RightNation.US
News (Home) | Righters' Blog | Hollywood Halfwits | Our Store | New User Intro | Link to us | Support Us

RightNation.US: Trump-haters hype up a recession while the real economy is booming - RightNation.US

Jump to content

Trump-haters hype up a recession while the real economy is booming Rate Topic: -----

#41 User is offline   GrimV 

  • <no title>
  • Group: +Bronze Community Supporter
  • Posts: 8,954
  • Joined: 08-May 06

Posted 25 August 2019 - 09:31 AM

View PostNatural Selection, on 25 August 2019 - 06:34 AM, said:

The US had a $419 billion trade deficit with China in 2018. Is that just a random occurrence, or is it the result of trade policy decisions on both sides?

If it's the result of trade policy decisions, then China has made the better decisions.


According to who?

Not any economist I've ever followed.

Quote

A "trade war" is essentially a collection of trade policy decisions.


No, a trade war is using retaliatory tactics like tariffs to engage in protectionism.

A collection of "trade policy decisions" is simply called "free trade". If you freely offer something for sale and I freely accept, how is that a "trade war"?

Again, nobody's putting a gun to retailer's heads and forcing them to buy from China. They do so of their own volition.

Quote

Many countries have been involved in "trade wars" for a long time. Those with trade surpluses have "won" the war. Those with trade deficits have "lost" the war.


Again: According to who?

If I work in the financial service industry, my money's not made through the sale of goods, right? It's made though the sale of a service. So every time I buy something from the grocery store I'm a net "importer", resulting in the store increasing their balance of trade.

So am I locked in a "trade war" with the grocery store, or do we simply have two different "economies"?











I'm loathe to drag in Comparative Advantage. At first blush it's counter-intuitive and ungodly boring, but it might be necessary.
0

#42 User is offline   GrimV 

  • <no title>
  • Group: +Bronze Community Supporter
  • Posts: 8,954
  • Joined: 08-May 06

Posted 25 August 2019 - 10:05 AM

View PostNatural Selection, on 25 August 2019 - 09:01 AM, said:

Can you provide any examples of inflation caused by our "unwinnable" trade war with China?



Here's the conclusion of a paper published by Princeton a few months ago SOURCE

SIDE NOTE: a "Deadweight Loss" is a loss of efficiency when markets are in disequilibrium. An increase in deadweight loss is typically followed by income erosion and job loss. Although not immediately. This is a $21 trillion economy, not Dominoes Pizza. You don't get what you want in 30 minutes or less or it's free. It takes a while for deadweight loss to work it's magic.

Anyway...

"Economists have long argued that there are real income losses from import protection. Using the evidence to date from the 2018 trade war, we find empirical support for these arguments. We estimate the cumulative deadweight welfare cost (reduction in real income) from the U.S. tariffs to be around $6.9 billion during the first 11 months of 2018, with an additional cost of $12.3 billion to domestic consumers and importers in the form of tariff revenue transferred to the government.
The deadweight welfare costs alone reached $1.4 billion per month by November of 2018. The trade war also caused dramatic adjustments in international supply chains, as approximately $165 billion dollars of trade ($136 billion of imports and $29 billion of exports) is lost or redirected in order to avoid the tariffs. We find that the U.S. tariffs were almost completely passed through into U.S. domestic prices, so that the entire incidence of the tariffs fell on domestic consumers and importers up to now, with no impact so far on the prices received by foreign exporters. We also find that U.S. producers responded to reduced import competition by raising their prices."

This post has been edited by GrimV: 25 August 2019 - 10:07 AM

0

#43 User is offline   Natural Selection 

  • Decrypt the truth
  • Group: Bronze
  • Posts: 18,293
  • Joined: 31-December 03

Posted 25 August 2019 - 10:09 AM

View PostGrimV, on 25 August 2019 - 09:31 AM, said:

No, a trade war is using retaliatory tactics like tariffs to engage in protectionism.


Tariffs are a trade policy decision.

Quote

A collection of "trade policy decisions" is simply called "free trade".


Trade policy decisions can also limit free trade.

Quote

So every time I buy something from the grocery store I'm a net "importer", resulting in the store increasing their balance of trade.

So am I locked in a "trade war" with the grocery store, or do we simply have two different "economies"?


