The trade deficit is an orthogonal problem... which can't be solved by merely cutting government spending. It's funny that you mention it though. Keynes foresaw the dangers of trade deficits / surpluses and proposed punishing both.
Even ignoring China's currency manipulation, until the US is turned into an environmental shithole with factory workers living in on site dormitories the US fundamentally can't have comparative advantage in production for most goods. Until balanced instead of free trade is enforced the trade deficit won't reverse in a hurry.
As for governments never paying back debt in the good time... lets take the punching bag of socialist waste, Ireland. Up till a few years ago it actually had one of the lowest expenditure/GDP ratios in Europe and was reducing sovereign debt quite quickly. Crony capitalism got Ireland into trouble, not socialism or Keynesianism.
From a Keynesian point of view any money which ends up with people likely to spend a significant part of it on consumption (ie. most of the population except the top 10%) is not waste at the moment.
What exactly are you talking about? Cap and trade? The implementation might be buggered, but it's clearly a market directed approach.
"Less regulation" doesn't do anything but increase pollution (can't wait till free trade, austerity and the drive for competitiveness allows all our environments to become as economically efficient as China).
The resolution of chemical film is high, but far from infinite and it's still just a 2D plane... with a printed 2D image of sufficient resolution, a good lighting setup and a good lens you can get anything you want on film... modelling the original camera and the development process is just that, a modelling problem. A solvable problem.
Ah fucking hell, scratch that... I thought I read the patent half a year ago and it used a lenticular screen... this is actually kind of clever:/
The amount of resolution you would need for more than a couple of viewers would be immense though, and you would need 3D pattern of valleys and sinusoidal pyramids since two viewers can be above each other.
You can't do that with apple's system any way, a rear projection system could do it (with enough resolution)... but not a single projector front projection system which reuses the lenticular. It needs quickly repeating viewing zones (and a very small viewing angle lenticular) to be able to operate in the first place. If the projector can't "see" a part of the plane behind the lenticular lens it can't put any light on it.
Front projection on lenticular screens is old hat.
Basically what Apple's patent adds to nearly 20 year old prior art is that instead of shifting the image mechanically they simply "waste" a lot of horizontal pixels (think of it like looking at a lenticular poster, you can only see a fraction of the poster at a time horizontally... with Apple's scheme the empty space is filled by individual pixels they can not use, they limit the waste by using a very small viewing angle lenticular but that has other side effects). This isn't in prior art because they didn't have that amount of resolution to waste in those days.
The device in Apple's patent is is not a true general multi-viewer system either. The viewing zones will repeat/alias, a problem it shares with normal lenticular displays unless they use a ridiculous amount of horizontal resolution to prevent it... that option isn't open to Apple's method though, it's exit lens has to be at least as wide as the distance between views before they start repeating. So it's not all that useful.
China does give back the taxes, it gives them back in the form of propped up dollars and cheaper prices for us foreigners. That is the whole point of what China is doing, it's selling it's citizen short and giving us a bargain... just as long as we buy our products from their factories, and as long as we don't ask to get the same price on their raw materials as their own industry.
They don't give a fuck about their citizens short term wealth, they just want more industry and will implement strategies to fuck over their citizens to accomplish it. It's an excellent long term strategy, a strategy which only a government can implement...
From a foreign point of view there is also no defence against it by anyone except for government. Individual consumers will always chose to buy the cheapest product after all. It's not a very nice strategy though and one which destabilizes the world economy if applied on too large a scale (and here we are).
Inflation doesn't impact the dollar's function as a reserve currency. If you hold on to a couple months worth of income in dollars to pay for your international purchases the US inflation rate is annoying, but no more than that.
It impacts China because it doesn't do that... it has years worth of accumulated dollars and more, it's still accumulating more than it's spending. It shouldn't have done it and it shouldn't be doing it... and it's getting what it deserves.
Every country has the right to devalue, if for one reason or the other internal debt has gotten out of control... even the US.
Russia has problems, but that's neither here nor there.
The export tariffs in China aren't meant to generate revenue for government, you are a bit myopic in your view of taxes. They are meant to stop exports. They are meant to create an artificially depressed price of materials low on the value chain domestically, to advantage their domestic industry compared to foreign industry.
