After an unprecedented period of demand vastly outstripping supply due to the covid supply chain disruption, we now have the opposite situation of new car glut amid rising interest rates and drops in consumer purchasing power. The average amount owed on car loans today exceeds the market value by $7,200.
Auto market hard times ahead
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Last: 1 mo ago by Cal88
you know what's so funny/sad about this situation is that car's continue to be more expensive, while they are sourcing parts from 2nd/3rd world nations and making more profit per unit sold. People have had enough, so the secondary market of used cars is so on fire that used cars are not even that much cheaper than new. There is basically no good reason they should be having these cheap cars sitting in lots. Oh and these "advanced" new cars you can't even work on them. Everything is electronic, so 1 problem and your spending thousands to get it fixed.Cal88 said:
After an unprecedented period of demand vastly outstripping supply due to the covid supply chain disruption, we now have the opposite situation of new car glut amid rising interest rates and drops in consumer purchasing power. The average amount owed on car loans today exceeds the market value by $7,200.
The shocker in the video for me was 4-cylinder trucks were going for 55-60k, that's nuts.
MinotStateBeav said:you know what's so funny/sad about this situation is that Car's continue to be more expensive, while they are sourcing parts from 2nd/3rd world nations and making more profit per unit sold. People have had enough, so the secondary market of used cars is so on fire that used cars are not even that much cheaper than new. There is basically no good reason they should be having these cheap cars sitting in lots. Oh and these "advanced" new cars you can't even work on them. Everything is electronic, so 1 problem and your spending thousands to get it fixed.Cal88 said:
After an unprecedented period of demand vastly outstripping supply due to the covid supply chain disruption, we now have the opposite situation of new car glut amid rising interest rates and drops in consumer purchasing power. The average amount owed on car loans today exceeds the market value by $7,200.
Kind of like college textbooks, one of the weirdest scams in America.
yeah that was so annoying, I wonder if professors were getting kickbacks from the book companies for going with them or the schools themselves. I would be so uncomfortable being a professor knowing you're absolutely scamming your students.Cal88 said:MinotStateBeav said:you know what's so funny/sad about this situation is that Car's continue to be more expensive, while they are sourcing parts from 2nd/3rd world nations and making more profit per unit sold. People have had enough, so the secondary market of used cars is so on fire that used cars are not even that much cheaper than new. There is basically no good reason they should be having these cheap cars sitting in lots. Oh and these "advanced" new cars you can't even work on them. Everything is electronic, so 1 problem and your spending thousands to get it fixed.Cal88 said:
After an unprecedented period of demand vastly outstripping supply due to the covid supply chain disruption, we now have the opposite situation of new car glut amid rising interest rates and drops in consumer purchasing power. The average amount owed on car loans today exceeds the market value by $7,200.
Kind of like college textbooks, one of the weirdest scams in America.
I am in the market for a new car.
A downturn in prices would be great. Not seeing it so far.
Agreed on all parts. Many car companies CEO's ran these companies into the ground because they were not Car guys !!!
"Capitalism cannot reform itself; it is doomed to self-destruction"
A couple of my professors used their own textbooks and gave us pdf's of the material.
"Capitalism cannot reform itself; it is doomed to self-destruction"
dimitrig said:
I am in the market for a new car.
A downturn in prices would be great. Not seeing it so far.
The focus of that video seems to be on trucks, maybe that market is more affected.
Some more data:
⚠️US CAR MARKET BUBBLE IS BURSTING⚠️
— Global Markets Investor (@GlobalMktObserv) November 19, 2024
Subprime auto loan 60+ day delinquencies spiked to ~6%, the highest on record.
Serious delinquencies have DOUBLED over the last 3 years.
They are now way above the 2008 Financial Crisis levels and the previous peak seen in the 1990s. pic.twitter.com/a8oe61Klqk
Crazy stat:
— Car Dealership Guy (@GuyDealership) September 10, 2023
50% of Americans are priced out of the car market.
Jonathan Smoke, Chief Economist of Cox Automotive, breaks it down in < 45 seconds: pic.twitter.com/kAI6oAiTAn
and a counterpoint (however, 14 months old from Sept. 23)
Used car prices are unlikely to 'crash' anytime soon.