Does the grocery store buy anything from you? If not, then you are not trading with each other and can't have a "trade war".
0

#44 User is offline   Natural Selection 

  • Decrypt the truth
  • Group: Bronze
  • Posts: 18,293
  • Joined: 31-December 03

Posted 25 August 2019 - 10:19 AM

View PostGrimV, on 25 August 2019 - 10:05 AM, said:

We find that the U.S. tariffs were almost completely passed through into U.S. domestic prices, so that the entire incidence of the tariffs fell on domestic consumers


I don't see any unusual price increases with Trump.

http://i.postimg.cc/fbs9N0dx/inflation.png

(source)

This post has been edited by Natural Selection: 25 August 2019 - 10:20 AM

0

#45 User is online   kestrel 

  • <no title>
  • Group: +Copper Community Supporter
  • Posts: 1,840
  • Joined: 22-January 05

Posted 25 August 2019 - 10:34 AM

View PostNatural Selection, on 25 August 2019 - 10:09 AM, said:

Tariffs are a trade policy decision.
Trade policy decisions can also limit free trade.
Does the grocery store buy anything from you? If not, then you are not trading with each other and can't have a "trade war".

"The future Rough Rider, in his letter to Henry Cabot Lodge in 1895, declared: "Thank God I am not a free trader....Pernicious indulgence in the doctrine of free trade seems inevitably to produce fatty degeneration of the moral fibre." Roosevelt had no use for think-tank free traders. Experience had not shown, he said, "that we could afford...to follow those professional counselors who have confined themselves to study in the closet; for the actual working of the tariff has emphatically contradicted their theories."

Roosevelt's 1904 platform read: "Protection, which guards and develops our industries, is a cardinal policy of the Republican Party. The measure of protection should always at least equal the difference in the cost of production at home and abroad."

If Teddy is the wrong Roosevelt to cite, we could reference Eleanor or Franklin. Both were liberal free traders, big time.

Ok I'm NOT an economist, don't even play one on the interwebs But our founders seemed to think tariffs were a good idea...and i read stuff like what Teddy Roosevelt said about it...why are these people for tariffs as a tool for economics and governance..Not a shot at you personally but please, in simple terms cuz I be just a simple working guy (just put in my social security papers last week) explain why Tariffs can NOT be part of the tool bag when dealing with other countries?..(its seems to be working as regards Mexico at least attempting to stop the invasion from S/A and possibly dealing with China and N/K) Again this is not a shot I'm not saying that you have TDS or anything just want to know??
Kestrel...

This post has been edited by kestrel: 25 August 2019 - 10:37 AM

0

#46 User is offline   GrimV 

  • <no title>
  • Group: +Bronze Community Supporter
  • Posts: 8,954
  • Joined: 08-May 06

Posted 25 August 2019 - 10:38 AM

View PostNatural Selection, on 25 August 2019 - 10:09 AM, said:

Tariffs are a trade policy decision.


Trade policy decisions can also limit free trade.


No, limiting free trade is called "protectionism".




Quote

Does the grocery store buy anything from you? If not, then you are not trading with each other and can't have a "trade war".


I should've been little more blunt. I was illustrating the difference between a service heavy economy (the US) and a manufacturing heavy economy (China).

SIDE NOTE: The service sector in the United States accounts for about 80% of GDP. So no, it's not a stretch to say the US economy is a "service heavy economy".

And yes, service economies and manufacturing economies most certainly trade with one another. All the time.







Of course the next question will be this: "Why can't we do both? Manufacturing and service?"

ANSWER (which I've already foreshadowed): Comparative Advantage.

Even if we have an absolute advantage in both manufacturing and services, the real question isn't "can we", it's "should we". And the answer is "no". For the same reason a doctor doesn't waste time fussing around with labyrinthine insurance transactions. It's takes them away from doing what they do best, so they hire someone to do it for them.

View PostNatural Selection, on 25 August 2019 - 10:19 AM, said:

I don't see any unusual price increases with Trump.

http://i.postimg.cc/fbs9N0dx/inflation.png

(source)


Cut/Paste

This is a $21 trillion economy, not Dominoes Pizza. You don't get what you want in 30 minutes or less or it's free. It takes a while for deadweight loss to work it's magic.




EDIT: But when you have a "reduction in real income from the U.S. tariffs to be around $6.9 billion during the first 11 months of 2018, with an additional cost of $12.3 billion to domestic consumers and importers in the form of tariff revenue transferred to the government", the groundwork is most certainly being laid.