I can somewhat understand free trade fundamentalists, if everyone had a small government and free trade it might very well optimize average global growth and everyone's wealth. That's never the metric China wanted to optimize though... where free trade fundamentalism falls down is that large actors like China want to optimize a fundamentally different metrics. They want to grow industry, no matter how it affects their citizens and internal consumption. For that free trade is not the optimal strategy.
The moment an actor as large as China doesn't play ball... all the theories underlying free trade economics are just so much trash.
Availability of raw materials is not flexible at all, the world is not big enough for everyone if people start cheating.
I justify the US money printing because it's a domestic affair. Other countries should NEVER have build surpluses of their currency in the first place. That they are affected by the US choosing to devalue is unfortunate, but it's their own damn fault.
The US manipulates it's own currency. China manipulates someone else's currency... that's the difference.
Export tariffs to avoid capital flight are pure pragmatism, not communism. As I said, China does it too... they do it because they subsidize so many raw materials for their domestic industries, which would essentially be the same thing the US would be doing.
Free trade is not something countries who are (re-)building industry can rely on.
Lets say for a moment that China is more industrialized than the US, still growing rapidly and can make more efficient use of every resource than the US (the level of existing industrialization acts like a multiplier and they haven't run out of subsistence farmers to put to work by a long shot). Why would any raw materials be used in the US to rebuild it's industry instead of putting them to work in China? China could always pay a better price because it could get more productivity out of it.
If I took your point of view of American industry then the US fundamentally can't rebuild it's industry in a free international trade world until China stops expanding or the US has a cost of labour advantage sufficient to offset it's lack of industry (so basically they would have to be third world, at least from the factory worker point of view). It would have no comparative advantage otherwise.
In a world with scarce resources any country who is looking to expand it's industrial base should never rely on free international trade (China certainly never has). That doesn't mean you don't rely on market mechanisms inside your borders and go communist though.
Now I don't think things are that dire, I think the US still has enough of an industrial base to compete with China... if China stopped propping up the dollar and devaluing the Yuan. China's central bank doesn't have to buy the dollars flowing into China, it could simply change the peg sufficiently that companies chose to spend dollars instead.
China always has made the conscious choice to devalue it's currency and prop up the dollar, to attract outsourcing and erode the US's industry in favour of it's own. It's still doing it.
I don't see any Apple logo and the phone is too generic... so what here is being unlawfully copied? It can't be Steve Jobs's likeness... unless he is a CGI construct, robot or bio-engineered creature. Right of publicity infringement maybe.
People are buying US bonds... China has increased it's foreign exchange reserves massively in the last few months.
If it becomes necessary the US will simply implement export tariffs for food, energy and materials low on the value chain (something China does quite frequently as well I might add). The US is probably the country most capable of self sufficiency in the world. It won't allow capital flight.
Cumulative inflation in China for the last decade is well above 30%. They are also still increasing dollar reserves, pretty fast too.
Who is going to buy municipal bonds if the Fed starts buying them? People, because the Fed will apparently not allow them to go bankrupt and will keep the market liquid... at least until the whole economy goes bust. Short term they become a safer investment.
Products from China becoming more expensive isn't really a problem... yeah luxury products might become unaffordable for a while, but that's an economic opportunity for the internal market.
Oil, now that's an issue... but hey, there is always ANWR.
Chinese companies get dollars, Chinese central bank prints Yuan, Chinese companies get Yuan, Chinese central bank gets dollars and buys bonds with them. China buys bonds because it has the same effect as buying dollars but gives interest on top. Purely for the purpose of currency manipulation buying plain dollars works as well though.
The US has a bigger industrial output than China. It's not that the Chinese companies can't spend those dollars, it's that the Chinese government gives them a more attractive offer and then proceeds to NOT spend those dollars on product from the US. Because it makes the collective choice for the country to depress wages, internal consumption and prop up the US dollar. All to be able to grow it's industrial base faster than it otherwise could with the help of offshoring from US companies.
China wants to see it's internal consumption grow because their mercantilist scheme has almost run it's course... but it's not quite there, they will be buying US bonds for a few years yet. They'd rather the Fed didn't keep up the QE (they would much prefer the US government to use debt funded stimulus instead) but in the end they will do it regardless.
