned enterprises is not profit, and, unlike in the U.S., the Chinese government is not concerned with keeping their stock market growing.

https://www.youtube.com/watch?v=M4__IBd_sGE

‘Bad sign’: Purge of data experts raises alarms over economic reports

Posted on by Lone Candle

“The Trump administration has dismissed advisers to key statistical agencies behind major economic reports, sparking warnings that the cuts will jeopardize the quality of data critical to policymakers and Wall Street investors.

Economists, academics and corporate officials serving on a board of unpaid advisers to the Labor Department’s statistical bureau were told this week they were no longer needed, two of the former members told POLITICO. Similar committees that advised the Commerce Department’s Bureau of Economic Analysis and the Census Bureau have also been let go. And the Federal Housing Finance Authority placed workers who assisted with its widely cited home price index on administrative leave Wednesday.”

https://www.politico.com/news/2025/03/21/labor-commerce-department-economy-data-doge-00241559

Tariffs Raise Prices, Spark Conflicts, and Make Everyone Poorer

Posted on by Lone Candle

“The markets understand the basic truth about tariffs, which are taxes consumers in our country pay for imported goods. They raise prices, reduce our access to foreign goods and spark reciprocal tariffs that then punish our country’s farmers and manufacturers. They lead to less growth and more unemployment. They increase bureaucracy by requiring officials to calculate duties and enforce them. They create hostilities and have led to actual war.

As economist Robert Higgs explains, “Fiscally, protectionism is a poor source of government revenue that dries up completely as tariffs are increased so much that they reduce trade flows to zero. Morally, protectionism is vicious because it coercively substitutes the ill-informed and ill-directed judgment of government officials for the judgment of people making deals with their own private property.””

…

“Trump threatened them to gain ill-defined concessions from our friendly, highly developed and peaceful allies to the north. Then, after it was clear Canada had already conceded to whatever it was our president demanded, he suspended them. His supporters claimed tariff critics didn’t understand that this was just a brilliant negotiating tool. But then this month the president imposed them anyway. True to form, MAGA shifted back to arguing that tariffs are great policy in and of themselves.”

https://reason.com/2025/03/14/tariffs-raise-prices-spark-conflicts-and-make-everyone-poorer/

Howard Lutnick Doesn’t Get To Decide What You Buy

Posted on by Lone Candle

“What Lutnick is talking about is central planning, plain and simple. It’s also just silly. How much of America’s aluminum supply should come from Canada if not 60 percent? Is 50 percent the right amount? Is it 17.54 percent? Lutnick doesn’t know—because no one does—because that’s a question without an answer.

Clearly, however, the Trump administration wants the figure to be lower. New 25 percent tariffs on aluminum imports might accomplish that, but at significant cost to American consumers and businesses, whose only offense is buying aluminum from sources located within a country that is a close American ally and the signatory of a trade deal that the current president negotiated just five years ago.”

https://reason.com/2025/03/14/howard-lutnick-doesnt-get-to-decide-what-you-buy/

Is Trump’s Trade War Causing a Recession?

Posted on by Lone Candle

“Any hope of robust economic growth resulting from unleashing energy abundance, deregulating the private sector economy, or pro-growth tax policy may now be doused by the economic fallout of a pointless trade war.
It started as a murmur—a slight downward revision, nothing alarming. But within five days, the Federal Reserve Bank of Atlanta’s GDPNow forecast for the first quarter of 2025 went from mild optimism (2.3 percent growth) to outright recessionary territory (-1.5 percent). By March 3, the number had plunged to -2.8 percent, the kind of contraction that doesn’t just signal weakness but outright economic distress. Eight months of stock market gains were wiped out in less than four weeks.”

…

“Global supply chains are rattled, businesses are reluctant to invest in capital, and consumers are cutting back on purchases. Tariffs—pitched as a way to bring jobs back—have instead choked growth. The administration’s bet that protectionism would insulate the economy from foreign competition is proving to be precisely the opposite: a self-inflicted wound.”

https://reason.com/2025/03/17/is-trumps-trade-war-causing-a-recession/

Making Sense of America’s Tariff Chaos

Posted on by Lone Candle

‘Trump’s tariffs are short term pain for long term pain.

Tariffs will raise the price of the dollar, making U.S. exports more expensive. Other countries retaliate, making U.S. products more expensive. Raising the costs of inputs for U.S. outputs makes American products more expensive. This all hurts exports. These tariffs aren’t an export strategy, they are a self-reliance strategy, and self-reliance means a much smaller economy.’

https://www.youtube.com/watch?v=diHbQWP0bGw

‘If You Compromise With Totalitarian Systems, You Will Pay a High Price’

Posted on by Lone Candle

“instead of trying to decouple unilaterally from China, let’s do it in an organized manner together. Let’s sit together at the negotiation table, because if 300 million Americans impose tariffs, that’s one thing. But if 300 million Americans plus 500 million Europeans and some of the largest economies in the world and other democracies from Japan to Australia are warm-heartedly invited to join, then I think we will have a much better outcome that is very much to the benefit of every non-authoritarian economy, but most importantly, for the U.S.
I would strongly suggest that “America First” will only work if it’s not America alone. And there are some issues where America will need partners in order to have the ultimate leverage, and I think that leverage would be increased by joining forces.”

https://www.politico.com/news/magazine/2025/01/18/mathias-dopfner-trump-europe-trade-00199102