This post has been edited by GrimV: 25 August 2019 - 10:42 AM

0

#47 User is offline   Natural Selection 

  • Decrypt the truth
  • Group: Bronze
  • Posts: 18,293
  • Joined: 31-December 03

Posted 25 August 2019 - 10:41 AM

View PostGrimV, on 25 August 2019 - 10:38 AM, said:

No, limiting free trade is called "protectionism".






I should've been little more blunt. I was illustrating the difference between a service heavy economy (the US) and a manufacturing heavy economy (China).

SIDE NOTE: The service sector in the United States accounts for about 80% of GDP. So no, it's not a stretch to say the US economy is a "service heavy economy".

And yes, service economies and manufacturing economies most certainly trade with one another. All the time.







Of course the next question will be this: "Why can't we do both? Manufacturing and service?"

ANSWER (which I've already foreshadowed): Comparative Advantage.

Even if we have an absolute advantage in both manufacturing and services, the real question isn't "can we", it's "should we". And the answer is "no". For the same reason a doctor doesn't waste time fussing around with labyrinthine insurance transactions. It's takes them away from doing what they do best, so they hire someone to do it for them.



Cut/Paste

This is a $21 trillion economy, not Dominoes Pizza. You don't get what you want in 30 minutes or less or it's free. It takes a while for deadweight loss to work it's magic.


How do you explain the Consumer Price Index actually dropping over the last year?
0

#48 User is offline   GrimV 

  • <no title>
  • Group: +Bronze Community Supporter
  • Posts: 8,954
  • Joined: 08-May 06

Posted 25 August 2019 - 10:43 AM

View PostNatural Selection, on 25 August 2019 - 10:41 AM, said:

How do you explain the Consumer Price Index actually dropping over the last year?


For the 3rd time: This is a $21 trillion economy, not Dominoes Pizza. You don't get what you want in 30 minutes or less or it's free. It takes a while for deadweight loss to work it's magic.

EDIT: and technically it's actually increased when compared to this time last year (.02% vs .03%).

This post has been edited by GrimV: 25 August 2019 - 10:45 AM

0

#49 User is offline   Natural Selection 

  • Decrypt the truth
  • Group: Bronze
  • Posts: 18,293
  • Joined: 31-December 03

Posted 25 August 2019 - 10:45 AM

View PostGrimV, on 25 August 2019 - 10:43 AM, said:

For the 3rd time: This is a $21 trillion economy, not Dominoes Pizza. You don't get what you want in 30 minutes or less or it's free. It takes a while for deadweight loss to work it's magic.


So you're going with a study produced by a bunch of Trump-hating liberal snobs at Princeton over the real-life CPI data?
0

#50 User is online   kestrel 

  • <no title>
  • Group: +Copper Community Supporter
  • Posts: 1,840
  • Joined: 22-January 05

Posted 25 August 2019 - 10:46 AM

View PostNatural Selection, on 25 August 2019 - 10:41 AM, said:

How do you explain the Consumer Price Index actually dropping over the last year?

Orange Man Bad?http://www.rightnation.us/forums/public/style_emoticons/default/Whislin2.gif
Kestrel...

0

#51 User is offline   GrimV 

  • <no title>
  • Group: +Bronze Community Supporter
  • Posts: 8,954
  • Joined: 08-May 06

Posted 25 August 2019 - 10:55 AM

View PostNatural Selection, on 25 August 2019 - 10:45 AM, said:

So you're going with a study produced by a bunch of Trump-hating liberal snobs at Princeton over the real-life CPI data?


Oh joy...

....Guilt by Association

....what a shock.

If this is the direction the conversation's gonna take, count me out. I have no interest in arguing against logical fallacies.

One parting shot though: the CPI is called a "lagging indicator" for a reason. You're expecting a 21 trillion dollar economy to turn on a hairpin and have an immediate reaction, which doesn't reflect reality. Not even close.

This post has been edited by GrimV: 25 August 2019 - 10:56 AM

0

#52 User is offline   Natural Selection 

  • Decrypt the truth
  • Group: Bronze
  • Posts: 18,293
  • Joined: 31-December 03

Posted 25 August 2019 - 11:04 AM

View PostGrimV, on 25 August 2019 - 10:55 AM, said:

One parting shot though: the CPI is called a "lagging indicator" for a reason. You're expecting a 21 trillion dollar economy to turn on a hairpin and have an immediate reaction, which doesn't reflect reality. Not even close.


