The following questions are theoretical questions. They resemble real-life situations, but are not presumed to be correct in their analysis of actual events. The purpose of this is to view our reactions to situations in isolation, free of the fuller picture that incorporates all truths. By doing so, we can break complex reactions down to their components, to better understand the complicated layers of analysis we all use, and to recognize how fallacies in one component of our reaction can cause fallacies to be accepted by the whole of our reaction.
Also by doing so, we can free ourselves to answer the actual question, rather than ask a different question which allows us to give the answers we would prefer. In the interest of that, and of getting actual answers to the question, I ask that readers consider the information in the questions to the exclusion of real-life matters which are not considered. If you believe that the questions excluding unasked issues are meaningless, then of course, so would any potential answer to them be. If those are your feelings, then do yourself a favor and spend your time considering other things you feel are less stupid.
Question One: Is a trade deficit by default a bad thing?
If the United States exports X amount of goods and services to China, but X is less than the amount of goods and services the United States imports from China, we are running a trade deficit with China. But, what if at the same time, the United States is increasing both the number of goods and services it creates in general, and also increasing the number of goods and services the US exports to China, and the deficit is due to the fact that Chinese imports are simply growing at an even higher rate?
In this scenario, the United States is becoming wealthier. It is making more, and exporting more. The Chinese are also becoming wealthier, making more, and exporting more, at a higher rate of growth. So, the US/China trade deficit is increasing.
Is this good for China and bad for the US? The other way around? Good or bad for both? Why?
Question Two: Is income inequity by default a bad thing?
If the richest ten percent of Americans are creating greater distance between their own income and that of the rest of Americans, then income inequity is rising. But, income inequity is also increasing if all Americans are getting richer, but the richest ten percent are getting richer at a faster rate.
If the poorest 90% of Americans are seeing their inflation-adjusted incomes increase by $1000 a year, while the richest 10% are seeing them increase by $10,000 a year, is that good for the 10% and bad for the 90%? What if the poorest 90% are only seeing their incomes increase by $100 a year? What if the richest 10% are gaining $500,000 a year while the other 90% gain only $1000?
15 comments
Skip to comment form
Author
As I said before, these questions do not mean that this is what is actually happening. They ask only if those things were happening, what would you think about them.
it will take me a day or two to really think them through
…sociopolitical and cultural endeavors is that the human lifespan is too short to gain a long range overview of the meaningful results of the evolutionary experiment.
And furthermore, while historical eras do tend to follow certain patterns and lead to certain ends — we now have many wild cards that are coming into play: Such as new technologies and remarkable peer to peer communications.
Clearly, now that we are a (mere) 20+ years into income disparity and trade imbalances, it’s logical to say, “I don’t like this. It feels insecure and our-of-control.”
I think it’s important to note that it’s mostly Americans who are struggling with this. We’re an infantile culture with a very brief history compared to the rest of the world.
This particular pendulum (of the questions you asked) swings wide, spanning generations. They won’t know it was any other way as they live through it.
Did you know that over a period of 5,000 years the Chinese enacted and repealed prohibition 41 times? Every single time they forgot how it worked out the last time. So every five generations or so — they would do it again. The pendulum just took so damn long to swing.
and something not so good to gleaned from both situations. I think it’s what we do with what we glean that measures our success. Both of these scenarios have the potential to lead to easily remedied human suffering among lower classes and when that suffering is ignored, well then…that’s what we fear.
Both conditions you site are bad–very bad. Carried to the extreme, China ends up with all the US Dollars–and buys us out–enslaves us. This is what the Arab Emirates are doing to us now–buying into Citibank is the most recent example.
As to income disparity, number 1, it isn’t happening that way–the rich are getting richer, the rest of us are sunk in debt. They have a cute name for most of us–subprime. Even if incomes all went up as you described, disparity leads to envy, which leads to class warfare, which leads to civil war.
I “know” you from many posts, you are very bright, very “progressive, but you’ve fallen for the Bushit. Deficits do damage and the rich don’t let their money trickle down. It’s hard to believe leaders can be so cold–so heartless–so greedy. Remember that everything is valued subjectively–it’s all perspective. To the Cheneys, poverty exists because the “colored” and the “trash” are lazy and/or inferior, not because they are abused by them.
When Reagan and company tarnished the word “liberal,” they tarnished the ideals of our country–and their own religion. That malevolence does trickle down to us subprimers.
You’ve probably seen this before, but…I like what Le Guin did with Levi-Strauss’ hot and cold societies in her essay “A Non-Euclidean View of California as a Cold Place to Be”. “Cold” societies tend toward equality and consensus, and stability. People who can live on a coast for ten millenia and keep similar stories and a way of life are part of a “cold” society. “Hot” societies, like hot gasses, are volatile, change quickly, and have huge inequalities. They tend to be innovative, albeit life is often Hobbesian in the extreme. Is one “better” than the other? Do you prefer merlot or chardonnay?
On a personal level, I’d say that extremely “hot” societies — where people are plentiful and disposable commodities — suck. But then, I like merlot :} Stepping over bodies cheapens us and narrows our perspective. On the other hand it does, indeed, motivate one wonderfully. Whether (at some point) it motivates one more toward revolution or immigration or suicide is another question. I suspect you regard the machine as beautifully efficient and the failures a just price, though I may be completely wrong; but I can’t help but think that great potential gets wasted, and people are not all robust in the same way (nor is it necessarily good for a society when they are) and if inequality is too great, “the friction comes to have it’s machine.”
The inequalities that bother me are not between ten and five hundered thousand, or even ten thousand and ten million; but between ten thousand and two hundered. It is probably my long-repudiated xtian upbringing speaking here, but the starving thirty thousand or so souls to death each day seems to me an absolute wrong, albeit complexly sourced.
As to trade deficits…I tend to think that it’s a mixed bag and i am not an economist :} I’ve read a lot, both ways. In the specific, think it is wonderful that millions of people are getting out of unimaginable poverty, and if that means we have to scramble harder, that’s totally cool.
is the root of all evils.
If taxation is set up so that there’s enough spread in incomes to let people who excel achieve a difference in income that rewards them socially for their efforts, that’s all that’s required. If there’s too much spread, that allows people to walk different streets, send their children to different schools, rub elbows only with those like themselves and not face the same problems like crime, addiction, mental illness, the need for health care, the need to be able to afford higher educations for children, etc.
To have social cohesion you have to make sure the societal conditions are shared. With too much income inequality it inevitably becomes ‘us’ and ‘them’ instead of just ‘us’. If there’s no us, what’s the point of having a country? We’re all just a bunch of wild dogs fighting over a dead carcass.
I think that with re-distribution of income that retains rewards for individual effort within a limited range you can maintain a society that has both minimum living standards for all and a shared risk for societal failure.
I think this is the key to all the rest – political correctness and racism and attention to minority civil rights all become irrelevant as issues when everyone has reasonably similar economic power.
But who the fuck cares about ideas here. There’s fun to be had elsewhere playing games with who can push who around.