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Thread: US economic power

  1. #41
    i pwnd ur ooda loop selil's Avatar
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    Quote Originally Posted by Rex Brynen View Post
    Hey, I just thought it was a fun map
    eh dang canuckians stirring up trouble... You from Quebec ?
    Sam Liles
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  2. #42
    Council Member Tom Odom's Avatar
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    Quote Originally Posted by Rex Brynen View Post
    Hey, I just thought it was a fun map
    Me too

    Speaking for Texas, I am happy

    What about Canada, Rex?

  3. #43
    Council Member Ken White's Avatar
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    Default It is a fun map and any discussion

    about the validity of this or that theory should always be made with the thought in mind that Economists are like Doctors -- if one tells you something you don't want to hear, there's always another that will tell you the opposite.

    The dismal science is well named...

    I'm still not going for the Kimchi, don't care what blandishments Ron offers.

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    Quote Originally Posted by Tom Odom View Post
    Me too

    Speaking for Texas, I am happy

    What about Canada, Rex?
    Works for me!

    Which way to l'Alamo, svp?

  5. #45
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    Quote Originally Posted by Fuchs View Post
    You seem to ignore consequently that the current model of exports in exchange for bare promises is much less reasonable than producing for those who actually add the value.
    No, I'm not ignoring something. I've simply fallen into the trap of conversing with Fuchs, playing whack-a-mole as you throw out an idea, it gets whacked, and then you just toss out another, and then return to tossing out the original idea, and on, and on.

    Quote Originally Posted by Fuchs View Post
    The standard theory is that lower price = more sales potential.
    Yes, but the all-important word "potential" makes that statement different from your original statement that "Excess supply = lower prices = broadened base of customers." But I guess that I'm wrong for not reading your mind and assuming that you meant something other than what you typed.

    Quote Originally Posted by Fuchs View Post
    The black beret example doesn't work well because a black beret factory could easily change its production portfolio - that's why I wrote repeatedly about a time of adaption.
    Indeed. And I repeatedly wrote that if economic calamity befalls the US then the disposable income of other countries suffers and they have less money with which to purchase alternate goods. Go ahead and ignore this and repeat yourself again. Maybe if I smack my head against the wall a few times than I will make the mistake of repeating my rebuttal yet again.

    Quote Originally Posted by Fuchs View Post
    A factory usually being owned by companies that have a strong interest to make profit. They won't simply stare at the USA and close the factory because Americans don't buy their goods anymore. They would seek other markets and adapt their production.
    And again.

    Quote Originally Posted by Fuchs View Post
    And the IMF has - like the World Bank - a record of being useless in economic theory. Too much agenda and ideology.
    Plus; it's a human trait to be risk-averse. Most are. That's why so many people are conservatives. The want to preserve because they fear changes. That's already enough to explain why some sound the drumbeat.
    This hand-waving dismissal, like your earlier inane remark about what "the mantra of the TV reports" tell us is highly subjective and vague, to put it mildly.

    Quote Originally Posted by Fuchs View Post
    All else would not be modern economic theory.
    I'll leave you to subjectively interpret what is and what isn't. I give up.

  6. #46
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    Quote Originally Posted by Fuchs View Post
    Statistics...
    You're right for official exchange rates (but everybody knows that the Renminbi is too cheap). But you're wrong at purchasing power parity exchange rates.

    USA:
    GDP = USD 13.84 trillion
    industry: 20.5% share of GDP
    2.837 trillion industrial value added, USD

    PR China:
    GDPppp = USD 6.991 trillion
    GDP = USD 3.251 trillion
    industry: 48.6% share of GDP
    3.398 trillion industrial value added, USDppp
    1.580 trillion industrial value added, USD

    As I said before, money is just an illusion. The offiial exchange rates are a wrong illusion.
    PPP exchange rates are a less incorrect illusion.

    (source: CIA World Factbook, everything 2007 estimates)
    Fuchs,
    Good point about PPP - I hadn't realized that the stats didn't incorporate PPP. Once you adjust the UNIDO statistics quoted in the piece based on the recent PPP revision from the World Bank, I still come up with the US being #1. We could spin around whether CIA estimates are better than UN/World Bank statistics, but we'll just obfuscate the larger point I was making that the US is by no means a faltering manufacturing state (and instead, remains either #1 or at worse, a very close #2). We could also look at the composition of the US manufacturing sector and decide that it tends to be at the higher end, making it well suited for the type of technology required to equip the national security apparatus of the United States.

