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Comment by whatshisface | Hacker News Reader

The strangest thing about this event is how nobody can agree on what has already happened. US consumers are being hurt, US consumers are doing fine, the US economy is teetering on the brink of recession and China is steady, China is teetering on the brink of total collapse and the US doesn't feel a thing... all of these contradictory claims have been made to me by internet commenters and media outlets. Shouldn't the effects of the trade war be objective and easy to measure with typical macroeconomic indicators? It beats me as to why there are so many contradictory claims.

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From what I understand it's the following:

* Certain sectors of US industries are being disproportionately harmed by the trade war: steel, agriculture, and similar.

* Other sectors of US industries, such as service and retail, are less affected, and are posting strong numbers. This, along with a tight job market, point to a generally strong economy even if specific industries are suffering.

* China is difficult to understand due to the government being known for opacity in their finances. Therefore, we can generally only speculate on second or third order effects of trends, eg. what does the currency floating mean? It means China is shifting financial strategies for X or Y. But we have no idea the X or Y reasoning, only speculations of possible reasons.

* There are several indicators of a recession coming on, including significant day-to-day dips and yield curve inversions and slowdowns in other regions like Europe. However, recessions can't be known until the numbers come out and womp womp we're in one.

So it might actually be worse, since news of the indicators might already mean that cutbacks in payroll are taking place. We would see that with the August jobs number (due out in the first week of next month). Smart companies want to be ahead of the recession curve.

The good news is that the labor force is at record highs. IOW were as close to full employment as we have ever been.

https://www.cnbc.com/2019/08/02/us-jobs-report-july-2019.htm...

The bad news is there's no where to go but down.

I'll be perfectly honest and haven't felt the tariffs one bit. I couldn't tell you one aspect of my life that has been affected. I see gas prices fluctuate drastically but nothing else seems to have been affected as far as I can tell.

There is little oil in China, so the tariffs may not even be related to that.

To be clear, I didn't mean that gas prices were affected by the tariffs. Just that I noticed gas prices more than I notice any other changes in price since the tariffs have gone in place.

As I mentioned in my earlier comment. I feel the difficulty lies in understanding the extent of global supply chains and its impact.

With successive globalization more and more nations got interconnected with multiple layers of mutual import/export of raw material, parts or finished goods and services. If its made in USA or China does not mean it's completely made in USA or China, the components or raw material for it might come from multiple nations. This trade tariffs and war is taking us to old century where we had closed borders and middle man charge a premium to get products and services in and out.

Eventually it will be a loss for everyone not just for any specific nation.

I find it personally helpful in forming my own opinion to consider that the people saying "everything is fine" have a vested interest in everyone believing that and do not in my opinion have a reputation for honesty.

Agreed. It's why I think we (and I'm slowly working towards some ideas there personally) need to prioritize (micro) information sharing, sourcing, referencing, and etc.

I feel like there is too much misinformation out there for any person to be informed these days. Any effort to wade through that should be a currency worth more than gold in my mind, and easily sharable, reference-able, tamper-proof (immutable/signed/etc), and easily remembered.

Information is tough these days. We need to find ways to adapt, because misinformation seems to be winning by leagues.

I also agree, that's very true. China looses more money to FUD, than to genuine industrial decline at the moment.

Industrialist cashing out their factories and running for good life in America not because they can't make sale now, but because they have an expectation of "hard times to come" (even if such are nowhere to be genuinely seen.)

Some of the effects are mitigated by taxpayer subsidies, so things are okay in the short term because of that. And apparently much of that money is going to Big Agriculture.

https://www.latimes.com/business/hiltzik/la-fi-hiltzik-trump...

> Shouldn't the effects of the trade war be objective and easy to measure with typical macroeconomic indicators?

No.

Typical macroeconomic indicators often don't result in undisputed broad characteristizations of conditions (good, bad, teetering on the edge of recession), and, even moreso, don't tell you how they would be different if you changed a particular factor (e.g., the trade war.)

Is the recession "because" of the trade fight?

It's not clear to me that is the case as much as the recession was a long time in coming anyway.

Economic predictions have been all over the map. The stimulus after the events of 2008 was supposed to bring in a lot of inflation, some folks seemed very sure of that ... didn't happen.

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