It's called a "lagging indicator" because it's not a forecast. It's about something that already happened. I don't know exactly how long the "lag" is, but I'm pretty sure it would have detected Trump's tariffs on China which started over a year ago.
0

#53 User is offline   GrimV 

  • <no title>
  • Group: +Bronze Community Supporter
  • Posts: 8,954
  • Joined: 08-May 06

Posted 25 August 2019 - 11:19 AM

View PostNatural Selection, on 25 August 2019 - 11:04 AM, said:

It's called a "lagging indicator" because it's not a forecast. It's about something that already happened. I don't know exactly how long the "lag" is, but I'm pretty sure it would have detected Trump's tariffs on China which started over a year ago.


It has. In the paper I cited. Which, no, was not written by "Trump-hating liberal snobs at Princeton". In fact, David Weinstein co-authored a book I'd recommend to Any_One, called "Prices, Poverty, and Inequality: Why Americans are Better Off Than You Think".

And your "pretty sure" is incorrect. Look, I realize the entire country's been weened on instant gratification, but that's not how economics works. Think of an economy as a large oil tanker. With enough opposing force it'll eventually stop, but there's a reason captains cut their engines 15 miles from shore. Something that big doesn't stop on a dime.
0

#54 User is offline   GrimV 

  • <no title>
  • Group: +Bronze Community Supporter
  • Posts: 8,954
  • Joined: 08-May 06

Posted 25 August 2019 - 11:42 AM

Since I'm pretty sure the conversation will eventually lead to the belief that the US would be better off combining both manufacturing and service, I'll let Thomas Sowell explain Comparative Advantage. Since he does a way better job than I ever could...


Comparative Advantage

Let’s suppose that one country is so efficient that it is capable of producing anything
more cheaply than another country. Should the two countries trade?

Yes.

Why?

Because even in an extreme case, where one country can produce anything more cheaply
than another country, it may do so to varying degrees. For example, it may be twice as
efficient at producing chairs but ten times as efficient at producing television sets. In this
case, the total number of chairs and television sets produced in the two countries
combined would be greater if one country produced all the chairs and the other produced
all the television sets. Then they could trade with one another and each end up with more
chairs and more television sets than if they each produced both products for themselves.

As economists would say, country A has an “absolute advantage” in producing both
products but, country B has a “comparative advantage” in producing chairs while A has a
“comparative advantage” in producing television sets.
Let’s look at this on a small, human scale. Imagine that you are an eye surgeon and that
you paid your way through college by washing cars. Now that you have a car of your
own, should you wash it yourself or should you hire someone else to wash it—even if
your previous experience allows you to do the job more efficiently than the person you
hire?

-- Even though you have an “absolute advantage” in both activities, your comparative
advantage in treating eye diseases is far greater.

The surgeon has only 24 hours in the day, like everyone else. Time that he is spending
doing one thing cannot be spent doing something else. The same is true of countries.
Although country A may be capable, in the abstract, of producing anything more cheaply
than country B, it cannot in reality produce everything more cheaply because the time it
spends producing one thing comes at the expense of the time that could have been spent
producing other things.

While Country A can produce either product more efficiently, the time it spends
producing chairs would pay off much bigger in producing television sets, some of which
it can trade for chairs from Country B, ending up with more of both products than if it
produced both for itself.

SOURCE
0

#55 User is offline   Natural Selection 

  • Decrypt the truth
  • Group: Bronze
  • Posts: 18,293
  • Joined: 31-December 03

Posted 25 August 2019 - 11:56 AM

View PostGrimV, on 25 August 2019 - 11:42 AM, said:

Since I'm pretty sure the conversation will eventually lead to the belief that the US would be better off combining both manufacturing and service, I'll let Thomas Sowell explain Comparative Advantage. Since he does a way better job than I ever could...


Comparative Advantage

Let’s suppose that one country is so efficient that it is capable of producing anything
more cheaply than another country. Should the two countries trade?

Yes.

Why?

Because even in an extreme case, where one country can produce anything more cheaply
than another country, it may do so to varying degrees. For example, it may be twice as
efficient at producing chairs but ten times as efficient at producing television sets. In this
case, the total number of chairs and television sets produced in the two countries
combined would be greater if one country produced all the chairs and the other produced
all the television sets. Then they could trade with one another and each end up with more
chairs and more television sets than if they each produced both products for themselves.