— Car Dealership Guy (@GuyDealership) September 21, 2023
Why? Because we potentially under-produced *8.5M* cars the past 3 years 😳 pic.twitter.com/b9W01tBVf8
Electric Viking
I've been listening to this guy's YouTube channel the last couple months or so. He's in Australia. I found him because he occasionally reports on solar and battery grid plants, but found that he actually covers the auto market as a news aggregator, summary commenter. He's a total Tesla and Chinese EV enthusiast, and he regularly pounds on legacy automakers and legacy ICE engines.
What I find interesting is that he tosses out stats to back up his opinions. Here are the net beliefs of his:
Electric is the future
Battery tech continues to improve. He discusses this as well, and it's interesting! Range is increasing. Cost is declining, and China is leading the way.
Chinese vehicles are refined in quality.
This improvement has occurred very quickly. The west no longer has anything on Chinese brands. In fact, Ford CEO Jim Farley say Chinese tech is better than what they have , and he is in a panic and says Ford could be out soon if they don't improve. (I listened to some Farley talks as well - shocking transparency!!)
Some European manufacturers and Japanese companies are already going under.
I've heard him (Sam Evans) cover troubles at Stellantis, Nissan, and others.
Chinese car co's will dominate soon.
I've learned about brands such as BYD and Xpeng, and others. Quality is up. Price is way cheaper, and their sales are booming. China are exporting to many countries, like Australia (he's about to receive shipment of his Xpeng) and Mexico and penetration is occurring rapidly. Americans are blind to what's happening because our government won't approve them for import but the wall will crumble and when it dies, bye bye Big 3. Something like 30% of cars sold in Mexico are Chinese. China is building manufacturing plants in Mexico for import into USA, based on NAFTA, which USA cannot stop so long as it honors NAFTA. (No wonder we hear more isolationist talk from Trump, however that only makes USA more expensive for its citizens and therefore less competitive in the global economic race for wealth and dominance. This is an entirely different discussion, and Evans doesn't get too much into US politics.)
I find myself pondering the rapid pace of technological change and thinking back to when I started carrying a blackberry, then an iPhone and, you know, it wasn't that long ago! And yet, can we imagine a world without our phones in our pockets???!!! It's shocking actually. So, more big changes are coming. We are just at the start of things.
I'm holding to my old gas beaters for a day when car price increase tumble not unlike PCs of yesteryear. I'm also building a solar array in my field with a level two charger to be ready. Energy will be free for me!
Weeeeeeeeeeeee!
If you don't like some Ausie sitting in his house, here's a CNBC report from 3 days ago! 45 minutes long called The Chinese Takeover.
Prepare to be shocked.
Prepare to be shocked.
Vehicles now even if maintained brake down quicker now and are crazy expensive to fix. So a lot of vehicles are run into the gound
"Capitalism cannot reform itself; it is doomed to self-destruction"
These are "shorts"
going4roses said:
Vehicles now even if maintained brake down quicker now and are crazy expensive to fix. So a lot of vehicles are run into the gound
ICE cars have more moving parts than EV's. (ICE = Internal Combustion Engine, gas or diesel)
The problem with EV's is the:
high cost of the battery,
the limited range and
lifespan of the battery (see Nissan Leaf, circa 2012).
But that's all about to change! Follow the tech curves and you'll realize it's a matter of time.
ChatGPT just summed what I've read/heard: Batteries are 30-40% of total cost of cars.
Quote:
For example:
A mid-range EV with a $40,000 price tag might have a battery costing about $12,000$16,000.
Luxury EVs with larger batteries could see battery costs exceeding $20,000, but the percentage might be lower relative to the higher total vehicle cost.
As battery production becomes more efficient and recycling methods improve, the percentage cost of batteries in EVs is expected to decrease over time.
Battery tech is on the rise big time because it can be used in global auto market, where range will increase and the batteries will outlive the rest of vehicle, utility scale grid storage (see Hornsdale or Moss Landing as examples of current successful implementation), and individual homeowner efficiency options.
This ever-improving Battery tech is modular to the user and use.
EG: Tesla builds not just cars, but Powerwall for homes and Megapacks for Utilities.
dimitrig said:
I am in the market for a new car.
A downturn in prices would be great. Not seeing it so far.