The US government doesn't push money offshore, the fact that US workers don't work in factory dormitories and have pollution caused cancer as their #1 cause of death pushes money offshore.
At least when combined with free trade and China's eagerness to absorb more offshored industry by making it's citizens work like that (US still has the largest industrial output in the world, there is still industry they can offshore... that's why China is still buying dollars, it's not charity). Even if US M1 was completely static the same thing would have happened.
China is willing to take IOUs and fuck over their citizen's wages (US inflation compared to China's over the last decade is a pittance). How exactly was an American worker ever supposed to compete with that?
The US manipulates it's own inflation... but it doesn't manipulate the Yuan.
Buying foreign currency with printed money is a direct attack on the competitiveness of foreign exports on your internal market (this is what China does). The same is not true for plain money printing to monetize government debt (this is what the US does).
Without currency manipulation by government, companies in a trade surplus country will tend to chose to spend foreign currency they receive... which means trade will have to balance out, since the foreign currency can only buy foreign goods.
The world is never black and white. You do need decent education and infrastructure... but you can't run decades worth of trade surplus without currency manipulation.
China didn't succeed by attracting capital. Business is done in China with Yuan, not with foreign capital. What they needed were entrepreneurs, dollars to buy raw materials, outsourced business from the US/EU to get know how. Capital they could simply print, which is what they did.
If the US removes minimum wage and welfare who exactly would buy the potential output from US factories using the trick of cheap labour? The US is the consumer of last resort of the world productive output... if the US median wage drops everything goes to shit, at least in the short term.
Now you may promise a fast recovery... but in the mean time given the amount of debt accumulated it's going to make the great depression look like a walk in the park.
BTW, China destroyed over 10% of it's arable land... removing regulations has side effects.
The Chinese plan to inflate wages is more of a long term plan... they will buy plenty of dollars in the mean time, they will just ease off a bit.
The way that Chinese did it is not by printing currency
Gosh golly... why did they do it then?
That they printed fiat money to buy up dollars is beyond all reasonable discussion, the sun comes up in the morning and China printed Yuan to buy dollars... that's just how it is.
China wants to boost internal consumption, for that media wage has to rise (inflate).
China meteoric rise has been accompanied by inflation all the way. It was to their benefit AND centrally planned.
As for deserving it, I would disagree... running trade surpluses is no better than running trade deficits. It can only be accomplished by currency manipulation, which has required massive money printing... which you say you dislike. Without money printing (to buy dollars and US bonds) they could never have run a trade surplus for so long and attracted so much investment and industry.
This was what my original comment about Keynes was about, he recognized that trade deficits and surpluses are destabilizing... and his bancor scheme would have punished them. Unfortunately we got the US dollar as a reserve currency instead.
Whether they deserve it or not will ultimately be irrelevant too... as I said, as soon as they start increasing wages they will start bleeding industry. Free trade takes no prisoners.
Interest rates are low, even after servicing debts people in the US/EU/Japan/etc still have the highest disposable income in the world.
Like where? As bad as it is getting in the first world... we still have the highest median disposable income, it's dropping... but it's not going to be exceeded anywhere else any time soon.
China is trying to inflate wages but it runs the risk of falling into the same trap as the US and just bleeding industry while their poorer neighbours buy up their currency allowing China to run a trade deficit with them... until China too is mired in debt.
Free trade is a race to the bottom. For decades China has stuck to the bottom (for the majority of their population) allowing their industry to grow... but as they try to climb out of the bottom free trade will reverse that growth.
We got over the dot com bust in a hurry as well... in the exact same way as the 20s, by ballooning private debt.
I just don't see how you can see the 20s as a market miracle without looking at the 00s as the same thing. IMO neither was, they were purely debt fuelled consumption binges.
The last hurrah before reality took over.
Social security is pay as you go (mostly, the fund covers short term fluctuations). It's not debt proper, more like a future tax increase to come.
Slashdot Mirror
Then came the rifles and it was all fucked up again.
The trade deficit is an orthogonal problem ... which can't be solved by merely cutting government spending. It's funny that you mention it though. Keynes foresaw the dangers of trade deficits / surpluses and proposed punishing both.