    Quote Originally Posted by Fuchs
    You overestimate the relevance of the USA.
    It's correct that the somewhat close economic ties can export U.S. economic troubles to most of the world. But that's only a short-term effect. Few per cent of the German GDP are related to trade with the U.S., for example - and the trade is a drain on its resources, not a push to its economy.
    All countries that have a positive trade balance with the U.S. are actually feeding it - they could consume their own goods or export to other nations instead. The economic should would just cause short-term adaption costs.
    Nobody really depends on working for Americans for promises to pay sometime in return.

    Africa and the UN actually get a lot of money from other countries than the US.

    European trade with the USA is actually not so overwhelmingly large as many people suppose. Its exports are diverse, so it would be possible to consume much of it in Europe or elsewhere.
    And the reference to welfare state - well, that reminds me of a stereotypic misunderstanding by Americans. We pay to steer the society a bit and to keep the poor less poor. That's actually not more expensive than to have a higher crime rate and 0.75% of the countries' population in jail.
    I understand that this was directed at Schmedlap, but once again, if you dive down into the weeds of bilateral trade stats, you miss the overarching point that Steve Blair simply put - the global economy is interdependent and so no matter what you quote from bilateral trade stats, a decline in an economic powerhouse (US, EU, etc.) is going to have a ripple effect that hits all. Whether the impact is direct to the EU or indirect through impacts on China, etc., is irrelevant. The fact that the ECB coordinated with the Fed this past spring to inject huge amounts of liquidity into the financial markets demonstrates this interdependence.

  7. #47
    Council Member Fuchs's Avatar
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    I use CIA World Factbook for convenience (it's really a nice collection of data) and because it's generally less prone to be challenged as source in an English-speaking environment.

    The ECB is responsible for inflation, not for growth. And central banks have a well-deserved reputation for being in love with stability.

    About demand - I'm tired to discuss first week economic studies content anymore:
    http://en.wikipedia.org/wiki/Demand

    About Non-Americans having less money at hand when they stop exporting to the USA: Would be true if the U.S. bought its surplus imports with anything else than loans.
    If in the current situation the USA would cut its imports and keep exports stable, the rest of the world would have MORE money for consumption/investment at hand (simply because the USA would not lend it to pay for the imports).


    B2topic; Sure, the U.S. economy is large, even its small industrial part. It's just like that it doesn't resemble the economy of the 40's to 70's that some people still think about when they think of U.S. economic power and how well the military is being backed up by that.
    I disliked the original picture because it was suitable to reinforce the idea of an extreme superiority that's simply not true for some critical branches and quite the opposite for some as well.

  8. #48
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    Quote Originally Posted by Fuchs View Post
    The ECB is responsible for inflation, not for growth. And central banks have a well-deserved reputation for being in love with stability.
    Not true. The primary objective is price stability with a much more rigid requirement than the Fed. However, the reason that price stability is a goal of both institutions is precisely because price stability provides the conditions for firms and individuals to make longer-term decisions that are more productive for the economy, i.e., greater price stability = greater rates of growth.

    http://www.ecb.eu/press/key/date/199...0610_1.en.html

    I should like to draw your attention first to the word "objectives" in plural. The ECB certainly has a primary objective: "price stability". However, Article 105.1 of the Maastricht Treaty adds that "without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Community with a view to contributing to the achievement of the objectives of the Community as laid down in Article 2."

    Among other objectives, Article 2 states that the Community shall promote a "sustainable and non-inflationary growth" and "a high level of employment and social protection".
    Quote Originally Posted by Fuchs
    About demand - I'm tired to discuss first week economic studies content anymore:
    http://en.wikipedia.org/wiki/Demand

    About Non-Americans having less money at hand when they stop exporting to the USA: Would be true if the U.S. bought its surplus imports with anything else than loans.
    If in the current situation the USA would cut its imports and keep exports stable, the rest of the world would have MORE money for consumption/investment at hand (simply because the USA would not lend it to pay for the imports).
    The reason that the money is available for Americans to borrow against is because people find that the US provides the greatest returns on their money all things considered (default risk, exchange rate risk, etc.). Thus, a decreased appetite for imports would mean less demand for loanable funds, pushing returns on loanable funds down, meaning that the funds that other countries put into the loan markets in the US would simply move elsewhere and face lower returns. Personal investment (I assume that you are referring to investments from a personal finance perspective) amounts don't change, they've just moved geograhpically and just become less productive all things considered. Thus, consumption/investments cannot increase since the loaned funds are already "investments". It is a zero-sum game as you've presented it.

