The failures of Trade

Here is a Post which extends some reality. Some people imagine that the globalization of Old can continue, but Mish provides a lot of viewpoints which carry adverse Signs. Production Costs have increased, Transportation Costs have increased, Everyone owes money to People and Organizations they have functionally never heard of, and Consumer Demand is in decline in almost all of the developed world. Ports are clogged, infrastructures are suffering constant wear, Replacement Costs for that infrastructure is rising out of the Cost realm of most focal points of Trade, and human populations simply inhibiting the flow of Goods. The good old days of borrowing billions to spend billions with high Profits at each end may be coming to an End, what with the major Banks unable even to clearly estimate their Risk. The most frightening aspect the insensitivity of both Consumer and specialized Labor to respond to the old Incentives to maintain the system.

Everyone should read this Post from Greg Mankiw. I must admit that I have some minor, or more serious, reservations about 2,3,4,6,8,9, and 12. The practice of Tariffs and Quotas have not been shown to actually constrict economic performance; location advantage of Production has basically never been proven outside base materials and metallurgy. There is more discontinuity in flexible and floating exchange rates–especially in recessionary periods. American farm subsidies forestall the complete conquest of Agriculture by the Corporate world, and their elimination would not actively alter the Exports or Import fractions currently endured; such elimination, though, would raise Food Costs by an estimated 25%. Social Security will become unsustainable only if a lengthy deflationary period persists over years, otherwise; actual payment for the system remains relatively unchanged–if no further services are granted. The Minimum Wage debate is where Greg might be completely wrong, as the data expresses a contrary condition. So much for the absolute Consensus between economic factions.

Even the old Revolutionaries were confused–Past and Present. The search for causation is always self-oriented, and researched only for personal defense, as this Post will outline. The Taiping Rebellion was driven by a religious fanaticism, tactically commandeered by Western soldiers of fortune utilizing modern weaponry for the Times, and directed against the propertied classes which were the Target of Mao’s Revolution much later. The Western military leadership was responsible for the success of the Taiping Rebellion, which later failed under native leadership. Western intervention was the factor for Taiping success, and so must be accounted for the huge human death toll; they supplying the means of destruction and the success for the Movement to spread. The later success of Mao came from the inability of their opposition to effectively fight, rather than the religious or political superiority of Mao’s message. The causation of both Rebellions rested on the level of Corruption expressed by Chinese leadership, and little else. lgl