This weekly roundup thread is intended for all culture war posts. 'Culture war' is vaguely defined, but it basically means controversial issues that fall along set tribal lines. Arguments over culture war issues generate a lot of heat and little light, and few deeply entrenched people ever change their minds. This thread is for voicing opinions and analyzing the state of the discussion while trying to optimize for light over heat.
Optimistically, we think that engaging with people you disagree with is worth your time, and so is being nice! Pessimistically, there are many dynamics that can lead discussions on Culture War topics to become unproductive. There's a human tendency to divide along tribal lines, praising your ingroup and vilifying your outgroup - and if you think you find it easy to criticize your ingroup, then it may be that your outgroup is not who you think it is. Extremists with opposing positions can feed off each other, highlighting each other's worst points to justify their own angry rhetoric, which becomes in turn a new example of bad behavior for the other side to highlight.
We would like to avoid these negative dynamics. Accordingly, we ask that you do not use this thread for waging the Culture War. Examples of waging the Culture War:
-
Shaming.
-
Attempting to 'build consensus' or enforce ideological conformity.
-
Making sweeping generalizations to vilify a group you dislike.
-
Recruiting for a cause.
-
Posting links that could be summarized as 'Boo outgroup!' Basically, if your content is 'Can you believe what Those People did this week?' then you should either refrain from posting, or do some very patient work to contextualize and/or steel-man the relevant viewpoint.
In general, you should argue to understand, not to win. This thread is not territory to be claimed by one group or another; indeed, the aim is to have many different viewpoints represented here. Thus, we also ask that you follow some guidelines:
-
Speak plainly. Avoid sarcasm and mockery. When disagreeing with someone, state your objections explicitly.
-
Be as precise and charitable as you can. Don't paraphrase unflatteringly.
-
Don't imply that someone said something they did not say, even if you think it follows from what they said.
-
Write like everyone is reading and you want them to be included in the discussion.
On an ad hoc basis, the mods will try to compile a list of the best posts/comments from the previous week, posted in Quality Contribution threads and archived at /r/TheThread. You may nominate a comment for this list by clicking on 'report' at the bottom of the post and typing 'Actually a quality contribution' as the report reason.
Jump in the discussion.
No email address required.
Notes -
Tariffs aren't as cooked as they seem
I saw this video on YT about the tariffs from the perspective of a dropshipper, and they are actually less than they might seem. In his example, on an item that retails for $600, 50% tariffs apply to the wholesale price of the item of $200, and the overall tariff tax burden is $100, or 17% of the retail price of the item.
This might seem bad, but to put it in perspective, countries in Europe have a VAT tax (similar to sales tax) of 20-30% on the retail price, and that's on top of any customs import duties/tariffs. Even though the calculation is different than sales tax, my understanding is that the total tax burden is always equal to the percentage of the final sale price of the item. And nobody is complaining that the sky is falling in Europe or that retail prices are crazy over there.
Even more so for cheap crap, the tariff burden is even less important. For <$20 crap sold on Scamazon, the wholesale price may be only $1-3, which is possibly less than the cost of the sea freight to ship it to the Scamazon FC. Then Scamazon will take $5-10 on FBA fees. So in the end even a 50 or 100% tariff may only account for $1-2 out of a $20 item.
It remains to be seen if US manufacturers can actually pick up any of the slack after the tariffs. A huge amount of manufacturing heavily automated and done in china due to the preexisting large manufacturing base as well as the lack of any good reason not to do it there. I saw this tweet about gpus, where semiconductors are tariff-exempt, but finished gpus are not.
A top of the line AI gpu is simply a relatively small circuit board, with a huge chip on it and a handful of supporting components. There isn't even a cooler or bracket to worry about. You could order all of the components from china (negligible bom and tariff besides the chip itself) and set up a factory with just a pick & place machine and reflow oven, and pump out 100 $30,000 gpus per hour. There's no reason we can't do this, we just don't do it because we never had a reason to.
There’s an idea I keep reading that “lower/middle income buy most of their goods overseas and so will be hit harder by tariffs”, but I bet that if you look at actual dollar amount of imported goods, the wealthiest 10% eat up 99% of the dollar amount of imported goods. The Rolexes, foreign cars, lululemons, Canada goose, the multiple consumer electronics, the French fashion, the French wine, the obscure ingredients and cutlery at their restaurants, and so on. I hate all of this. So if Trump really does replace the income tax in the lower/middle class with the tariff proceeds, this may be incredible for redistribution. (Not that I think this will happen; who knows what he is going to do).
I would think the problem here is that luxury goods are substitutable whereas cheap goods are not, not for domestic production anyway. America does produce luxury cars which the rich can buy (though this won't even necessarily increase demand for American products because they will become proportionately less competitive abroad to the foreign rich), but there is no possible way for domestic products to compete on price for cheap consumer goods, so consumers will just have to eat the extra cost.
In any case none of this matters because the base assumption is just false. All deciles spend a very similar proportion of their income on imported goods. This does mean the top deciles will spend more in dollars on imports, but (obviously) the SoL impact will be much greater on the lower deciles which can't afford to take the hit - the distributional impact will be similar to ordinary inflation, except even worse because hourly workers' wages are more responsive to inflation than those of (on average, higher income) salaried workers.
https://www.federalreserve.gov/econres/notes/ifdp-notes/distributional-consequences-of-trade-for-us-consumers-20180403.htm.com
“Proportion” being key here, because 134,000 households are sitting on 44 trillion dollars in wealth.
This depends on where the tariff proceeds go. Your link is broken on my end so I can’t see the figures.
Essentially every decile consumes 10% of their income on imports +/-1% (and I'm not reading the table wrong it's just a funny coincidence the figure is 10%, it used to be all deciles spent 6.5% +/-1%).
Well note it's by income, not by wealth. Post-tax income of the top decile is only about 30% of the total.
Given Trump's track record on distributional policy the chance of anything close to offsetting the disruption via distribution of revenues is near-zero. If reshoring does occur then there will be an increase in price with no concomitant revenue, and in a basically full employment economy it's difficult to see what benefit this reshoring would even have, you're just shifting workers into lower-productivity sectors (since they have been necessarily outcompeted in a freer market by whatever sector they're working in at the moment).
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link