    Quote Originally Posted by Fuchs
    B2topic; Sure, the U.S. economy is large, even its small industrial part. It's just like that it doesn't resemble the economy of the 40's to 70's that some people still think about when they think of U.S. economic power and how well the military is being backed up by that.
    I disliked the original picture because it was suitable to reinforce the idea of an extreme superiority that's simply not true for some critical branches and quite the opposite for some as well.
    I think that you're taking the graphic a little too seriously.

    However, don't get too wed to the military instrument of national power. Since the majority of the global economy has a foundation that is information-based, the fact that the US economy (and the EU) has a strong information component to it means that we both have means that can be used to good effect when implementing grand strategy. The squeeze on Iranian assets through the information-based financial networks was effective in bringing Iran to the bargaining table and got North Korea to sign an agreement (actual outcomes is another issue, but it shows that the military stick isn't the only possible stick out there). As with any change, it brings new capabilities to yield and potential weaknesses to defend against.

  9. #49
    Council Member Fuchs's Avatar
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    There's no discussion about ECB priorities. Whenever there's a conflict between inflation and growth, it is obliged to opt for the inflation control target 2% p.a.. Period.

    "Thus, consumption/investments cannot increase since the loaned funds are already "investments". It is a zero-sum game as you've presented it."

    You confuse world and non-U.S. world here.
    When the non-U.S. world reduces its lending of money to the USA, the non-U.S. world would have more money left for consumption/investment. Simple fact.
    That's what you denied (instead, you claimed they'd have less money to spend). I did never write about increased world-wide demand here.

    And the present situation of assumed good ROI in the U.S. is a present situation, one that would not persist in the scenario we were talking about; an economic crisis in the U.S. that shrinks its huge imports.

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    Quote Originally Posted by Fuchs View Post
    There's no discussion about ECB priorities. Whenever there's a conflict between inflation and growth, it is obliged to opt for the inflation control target 2% p.a.. Period.
    Exactly what I quoted, and the point still remains that growth is an objective of the ECB, contrary to your earlier statement.

    Quote Originally Posted by Fuchs
    "Thus, consumption/investments cannot increase since the loaned funds are already "investments". It is a zero-sum game as you've presented it."

    You confuse world and non-U.S. world here.
    When the non-U.S. world reduces its lending of money to the USA, the non-U.S. world would have more money left for consumption/investment. Simple fact.
    That's what you denied (instead, you claimed they'd have less money to spend). I did never write about increased world-wide demand here.

    And the present situation of assumed good ROI in the U.S. is a present situation, one that would not persist in the scenario we were talking about; an economic crisis in the U.S. that shrinks its huge imports.
    No, I didn't confuse anything here. The investment/consumption amount of non-US countries doesn't change in the net, it only changes geographical locations (with lower expected returns). Either way, it is the exact same amount money being allocated differently based on the consume vs. save (invest) decision now that the best option has been eliminated.

    Like Schmedlap, I give up. We are down in the weeds and missing the big picture that I think Rex intended with this fun graphic.

  11. #51
    Moderator Steve Blair's Avatar
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    Quote Originally Posted by selil View Post
    eh dang canuckians stirring up trouble... You from Quebec ?
    Can't be...he posted in English.

    And it's clear to me that Rex posted the map as a fun sort of thing (although the KSC might have been a better place for that - or one less prone to confuse folks)...not as a serious expression of economic worth or value. From there it took a turn.
    Last edited by Steve Blair; 07-31-2008 at 02:12 PM.
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    T.R. Fehrenbach This Kind of War

  12. #52
    Council Member Tom Odom's Avatar
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    Quote Originally Posted by Steve Blair View Post
    Can't be...he posted in English.

    And it's clear to me that Rex posted the map as a fun sort of thing (although the KSC might have been a better place for that - or one less prone to confuse folks)...not as a serious expression of economic worth or value. From there it took a turn.
    Naw mate. Texas now owns Canada. We are once again the biggest state in the Union and rightfully so...