See my thread on the US dollar.
In all bubbles the balloon is kept inflated, pumped full of air, until the damn bursts, the bubble pops.
How is this car price situation I've been describing any different?
$72k for a tundra pickup? Are you kidding me????
Cal88 said:dimitrig said:
I am in the market for a new car.
A downturn in prices would be great. Not seeing it so far.Crazy stat:
— Car Dealership Guy (@GuyDealership) September 10, 2023
50% of Americans are priced out of the car market.
Jonathan Smoke, Chief Economist of Cox Automotive, breaks it down in < 45 seconds: pic.twitter.com/kAI6oAiTAn
He mentioned interest rates, as in them being high.
If one looks at long term rates, they are not necessarily high. Instead, it's the prior period that was low. And they were low because we had two big shocks (2008 mortgage meltdown and 2020 Covid) that cratered production, sending rates to record lows.
But low rates are not healthy for the market. They indicate low activity, low savings rates. And you want rates higher for overall economic health.
It's attitudes about where rates *should be* that gets America in trouble. Voters believed the nonsense they heard from trump and think they get their cake and eat it, too. Blather!!
The pop is coming.
Can't say where, but the American king wears no clothes. (And to the point of interest rates I'm not just talking Trump)
Havent watched the video. I see two separate issue. First, China. Not sure exactly why it's happening but we saw similar evolutions in the manufacturing sector with Japan in the 1970s then Korea some years later. The Big 3 were threatened and ultimately evolved / improved to survive. I expect the same thing to happen this time. Evolve or die…welcome to capitalism.concordtom said:
If you don't like some Ausie sitting in his house, here's a CNBC report from 3 days ago! 45 minutes long called The Chinese Takeover.
Prepare to be shocked.
Second issue is EV. I'm personally not on board, don't like the limited range, inconveniences around recharging, battery replacement costs or hidden environmental impacts of battery manufacturing. I am a fan of hybrids and expect that'll be our family sweet spot going forward, at least until the EV stuff matures a good bit more.
Also, interesting material / discussion. Good addition to the thread.
Thx for enjoying.
If you dive in deeper, you'll learn that your concerns about range and battery replacement (which were mine when we selected a Kia Niro hybrid [50 mpg] instead of full electric a couple years ago) are going to go away. I mentioned this above.
Look at BYD or CATL in battery searches. Learn about Thacker Pass lithium deposit in Northern Nevada.
Mining operations for this element are expanding, and it takes time to ramp up.
And yet, new battery formulations are coming forth, so it might not just be rare elements.
These are all quick Shorts:
Think Grid Storage
Basically, we don't know, but if you look at the pace of change, you must agree that it's quickening and that we can't see the future but must know it'll be different. Just look back to how different life was when you were a chil or your parents, grandparents, etc.
If you dive in deeper, you'll learn that your concerns about range and battery replacement (which were mine when we selected a Kia Niro hybrid [50 mpg] instead of full electric a couple years ago) are going to go away. I mentioned this above.
Look at BYD or CATL in battery searches. Learn about Thacker Pass lithium deposit in Northern Nevada.
Mining operations for this element are expanding, and it takes time to ramp up.
And yet, new battery formulations are coming forth, so it might not just be rare elements.
These are all quick Shorts:
Think Grid Storage
Basically, we don't know, but if you look at the pace of change, you must agree that it's quickening and that we can't see the future but must know it'll be different. Just look back to how different life was when you were a chil or your parents, grandparents, etc.
The other thing I wanted to say is…
Consider that there are no televisions manufactured in the United States. There are many other items which we no longer make, or we make at a globally uncompetitive price.
It wasn't that long ago that Container Shipping industry made this all possible. Other countries have fewer regulations, and their workers will do so for less, so it doesn't take much imagination to accept that cars can go the same route.
I think you're simply trying to stand behind some sort of American mindset that because we practice capitalism we will always adapt and win. This is a very MAGA base mindset.
- The economics of it don't play out that way.
Consider that there are no televisions manufactured in the United States. There are many other items which we no longer make, or we make at a globally uncompetitive price.
It wasn't that long ago that Container Shipping industry made this all possible. Other countries have fewer regulations, and their workers will do so for less, so it doesn't take much imagination to accept that cars can go the same route.
