Comment by rayiner | Hacker News Reader

Comment by rayiner | Hacker News Reader

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But does GDP growth reflect quality of life? The inequality you’re seeing is exactly what you’d expect from policies that reduce labor market bargaining power through the dual-pronged approach of outsourcing production and facilitating mass immigration.

Germans and Japanese don’t make socks for $10,000/year. Our former au pair lives in a small town in Germany. She was tracked into an apprenticeship program at 16 (off the college track), but now in her early 30s has a solid white collar job doing logistics for a baby formula manufacturer. Her boyfriend works in logistics as well—a big industry in a country that makes things.

By contrast, GDP is higher in the U.S., but is that real? As a corporate attorney, I make probably double what I would in Germany. Pay differentials seem to be similar for other knowledge-economy jobs like software development, marketing, etc. Our laptop class makes tons of money compared to their counterparts in Germany or Japan. But is that a good thing?

It's so weird to see conservatives talk about how great the European economy is. I used to have to argue with my liberal friends about how Europe is a sclerotic economy and now I'm arguing with conservatives about it. Weird world.

> By contrast, GDP is higher in the U.S., but is that real?

Yes it's real, we live in larger homes, have more cars, have more stuff. Maybe that doesn't drive a huge change in quality of life, but making us poorer isn't going to do that either. And when you talk to Europeans about why they like Europe they don't list how poor everyone is there, or how many factory jobs there are. They list a bunch of stuff that is anathema to conservatives like the socialized medicine (some love it, other's hate it), a carless culture, a social safety net, a slower speed of life, lots of vacation. (Which is a big reason why they are poorer)

And it's not just the laptop class, almost everyone who is full time is richer in the US. The exception is people who are marginally employed who would probably benefit from Europe's larger social safety net.

> It's so weird to see conservatives talk about how great the European economy is. I used to have to argue with my liberal friends about how Europe is a sclerotic economy and now I'm arguing with conservatives about it. Weird world.

The liberals were right about this, and the Reagan/Bush conservatives were wrong. What you’re observing is simply the reshuffling of the party coalitions. The Buchanan wing of the GOP has gained the upper hand, and many of the Rockefeller republicans and neocons have become Democrats. Meanwhile, many blue collar Democrats in the midwest and south have become Republicans.

No, GDP by itself, in aggregate doesn't.

Mean purchasing power does, which roughly tracks GDP per capita, and this is what tariffs will hurt.

I think the characteristics you are looking at are orthogonal from the issue of tariffs. It is about labor mobility and income differentials.

For some reason, people seem to think tariffs will raise labor pay more than the cost of goods.

Cost of goods goes up more than labor compensation.

But labor mobility and income differentials reflect the structure of the economy. It seems to me that knowledge economies are inherently more unequal than manufacturing economies.[1] And tariffs and industrial policy shape the structure of the economy.

[1] To use a domestic example, compare Iowa and California. California has higher GDP per capita, but Iowa (which isn’t a manufacturing economy but rather an advanced agricultural one) is a flatter and less hierarchical society. People in Iowa can afford houses and afford to start families. Who is really better off?

I don't necessarily disagree. I think there are some big advantages to being Iowa relative to California. I just don't think tariffs fix that. You get a poorer Iowa and Cali.

It may be the case that tariffs reduce disparity by making everyone poorer

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