  13. #53
    Moderator Steve Blair's Avatar
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    Quote Originally Posted by Tom Odom View Post
    Naw mate. Texas now owns Canada. We are once again the biggest state in the Union and rightfully so...
    But we have more nukes than you do..... And once we ally with North Dakota, we'll have a respectable bomber fleet to supplement our missiles. [Boris voice from Goldeneye] We....are...inwincible!
    "On the plains and mountains of the American West, the United States Army had once learned everything there was to learn about hit-and-run tactics and guerrilla warfare."
    T.R. Fehrenbach This Kind of War

  14. #54
    Council Member wm's Avatar
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    Quote Originally Posted by Steve Blair View Post
    But we have more nukes than you do..... And once we ally with North Dakota, we'll have a respectable bomber fleet to supplement our missiles. [Boris voice from Goldeneye] We....are...inwincible!
    You'll have to get those folks in Minot to stop sending their nukes down to Louisiana--otherwise Tom, from his JRTC mole site, will figure out how to get them out of Cajun Land over to that Lone Star/Maple Leaf State/Republic/Dominion thingy.

    I wonder how you combine "Blue Bonnets of Texas" with "Maple Leaf Forever" and "Oh Canada" to get a singable national anthem.

    By the way, I also wonder whether the Habs, Senators, Leafs, and Stars can merge to bring about a hockey team that can win Lord Stanley's Cup? Even with all that talent to draw from, beating the Red Wings still looks tough.
    Vir prudens non contra ventum mingit
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    Quote Originally Posted by Tom Odom View Post
    Naw mate. Texas now owns Canada. We are once again the biggest state in the Union and rightfully so...
    Plus, we have Texas Rangers AND Mounties! How cool is that?

    Take that, Montana Highway Patrol/Tunisian National Gendarmerie.


    Actually, I did have a semi-serious point in posting the map, since--whatever the caveats that might be placed on measuring national economic power, and on how economic power contributes to military-strategic power--it does rather nicely highlight global disparities.

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    Quote Originally Posted by Rex Brynen View Post
    Plus, we have Texas Rangers AND Mounties! How cool is that?

    Take that, Montana Highway Patrol/Tunisian National Gendarmerie.


    Actually, I did have a semi-serious point in posting the map, since--whatever the caveats that might be placed on measuring national economic power, and on how economic power contributes to military-strategic power--it does rather nicely highlight global disparities.
    Yeah...but our guys still have a number on their badges that commemorates vigilante action....

    That and we DIDN'T have either singing Mountie movies or Chuck Norris pretending to be one of us......

    And yeah, the point of the map is well-taken, both for the reasonably serious point you had and some of the comparisons that have arisen in its less serious wake.
    "On the plains and mountains of the American West, the United States Army had once learned everything there was to learn about hit-and-run tactics and guerrilla warfare."
    T.R. Fehrenbach This Kind of War

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    Quote Originally Posted by Steve Blair View Post
    That and we DIDN'T have either singing Mountie movies or Chuck Norris pretending to be one of us......
    "I'm a lumberjack and that's okay . . ."
    Vir prudens non contra ventum mingit
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    Council Member Tom Odom's Avatar
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    Quote:
    Originally Posted by Steve Blair
    That and we DIDN'T have either singing Mountie movies or Chuck Norris pretending to be one of us......
    But we have Jerry Jeff Walker and Ted Nugent

    As well as the legacies of Stevie Ray Vaughan and Warren Zevon

    Besides Mounties are cool
    Attached Images Attached Images

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    Canada sounds dangerous:

    A passenger traveling on a bus across Canada's vast Western plains stabbed, gutted and decapitated a man seated next to him in an unexplained attack, a witness told media Thursday.

    The victim had been sleeping before he was repeatedly stabbed in the chest by a man with a large knife, witness Garnet Caton told public broadcaster CBC.

    The other 35 passengers and driver were jolted by "blood-curdling screams" and fled. "He must have stabbed him 50 times or 60 times," said Caton.

    When Caton and two others returned to check on the victim, he said they saw the attacker "cutting the guy's head off and gutting him."

    "While we were watching ... he calmly walked up to the front (of the bus) with the head in his hand and the knife and just calmly stared at us and dropped the head right in front of us."

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    Council Member Tom Odom's Avatar
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    Quote Originally Posted by Entropy View Post
    I was in a staff meeting yesterday. We could have used this guy...

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