As economists would say, country A has an “absolute advantage” in producing both
products but, country B has a “comparative advantage” in producing chairs while A has a
“comparative advantage” in producing television sets.
Let’s look at this on a small, human scale. Imagine that you are an eye surgeon and that
you paid your way through college by washing cars. Now that you have a car of your
own, should you wash it yourself or should you hire someone else to wash it—even if
your previous experience allows you to do the job more efficiently than the person you
hire?

-- Even though you have an “absolute advantage” in both activities, your comparative
advantage in treating eye diseases is far greater.

The surgeon has only 24 hours in the day, like everyone else. Time that he is spending
doing one thing cannot be spent doing something else. The same is true of countries.
Although country A may be capable, in the abstract, of producing anything more cheaply
than country B, it cannot in reality produce everything more cheaply because the time it
spends producing one thing comes at the expense of the time that could have been spent
producing other things.

While Country A can produce either product more efficiently, the time it spends
producing chairs would pay off much bigger in producing television sets, some of which
it can trade for chairs from Country B, ending up with more of both products than if it
produced both for itself.

SOURCE


Where's the part about government subsidized manufacturing, currency manipulation, and stolen IP?
0

#56 User is offline   GrimV 

  • <no title>
  • Group: +Bronze Community Supporter
  • Posts: 8,954
  • Joined: 08-May 06

Posted 25 August 2019 - 12:09 PM

View PostNatural Selection, on 25 August 2019 - 11:56 AM, said:

Where's the part about government subsidized manufacturing, currency manipulation, and stolen IP?


It's there. It's called "Comparative Advantage". They're better at selling cheap sh*t, we're better at providing services. It makes more sense to buy cheap sh*t and focus on doing what we do best, for the same reason the doctor in Sowell's example is better of paying someone to wash his car. His time and resources could be put to better and more efficient use.

BTW, stolen intellectual property is a court issue, not a trade issue. Unless someone can finally answer this question: How does taxing the American people with an unwinnable trade war fix that?
0

#57 User is offline   Natural Selection 

  • Decrypt the truth
  • Group: Bronze
  • Posts: 18,293
  • Joined: 31-December 03

Posted 25 August 2019 - 12:17 PM

View PostGrimV, on 25 August 2019 - 12:09 PM, said:

BTW, stolen intellectual property is a court issue, not a trade issue.


Stolen IP allows China to reduce R&D costs which lead to lower product costs. Ultimately, it's a trade issue because it affects prices. There is no court solution to their illegal activity. They can only be forced to change their ways by economic or military means.

Quote

Unless someone can finally answer this question: How does taxing the American people with an unwinnable trade war fix that?


Again, there is no evidence that the American people are being "taxed" by Trump's tariffs on China. All we have is a theory by a bunch of Trump-hating liberal snobs at Princeton.
0

#58 User is offline   zurg 

  • <no title>
  • Group: +Copper Community Supporter
  • Posts: 28,868
  • Joined: 19-October 09

Posted 25 August 2019 - 12:52 PM

View PostNatural Selection, on 25 August 2019 - 11:56 AM, said:

Where's the part about government subsidized manufacturing, currency manipulation, and stolen IP?

Exactly. An economist will tend to only look at situations like this in purely economic terms, which in my opinion is where the mistake is, and it EVEN affects the economy long term. Someone needs to get China under control, there’s zero question about that, and actually the EU countries agree, they just want the US to do all the heavy lifting.

The purpose of the “trade war” isn’t to take all Chinese manufacturing that’s directed into products sold to the US and move the manufacturing to the US. No, in fact probably a fraction will move to the US (more automation and robotics will help here, because it reduces impact of labor cost and transport). A chunk can move to Vietnam, Philippines, Thailand, Mexico and other places. This is China’s game to lose, long term. Yes, there can be short and medium term effects economically, but if you have any exposure to the depth of stealing by the Chinese, you’ll agree that they are so far from playing on a level field that someone needs to get them under control. They are cheating, big time.

(Oh, and Comparative Advantage is related to another, more intuitive concept: opportunity cost.)

This post has been edited by zurg: 25 August 2019 - 12:53 PM

0

#59 User is offline   GrimV 

  • <no title>
  • Group: +Bronze Community Supporter
  • Posts: 8,954
  • Joined: 08-May 06

Posted 25 August 2019 - 01:39 PM

View PostNatural Selection, on 25 August 2019 - 12:17 PM, said:

Stolen IP allows China to reduce R&D costs which lead to lower product costs. Ultimately, it's a trade issue because it affects prices. There is no court solution to their illegal activity. They can only be forced to change their ways by economic or military means.