Even ignoring China's currency manipulation, until the US is turned into an environmental shithole with factory workers living in on site dormitories the US fundamentally can't have comparative advantage in production for most goods. Until balanced instead of free trade is enforced the trade deficit won't reverse in a hurry.
As for governments never paying back debt in the good time ... lets take the punching bag of socialist waste, Ireland. Up till a few years ago it actually had one of the lowest expenditure/GDP ratios in Europe and was reducing sovereign debt quite quickly. Crony capitalism got Ireland into trouble, not socialism or Keynesianism.
From a Keynesian point of view any money which ends up with people likely to spend a significant part of it on consumption (ie. most of the population except the top 10%) is not waste at the moment.
What exactly are you talking about? Cap and trade? The implementation might be buggered, but it's clearly a market directed approach.
"Less regulation" doesn't do anything but increase pollution (can't wait till free trade, austerity and the drive for competitiveness allows all our environments to become as economically efficient as China).
The resolution of chemical film is high, but far from infinite and it's still just a 2D plane ... with a printed 2D image of sufficient resolution, a good lighting setup and a good lens you can get anything you want on film ... modelling the original camera and the development process is just that, a modelling problem. A solvable problem.
Ah fucking hell, scratch that ... I thought I read the patent half a year ago and it used a lenticular screen ... this is actually kind of clever :/
The amount of resolution you would need for more than a couple of viewers would be immense though, and you would need 3D pattern of valleys and sinusoidal pyramids since two viewers can be above each other.
Ah fucking hell, scratch that ... I thought I read the patent half a year ago and it used a lenticular screen ... this is actually kind of clever :/
You can't do that with apple's system any way, a rear projection system could do it (with enough resolution) ... but not a single projector front projection system which reuses the lenticular. It needs quickly repeating viewing zones (and a very small viewing angle lenticular) to be able to operate in the first place. If the projector can't "see" a part of the plane behind the lenticular lens it can't put any light on it.
http://www.dgp.toronto.edu/~gf/Research/Volumetric%20UI/3-D%20Displays%20A%20review%20of%20current%20technologies.htm
Front projection on lenticular screens is old hat.
Basically what Apple's patent adds to nearly 20 year old prior art is that instead of shifting the image mechanically they simply "waste" a lot of horizontal pixels (think of it like looking at a lenticular poster, you can only see a fraction of the poster at a time horizontally ... with Apple's scheme the empty space is filled by individual pixels they can not use, they limit the waste by using a very small viewing angle lenticular but that has other side effects). This isn't in prior art because they didn't have that amount of resolution to waste in those days.
The device in Apple's patent is is not a true general multi-viewer system either. The viewing zones will repeat/alias, a problem it shares with normal lenticular displays unless they use a ridiculous amount of horizontal resolution to prevent it ... that option isn't open to Apple's method though, it's exit lens has to be at least as wide as the distance between views before they start repeating. So it's not all that useful.
So, neither innovative nor useful.
China does give back the taxes, it gives them back in the form of propped up dollars and cheaper prices for us foreigners. That is the whole point of what China is doing, it's selling it's citizen short and giving us a bargain ... just as long as we buy our products from their factories, and as long as we don't ask to get the same price on their raw materials as their own industry.
They don't give a fuck about their citizens short term wealth, they just want more industry and will implement strategies to fuck over their citizens to accomplish it. It's an excellent long term strategy, a strategy which only a government can implement ...
From a foreign point of view there is also no defence against it by anyone except for government. Individual consumers will always chose to buy the cheapest product after all. It's not a very nice strategy though and one which destabilizes the world economy if applied on too large a scale (and here we are).
Inflation doesn't impact the dollar's function as a reserve currency. If you hold on to a couple months worth of income in dollars to pay for your international purchases the US inflation rate is annoying, but no more than that.
It impacts China because it doesn't do that ... it has years worth of accumulated dollars and more, it's still accumulating more than it's spending. It shouldn't have done it and it shouldn't be doing it ... and it's getting what it deserves.
Every country has the right to devalue, if for one reason or the other internal debt has gotten out of control ... even the US.
Russia has problems, but that's neither here nor there.
The export tariffs in China aren't meant to generate revenue for government, you are a bit myopic in your view of taxes. They are meant to stop exports. They are meant to create an artificially depressed price of materials low on the value chain domestically, to advantage their domestic industry compared to foreign industry.