I think you're simply trying to stand behind some sort of American mindset that because we practice capitalism we will always adapt and win. This is a very MAGA base mindset.
- The economics of it don't play out that way.
My views evolve as I experience life and examine how things do / don't work. 30+ years ago I was very pro-free trade. Still believe that competition is a great thing. But I also have any number of union family members, including blue collar types, and I have seen how exporting jobs has hurt every day Americans. What's the purpose of a government if it isn't to protect and serve its citizens? So yes, some - but not all - components of America First work for me. I'm fine with some targeted protective tariffs, especially for some sectors of the economy such as farming and things that correlate to national security (eg steel, automotive, air, etc.).concordtom said:
The other thing I wanted to say is…
Consider that there are no televisions manufactured in the United States. There are many other items which we no longer make, or we make at a globally uncompetitive price.
It wasn't that long ago that Container Shipping industry made this all possible. Other countries have fewer regulations, and their workers will do so for less, so it doesn't take much imagination to accept that cars can go the same route.
I think you're simply trying to stand behind some sort of American mindset that because we practice capitalism we will always adapt and win. This is a very MAGA base mindset.
- The economics of it don't play out that way.
tequila4kapp said:Havent watched the video. I see two separate issue. First, China. Not sure exactly why it's happening but we saw similar evolutions in the manufacturing sector with Japan in the 1970s then Korea some years later. The Big 3 were threatened and ultimately evolved / improved to survive. I expect the same thing to happen this time. Evolve or die…welcome to capitalism.concordtom said:
If you don't like some Ausie sitting in his house, here's a CNBC report from 3 days ago! 45 minutes long called The Chinese Takeover.
Prepare to be shocked.
Second issue is EV. I'm personally not on board, don't like the limited range, inconveniences around recharging, battery replacement costs or hidden environmental impacts of battery manufacturing. I am a fan of hybrids and expect that'll be our family sweet spot going forward, at least until the EV stuff matures a good bit more.
Also, interesting material / discussion. Good addition to the thread.
China is happening because their government bet big on EVs, partly because of pollution in big cities and because of dependence on imported oil. They also saw the EV market as a way of the future with the global anti-oil policies and a chance for them to take the lead on a new market/technology.
The EV ecosystem in China over the last decade was vast and very competitive, the big brands that have emerged are a handful of companies from a former pool of over a hundred, a bit like the PC or hard drive companies in Silicon Valley in the 1980s/90s or the car industry in Detroit in the early 1920s.
The other thing with China and EV is that China now controls the whole supply chain, from the mining and processing of minerals for batteries, to the production of batteries and IPs. To this extent Tesla is a godsend as the non-Chinese leader in the field.
The quality of Chinese cars and EVs has gone way up, it is on par today with Japan and Korea in quality but well ahead in terms of competitiveness/value. As well the performance and range of batteries is still rising rapidly, to the point where the range of many new Chinese EVs now exceeds that of ICEs.
Without any tariffs, Chinese car brands would take over the low and mid-markets in the US within this decade, as they are doing now in Australia.
This channel, Inside China Business by an expat financial analyst/fund manager based out of China has a very good coverage of the auto industry and the challenge of Chinese EVs, highly recommend, long list of short presentations on the subject:
https://www.youtube.com/@Inside_China_Business/search?query=auto
Wow, glad I stopped by. A thread that is not name calling and interesting. Well done folks.
Tesla apparently is going to bet big on hydrogen:
MITechNewsElon Musk Says He's Leaving Electric Vehicles Behind3 days ago
This has consequences in so many different sectors (e.g., energy, real estate, etc.) If Tesla can make the technology viable for mass car production.
Tesla apparently is going to bet big on hydrogen:
MITechNewsElon Musk Says He's Leaving Electric Vehicles Behind3 days ago
This has consequences in so many different sectors (e.g., energy, real estate, etc.) If Tesla can make the technology viable for mass car production.
wifeisafurd said:
Wow, glad I stopped by. A thread that is not name calling and interesting. Well done folks.
Tesla apparently is going to bet big on hydrogen:
MITechNewsElon Musk Says He's Leaving Electric Vehicles Behind3 days ago
This has consequences in so many different sectors (e.g., energy, real estate, etc.) If Tesla can make the technology viable for mass car production.
