No. of Recommendations: 38
It's an interesting write-up.
I am simultaneously heartened and appalled at his optimism. It's great that one can be so cheery, but terrible that some people can see a plane crash as a fender bender.
One might sum up his article with his words "recession is a very real possibility."
My reading is that that recessions (around the world) are now a rock solid certainty, and it's only a question of whether it ultimately counts as a global depression or not. (only partly because of the tariffs)
I do like the quote he includes from Mr Hakimian.
"Very excited to see the millions of readily available Americans line up out the door to apply for their new job sewing jeans for 18 hours per day, 6 days per week, for $50 weekly pay! We can't keep letting Cambodia rip us off!"
And his snip from a WSJ article
“Even if US-manufactured exports increased enough to close the trade deficit—-an extremely unlikely event—-and if employment grew proportionately, our manufacturing-workforce share would climb only from 8% to 9%. Not exactly transformational.”
And it's always good to remember the the average service sector job in the US pays better, and is much healthier, than the average manufacturing sector job. And of course that inflation-adjusted total US manufacturing output is about as high as it ever has been. (there was a temporary higher peak just before the credit crunch, but current levels are higher that at the temporary peak in 2000).
If one sees a disease where there isn't one, it isn't very surprising that the prescribed treatment isn't an appropriate one.
I particularly like the last part. My emphasis
"Vietnam, for example, has a monster trade deficit with the US. Vietnamese exporters sent goods valued at roughly $137 billion to the US in 2024, while importing only $13 billion in US goods. This produced a $124 billion trade deficit. Vietnam’s GDP was approximately $476 billion, so trade with the US is obviously crucial. The tariff proposal is almost 10% of Vietnam’s GDP.
The White House’s formula claims Vietnam charges 90% tariffs on the US. That is untrue. They do have some small import duties. The trade deficit exists not because Vietnam throws up unfair barriers, but because Vietnam’s low-wage workers make a lot of stuff Americans want to buy (like Nike shoes and T-shirts). Meanwhile those same workers (because of their low wages) can’t afford many American goods. Nevertheless, we are now imposing a 46% tax on their exports to the US. To the extent this reduces exports, it will make Vietnamese workers even less likely to buy US goods—not to mention devastate their economy."
It is not a really surprising situation that poor people don't buy a lot. It's also not surprising that both parties benefit if richer people pay poorer people to make stuff for them at attractive prices. The alternatives are either living without, and/or paying a lot more to have richer people do it while leaving the poorer people jobless. Cui bono? Nemo.
Jim