I can somewhat understand free trade fundamentalists, if everyone had a small government and free trade it might very well optimize average global growth and everyone's wealth. That's never the metric China wanted to optimize though ... where free trade fundamentalism falls down is that large actors like China want to optimize a fundamentally different metrics. They want to grow industry, no matter how it affects their citizens and internal consumption. For that free trade is not the optimal strategy.
The moment an actor as large as China doesn't play ball ... all the theories underlying free trade economics are just so much trash.
Availability of raw materials is not flexible at all, the world is not big enough for everyone if people start cheating.
I justify the US money printing because it's a domestic affair. Other countries should NEVER have build surpluses of their currency in the first place. That they are affected by the US choosing to devalue is unfortunate, but it's their own damn fault.
The US manipulates it's own currency. China manipulates someone else's currency ... that's the difference.
Export tariffs to avoid capital flight are pure pragmatism, not communism. As I said, China does it too ... they do it because they subsidize so many raw materials for their domestic industries, which would essentially be the same thing the US would be doing.
Free trade is not something countries who are (re-)building industry can rely on.
Lets say for a moment that China is more industrialized than the US, still growing rapidly and can make more efficient use of every resource than the US (the level of existing industrialization acts like a multiplier and they haven't run out of subsistence farmers to put to work by a long shot). Why would any raw materials be used in the US to rebuild it's industry instead of putting them to work in China? China could always pay a better price because it could get more productivity out of it.
If I took your point of view of American industry then the US fundamentally can't rebuild it's industry in a free international trade world until China stops expanding or the US has a cost of labour advantage sufficient to offset it's lack of industry (so basically they would have to be third world, at least from the factory worker point of view). It would have no comparative advantage otherwise.
In a world with scarce resources any country who is looking to expand it's industrial base should never rely on free international trade (China certainly never has). That doesn't mean you don't rely on market mechanisms inside your borders and go communist though.
Now I don't think things are that dire, I think the US still has enough of an industrial base to compete with China ... if China stopped propping up the dollar and devaluing the Yuan. China's central bank doesn't have to buy the dollars flowing into China, it could simply change the peg sufficiently that companies chose to spend dollars instead.
China always has made the conscious choice to devalue it's currency and prop up the dollar, to attract outsourcing and erode the US's industry in favour of it's own. It's still doing it.
I don't see any Apple logo and the phone is too generic ... so what here is being unlawfully copied? It can't be Steve Jobs's likeness ... unless he is a CGI construct, robot or bio-engineered creature. Right of publicity infringement maybe.
Any competently designed binary representation of XML (either in memory or on disk) will infringe on their patent.
People are buying US bonds ... China has increased it's foreign exchange reserves massively in the last few months.
If it becomes necessary the US will simply implement export tariffs for food, energy and materials low on the value chain (something China does quite frequently as well I might add). The US is probably the country most capable of self sufficiency in the world. It won't allow capital flight.
Cumulative inflation in China for the last decade is well above 30%. They are also still increasing dollar reserves, pretty fast too.
Who is going to buy municipal bonds if the Fed starts buying them? People, because the Fed will apparently not allow them to go bankrupt and will keep the market liquid ... at least until the whole economy goes bust. Short term they become a safer investment.
Products from China becoming more expensive isn't really a problem ... yeah luxury products might become unaffordable for a while, but that's an economic opportunity for the internal market.
Oil, now that's an issue ... but hey, there is always ANWR.
Chinese companies get dollars, Chinese central bank prints Yuan, Chinese companies get Yuan, Chinese central bank gets dollars and buys bonds with them. China buys bonds because it has the same effect as buying dollars but gives interest on top. Purely for the purpose of currency manipulation buying plain dollars works as well though.
The US has a bigger industrial output than China. It's not that the Chinese companies can't spend those dollars, it's that the Chinese government gives them a more attractive offer and then proceeds to NOT spend those dollars on product from the US. Because it makes the collective choice for the country to depress wages, internal consumption and prop up the US dollar. All to be able to grow it's industrial base faster than it otherwise could with the help of offshoring from US companies.