The technology is already viable. The two problems are:
1. The cost to build. It is still really expensive. Hydrogen cars are sold at steep losses. This will get better over time as more units are built.
2. The bigger problem is where to get hydrogen. Right now we get most of it as a byproduct of the petroleum industry. It is essentially free. If the fossil fuel industry declines so will the production of hydrogen. There are other ways to produce hydrogen but they are energy intensive and the cost is just too high relative to alternatives.
#2 needs to be resolved before we can go all-in on hydrogen.
My source for this is that I was a test driver for a GM hydrogen vehicle with direct access to the engineers. The vehicle was fine. No issues. Cost was the main concern.
wifeisafurd said:
Wow, glad I stopped by. A thread that is not name calling and interesting. Well done folks.
Tesla apparently is going to bet big on hydrogen:
MITechNewsElon Musk Says He's Leaving Electric Vehicles Behind3 days ago
This has consequences in so many different sectors (e.g., energy, real estate, etc.) If Tesla can make the technology viable for mass car production.
That's going to be interesting to read because the problem with hydrogen it it's not efficient to produce it.
I heard about a plan to have hydrogen tanks in some Japanese model that you insert into the vehicle. I guess they want to sell folks more stuff on a regular basis rather than a one time car sale and a one time solar array sale. I mean… ive got it mapped out for my property, I'll never have to buy fuel from anyone. The sun is free.
In the planning process! I've taken classes and plan to build it together.
wifeisafurd said:
Wow, glad I stopped by. A thread that is not name calling and interesting. Well done folks.
Tesla apparently is going to bet big on hydrogen:
MITechNewsElon Musk Says He's Leaving Electric Vehicles Behind3 days ago
This has consequences in so many different sectors (e.g., energy, real estate, etc.) If Tesla can make the technology viable for mass car production.
The anti trump crowd has given up.
It does no good to try and correct lies and educate people. The tanks are going to roll, and when the horrors of it are over all we can do is lament the atrocities.
I'm in a safe place, I hope you and yours are, too.
'Tis the nature of mankind to be foolish. Each generation needs to learn for themselves, and you cannot stop it.
Don't they already have machines that capture hydrogen out of the air? Wouldn't it just be a case of scale at that point?
I have had the same evolution of thinking. My Cal econ degree taught me the benefits of free trade and why tariffs are "bad." Both are true - in a sense - but the thinking was far too simplistic in not asking "good for who" and "bad for who."tequila4kapp said:My views evolve as I experience life and examine how things do / don't work. 30+ years ago I was very pro-free trade. Still believe that competition is a great thing. But I also have any number of union family members, including blue collar types, and I have seen how exporting jobs has hurt every day Americans. What's the purpose of a government if it isn't to protect and serve its citizens? So yes, some - but not all - components of America First work for me. I'm fine with some targeted protective tariffs, especially for some sectors of the economy such as farming and things that correlate to national security (eg steel, automotive, air, etc.).concordtom said:
The other thing I wanted to say is…
Consider that there are no televisions manufactured in the United States. There are many other items which we no longer make, or we make at a globally uncompetitive price.
It wasn't that long ago that Container Shipping industry made this all possible. Other countries have fewer regulations, and their workers will do so for less, so it doesn't take much imagination to accept that cars can go the same route.
I think you're simply trying to stand behind some sort of American mindset that because we practice capitalism we will always adapt and win. This is a very MAGA base mindset.
- The economics of it don't play out that way.
The low and middle class workers have carried a disproportionate burden of free trade - but hey, they get cheap flat screen TVs, so they should be happy, right?
And national security interest were never discussed, because the underlying assumption was that those engaging in fair trade would, like the US, be democracy oriented countries with western values.
With the onset of globalization, we've become dangerously reliant on goods and source materials from countries that don't share our values and/or engage in truly fair trade. It is insane, from a national security perspective, to rely on China for things like medicine, steel, food, etc. Yet we do.
The chips act was a step in the right direction. Targeted tariffs seem like a necessary evil to advance/protect the interests of the US and its citizens.