You do realize China's "trade advantage" isn't much of an advantage. Oddly enough, both sides of the aisle like to portray China as an unstoppable economic behemoth. The Left thinks it proves China's mixed economy is workable (it's not), and the Right believes it would be advantageous to eat away at their solid service based economy to adopt China's manufacturing, simply because China sells a lot of cheap sh*t (it won't). But compare and contrast the US economy and the Chinese economy. Yes, China's Nominal GPD ranks high. Not as high as the United States, but still high. But nominal GDP is useless when defining a country's "Standard of Living". For that you need what's known as Per Capita GDP, which uses Purchasing Power Party.

Based on Per Capita GDP, the United States is ranked 8th.

China? 75th.

They're ranked below the Dominican Republic, for chrissakes. Is that the economy you want, because (whether you realize it or not) it's the economy you're asking for. Which is why I keep saying "Yes, China sells a lot of cheap sh*t, but at what cost? At what cost to their country? At what cost to their people?

At what cost compared to the benefits?

From where I'm sitting, their benefits don't outweigh the costs, and their sh*tty economy proves it.

Quote

Again, there is no evidence that the American people are being "taxed" by Trump's tariffs on China.


For the 4th time: This is a $21 trillion economy, not Dominoes Pizza. You don't get what you want in 30 minutes or less or it's free. It takes a while for deadweight loss to work it's magic.

Think about recent history: The Credit Crunch. The Credit Crunch hit in 2007, the resulting recession didn't hit until 2009. Two years later. Why? Because this is a $21 trillion economy, not Dominoes Pizza.

Stop looking for instant gratification, it doesn't exist in the macro-economy.


Quote

All we have is a theory by a bunch of Trump-hating liberal snobs at Princeton.


Yes. A man who wrote a book called "Prices, Poverty, and Inequality: Why Americans are Better Off Than You Think" is the very definition of "Trump-hating liberal snob".

Listen to yourself. This isn't a "debate", you're engaging in tribalism.
0

#60 User is offline   GrimV 

  • <no title>
  • Group: +Bronze Community Supporter
  • Posts: 8,954
  • Joined: 08-May 06

Posted 25 August 2019 - 01:52 PM

View Postzurg, on 25 August 2019 - 12:52 PM, said:

Exactly. An economist will tend to only look at situations like this in purely economic terms, which in my opinion is where the mistake is, and it EVEN affects the economy long term. Someone needs to get China under control, there’s zero question about that, and actually the EU countries agree, they just want the US to do all the heavy lifting.

The purpose of the “trade war” isn’t to take all Chinese manufacturing that’s directed into products sold to the US and move the manufacturing to the US. No, in fact probably a fraction will move to the US (more automation and robotics will help here, because it reduces impact of labor cost and transport). A chunk can move to Vietnam, Philippines, Thailand, Mexico and other places. This is China’s game to lose, long term. Yes, there can be short and medium term effects economically, but if you have any exposure to the depth of stealing by the Chinese, you’ll agree that they are so far from playing on a level field that someone needs to get them under control. They are cheating, big time.

(Oh, and Comparative Advantage is related to another, more intuitive concept: opportunity cost.)


Yes! Exactly! Opportunity Cost. Somebody finally gets it.

So what's the opportunity cost of the United States shifting away from their serviced based economy, forgoing international trade, and manufacturing more domestically?

Well, that's easy: The "cost" is higher prices and revenue loss.

Think about the aforementioned Doctor who paid his way through college washing cars. He has an Absolute Advantage in washing cars and being a doctor, he can do both efficiently. But what's his Opportunity Cost? How much does it *cost* him to wash his own car?

He might save, what, 20 bucks an hour washing his own car? Now compare that to the $300 an hour he makes healing patients.

There's no comparison. He's better off trading his money for a service, even if (and this is the important part) even if the person he hires is less efficient at washing cars. The doctor still comes out ahead.

That's the magic of Comparative Advantage.
0

Share this topic:


  • 13 Pages +
  • 1
  • 2
  • 3
  • 4
  • 5
  • Last »
  • You cannot start a new topic
  • You cannot reply to this topic

1 User(s) are reading this topic
0 members, 1 guests, 0 anonymous users