No. of Recommendations: 0
Toast? No. Just worth recognizing that Trump's desire to fundamentally alter the existing international global economic system doesn't just come with upsides (fewer imports! tariff revenue), but also comes with downsides (de-dollarization! increased prominence of China in global economic system!).
That doesn't mean "toast," but it does mean we might end up with some aspects of our situation worse than where we started - even if some aspects are better.Glad you said that last part, because "changing rules-based international order" carries with it both upside and downside. That nuance is the most important thing to discuss, not whinging over the change itself. What kind of economy should we have? That's the important question.
Some can point to recent stats that say American manufacturing has never been higher, that the current system is still enabling us to produce more. But even that carries a lot of nuance and the FRED data curiously only goes back to 1988:
https://fred.stlouisfed.org/series/GOMAHere's a paper I'm digesting:
https://tsapps.nist.gov/publication/get_pdf.cfm?pu... In 2022, there was $15.0 trillion of value added (i.e.,
GDP) in global manufacturing in constant 2015 dollars, which is 17.5 % of the value
added by all industries ($86.1 trillion), according to the United Nations Statistics
Division. Since 1970, manufacturing ranged between 13.8 % and 17.5 % of global GDP.
The top 10 manufacturing countries accounted for $10.7 trillion or 71.0 % of global
manufacturing value added: China (31.0 %), United States (15.1 %), Japan (6.6 %),
Germany (4.9 %), South Korea (3.1 %), India (3.1 %), United Kingdom (1.9 %), Italy
(1.9 %), Mexico (1.8 %), and France (1.7 %) (United Nations Statistics Division 2024).Others can point to the fact that the basic middle class American dream story is getting harder and harder to realize. I interact with a lot of younger engineers. The ones in their late 20's/early 30s despair of ever owning a home nowadays. My parents bought their first house on 1 income, rarely worked evenings, never had to work on weekends. My wife and I bought our first house on 2 incomes, almost always work part of every weekend and often do things in the evenings for work. We will (barring an economic calamity) retire comfortably, but to do so we've had to pound away at this lifestyle for 30 years. That's a lot to ask for anyone.
We work in high tech, both of us. But what about the Rust Belt and small towns that used to have things like mills and small factories that make things? They've been left behind as the US has shifted to more of a service-based economy:
https://fred.stlouisfed.org/release/tables?rid=53&...(Services was 39% of GDP in 1947. Now it's 61% of GDP).
Service-based stuff is more localized (as opposed to a good one can ship to any market). The closure of mills, mines and other processing facilities has left a lot of places in the United States behind. Is this a good thing?
Then there's the looming specter of a conflict with China, which has 2x our manufacturing capacity but even that doesn't tell the full story when you throw in raw material sourcing and processing, which they also have....