Your 3rd paragraph is super spot on. I remember when we thought market factors would democratize China. Wrong. Instead of them moving toward us with their values they are using capitalism to try to win the world over toward their values. That's another value proposition in favor of targeted tariffs.
tequila4kapp said:
Your 3rd paragraph is super spot on. I remember when we thought market factors would democratize China. Wrong. Instead of them moving toward us with their values they are using capitalism to try to win the world over toward their values. That's another value proposition in favor of targeted tariffs.
Unlike us, the Chinese make a point of not pushing their values on their trade partners or allies, they believe that their political system is tied to their own cultural values, norms and history and not necessarily transportable. This is a departure from Mao's time when communism was viewed as an internationalist/universal movement. This is also a big difference with the US and western countries, as we believe that our current value system is superior to all others and should be imposed on the rest of the world.
China's mixed system of industrial capitalism and socialism has delivered for them, having lifted them out of poverty and created an 800 million strong middle class.
The atmosphere is 99.96% oxygen, nitrogen and argon. The only sources of hydrogen in the atmosphere are water vapor and methane, which are a part of the remaining 0.04%. I don't know how difficult it is to get hydrogen out of methane, but I expect using water from rivers and lakes would be easier than using atmospheric water vapor.MinotStateBeav said:
Don't they already have machines that capture hydrogen out of the air? Wouldn't it just be a case of scale at that point?
Are you kidding? The entire point of the Belt and Road initiative is to give China dominant leverage over other countries. And I think North Korea, Hong Kong and Taiwan (not to mention China's other neighbors) would be surprised to learn that China was agnostic about other country's political systems.Cal88 said:tequila4kapp said:
Your 3rd paragraph is super spot on. I remember when we thought market factors would democratize China. Wrong. Instead of them moving toward us with their values they are using capitalism to try to win the world over toward their values. That's another value proposition in favor of targeted tariffs.
Unlike us, the Chinese make a point of not pushing their values on their trade partners or allies, they believe that their political system is tied to their own cultural values, norms and history and not necessarily transportable. This is a departure from Mao's time when communism was viewed as an internationalist/universal movement. This is also a big difference with the US and western countries, as we believe that our current value system is superior to all others and should be imposed on the rest of the world.
China's mixed system of industrial capitalism and socialism has delivered for them, having lifted them out of poverty and created an 800 million strong middle class.
If the US wanted to impose its values on the rest of the world, we could - by force. How many countries win wars (like the US did in WWII and just leave)?
And in terms of the second bolded statement, how would you assess that statement in relation to political Islam or for that matter Russia? You're a big defender of Putin's Russia and Hamas (political islamists). Do you think their respective policies seek to push their preferred values and political systems on his neighbors? If not, how do you explain the historical expansion of Islam by force/jihad?
I understand that you don't like the noecon approach. It failed, so that fair. But to suggest that the US is the only country that had those goals - or that the US is particularly worse than other countries - is just wrong.
BearGoggles said:Are you kidding? The entire point of the Belt and Road initiative is to give China dominant leverage over other countries. And I think North Korea, Hong Kong and Taiwan (not to mention China's other neighbors) would be surprised to learn that China was agnostic about other country's political systems.Cal88 said:tequila4kapp said:
Your 3rd paragraph is super spot on. I remember when we thought market factors would democratize China. Wrong. Instead of them moving toward us with their values they are using capitalism to try to win the world over toward their values. That's another value proposition in favor of targeted tariffs.
Unlike us, the Chinese make a point of not pushing their values on their trade partners or allies, they believe that their political system is tied to their own cultural values, norms and history and not necessarily transportable. This is a departure from Mao's time when communism was viewed as an internationalist/universal movement. This is also a big difference with the US and western countries, as we believe that our current value system is superior to all others and should be imposed on the rest of the world.
China's mixed system of industrial capitalism and socialism has delivered for them, having lifted them out of poverty and created an 800 million strong middle class.
If the US wanted to impose its values on the rest of the world, we could - by force. How many countries win wars (like the US did in WWII and just leave)?
And in terms of the second bolded statement, how would you assess that statement in relation to political Islam or for that matter Russia? You're a big defender of Putin's Russia and Hamas (political islamists). Do you think their respective policies seek to push their preferred values and political systems on his neighbors? If not, how do you explain the historical expansion of Islam by force/jihad?