China wants to see it's internal consumption grow because their mercantilist scheme has almost run it's course ... but it's not quite there, they will be buying US bonds for a few years yet. They'd rather the Fed didn't keep up the QE (they would much prefer the US government to use debt funded stimulus instead) but in the end they will do it regardless.
The US government doesn't push money offshore, the fact that US workers don't work in factory dormitories and have pollution caused cancer as their #1 cause of death pushes money offshore.
At least when combined with free trade and China's eagerness to absorb more offshored industry by making it's citizens work like that (US still has the largest industrial output in the world, there is still industry they can offshore ... that's why China is still buying dollars, it's not charity). Even if US M1 was completely static the same thing would have happened.
China is willing to take IOUs and fuck over their citizen's wages (US inflation compared to China's over the last decade is a pittance). How exactly was an American worker ever supposed to compete with that?
The US manipulates it's own inflation ... but it doesn't manipulate the Yuan.
Buying foreign currency with printed money is a direct attack on the competitiveness of foreign exports on your internal market (this is what China does). The same is not true for plain money printing to monetize government debt (this is what the US does).
Without currency manipulation by government, companies in a trade surplus country will tend to chose to spend foreign currency they receive ... which means trade will have to balance out, since the foreign currency can only buy foreign goods.
The world is never black and white. You do need decent education and infrastructure ... but you can't run decades worth of trade surplus without currency manipulation.
China didn't succeed by attracting capital. Business is done in China with Yuan, not with foreign capital. What they needed were entrepreneurs, dollars to buy raw materials, outsourced business from the US/EU to get know how. Capital they could simply print, which is what they did.
If the US removes minimum wage and welfare who exactly would buy the potential output from US factories using the trick of cheap labour? The US is the consumer of last resort of the world productive output ... if the US median wage drops everything goes to shit, at least in the short term.
Now you may promise a fast recovery ... but in the mean time given the amount of debt accumulated it's going to make the great depression look like a walk in the park.
BTW, China destroyed over 10% of it's arable land ... removing regulations has side effects.
The Chinese plan to inflate wages is more of a long term plan ... they will buy plenty of dollars in the mean time, they will just ease off a bit.
The way that Chinese did it is not by printing currency
Gosh golly ... why did they do it then?
That they printed fiat money to buy up dollars is beyond all reasonable discussion, the sun comes up in the morning and China printed Yuan to buy dollars ... that's just how it is.
China wants to boost internal consumption, for that media wage has to rise (inflate).
China meteoric rise has been accompanied by inflation all the way. It was to their benefit AND centrally planned.
As for deserving it, I would disagree ... running trade surpluses is no better than running trade deficits. It can only be accomplished by currency manipulation, which has required massive money printing ... which you say you dislike. Without money printing (to buy dollars and US bonds) they could never have run a trade surplus for so long and attracted so much investment and industry.
This was what my original comment about Keynes was about, he recognized that trade deficits and surpluses are destabilizing ... and his bancor scheme would have punished them. Unfortunately we got the US dollar as a reserve currency instead.
Whether they deserve it or not will ultimately be irrelevant too ... as I said, as soon as they start increasing wages they will start bleeding industry. Free trade takes no prisoners.
Interest rates are low, even after servicing debts people in the US/EU/Japan/etc still have the highest disposable income in the world.
Like where? As bad as it is getting in the first world ... we still have the highest median disposable income, it's dropping ... but it's not going to be exceeded anywhere else any time soon.
China is trying to inflate wages but it runs the risk of falling into the same trap as the US and just bleeding industry while their poorer neighbours buy up their currency allowing China to run a trade deficit with them ... until China too is mired in debt.
Free trade is a race to the bottom. For decades China has stuck to the bottom (for the majority of their population) allowing their industry to grow ... but as they try to climb out of the bottom free trade will reverse that growth.
We got over the dot com bust in a hurry as well ... in the exact same way as the 20s, by ballooning private debt.
I just don't see how you can see the 20s as a market miracle without looking at the 00s as the same thing. IMO neither was, they were purely debt fuelled consumption binges.
The last hurrah before reality took over.
Social security is pay as you go (mostly, the fund covers short term fluctuations). It's not debt proper, more like a future tax increase to come.
BTW, private debt exceeds government debt by over 2:1.