I understand that you don't like the noecon approach. It failed, so that fair. But to suggest that the US is the only country that had those goals - or that the US is particularly worse than other countries - is just wrong.
Leave after WW2?
There are STILL American military bases in Japan and Germany.
BearGoggles said:I have had the same evolution of thinking. My Cal econ degree taught me the benefits of free trade and why tariffs are "bad." Both are true - in a sense - but the thinking was far too simplistic in not asking "good for who" and "bad for who."tequila4kapp said:My views evolve as I experience life and examine how things do / don't work. 30+ years ago I was very pro-free trade. Still believe that competition is a great thing. But I also have any number of union family members, including blue collar types, and I have seen how exporting jobs has hurt every day Americans. What's the purpose of a government if it isn't to protect and serve its citizens? So yes, some - but not all - components of America First work for me. I'm fine with some targeted protective tariffs, especially for some sectors of the economy such as farming and things that correlate to national security (eg steel, automotive, air, etc.).concordtom said:
The other thing I wanted to say is…
Consider that there are no televisions manufactured in the United States. There are many other items which we no longer make, or we make at a globally uncompetitive price.
It wasn't that long ago that Container Shipping industry made this all possible. Other countries have fewer regulations, and their workers will do so for less, so it doesn't take much imagination to accept that cars can go the same route.
I think you're simply trying to stand behind some sort of American mindset that because we practice capitalism we will always adapt and win. This is a very MAGA base mindset.
- The economics of it don't play out that way.
The low and middle class workers have carried a disproportionate burden of free trade - but hey, they get cheap flat screen TVs, so they should be happy, right?
And national security interest were never discussed, because the underlying assumption was that those engaging in fair trade would, like the US, be democracy oriented countries with western values.
With the onset of globalization, we've become dangerously reliant on goods and source materials from countries that don't share our values and/or engage in truly fair trade. It is insane, from a national security perspective, to rely on China for things like medicine, steel, food, etc. Yet we do.
The chips act was a step in the right direction. Targeted tariffs seem like a necessary evil to advance/protect the interests of the US and its citizens.
I must say, it's laughable reading Americans complain about Free Trade now that it appears to be benefiting others, whereas for the entirety of the 1900's we were kicking butts of other nations.
But in truth, you should go back to your coursework where you (hopefully) learned about how it each entity in a system performs the task which they have a "competitive advantage" in, all sides will benefit - as you wrote, but now no longer believe.
It is also true that if one side using power (and not free trade) principles to exploit another side, it doesn't work right. It is true that if country A produces cars and TVs (a high value add product) while the other side produces food, if the food producer starves out the tech producer, … No bueno.
This is why many proclaim various industries to be sacred cows for national security:
Food
Steel
Guns and bullets
Oil
Now it's chips and cars
I guess it depends… are governments going to work together for efficiency sake or not?
The Chinese are working well amongst themselves and have thus produced an economy that is out competing Rest of World in many areas - AND WE CAN'T STAND IT!!!!!
tequila4kapp said:
Your 3rd paragraph is super spot on. I remember when we thought market factors would democratize China. Wrong. Instead of them moving toward us with their values they are using capitalism to try to win the world over toward their values. That's another value proposition in favor of targeted tariffs.
I kinda like $400 65" flat panel WiFi TVs.
But what are you afraid of here?
Quote:
Instead of them moving toward us with their values they are using capitalism to try to win the world over toward their values.
Are they going to brainwash you into speaking Cantonese?
Cal88 said:tequila4kapp said:
Your 3rd paragraph is super spot on. I remember when we thought market factors would democratize China. Wrong. Instead of them moving toward us with their values they are using capitalism to try to win the world over toward their values. That's another value proposition in favor of targeted tariffs.
Unlike us, the Chinese make a point of not pushing their values on their trade partners or allies, they believe that their political system is tied to their own cultural values, norms and history and not necessarily transportable. This is a departure from Mao's time when communism was viewed as an internationalist/universal movement. This is also a big difference with the US and western countries, as we believe that our current value system is superior to all others and should be imposed on the rest of the world.
China's mixed system of industrial capitalism and socialism has delivered for them, having lifted them out of poverty and created an 800 million strong middle class.
Ha!
Pretty much, yes!!!
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